Minnesota Legislature
SF 2657
2nd Engrossment - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am
KEY: stricken = removed, old language.
underscored = added, new language.
Current Version - 2nd Engrossment
1.1 A bill for an act 1.2 relating to financing of government in this state; 1.3 providing for payment of sales tax rebates and 1.4 assistance to farmers; providing an income tax 1.5 deduction or credit for dependents; extending the job 1.6 training credit; modifying the treatment of certain 1.7 types of income; modifying tax administration 1.8 provisions; authorizing the city of Luverne to provide 1.9 certain tax incentives; conforming with federal income 1.10 tax changes; changing interest provision for 1.11 individual income tax refunds; reducing the rate of 1.12 the motor vehicle registration tax; exempting certain 1.13 sales from taxation; restricting local taxes on motor 1.14 vehicles; altering the imposition of the tax on 1.15 insurance premiums; modifying the provider tax; 1.16 reducing the rates of taxes on gambling; providing for 1.17 administration of the tax on cigarettes; prohibiting 1.18 distribution of certain types of cigarettes; providing 1.19 for property tax homestead treatment; providing for 1.20 certain property tax exemptions, credits, assessments, 1.21 appeals, notices, and refunds; reducing certain 1.22 property tax class rates; changing and providing for 1.23 certain payments in lieu of taxes; changing provisions 1.24 relating to tax increment financing, housing 1.25 improvement areas, county housing authorities, and 1.26 corporations created by political subdivisions; 1.27 authorizing election by local governments to provide 1.28 truth in taxation information on the Internet; 1.29 extending senior citizen property tax deferral to 1.30 certain taxes, special assessments, penalties, and 1.31 interest; providing for certain special assessments by 1.32 counties; modifying or increasing certain aids to 1.33 local governments; providing special authority to 1.34 certain political subdivisions; changing certain 1.35 forfeiture provisions relating to plats; authorizing 1.36 issuance of certain obligations; changing priority of 1.37 certain revenue recapture claims; providing for 1.38 studies; appropriating money; amending Minnesota 1.39 Statutes 1998, sections 16A.46; 60A.15, subdivision 1; 1.40 97A.061, by adding subdivisions; 168.013, subdivision 1.41 1a; 238.08, subdivision 3; 270.063, by adding a 1.42 subdivision; 270.07, subdivision 5; 270A.10; 272.115, 1.43 subdivision 1; 273.11, subdivision 14, and by adding a 1.44 subdivision; 273.124, by adding a subdivision; 1.45 273.1398, subdivision 4; 273.1399, subdivision 1; 1.46 273.37, subdivision 3; 275.065, subdivisions 3, 8, and 2.1 by adding subdivisions; 275.066; 276.19, subdivision 2.2 1; 289A.08, by adding a subdivision; 289A.35; 289A.56, 2.3 subdivision 2; 289A.60, subdivision 1; 290.01, by 2.4 adding a subdivision; 290.0673, subdivision 8; 290.17, 2.5 subdivision 2; 290A.15; 290B.04, by adding a 2.6 subdivision; 290B.05, subdivision 3; 290B.07; 290B.08, 2.7 subdivisions 1 and 2; 290B.09, subdivision 2; 295.50, 2.8 subdivision 9b; 297A.01, subdivisions 3 and 15; 2.9 297A.15, by adding a subdivision; 297A.25, 2.10 subdivisions 5, 7, 65, and by adding subdivisions; 2.11 297F.01, subdivision 17; 297F.08, subdivisions 2, 4, 2.12 5, 8, and 9; 297F.21, subdivisions 1 and 3; 428A.11, 2.13 by adding subdivisions; 428A.13, subdivisions 1 and 3; 2.14 428A.14, subdivision 1; 428A.15; 428A.16; 428A.17; 2.15 428A.19; 428A.21; 429.011, subdivisions 2a and 5; 2.16 429.021, subdivision 1; 429.031, subdivision 1; 2.17 469.003, subdivision 5; 469.006, subdivisions 1 and 2; 2.18 469.011, subdivision 4; 469.040, by adding a 2.19 subdivision; 469.174, subdivision 10; 469.175, 2.20 subdivisions 1a, 5, and 6; 469.176, subdivision 1b; 2.21 469.1763, by adding a subdivision; 473.39, by adding a 2.22 subdivision; 477A.011, by adding a subdivision; 2.23 477A.0121, subdivision 4, and by adding a subdivision; 2.24 477A.03, by adding a subdivision; 477A.06, 2.25 subdivisions 2 and 3; 477A.11, subdivision 1; 477A.12; 2.26 477A.13; 477A.14; Minnesota Statutes 1999 Supplement, 2.27 sections 16D.09, subdivision 2; 123B.54; 270.65; 2.28 270A.03, subdivision 2; 272.02, subdivision 39, and by 2.29 adding a subdivision; 273.124, subdivisions 1 and 14; 2.30 273.13, subdivisions 24 and 25; 273.1382, subdivision 2.31 1b; 273.1398, subdivisions 1a and 4a; 275.065, 2.32 subdivision 5a; 275.71, subdivision 4; 289A.02, 2.33 subdivision 7; 290.01, subdivisions 19, 19b, and 31; 2.34 290.091, subdivision 2; 290A.03, subdivision 15; 2.35 290B.03, subdivision 1; 290B.05, subdivision 1; 2.36 291.005, subdivision 1; 295.53, subdivision 1; 2.37 297A.25, subdivisions 9 and 11; 297E.02, subdivisions 2.38 1, 4, and 6; 297F.08, subdivision 8a; 383D.74; 473.39, 2.39 subdivision 1g; 477A.011, subdivision 36; 477A.03, 2.40 subdivision 2; 477A.06, subdivision 1; 505.08, 2.41 subdivision 3; Laws 1995, chapter 264, article 2, 2.42 section 44, as amended; Laws 1995, First Special 2.43 Session chapter 3, article 15, section 25; Laws 1999, 2.44 chapters 112, sections 1, subdivisions 2 and 7; and 2; 2.45 and 243, article 1, section 2; proposing coding for 2.46 new law in Minnesota Statutes, chapters 273; 278; 290; 2.47 297F; 465; and 477A; repealing Minnesota Statutes 2.48 1998, sections 297A.15, subdivision 7; 465.715, 2.49 subdivisions 1, 2, and 3; and 469.175, subdivision 6a; 2.50 Minnesota Statutes 1999 Supplement, section 465.715, 2.51 subdivision 1a; Minnesota Rules, part 8160.0300, 2.52 subpart 4. 2.53 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 2.54 ARTICLE 1 2.55 2000 SALES TAX REBATE 2.56 Section 1. [STATEMENT OF PURPOSE.] 2.57 (a) The state of Minnesota derives revenues from a variety 2.58 of taxes, fees, and other sources, including the state sales tax. 2.59 (b) It is fair and reasonable to refund the existing state 2.60 budget surplus in the form of a rebate of nonbusiness consumer 2.61 sales taxes paid by individuals in calendar year 1998. 3.1 (c) Information concerning the amount of sales tax paid at 3.2 various income levels is contained in the Minnesota tax 3.3 incidence report, which is written by the commissioner of 3.4 revenue and presented to the legislature according to Minnesota 3.5 Statutes, section 270.0682. 3.6 (d) It is fair and reasonable to use information contained 3.7 in the Minnesota tax incidence report to determine the 3.8 proportionate share of the sales tax rebate due each eligible 3.9 taxpayer since no effective or practical mechanism exists for 3.10 determining the amount of actual sales tax paid by each eligible 3.11 individual. 3.12 Sec. 2. [SALES TAX REBATE.] 3.13 (a) An individual who: 3.14 (1) was eligible for a credit under Laws 1998, chapter 389, 3.15 article 1, section 1, and who filed for or received that credit 3.16 on or before November 30, 2000; or 3.17 (2) was a resident of Minnesota for any part of 1998, and 3.18 filed a 1998 Minnesota income tax return on or before November 3.19 30, 2000, and had a tax liability before refundable credits on 3.20 that return of at least $1 but did not file the claim for credit 3.21 authorized under Laws 1998, chapter 389, article 1, section 1, 3.22 and who was not allowed to be claimed as a dependent on a 1998 3.23 federal income tax return filed by another person; or 3.24 (3) had the property taxes payable on his or her homestead 3.25 abated to zero under Laws 1998, chapter 383, section 20, 3.26 shall receive a sales tax rebate. 3.27 (b) The sales tax rebate for taxpayers who qualify under 3.28 paragraph (a) as married filing joint or head of household must 3.29 be computed according to the following schedule: 3.30 Income Sales Tax Rebate 3.31 less than $2,500 $ 91 3.32 at least $2,500 but less than $5,000 $ 118 3.33 at least $5,000 but less than $10,000 $ 126 3.34 at least $10,000 but less than $15,000 $ 138 3.35 at least $15,000 but less than $20,000 $ 150 3.36 at least $20,000 but less than $25,000 $ 163 4.1 at least $25,000 but less than $30,000 $ 170 4.2 at least $30,000 but less than $35,000 $ 184 4.3 at least $35,000 but less than $40,000 $ 201 4.4 at least $40,000 but less than $45,000 $ 216 4.5 at least $45,000 but less than $50,000 $ 227 4.6 at least $50,000 but less than $60,000 $ 242 4.7 at least $60,000 but less than $70,000 $ 259 4.8 at least $70,000 but less than $80,000 $ 285 4.9 at least $80,000 but less than $90,000 $ 306 4.10 at least $90,000 but less than $100,000 $ 338 4.11 at least $100,000 but less than $120,000 $ 366 4.12 at least $120,000 but less than $140,000 $ 401 4.13 at least $140,000 but less than $160,000 $ 433 4.14 at least $160,000 but less than $180,000 $ 464 4.15 at least $180,000 but less than $200,000 $ 493 4.16 at least $200,000 but less than $400,000 $ 630 4.17 at least $400,000 but less than $600,000 $ 829 4.18 at least $600,000 but less than $800,000 $ 995 4.19 at least $800,000 but less than $1,000,000 $1,140 4.20 $1,000,000 and over $1,500 4.21 (c) The sales tax rebate for individuals who qualify under 4.22 paragraph (a) as single or married filing separately must be 4.23 computed according to the following schedule: 4.24 Income Sales Tax Rebate 4.25 less than $2,500 $ 52 4.26 at least $2,500 but less than $5,000 $ 63 4.27 at least $5,000 but less than $10,000 $ 74 4.28 at least $10,000 but less than $15,000 $ 100 4.29 at least $15,000 but less than $20,000 $ 114 4.30 at least $20,000 but less than $25,000 $ 124 4.31 at least $25,000 but less than $30,000 $ 129 4.32 at least $30,000 but less than $40,000 $ 141 4.33 at least $40,000 but less than $50,000 $ 158 4.34 at least $50,000 but less than $70,000 $ 186 4.35 at least $70,000 but less than $100,000 $ 237 4.36 at least $100,000 but less than $140,000 $ 285 5.1 at least $140,000 but less than $200,000 $ 344 5.2 at least $200,000 but less than $400,000 $ 467 5.3 at least $400,000 but less than $600,000 $ 614 5.4 $600,000 and over $ 875 5.5 (d) Individuals who: 5.6 (1) were residents of Minnesota in 1998; 5.7 (2) attained the age of 18 on or before December 31, 1998; 5.8 (3) had at least $500 of qualifying income in 1998; and 5.9 (4) do not otherwise qualify for a rebate either 5.10 individually or as the spouse of an individual who receives a 5.11 rebate on the basis of a married joint filing status, 5.12 qualify for a rebate under this paragraph only. If required to 5.13 do so by the commissioner, claimants under this paragraph must 5.14 file a claim for a rebate on a form prescribed by the 5.15 commissioner before June 15, 2001. The commissioner shall 5.16 verify the information provided and rebate the minimum amount 5.17 for which the claimant would have been eligible as determined 5.18 under paragraph (b), as adjusted by paragraph (p), if the 5.19 taxpayer would have met the requirements to file a 1998 federal 5.20 income tax return as a married taxpayer filing jointly or head 5.21 of household, or as determined under paragraph (c), as adjusted 5.22 by paragraph (p), for other taxpayers. Qualified claims for 5.23 rebate under this paragraph not paid by October 1, 2001, bear 5.24 interest at the rate specified in Minnesota Statutes, section 5.25 270.75. As used in this paragraph only, "qualifying income" 5.26 means the sum of: 5.27 (1) self-employment income subject to the tax under section 5.28 1401(b) of the Internal Revenue Code of 1986, as amended through 5.29 December 31, 1997; plus 5.30 (2) wages subject to tax under section 3101(b) of the 5.31 Internal Revenue Code of 1986, as amended through December 31, 5.32 1997; plus 5.33 (3) amounts described in Minnesota Statutes, section 5.34 290A.03, subdivision 3, paragraph (b), clauses (iv), (v), (vi), 5.35 (vii), (viii), (ix), (x), and (xii). 5.36 As used in this paragraph, "qualifying income" does not 6.1 include any compensation paid to inmates at a state, local, 6.2 federal, or privately operated correctional facility as pay for 6.3 services performed by the inmate at the facility. 6.4 If the Social Security Administration or Railroad 6.5 Retirement Board is paying benefits to a recipient by electronic 6.6 funds transfers in 2000, the rebate under this paragraph must be 6.7 paid by the commissioner through electronic funds transfer to 6.8 the same financial institution and into the same account into 6.9 which the Social Security Administration or Railroad Retirement 6.10 Board transfers social security benefits in calendar year 2000. 6.11 (e) Individuals who were not residents of Minnesota for any 6.12 part of 1998 and who paid more than $10 in Minnesota sales tax 6.13 under Minnesota Statutes, chapters 297A and 297B, on nonbusiness 6.14 consumer purchases in that year qualify for a rebate under this 6.15 paragraph only. Qualifying nonresidents must file a claim for 6.16 rebate on a form prescribed by the commissioner before November 6.17 30, 2000. The claim must include receipts showing the Minnesota 6.18 sales tax paid and the date of the sale. Taxes paid on 6.19 purchases allowed in the computation of federal taxable income 6.20 or reimbursed by an employer are not eligible for the rebate. 6.21 The commissioner shall determine the qualifying taxes paid and 6.22 rebate the lesser of: 6.23 (1) 16.18 percent of that amount; or 6.24 (2) the maximum amount for which the claimant would have 6.25 been eligible as determined under paragraph (b) if the taxpayer 6.26 filed the 1998 federal income tax return as a married taxpayer 6.27 filing jointly or head of household, or as determined under 6.28 paragraph (c) for other taxpayers. 6.29 (f) "Income," for purposes of this section other than 6.30 paragraph (e), is taxable income as defined in section 63 of the 6.31 Internal Revenue Code of 1986, as amended through December 31, 6.32 1997, plus the sum of any additions to federal taxable income 6.33 for the taxpayer under Minnesota Statutes, section 290.01, 6.34 subdivision 19a, and reported on the original 1998 income tax 6.35 return including subsequent adjustments to that return made 6.36 within the time limits specified in paragraph (i). For an 7.1 individual who was a resident of Minnesota for less than the 7.2 entire year, income as determined under this paragraph must be 7.3 multiplied by the percentage determined pursuant to Minnesota 7.4 Statutes, section 290.06, subdivision 2c, paragraph (e), as 7.5 calculated on the original 1998 income tax return including 7.6 subsequent adjustments to that return made within the time 7.7 limits specified in paragraph (i). For purposes of paragraph 7.8 (e), "income" is taxable income as defined in section 63 of the 7.9 Internal Revenue Code of 1986, as amended through December 31, 7.10 1997, and reported on the taxpayer's original federal tax return 7.11 for the first taxable year beginning after December 31, 1997. 7.12 (g) For a fiscal year taxpayer, the November 30, 2000, 7.13 dates in paragraphs (a) through (e) are extended one month for 7.14 each month in calendar year 1998 that occurred prior to the 7.15 start of the individual's 1998 fiscal tax year. 7.16 (h) Sales tax rebates not paid by April 1, 2001, bear 7.17 interest at the rate specified in Minnesota Statutes, section 7.18 270.75. 7.19 (i) A sales tax rebate shall not be adjusted based on 7.20 changes to a 1998 income tax return that are made by order of 7.21 assessment after June 15, 2000, or made by the taxpayer by 7.22 amended return that are filed with the commissioner of revenue 7.23 after June 15, 2000. 7.24 (j) Individuals who filed a joint income tax return for 7.25 1998 shall receive a joint sales tax rebate. After the sales 7.26 tax rebate has been issued, but before the check has been 7.27 cashed, either joint claimant may request a separate check for 7.28 one-half of the joint sales tax rebate. Notwithstanding 7.29 anything in this section to the contrary, if, prior to payment, 7.30 the commissioner has been notified that persons who filed a 7.31 joint 1998 income tax return are living at separate addresses, 7.32 as indicated on their 1999 income tax return or otherwise, the 7.33 commissioner may issue separate checks to each person. The 7.34 amount payable to each person is one-half of the total joint 7.35 rebate. 7.36 If a rebate is received by the estate of a deceased 8.1 individual after the probate estate has been closed, and if the 8.2 original rebate check is returned to the commissioner with a 8.3 copy of the decree of descent or final account of the estate, 8.4 social security numbers, and addresses of the beneficiaries, the 8.5 commissioner may issue separate checks in proportion to their 8.6 share in the residuary estate in the names of the residuary 8.7 beneficiaries of the estate. 8.8 (k) The sales tax rebate is a "Minnesota tax law" for 8.9 purposes of Minnesota Statutes, section 270B.01, subdivision 8. 8.10 (l) The sales tax rebate is "an overpayment of any tax 8.11 collected by the commissioner" for purposes of Minnesota 8.12 Statutes, section 270.07, subdivision 5. For purposes of this 8.13 paragraph, a joint sales tax rebate is payable to each spouse 8.14 equally. 8.15 (m) If the commissioner of revenue cannot locate an 8.16 individual entitled to a sales tax rebate by July 1, 2002, or if 8.17 an individual to whom a sales tax rebate was issued has not 8.18 cashed the check by July 1, 2002, the right to the sales tax 8.19 rebate lapses and the check must be deposited in the general 8.20 fund. 8.21 (n) Individuals entitled to a sales tax rebate pursuant to 8.22 paragraph (a), but who did not receive one, and individuals who 8.23 receive a sales tax rebate that was not correctly computed, must 8.24 file a claim with the commissioner before July 1, 2001, in a 8.25 form prescribed by the commissioner. These claims must be 8.26 treated as if they are a claim for refund under Minnesota 8.27 Statutes, section 289A.50, subdivisions 4 and 7. 8.28 (o) The sales tax rebate is a refund subject to revenue 8.29 recapture under Minnesota Statutes, chapter 270A. The 8.30 commissioner of revenue shall remit the entire refund to the 8.31 claimant agency, which shall, upon the request of the spouse who 8.32 does not owe the debt, refund one-half of the joint sales tax 8.33 rebate to the spouse who does not owe the debt. 8.34 (p) Before payment, the rebates calculated in paragraphs 8.35 (b), (c), (d), and (e) must be proportionately reduced to 8.36 account for 1998 income tax returns that are filed on or after 9.1 January 1, 2000, but before July 1, 2000, so that the amount of 9.2 sales tax rebates payable under paragraphs (b), (c), (d), and 9.3 (e) does not exceed $453,000,000, less the amount of the rebates 9.4 paid under article 2. 9.5 The adjustments under this paragraph are not rules subject to 9.6 Minnesota Statutes, chapter 14. 9.7 (q) The rebate is a reduction of fiscal year 2000 sales tax 9.8 revenues. The amount necessary to make the sales tax rebates 9.9 and interest provided in this section is appropriated from the 9.10 general fund to the commissioner of revenue in fiscal year 2000 9.11 and is available until June 30, 2002. 9.12 (r) If a sales tax rebate check is cashed by someone other 9.13 than the payee or payees of the check, and the commissioner of 9.14 revenue determines that the check has been forged or improperly 9.15 endorsed, or the commissioner determines that a rebate was 9.16 erroneously issued or overstated, the commissioner may issue an 9.17 order of assessment for the amount of the check or the amount 9.18 the check is overstated against the person or persons cashing 9.19 it. The assessment must be made within two years after the 9.20 check is cashed, but if cashing the check constitutes theft 9.21 under Minnesota Statutes, section 609.52, or forgery under 9.22 Minnesota Statutes, section 609.631, the assessment can be made 9.23 at any time. The assessment may be appealed administratively 9.24 and judicially. The commissioner may take action to collect the 9.25 assessment in the same manner as provided by Minnesota Statutes, 9.26 chapter 289A, for any other order of the commissioner assessing 9.27 tax. 9.28 (s) Notwithstanding Minnesota Statutes, sections 9.031, 9.29 16A.40, 16B.49, 16B.50, and any other law to the contrary, the 9.30 commissioner of revenue may take whatever actions the 9.31 commissioner deems necessary to pay the rebates required by this 9.32 section, and may, in consultation with the commissioner of 9.33 finance and the state treasurer, contract with a private vendor 9.34 or vendors to process, print, and mail the rebate checks or 9.35 warrants required under this section and receive and disburse 9.36 state funds to pay those checks or warrants. 10.1 (t) The commissioner may pay rebates required by this 10.2 section by electronic funds transfer to individuals who 10.3 requested that their 1999 individual income tax refund be paid 10.4 through electronic funds transfer. The commissioner may make 10.5 the electronic funds transfer payments to the same financial 10.6 institution and into the same account as the 1999 individual 10.7 income tax refund. 10.8 (u) For purposes of this section, "resident" has the 10.9 meaning given in Minnesota Statutes, section 290.01, subdivision 10.10 7. 10.11 Sec. 3. [APPROPRIATION.] 10.12 $4,000,000 is appropriated from the general fund to the 10.13 commissioner of revenue to be used to pay the costs of 10.14 administering section 2 and articles 2 and 3. 10.15 EFFECTIVE DATE: Sections 1 and 2 are effective the day 10.16 following final enactment. 10.17 ARTICLE 2 10.18 1999 SALES TAX REBATE 10.19 Section 1. Laws 1999, chapter 243, article 1, section 2, 10.20 is amended to read: 10.21 Sec. 2. [SALES TAX REBATE.] 10.22 (a) An individual who: 10.23 (1) was eligible for a credit under Laws 1997, chapter 231, 10.24 article 1, section 16, as amended by Laws 1997, First Special 10.25 Session chapter 5, section 35, and Laws 1997, Third Special 10.26 Session chapter 3, section 11, and Laws 1998, chapter 304, and 10.27 Laws 1998, chapter 389, article 1, section 3, and who filed for 10.28 or received that credit on or before June 15,19992000; or 10.29 (2) was a resident of Minnesota for any part of 1997, and 10.30 filed a 1997 Minnesota income tax return on or before June 15, 10.3119992000, and had a tax liability before refundable credits on 10.32 that return of at least $1 but did not file the claim for credit 10.33 authorized under Laws 1997, chapter 231, article 1, section 16, 10.34 as amended, and who was not allowed to be claimed as a dependent 10.35 on a 1997 federal income tax return filed by another person; or 10.36 (3) had the property taxes payable on his or her homestead 11.1 abated to zero under Laws 1997, chapter 231, article 2, section 11.2 64, 11.3 shall receive a sales tax rebate. 11.4 (b) The sales tax rebate for taxpayers who qualify under 11.5 paragraph (a) as married filing joint or head of household must 11.6 be computed according to the following schedule: 11.7 Income Sales Tax Rebate 11.8 less than $2,500 $ 358 11.9 at least $2,500 but less than $5,000 $ 469 11.10 at least $5,000 but less than $10,000 $ 502 11.11 at least $10,000 but less than $15,000 $ 549 11.12 at least $15,000 but less than $20,000 $ 604 11.13 at least $20,000 but less than $25,000 $ 641 11.14 at least $25,000 but less than $30,000 $ 690 11.15 at least $30,000 but less than $35,000 $ 762 11.16 at least $35,000 but less than $40,000 $ 820 11.17 at least $40,000 but less than $45,000 $ 874 11.18 at least $45,000 but less than $50,000 $ 921 11.19 at least $50,000 but less than $60,000 $ 969 11.20 at least $60,000 but less than $70,000 $1,071 11.21 at least $70,000 but less than $80,000 $1,162 11.22 at least $80,000 but less than $90,000 $1,276 11.23 at least $90,000 but less than $100,000 $1,417 11.24 at least $100,000 but less than $120,000 $1,535 11.25 at least $120,000 but less than $140,000 $1,682 11.26 at least $140,000 but less than $160,000 $1,818 11.27 at least $160,000 but less than $180,000 $1,946 11.28 at least $180,000 but less than $200,000 $2,067 11.29 at least $200,000 but less than $400,000 $2,644 11.30 at least $400,000 but less than $600,000 $3,479 11.31 at least $600,000 but less than $800,000 $4,175 11.32 at least $800,000 but less than $1,000,000 $4,785 11.33 $1,000,000 and over $5,000 11.34 (c) The sales tax rebate for individuals who qualify under 11.35 paragraph (a) as single or married filing separately must be 11.36 computed according to the following schedule: 12.1 Income Sales Tax Rebate 12.2 less than $2,500 $ 204 12.3 at least $2,500 but less than $5,000 $ 249 12.4 at least $5,000 but less than $10,000 $ 299 12.5 at least $10,000 but less than $15,000 $ 408 12.6 at least $15,000 but less than $20,000 $ 464 12.7 at least $20,000 but less than $25,000 $ 496 12.8 at least $25,000 but less than $30,000 $ 515 12.9 at least $30,000 but less than $40,000 $ 570 12.10 at least $40,000 but less than $50,000 $ 649 12.11 at least $50,000 but less than $70,000 $ 776 12.12 at least $70,000 but less than $100,000 $ 958 12.13 at least $100,000 but less than $140,000 $1,154 12.14 at least $140,000 but less than $200,000 $1,394 12.15 at least $200,000 but less than $400,000 $1,889 12.16 at least $400,000 but less than $600,000 $2,485 12.17 $600,000 and over $2,500 12.18 (d) Individuals who were not residents of Minnesota for any 12.19 part of 1997 and who paid more than $10 in Minnesota sales tax 12.20 on nonbusiness consumer purchases in that year qualify for a 12.21 rebate under this paragraph only. Qualifying nonresidents must 12.22 file a claim for rebate on a form prescribed by the commissioner 12.23 before the later of June 15,19992000, or 30 days after the 12.24 date of enactment of this act. The claim must include receipts 12.25 showing the Minnesota sales tax paid and the date of the sale. 12.26 Taxes paid on purchases allowed in the computation of federal 12.27 taxable income or reimbursed by an employer are not eligible for 12.28 the rebate. The commissioner shall determine the qualifying 12.29 taxes paid and rebate the lesser of: 12.30 (1) 69.0 percent of that amount; or 12.31 (2) the maximum amount for which the claimant would have 12.32 been eligible as determined under paragraph (b) if the taxpayer 12.33 filed the 1997 federal income tax return as a married taxpayer 12.34 filing jointly or head of household, or as determined under 12.35 paragraph (c) for other taxpayers. 12.36 (e) "Income," for purposes of this section other than 13.1 paragraph (d), is taxable income as defined in section 63 of the 13.2 Internal Revenue Code of 1986, as amended through December 31, 13.3 1996, plus the sum of any additions to federal taxable income 13.4 for the taxpayer under Minnesota Statutes, section 290.01, 13.5 subdivision 19a, and reported on the original 1997 income tax 13.6 return including subsequent adjustments to that return made 13.7 within the time limits specified in paragraph (h). For an 13.8 individual who was a resident of Minnesota for less than the 13.9 entire year,the sales tax rebate equals the sales tax rebate13.10calculated under paragraph (b) or (c)income as determined under 13.11 this paragraph must be multiplied by the percentage determined 13.12 pursuant to Minnesota Statutes, section 290.06, subdivision 2c, 13.13 paragraph (e), as calculated on the original 1997 income tax 13.14 return including subsequent adjustments to that return made 13.15 within the time limits specified in paragraph (h). For purposes 13.16 of paragraph (d), "income" is taxable income as defined in 13.17 section 63 of the Internal Revenue Code of 1986, as amended 13.18 through December 31, 1996, and reported on the taxpayer's 13.19 original federal tax return for the first taxable year beginning 13.20 after December 31, 1996. 13.21 (f) For a fiscal year taxpayer, the June 15, 1999, dates in 13.22 paragraphs (a) through (d) are extended one month for each month 13.23 in calendar year 1997 that occurred prior to the start of the 13.24 individual's 1997 fiscal tax year. 13.25 (g) Before payment, the commissioner of revenue shall 13.26 adjust the rebate as follows: 13.27 (1) the rebates calculated in paragraphs (b), (c), and (d) 13.28 must be proportionately reduced to account for 1997 income tax 13.29 returns that are filed on or after January 1, 1999, but before 13.30 July 1, 1999, so that the amount of sales tax rebates payable 13.31 under paragraphs (b), (c), and (d) does not exceed 13.32 $1,250,000,000; and 13.33 (2) the commissioner of finance shall certify by July 15, 13.34 1999, preliminary fiscal year 1999 general fund net nondedicated 13.35 revenues. The certification shall exclude the impact of any 13.36 legislation enacted during the 1999 regular session. If 14.1 certified net nondedicated revenues exceed the amount forecast 14.2 in February 1999, up to $50,000,000 of the increase shall be 14.3 added to the total amount rebated. The commissioner of revenue 14.4 shall adjust all rebates proportionally to reflect any 14.5 increases. The total amount of the rebate shall not exceed 14.6 $1,300,000,000. 14.7 The adjustments under this paragraph are not rules subject to 14.8 Minnesota Statutes, chapter 14. 14.9(g)(h) The commissioner of revenue may begin making sales 14.10 tax rebates by August 1, 1999. Sales tax rebates not paid by 14.11 October 1, 1999, bear interest at the rate specified in 14.12 Minnesota Statutes, section 270.75. Sales tax rebates paid to: 14.13 (1) taxpayers who file their original 1997 Minnesota income 14.14 tax return after June 15, 1999; 14.15 (2) individuals qualifying under paragraph (s); and 14.16 (3) qualifying nonresidents who file a claim for rebate 14.17 after June 15, 1999, 14.18 bear interest at the rate specified in Minnesota Statutes, 14.19 section 270.75, beginning October 1, 2000. 14.20(h)(i) A sales tax rebate shall not be adjusted based on 14.21 changes to a 1997 income tax return that are made by order of 14.22 assessment after June 15, 1999, or made by the taxpayer that are 14.23 filed with the commissioner of revenue after June 15, 1999. 14.24(i)(j) Individuals who filed a joint income tax return for 14.25 1997 shall receive a joint sales tax rebate. After the sales 14.26 tax rebate has been issued, but before the check has been 14.27 cashed, either joint claimant may request a separate check for 14.28 one-half of the joint sales tax rebate. Notwithstanding 14.29 anything in this section to the contrary, if prior to payment, 14.30 the commissioner has been notified that persons who filed a 14.31 joint 1997 income tax return are living at separate addresses, 14.32 as indicated on their 1998 income tax return or otherwise, the 14.33 commissioner may issue separate checks to each person. The 14.34 amount payable to each person is one-half of the total joint 14.35 rebate. If a rebate is received by the estate of a deceased 14.36 individual after the probate estate has been closed, and if the 15.1 original rebate check is returned to the commissioner with a 15.2 copy of the decree of descent or final account of the estate, 15.3 social security numbers, and addresses of the beneficiaries, the 15.4 commissioner may issue separate checks in proportion to their 15.5 share in the residuary estate in the names of the residuary 15.6 beneficiaries of the estate. 15.7(j)(k) The sales tax rebate is a "Minnesota tax law" for 15.8 purposes of Minnesota Statutes, section 270B.01, subdivision 8. 15.9(k)(l) The sales tax rebate is "an overpayment of any tax 15.10 collected by the commissioner" for purposes of Minnesota 15.11 Statutes, section 270.07, subdivision 5. For purposes of this 15.12 paragraph, a joint sales tax rebate is payable to each spouse 15.13 equally. 15.14(l)(m) If the commissioner of revenue cannot locate an 15.15 individual entitled to a sales tax rebate by July 1, 2001, or if 15.16 an individual to whom a sales tax rebate was issued has not 15.17 cashed the check by July 1, 2001, the right to the sales tax 15.18 rebate lapses and the check must be deposited in the general 15.19 fund. 15.20(m)(n) Individuals entitled to a sales tax rebate pursuant 15.21 to paragraph (a), but who did not receive one, and individuals 15.22 who receive a sales tax rebate that was not correctly computed, 15.23 must file a claim with the commissioner before July 1, 2000, in 15.24 a form prescribed by the commissioner. Taxpayers who file their 15.25 original 1997 Minnesota income tax return after June 15, 1999, 15.26 and qualifying nonresidents who file a claim for rebate after 15.27 June 15, 1999, and who do not receive it or who receive a sales 15.28 tax rebate that was not correctly computed, must file a claim 15.29 with the commissioner before July 1, 2001, in a form prescribed 15.30 by the commissioner. These claims must be treated as if they 15.31 are a claim for refund under Minnesota Statutes, section 15.32 289A.50, subdivisions 4 and 7. 15.33(n)(o) The sales tax rebate is a refund subject to revenue 15.34 recapture under Minnesota Statutes, chapter 270A. The 15.35 commissioner of revenue shall remit the entire refund to the 15.36 claimant agency, which shall, upon the request of the spouse who 16.1 does not owe the debt, refund one-half of the joint sales tax 16.2 rebate to the spouse who does not owe the debt. 16.3(o)(p) The rebate is a reduction of fiscal year 1999 sales 16.4 tax revenues. The amount necessary to make the sales tax 16.5 rebates and interest provided in this section is appropriated 16.6 from the general fund to the commissioner of revenue in fiscal 16.7 year 1999 and is available until June 30, 2001. 16.8(p)(q) If a sales tax rebate check is cashed by someone 16.9 other than the payee or payees of the check, and the 16.10 commissioner of revenue determines that the check has been 16.11 forged or improperly endorsed or the commissioner determines 16.12 that a rebate was overstated or erroneously issued, the 16.13 commissioner may issue an order of assessment for the amount of 16.14 the check or the amount the check is overstated against the 16.15 person or persons cashing it. The assessment must be made 16.16 within two years after the check is cashed, but if cashing the 16.17 check constitutes theft under Minnesota Statutes, section 16.18 609.52, or forgery under Minnesota Statutes, section 609.631, 16.19 the assessment can be made at any time. The assessment may be 16.20 appealed administratively and judicially. The commissioner may 16.21 take action to collect the assessment in the same manner as 16.22 provided by Minnesota Statutes, chapter 289A, for any other 16.23 order of the commissioner assessing tax. 16.24(q)(r) Notwithstanding Minnesota Statutes, sections 9.031, 16.25 16A.40, 16B.49, 16B.50, and any other law to the contrary, the 16.26 commissioner of revenue may take whatever actions the 16.27 commissioner deems necessary to pay the rebates required by this 16.28 section, and may, in consultation with the commissioner of 16.29 finance and the state treasurer, contract with a private vendor 16.30 or vendors to process, print, and mail the rebate checks or 16.31 warrants required under this section and receive and disburse 16.32 state funds to pay those checks or warrants. 16.33(r)(s) The commissioner may pay rebates required by this 16.34 section by electronic funds transfer to individuals who 16.35 requested that their 1998 individual income tax refund be paid 16.36 through electronic funds transfer. The commissioner may make 17.1 the electronic funds transfer payments to the same financial 17.2 institution and into the same account as the 1998 individual 17.3 income tax refund. 17.4 (t) Individuals who: 17.5 (1) were residents of Minnesota in 1997; 17.6 (2) attained the age of 18 on or before December 31, 1997; 17.7 (3) had at least $500 of qualifying income in 1997; and 17.8 (4) do not otherwise qualify for a rebate either 17.9 individually or as the spouse of an individual who receives a 17.10 rebate on the basis of a married joint filing status, 17.11 qualify for a rebate under this paragraph only. If required to 17.12 do so by the commissioner, claimants under this paragraph must 17.13 file a claim for a rebate on a form prescribed by the 17.14 commissioner before the later of June 15, 2000, or 30 days after 17.15 the date of enactment of this act. The commissioner shall 17.16 verify the information provided and rebate the minimum amount 17.17 for which the claimant would have been eligible as determined 17.18 under paragraph (b), as adjusted by paragraph (f), if the 17.19 taxpayer would have met the requirements to file a 1997 federal 17.20 income tax return as a married taxpayer filing jointly or head 17.21 of household, or as determined under paragraph (c), as adjusted 17.22 by paragraph (f), for other taxpayers. Qualified claims for 17.23 rebate under this paragraph not paid by October 1, 2000, bear 17.24 interest at the rate specified in Minnesota Statutes, section 17.25 270.75. As used in this paragraph only, "qualifying income" 17.26 means the sum of: 17.27 (1) self-employment income subject to the tax under section 17.28 1401(b) of the Internal Revenue Code of 1986, as amended through 17.29 December 31, 1997; plus 17.30 (2) wages subject to tax under section 3101(b) of the 17.31 Internal Revenue Code of 1986, as amended through December 31, 17.32 1997; plus 17.33 (3) amounts described in Minnesota Statutes, section 17.34 290A.03, subdivision 3, paragraph (b), clauses (iv), (v), (vi), 17.35 (vii), (viii), (ix), (x), and (xii). 17.36 As used in this paragraph, "qualifying income" does not 18.1 include any compensation paid to inmates at a state, local, 18.2 federal, or privately operated correctional facility as pay for 18.3 services performed by the inmate at the facility. 18.4 If the Social Security Administration or Railroad 18.5 Retirement Board is paying benefits to a recipient by electronic 18.6 funds transfers in 2000, the rebate under this paragraph must be 18.7 paid by the commissioner through electronic funds transfer to 18.8 the same financial institution and into the same account into 18.9 which the Social Security Administration or Railroad Retirement 18.10 Board transfers social security benefits in calendar year 1999. 18.11 Sec. 2. [APPLICATION OF LAW.] 18.12 The limitation on the total amount of rebates in Laws 1999, 18.13 chapter 243, article 1, section 2, paragraph (f), does not apply 18.14 to rebates issued under section 1. To the extent applicable, 18.15 all other provisions of Laws 1999, chapter 243, article 1, 18.16 section 2, apply to the rebates paid under section 1. 18.17 Sec. 3. [APPROPRIATION.] 18.18 The amount necessary to pay the rebates under section 1 is 18.19 appropriated from the general fund to the commissioner of 18.20 revenue for fiscal years 2000 and 2001. 18.21 EFFECTIVE DATE: Sections 1 to 3 are effective the day 18.22 following final enactment. 18.23 ARTICLE 3 18.24 AGRICULTURAL ASSISTANCE 18.25 Section 1. Laws 1999, chapter 112, section 1, subdivision 18.26 2, is amended to read: 18.27 Subd. 2. [PAYMENT TO FARMERS.] Every farm operator may 18.28 apply on a separate form for each farm that they operate to the 18.29 commissioner for payments as provided under this subdivision. 18.30 The payment shall be made to each farmer at risk for a farm 18.31 operation and shall equal $4, multiplied by the number of acres 18.32 of the farm operation, multiplied by the percentage of the risk 18.33 borne by that farmer for that farm operation. If total payments 18.34 for a farm to all farmers at risk for that farm would exceed 18.35 $5,600, the payment to each farmer at risk shall be prorated so 18.36 that the total payments to all farmers at risk for that farm do 19.1 not exceed $5,600. 19.2 Applications shall be based on information reported to the 19.3 farm service agency for crop year 1998 by December 31, 1998. 19.4 The applications shall include the social security number or 19.5 federal employer identification number or a producer number 19.6 assigned by the farm service agency for each farmer and the farm 19.7 service agency farm number from form 156EZ. The commissioner 19.8 shall prepare application forms for the payment and ensure that 19.9 they are available throughout the state. The commissioner shall 19.10 make payments by June 30, 1999, to each eligible farmer who 19.11 applies by May 31, 1999, or within 30 days of the application if 19.12 the application is received after May 31, 1999. In no case will 19.13 applications be accepted afterSeptemberJune 30,19992000. 19.14 Sec. 2. Laws 1999, chapter 112, section 1, subdivision 7, 19.15 is amended to read: 19.16 Subd. 7. [CERTIFICATION AND PAYMENT.] Any person eligible 19.17 for the refund under subdivisions 4 to 8 shall send the 19.18 commissioner a copy of the certification that the taxpayer 19.19 received from the county auditor. In no case will applications 19.20 be accepted afterNovemberJune 30,19992000. The commissioner 19.21 shall issue a refund by July 15, 1999, to each qualifying 19.22 taxpayer who applied by June 15, 1999, or within 30 days of 19.23 receipt of the application if received after June 15, 1999. 19.24 Sec. 3. Laws 1999, chapter 112, section 2, is amended to 19.25 read: 19.26 Sec. 2. [APPROPRIATION.] 19.27 (a) The amount necessary to fund the payments required 19.28 under section 1, subdivisions 2 and 7, is appropriated in fiscal 19.29yearyears 1999 and 2000 from the general fund to the 19.30 commissioner of revenue. This appropriation is available 19.31 untilJune 30December 31, 2000. 19.32 (b) $68,000 is appropriated in fiscal year 1999 to the 19.33 commissioner of revenue for distribution to counties for the 19.34 costs of administering section 1, subdivisions 4 to 8. This 19.35 appropriation is available until June 30, 2000. The 19.36 distribution to counties shall be based on the number of refunds 20.1 received under the provisions of section 1, subdivisions 4 to 8. 20.2 Sec. 4. [AGRICULTURAL ASSISTANCE IN 2000.] 20.3 Subdivision 1. [DEFINITIONS.] (a) The definitions in this 20.4 subdivision apply to this section. 20.5 (b) "Acre" means an acre of effective agricultural use land 20.6 within the state of Minnesota as reported to the Farm Service 20.7 Agency on form 156EZ. 20.8 (c) "Commissioner" means the commissioner of revenue. 20.9 (d) "Disaster county" means a county in Minnesota that: 20.10 (1) received a presidential major disaster declaration in 20.11 1999; or 20.12 (2) was named as a contiguous county under a presidential 20.13 major disaster declaration in 1999. 20.14 (e) "Effective agricultural use land" means land suitable 20.15 for growing an agricultural crop and excludes land enrolled in 20.16 the conservation reserve program established by Minnesota 20.17 Statutes, section 103F.515, or the water bank program 20.18 established by Minnesota Statutes, section 103F.601. 20.19 (f) "Farm" or "farm operation" means an agricultural 20.20 production operation located wholly or in part within a disaster 20.21 county that: 20.22 (1) has a unique farm number as reported on form 156EZ to 20.23 the Farm Service Agency and includes at least 40 acres of 20.24 effective agricultural use land; or 20.25 (2) has produced at least $10,000 in sales of unprocessed 20.26 livestock or unprocessed dairy products as reported on schedule 20.27 F or form 1065, 1120, or 1120S of the farmer's federal income 20.28 tax return for the taxable year beginning in either calendar 20.29 year 1998 or 1999. 20.30 (g) "Farm operator" means a person who is identified as the 20.31 operator of a farm on form 156EZ filed with the Farm Service 20.32 Agency, provided that if both spouses in a married couple are so 20.33 identified, only one will be deemed to be a farm operator for 20.34 purposes of this article. 20.35 (h) "Farm Service Agency" means the United States 20.36 Department of Agriculture, Farm Service Agency. 21.1 (i) "Farmer" or "farmer at risk" means a person who: 21.2 (1) produces an agricultural crop or livestock and is 21.3 reported to the Farm Service Agency as bearing a percentage of 21.4 the risk for the farm operation; or 21.5 (2) owns or resides on property homesteaded under Minnesota 21.6 Statutes, section 273.124, subdivision 1, paragraph (c), and 21.7 operates a livestock production facility. 21.8 (j) "Livestock" means cattle, hogs, poultry, and sheep. 21.9 (k) "Person" includes individuals, fiduciaries, estates, 21.10 trusts, partnerships, joint ventures, and corporations. 21.11 Subd. 2. [PAYMENT TO FARMERS.] (a) A farm operator may 21.12 apply on a separate form for each farm that the person operates 21.13 to the commissioner for payments as provided under this 21.14 subdivision. The payment must be made to each farmer at risk 21.15 for a farm operation and must equal $4, multiplied by the number 21.16 of acres of the farm operation, multiplied by the percentage of 21.17 the risk borne by that farmer for that farm operation. 21.18 (b) Applications must be based on information reported to 21.19 the Farm Service Agency for crop year 1999, by December 31, 21.20 1999, and must include the social security number or federal 21.21 employer identification number, or a producer number assigned by 21.22 the Farm Service Agency for each farmer and the Farm Service 21.23 Agency farm number from form 156EZ. The commissioner shall 21.24 prepare application forms for the payment and ensure that they 21.25 are available throughout the state. The commissioner shall make 21.26 payments by June 30, 2000, to each eligible farmer who applies 21.27 by May 31, 2000, or within 30 days of the application if the 21.28 application is received after May 31, 2000. In no case will 21.29 applications be accepted after September 30, 2000. 21.30 Subd. 3. [ALTERNATE QUALIFICATION.] (a) If an agricultural 21.31 production operation does not meet the definition of a farm 21.32 under subdivision 1 solely because: 21.33 (1) the farm operator had not filed a form 156EZ with the 21.34 Farm Service Agency; 21.35 (2) there was an error in the Farm Service Agency's 21.36 records; or 22.1 (3) an operator operates more than one farm and the acres 22.2 of effective agricultural use land of a farm is less than 40 22.3 acres, but the combined acres of effective agricultural use land 22.4 of all land operated by that operator is at least 40 acres, 22.5 the commissioner may allow the farm operator to apply for 22.6 payment under subdivision 2 after providing the information the 22.7 commissioner requires to determine the number of acres that 22.8 would be comparable to the effective agricultural use land 22.9 listed on form 156EZ. 22.10 (b) If the number of acres of effective agricultural use 22.11 land for crop year 1999 for a farm is greater than indicated in 22.12 the Farm Service Agency's records, the commissioner may allow a 22.13 farm operator to apply for payment on the greater acreage after 22.14 providing the information the commissioner requires. 22.15 (c) If a person who produced an agricultural crop or 22.16 livestock in 1999 and bore a portion of the risk for the farm 22.17 operation does not meet the definition of a farmer under 22.18 subdivision 1 solely because that information was not reported 22.19 to the Farm Service Agency or because there was an error in the 22.20 Farm Service Agency's records, the commissioner may allow the 22.21 farmer to be included on an application for payment under 22.22 subdivision 2 after the farmer provides the information the 22.23 commissioner requires to determine the farmer was at risk for 22.24 that farm. 22.25 Subd. 4. [LIMIT.] No person and no married couple may 22.26 receive a payment under subdivision 2 that exceeds $5,600. 22.27 Subd. 5. [APPLICATION OF OTHER LAWS.] The payments under 22.28 subdivision 2 are a "Minnesota tax law" for purposes of 22.29 Minnesota Statutes, section 270B.01, subdivision 8. 22.30 Subd. 6. [REMEDIES.] A farmer denied a payment under 22.31 subdivision 2 may appeal that denial under Minnesota Statutes, 22.32 section 289A.50, subdivision 7. 22.33 Subd. 7. [INTEREST.] Payments under subdivision 2 bear 22.34 interest at the rate specified in Minnesota Statutes, section 22.35 289A.55, subdivision 1, from the later of the payment dates 22.36 specified under subdivision 2 or 75 days after a complete 23.1 payment application was filed with the commissioner. 23.2 Subd. 8. [PENALTIES.] If the commissioner determines that 23.3 claims for payments under subdivision 2 are or were excessive 23.4 and were filed with fraudulent intent, the claim must be 23.5 disallowed in full. If the claim has been paid, the amount 23.6 disallowed must be recovered by assessment and collection under 23.7 Minnesota Statutes, chapter 289A. The assessment must be made 23.8 within two years after a check is cashed, but if cashing a check 23.9 constitutes theft under Minnesota Statutes, section 609.52, or 23.10 forgery under Minnesota Statutes, section 609.631, the 23.11 assessment may be made at any time. The assessment may be 23.12 appealed administratively and judicially. 23.13 Sec. 5. [APPROPRIATION.] 23.14 The amount necessary to fund the payments required under 23.15 section 4, subdivision 2, is appropriated in fiscal year 2000 23.16 from the general fund to the commissioner of revenue. This 23.17 appropriation is available until June 30, 2001. 23.18 EFFECTIVE DATE: Sections 1 to 5 are effective the day 23.19 following final enactment. 23.20 ARTICLE 4 23.21 INCOME AND FRANCHISE TAXES 23.22 Section 1. Minnesota Statutes 1998, section 289A.08, is 23.23 amended by adding a subdivision to read: 23.24 Subd. 16. [TAX REFUND OR RETURN PREPARERS.] (a) A "tax 23.25 refund or return preparer," as defined in section 289A.60, 23.26 subdivision 13, paragraph (g), who prepared more than 500 23.27 Minnesota individual income tax returns for the prior calendar 23.28 year must file all Minnesota individual income tax returns 23.29 prepared for the current calendar year by electronic means. 23.30 (b) For tax returns prepared for the tax year beginning in 23.31 2001, the "500" in paragraph (a) is reduced to 250. 23.32 (c) For tax returns prepared for tax years beginning after 23.33 December 31, 2001, the "500" in paragraph (a) is reduced to 100. 23.34 (d) Paragraph (a) does not apply to a return if the 23.35 taxpayer has indicated on the return that the taxpayer did not 23.36 want the return filed by electronic means. 24.1 EFFECTIVE DATE: This section is effective for tax returns 24.2 prepared for taxable years beginning after December 31, 1999. 24.3 Sec. 2. Minnesota Statutes 1998, section 289A.56, 24.4 subdivision 2, is amended to read: 24.5 Subd. 2. [CORPORATE FRANCHISE, MINING COMPANY, INDIVIDUAL 24.6 AND FIDUCIARY INCOME, AND ENTERTAINER TAX OVERPAYMENTS.] 24.7 Interest must be paid on an overpayment refunded or credited to 24.8 the taxpayer from the date of payment of the tax until the date 24.9 the refund is paid or credited. For purposes of this 24.10 subdivision, the prepayment of tax made by withholding of tax at 24.11 the source or payment of estimated tax before the due date is 24.12 considered paid on the last day prescribed by law for the 24.13 payment of the tax by the taxpayer. A return filed before the 24.14 due date is considered as filed on the due date. 24.15 When the amount of tax withheld at the source or paid as 24.16 estimated tax or allowable as other refundable credits, or 24.17 withheld from compensation of entertainers, exceeds the tax 24.18 shown on the original return by $10, the amount refunded bears 24.19 interest from 90 days, or, in the case of individual income 24.20 taxes, 30 days, after (1) the due date of the return of the 24.21 taxpayer, or (2) the date on which the original return is filed, 24.22 whichever is later, until the date the refund is paid to the 24.23 taxpayer. Where the amount to be refunded is less than $10, no 24.24 interest is paid. However, to the extent that the basis for the 24.25 refund is a net operating loss carryback, interest is computed 24.26 only from the end of the taxable year in which the loss occurs. 24.27 EFFECTIVE DATE: This section is effective for returns due 24.28 after December 31, 2000. 24.29 Sec. 3. Minnesota Statutes 1998, section 289A.60, 24.30 subdivision 1, is amended to read: 24.31 Subdivision 1. [PENALTY FOR FAILURE TO PAY TAX.] If a tax 24.32 other than a withholding or sales or use tax is not paid within 24.33 the time specified for payment, a penalty must be added to the 24.34 amount required to be shown as tax. The penalty is three 24.35 percent of the tax not paid on or before the date specified for 24.36 payment of the tax if the failure is for not more than 30 days, 25.1 with an additional penalty of three percent of the amount of tax 25.2 remaining unpaid during each additional 30 days or fraction of 25.3 30 days during which the failure continues, not exceeding 24 25.4 percent in the aggregate. 25.5 If an individual files a state individual income tax return 25.6 and pays all of the state individual income tax with the filing 25.7 of a return within six months of the date the return is due and 25.8 the amount paid by the due date of the return is at least 90 25.9 percent of the amount of tax due, as shown on the return, the 25.10 individual is presumed to have reasonable cause for the late 25.11 payment. 25.12 If a withholding or sales or use tax is not paid within the 25.13 time specified for payment, a penalty must be added to the 25.14 amount required to be shown as tax. The penalty is five percent 25.15 of the tax not paid on or before the date specified for payment 25.16 of the tax if the failure is for not more than 30 days, with an 25.17 additional penalty of five percent of the amount of tax 25.18 remaining unpaid during each additional 30 days or fraction of 25.19 30 days during which the failure continues, not exceeding 15 25.20 percent in the aggregate. 25.21 EFFECTIVE DATE: This section is effective for taxable 25.22 years beginning after December 31, 1999. 25.23 Sec. 4. Minnesota Statutes 1999 Supplement, section 25.24 290.01, subdivision 19b, is amended to read: 25.25 Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 25.26 individuals, estates, and trusts, there shall be subtracted from 25.27 federal taxable income: 25.28 (1) interest income on obligations of any authority, 25.29 commission, or instrumentality of the United States to the 25.30 extent includable in taxable income for federal income tax 25.31 purposes but exempt from state income tax under the laws of the 25.32 United States; 25.33 (2) if included in federal taxable income, the amount of 25.34 any overpayment of income tax to Minnesota or to any other 25.35 state, for any previous taxable year, whether the amount is 25.36 received as a refund or as a credit to another taxable year's 26.1 income tax liability; 26.2 (3) the amount paid to others, less the credit allowed 26.3 under section 290.0674, not to exceed $1,625 for each qualifying 26.4 child in grades kindergarten to 6 and $2,500 for each qualifying 26.5 child in grades 7 to 12, for tuition, textbooks, and 26.6 transportation of each qualifying child in attending an 26.7 elementary or secondary school situated in Minnesota, North 26.8 Dakota, South Dakota, Iowa, or Wisconsin, wherein a resident of 26.9 this state may legally fulfill the state's compulsory attendance 26.10 laws, which is not operated for profit, and which adheres to the 26.11 provisions of the Civil Rights Act of 1964 and chapter 363. For 26.12 the purposes of this clause, "tuition" includes fees or tuition 26.13 as defined in section 290.0674, subdivision 1, clause (1). As 26.14 used in this clause, "textbooks" includes books and other 26.15 instructional materials and equipment used in elementary and 26.16 secondary schools in teaching only those subjects legally and 26.17 commonly taught in public elementary and secondary schools in 26.18 this state. Equipment expenses qualifying for deduction 26.19 includes expenses as defined and limited in section 290.0674, 26.20 subdivision 1, clause (3). "Textbooks" does not include 26.21 instructional books and materials used in the teaching of 26.22 religious tenets, doctrines, or worship, the purpose of which is 26.23 to instill such tenets, doctrines, or worship, nor does it 26.24 include books or materials for, or transportation to, 26.25 extracurricular activities including sporting events, musical or 26.26 dramatic events, speech activities, driver's education, or 26.27 similar programs. For purposes of the subtraction provided by 26.28 this clause, "qualifying child" has the meaning given in section 26.29 32(c)(3) of the Internal Revenue Code; 26.30 (4) contributions made in taxable years beginning after 26.31 December 31, 1981, and before January 1, 1985, to a qualified 26.32 governmental pension plan, an individual retirement account, 26.33 simplified employee pension, or qualified plan covering a 26.34 self-employed person that were included in Minnesota gross 26.35 income in the taxable year for which the contributions were made 26.36 but were deducted or were not included in the computation of 27.1 federal adjusted gross income, less any amount allowed to be 27.2 subtracted as a distribution under this subdivision or a 27.3 predecessor provision in taxable years that began before January 27.4 1, 2000. This subtraction applies only for taxable years 27.5 beginning after December 31, 1999, and before January 1, 2001; 27.6 (5) income as provided under section 290.0802; 27.7 (6) the amount of unrecovered accelerated cost recovery 27.8 system deductions allowed under subdivision 19g; 27.9 (7) to the extent included in federal adjusted gross 27.10 income, income realized on disposition of property exempt from 27.11 tax under section 290.491; 27.12 (8) to the extent not deducted in determining federal 27.13 taxable income, the amount paid for health insurance of 27.14 self-employed individuals as determined under section 162(l) of 27.15 the Internal Revenue Code, except that the percent limit does 27.16 not apply. If the taxpayer deducted insurance payments under 27.17 section 213 of the Internal Revenue Code of 1986, the 27.18 subtraction under this clause must be reduced by the lesser of: 27.19 (i) the total itemized deductions allowed under section 27.20 63(d) of the Internal Revenue Code, less state, local, and 27.21 foreign income taxes deductible under section 164 of the 27.22 Internal Revenue Code and the standard deduction under section 27.23 63(c) of the Internal Revenue Code; or 27.24 (ii) the lesser of (A) the amount of insurance qualifying 27.25 as "medical care" under section 213(d) of the Internal Revenue 27.26 Code to the extent not deducted under section 162(1) of the 27.27 Internal Revenue Code or excluded from income or (B) the total 27.28 amount deductible for medical care under section 213(a); 27.29 (9) the exemption amount allowed under Laws 1995, chapter 27.30 255, article 3, section 2, subdivision 3; 27.31 (10) to the extent included in federal taxable income, 27.32 postservice benefits for youth community service under section 27.33 124D.42 for volunteer service under United States Code, title 27.34 42, section 5011(d), as amended; 27.35 (11) to the extent not deducted in determining federal 27.36 taxable income by an individual who does not itemize deductions 28.1 for federal income tax purposes for the taxable year, an amount 28.2 equal to 50 percent of the excess of charitable contributions 28.3 allowable as a deduction for the taxable year under section 28.4 170(a) of the Internal Revenue Code over $500;and28.5 (12) to the extent included in federal taxable income, 28.6 holocaust victims' settlement payments for any injury incurred 28.7 as a result of the holocaust, if received by an individual who 28.8 was persecuted for racial or religious reasons by Nazi Germany 28.9 or any other Axis regime or an heir of such a person.; 28.10 (13) an amount equal to $360 for each of the taxpayer's 28.11 personal exemptions, as defined in section 151 of the Internal 28.12 Revenue Code, and allowed on the taxpayer's federal tax return 28.13 for the tax year without regard to the phase-out under section 28.14 151(d)(3) of the Internal Revenue Code. For taxable years 28.15 beginning after December 31, 2000, the commissioner shall adjust 28.16 the subtraction amount by the percentage determined under 28.17 section 290.06, subdivision 2d, for the taxable year; and 28.18 (14) an amount equal to $360 for each of the taxpayer's 28.19 dependent exemptions, as defined in section 152 of the Internal 28.20 Revenue Code, and allowed on the taxpayer's federal tax return 28.21 for the tax year without regard to the phase-out under section 28.22 151(d)(3) of the Internal Revenue Code. For taxable years 28.23 beginning after December 31, 2000, the commissioner shall adjust 28.24 the subtraction amount by the percentage determined under 28.25 section 290.06, subdivision 2d, for the taxable year. The 28.26 subtraction in this clause is not allowed to taxpayers who claim 28.27 the credit in section 290.0676. 28.28 EFFECTIVE DATE: This section is effective for taxable 28.29 years beginning after December 31, 1999. 28.30 Sec. 5. Minnesota Statutes 1998, section 290.01, is 28.31 amended by adding a subdivision to read: 28.32 Subd. 33. [DOMICILE.] For corporations, "domicile" means 28.33 the principal place from which the trade or business of the 28.34 taxpayer is directed or managed. 28.35 EFFECTIVE DATE: This section is effective for taxable 28.36 years beginning after December 31, 1999. 29.1 Sec. 6. Minnesota Statutes 1998, section 290.0673, 29.2 subdivision 8, is amended to read: 29.3 Subd. 8. [EXPIRATION.] This section expires effective for 29.4 taxable years beginning after December 31,20012002. 29.5 Sec. 7. [290.0676] [CHILD TAX CREDIT.] 29.6 Subdivision 1. [CREDIT ALLOWED.] An individual is allowed 29.7 a credit against the tax imposed by this chapter equal to $20 29.8 for each dependent exemption as defined in section 152 of the 29.9 Internal Revenue Code, and allowed on the taxpayer's federal tax 29.10 return for the tax year. The credit is not allowed to an 29.11 individual who claims the subtraction in section 290.01, 29.12 subdivision 19b, clause (14). 29.13 For a nonresident or part-year resident, the credit 29.14 determined under this section must be allocated based on the 29.15 percentage calculated under section 290.06, subdivision 2c, 29.16 paragraph (e). 29.17 For taxable years beginning after December 31, 2000, the 29.18 commissioner shall adjust the credit amount by the percentage 29.19 determined under section 290.06, subdivision 2d, for the taxable 29.20 year. 29.21 Subd. 2. [CREDIT REFUNDABLE.] If the amount of credit 29.22 which the claimant is eligible to receive under this section 29.23 exceeds the claimant's tax liability under this chapter, the 29.24 commissioner shall refund the excess to the claimant. 29.25 EFFECTIVE DATE: This section is effective for taxable 29.26 years beginning after December 31, 1999. 29.27 Sec. 8. Minnesota Statutes 1999 Supplement, section 29.28 290.091, subdivision 2, is amended to read: 29.29 Subd. 2. [DEFINITIONS.] For purposes of the tax imposed by 29.30 this section, the following terms have the meanings given: 29.31 (a) "Alternative minimum taxable income" means the sum of 29.32 the following for the taxable year: 29.33 (1) the taxpayer's federal alternative minimum taxable 29.34 income as defined in section 55(b)(2) of the Internal Revenue 29.35 Code; 29.36 (2) the taxpayer's itemized deductions allowed in computing 30.1 federal alternative minimum taxable income, but excluding: 30.2 (i) the Minnesota charitable contribution deduction; 30.3 (ii) the medical expense deduction; 30.4 (iii) the casualty, theft, and disaster loss deduction; 30.5 (iv) the impairment-related work expenses of a disabled 30.6 person; and 30.7 (v) holocaust victims' settlement payments to the extent 30.8 allowed under section 290.01, subdivision 19b; 30.9 (3) for depletion allowances computed under section 613A(c) 30.10 of the Internal Revenue Code, with respect to each property (as 30.11 defined in section 614 of the Internal Revenue Code), to the 30.12 extent not included in federal alternative minimum taxable 30.13 income, the excess of the deduction for depletion allowable 30.14 under section 611 of the Internal Revenue Code for the taxable 30.15 year over the adjusted basis of the property at the end of the 30.16 taxable year (determined without regard to the depletion 30.17 deduction for the taxable year); 30.18 (4) to the extent not included in federal alternative 30.19 minimum taxable income, the amount of the tax preference for 30.20 intangible drilling cost under section 57(a)(2) of the Internal 30.21 Revenue Code determined without regard to subparagraph (E); and 30.22 (5) to the extent not included in federal alternative 30.23 minimum taxable income, the amount of interest income as 30.24 provided by section 290.01, subdivision 19a, clause (1); 30.25 less the sum of the amounts determined under the following: 30.26 (1) interest income as defined in section 290.01, 30.27 subdivision 19b, clause (1); 30.28 (2) an overpayment of state income tax as provided by 30.29 section 290.01, subdivision 19b, clause (2), to the extent 30.30 included in federal alternative minimum taxable income;and30.31 (3) the amount of investment interest paid or accrued 30.32 within the taxable year on indebtedness to the extent that the 30.33 amount does not exceed net investment income, as defined in 30.34 section 163(d)(4) of the Internal Revenue Code. Interest does 30.35 not include amounts deducted in computing federal adjusted gross 30.36 income; and 31.1 (4) amounts subtracted from federal taxable income as 31.2 provided by section 290.01, subdivision 19b, clauses (4), (6), 31.3 (13), and (14). 31.4 In the case of an estate or trust, alternative minimum 31.5 taxable income must be computed as provided in section 59(c) of 31.6 the Internal Revenue Code. 31.7 (b) "Investment interest" means investment interest as 31.8 defined in section 163(d)(3) of the Internal Revenue Code. 31.9 (c) "Tentative minimum tax" equals 6.5 percent of 31.10 alternative minimum taxable income after subtracting the 31.11 exemption amount determined under subdivision 3. 31.12 (d) "Regular tax" means the tax that would be imposed under 31.13 this chapter (without regard to this section and section 31.14 290.032), reduced by the sum of the nonrefundable credits 31.15 allowed under this chapter plus the credit allowed under section 31.16 290.0676. 31.17 (e) "Net minimum tax" means the minimum tax imposed by this 31.18 section. 31.19 (f) "Minnesota charitable contribution deduction" means a 31.20 charitable contribution deduction under section 170 of the 31.21 Internal Revenue Code to or for the use of an entity described 31.22 in section 290.21, subdivision 3, clauses (a) to (e). When the 31.23 federal deduction for charitable contributions is limited under 31.24 section 170(b) of the Internal Revenue Code, the allowable 31.25 contributions in the year of contribution are deemed to be first 31.26 contributions to entities described in section 290.21, 31.27 subdivision 3, clauses (a) to (e). 31.28 EFFECTIVE DATE: This section is effective for taxable 31.29 years beginning after December 31, 1999. 31.30 Sec. 9. Minnesota Statutes 1998, section 290.17, 31.31 subdivision 2, is amended to read: 31.32 Subd. 2. [INCOME NOT DERIVED FROM CONDUCT OF A TRADE OR 31.33 BUSINESS.] The income of a taxpayer subject to the allocation 31.34 rules that is not derived from the conduct of a trade or 31.35 business must be assigned in accordance with paragraphs (a) to 31.36 (f): 32.1 (a)(1) Subject to paragraphs (a)(2) and (a)(3), income from 32.2labor or personal or professional serviceswages as defined in 32.3 section 3401(a) and (f) of the Internal Revenue Code is assigned 32.4 to this state if, and to the extent that, thelabor or services32.5arework of the employee is performed within it; all other 32.6 income from such sources is treated as income from sources 32.7 without this state. 32.8 Severance pay shall be considered income from labor or 32.9 personal or professional services. 32.10 (2) In the case of an individual who is a nonresident of 32.11 Minnesota and who is an athlete or entertainer, income from 32.12 compensation for labor or personal services performed within 32.13 this state shall be determined in the following manner: 32.14 (i) The amount of income to be assigned to Minnesota for an 32.15 individual who is a nonresident salaried athletic team employee 32.16 shall be determined by using a fraction in which the denominator 32.17 contains the total number of days in which the individual is 32.18 under a duty to perform for the employer, and the numerator is 32.19 the total number of those days spent in Minnesota. For purposes 32.20 of this paragraph, off-season training activities, unless 32.21 conducted at the team's facilities as part of a team imposed 32.22 program, are not included in the total number of duty days. 32.23 Bonuses earned as a result of play during the regular season or 32.24 for participation in championship, play-off, or all-star games 32.25 must be allocated under the formula. Signing bonuses are not 32.26 subject to allocation under the formula if they are not 32.27 conditional on playing any games for the team, are payable 32.28 separately from any other compensation, and are nonrefundable; 32.29 and 32.30 (ii) The amount of income to be assigned to Minnesota for 32.31 an individual who is a nonresident, and who is an athlete or 32.32 entertainer not listed in clause (i), for that person's athletic 32.33 or entertainment performance in Minnesota shall be determined by 32.34 assigning to this state all income from performances or athletic 32.35 contests in this state. 32.36 (3) For purposes of this section, amounts received by a 33.1 nonresident as "retirement income" as defined in section (b)(1) 33.2 of the State Income Taxation of Pension Income Act, Public Law 33.3 Number 104-95, are not considered income derived from carrying 33.4 on a trade or business or from performing personal or 33.5 professional services in Minnesota, and are not taxable under 33.6 this chapter. 33.7 (b) Income or gains from tangible property located in this 33.8 state that is not employed in the business of the recipient of 33.9 the income or gains must be assigned to this state. 33.10 (c) Income or gains from intangible personal property not 33.11 employed in the business of the recipient of the income or gains 33.12 must be assigned to this state if the recipient of the income or 33.13 gains is a resident of this state or is a resident trust or 33.14 estate. 33.15 Gain on the sale of a partnership interest is allocable to 33.16 this state in the ratio of the original cost of partnership 33.17 tangible property in this state to the original cost of 33.18 partnership tangible property everywhere, determined at the time 33.19 of the sale. If more than 50 percent of the value of the 33.20 partnership's assets consists of intangibles, gain or loss from 33.21 the sale of the partnership interest is allocated to this state 33.22 in accordance with the sales factor of the partnership for its 33.23 first full tax period immediately preceding the tax period of 33.24 the partnership during which the partnership interest was sold. 33.25 Gain on the sale of goodwill or income from a covenant not 33.26 to compete that is connected with a business operating all or 33.27 partially in Minnesota is allocated to this state to the extent 33.28 that the income from the business in the year preceding the year 33.29 of sale was assignable to Minnesota under subdivision 3. 33.30 When an employer pays an employee for a covenant not to 33.31 compete, the income allocated to this state is in the ratio of 33.32 the employee's service in Minnesota in the calendar year 33.33 preceding leaving the employment of the employer over the total 33.34 services performed by the employee for the employer in that year. 33.35 (d) Income from winnings on Minnesota pari-mutuel betting 33.36 tickets, the Minnesota state lottery, and lawful gambling as 34.1 defined in section 349.12, subdivision 24, conducted within the 34.2 boundaries of the state of Minnesota shall be assigned to this 34.3 state. 34.4 (e) All items of gross income not covered in paragraphs (a) 34.5 to (d) and not part of the taxpayer's income from a trade or 34.6 business shall be assigned to the taxpayer's domicile. 34.7 (f) For the purposes of this section, working as an 34.8 employee shall not be considered to be conducting a trade or 34.9 business. 34.10 EFFECTIVE DATE: This section is effective for wages paid 34.11 after the date of final enactment of this act, except that to 34.12 the extent this section impacts an employer's requirement to 34.13 withhold Minnesota tax under Minnesota Statutes, section 290.92, 34.14 subdivision 4a, the requirement to withhold is effective for 34.15 wages paid after December 31, 2000. 34.16 Sec. 10. [CITY OF LUVERNE.] 34.17 Subdivision 1. [AUTHORIZATION.] The governing body of the 34.18 city of Luverne may designate between one and six areas of the 34.19 city as border city development zones. The total area of the 34.20 zones may not exceed 100 acres. 34.21 Subd. 2. [APPLICATION OF GENERAL LAW.] (a) The provisions 34.22 of Minnesota Statutes, sections 469.1731 to 469.1735, apply to 34.23 the border city development zones designated under this section. 34.24 The governing body of the city may exercise the powers granted 34.25 under Minnesota Statutes, sections 469.1731 to 469.1735, 34.26 including powers that apply outside of the zones. 34.27 (b) The allocation under subdivision 3 for purposes of 34.28 Minnesota Statutes, section 469.1735, subdivision 2, and the 34.29 necessary amount of the allocation is appropriated to the 34.30 commissioner of revenue. 34.31 Subd. 3. [ALLOCATION OF STATE TAX REDUCTIONS.] (a) The 34.32 cumulative total amount of tax reductions for all years of the 34.33 program under Minnesota Statutes, sections 469.1731 to 469.1735, 34.34 is limited to $183,000, and the maximum for any year is $61,000. 34.35 (b) This allocation may be used for tax reductions provided 34.36 in Minnesota Statutes, section 469.1732 or 469.1734, or for 35.1 reimbursements under Minnesota Statutes, section 469.1735, 35.2 subdivision 3, but only if the governing body of the city of 35.3 Luverne determines that the tax reduction or offset is necessary 35.4 to enable a business to expand within a city or to attract a 35.5 business to the city. 35.6 (c) The commissioner of revenue may waive the limit under 35.7 this subdivision using the same rules and standards provided in 35.8 Minnesota Statutes, section 469.169, subdivision 12, paragraph 35.9 (b). 35.10 EFFECTIVE DATE: This section is effective upon approval by 35.11 the governing body of the city of Luverne and compliance with 35.12 the requirements of Minnesota Statutes, section 645.021, 35.13 subdivision 3. 35.14 Sec. 11. [TAX INFORMATION SAMPLE DATA STUDY.] 35.15 (a) One of the goals of a reengineered income tax system is 35.16 to reduce the administrative burden for both taxpayers and tax 35.17 administrators. In order to reduce the cost of handling paper 35.18 returns and to explore electronic options for taxpayer filing of 35.19 tax data, the department of revenue will explore eliminating the 35.20 requirement of Minnesota Statutes, section 289A.08, subdivision 35.21 11, that the federal return be attached in filing a Minnesota 35.22 individual income tax return. This federal return information 35.23 is used for the purposes of ensuring the accurate calculation of 35.24 individuals' Minnesota income tax liabilities and for the 35.25 purposes of preparing the microdata samples under Minnesota 35.26 Statutes, section 270.0681. 35.27 (b) To ensure the continued reliability of income tax data 35.28 samples and to evaluate ways in which the quality of samples may 35.29 be improved, the commissioner shall study and evaluate 35.30 alternatives to requiring taxpayers to attach a copy of their 35.31 federal return when filing Minnesota state income tax. The 35.32 study must be prepared in consultation with the coordinating 35.33 committee established in Minnesota Statutes, section 270.0681, 35.34 subdivision 2. The study must: 35.35 (1) evaluate the quality of federal electronic data 35.36 compared to sample data prepared from returns filed with the 36.1 department; 36.2 (2) evaluate alternative sampling methodology, including 36.3 preselection of sampled returns, panel data, and other sampling 36.4 methods; and 36.5 (3) evaluate and test whether alternative methods can 36.6 (i) provide a data sample that is as accurate and reliable 36.7 as one prepared from federal returns that are filed with or 36.8 attached to Minnesota individual income tax returns; and 36.9 (ii) result in a data sample that will continue to be 36.10 available to staff of both the department of finance and the 36.11 legislature on the same basis as one prepared from returns 36.12 required to be attached to or filed with the Minnesota tax 36.13 returns. 36.14 (c) The commissioner of revenue shall report the findings 36.15 of the study to the house tax committee chair, the senate tax 36.16 committee chair, and the commissioner of finance. 36.17 (d) The commissioner of revenue shall prepare a bill for 36.18 introduction in the 2001 legislative session that eliminates, 36.19 for some or all taxpayers, the requirement that a copy of the 36.20 federal return be filed with the individual income tax return, 36.21 if the commissioner determines as a result of the study that: 36.22 (1) an alternative method would provide a data sample that 36.23 is as accurate and reliable as one prepared from federal returns 36.24 required to be filed with the Minnesota return; and 36.25 (2) the sample will continue to be available to the staff 36.26 of both the department of finance and the legislature on the 36.27 same basis as one prepared from returns required to be filed 36.28 with Minnesota tax returns. 36.29 EFFECTIVE DATE: This section is effective the day 36.30 following final enactment. 36.31 Sec. 12. [COMMISSIONER OF REVENUE; TEMPORARY POWERS.] 36.32 Subdivision 1. [APPLICABILITY.] This section gives the 36.33 commissioner of revenue certain temporary powers. These powers 36.34 apply only to taxes imposed under Minnesota Statutes, sections 36.35 290.032, 290.06, and 290.091 administered by the commissioner 36.36 under Minnesota Statutes, chapters 289A and 290. 37.1 Subd. 2. [PAYMENT OF TAXES.] The commissioner may 37.2 establish additional due dates, applicable to certain groups of 37.3 taxpayers, for the payment of taxes. Unless the commissioner 37.4 has the written consent of the taxpayer, the additional payment 37.5 dates must not require the taxpayer to pay the tax earlier than 37.6 the payment dates provided by statute or rule. The commissioner 37.7 may accept various forms of payment, including, but not limited 37.8 to, financial transaction cards and electronic funds transfer. 37.9 Subd. 3. [FILING OF RETURN.] The commissioner may 37.10 establish additional due dates, applicable to certain groups of 37.11 taxpayers, for the filing of tax returns. Unless the 37.12 commissioner has the written consent of the taxpayer, the return 37.13 due date must not be earlier than the due date provided by 37.14 statute or rule. In conducting pilot studies, the commissioner 37.15 may use tax return forms with varying formats, accept electronic 37.16 filed returns, and waive the taxpayer signature requirements. 37.17 Subd. 4. [AGREEMENTS.] The commissioner may enter written 37.18 agreements with taxpayers that provide for the payment of taxes 37.19 or the filing of returns at dates earlier than provided by 37.20 statute or rule. The commissioner and the taxpayer may also 37.21 agree in writing to other changes from the statutory or rule 37.22 requirements related to the administration of these taxes. If 37.23 the taxpayer agrees to pay taxes at a date earlier than that 37.24 provided by statute, the commissioner may negotiate payments to 37.25 the taxpayer to compensate in part or in full for the loss 37.26 incurred as a result of the accelerated payment. 37.27 Subd. 5. [PROCEDURE; APPROVAL.] Pilot studies proposed 37.28 under these authorities must be presented to the chairs of the 37.29 house of representatives tax committee and the senate committee 37.30 on taxes and to the chairs of the committees on state government 37.31 finance of the house of representatives and the senate. No 37.32 study may be undertaken without the approval of both tax 37.33 committee chairs. If either chair fails to respond within 15 37.34 days after the proposal is presented, that chair is considered 37.35 to have approved the study. If the study is approved, the 37.36 commissioner shall initially seek participation on a voluntary 38.1 basis from within the targeted taxpayer group. 38.2 Subd. 6. [EXPIRATION DATE.] This section expires June 30, 38.3 2002, and all pilot projects under this section must be 38.4 completed by June 30, 2002. 38.5 EFFECTIVE DATE: This section is effective the day 38.6 following final enactment. 38.7 ARTICLE 5 38.8 FEDERAL UPDATE 38.9 Section 1. Minnesota Statutes 1999 Supplement, section 38.10 289A.02, subdivision 7, is amended to read: 38.11 Subd. 7. [INTERNAL REVENUE CODE.] Unless specifically 38.12 defined otherwise, "Internal Revenue Code" means the Internal 38.13 Revenue Code of 1986, as amended through December 31,19981999. 38.14 Sec. 2. Minnesota Statutes 1999 Supplement, section 38.15 290.01, subdivision 19, is amended to read: 38.16 Subd. 19. [NET INCOME.] The term "net income" means the 38.17 federal taxable income, as defined in section 63 of the Internal 38.18 Revenue Code of 1986, as amended through the date named in this 38.19 subdivision, incorporating any elections made by the taxpayer in 38.20 accordance with the Internal Revenue Code in determining federal 38.21 taxable income for federal income tax purposes, and with the 38.22 modifications provided in subdivisions 19a to 19f. 38.23 In the case of a regulated investment company or a fund 38.24 thereof, as defined in section 851(a) or 851(g) of the Internal 38.25 Revenue Code, federal taxable income means investment company 38.26 taxable income as defined in section 852(b)(2) of the Internal 38.27 Revenue Code, except that: 38.28 (1) the exclusion of net capital gain provided in section 38.29 852(b)(2)(A) of the Internal Revenue Code does not apply; 38.30 (2) the deduction for dividends paid under section 38.31 852(b)(2)(D) of the Internal Revenue Code must be applied by 38.32 allowing a deduction for capital gain dividends and 38.33 exempt-interest dividends as defined in sections 852(b)(3)(C) 38.34 and 852(b)(5) of the Internal Revenue Code; and 38.35 (3) the deduction for dividends paid must also be applied 38.36 in the amount of any undistributed capital gains which the 39.1 regulated investment company elects to have treated as provided 39.2 in section 852(b)(3)(D) of the Internal Revenue Code. 39.3 The net income of a real estate investment trust as defined 39.4 and limited by section 856(a), (b), and (c) of the Internal 39.5 Revenue Code means the real estate investment trust taxable 39.6 income as defined in section 857(b)(2) of the Internal Revenue 39.7 Code. 39.8 The net income of a designated settlement fund as defined 39.9 in section 468B(d) of the Internal Revenue Code means the gross 39.10 income as defined in section 468B(b) of the Internal Revenue 39.11 Code. 39.12The Internal Revenue Code of 1986, as amended through39.13December 31, 1986, shall be in effect for taxable years39.14beginning after December 31, 1986. The provisions of sections39.1510104, 10202, 10203, 10204, 10206, 10212, 10221, 10222, 10223,39.1610226, 10227, 10228, 10611, 10631, 10632, and 10711 of the39.17Omnibus Budget Reconciliation Act of 1987, Public Law Number39.18100-203, the provisions of sections 1001, 1002, 1003, 1004,39.191005, 1006, 1008, 1009, 1010, 1011, 1011A, 1011B, 1012, 1013,39.201014, 1015, 1018, 2004, 3041, 4009, 6007, 6026, 6032, 6137,39.216277, and 6282 of the Technical and Miscellaneous Revenue Act of39.221988, Public Law Number 100-647, the provisions of sections39.237811, 7816, and 7831 of the Omnibus Budget Reconciliation Act of39.241989, Public Law Number 101-239, the provisions of sections39.251305, 1704(r), and 1704(e)(1) of the Small Business Job39.26Protection Act, Public Law Number 104-188, and the provisions of39.27sections 975 and 1604(d)(2) and (e) of the Taxpayer Relief Act39.28of 1997, Public Law Number 105-34, and the provisions of section39.294004 of the Omnibus Consolidated and Emergency Supplemental39.30Appropriations Act, 1999, Public Law Number 105-277 shall be39.31effective at the time they become effective for federal income39.32tax purposes.39.33The Internal Revenue Code of 1986, as amended through39.34December 31, 1987, shall be in effect for taxable years39.35beginning after December 31, 1987. The provisions of sections39.364001, 4002, 4011, 5021, 5041, 5053, 5075, 6003, 6008, 6011,40.16030, 6031, 6033, 6057, 6064, 6066, 6079, 6130, 6176, 6180,40.26182, 6280, and 6281 of the Technical and Miscellaneous Revenue40.3Act of 1988, Public Law Number 100-647, the provisions of40.4sections 7815 and 7821 of the Omnibus Budget Reconciliation Act40.5of 1989, Public Law Number 101-239, and the provisions of40.6section 11702 of the Revenue Reconciliation Act of 1990, Public40.7Law Number 101-508, shall become effective at the time they40.8become effective for federal tax purposes.40.9The Internal Revenue Code of 1986, as amended through40.10December 31, 1988, shall be in effect for taxable years40.11beginning after December 31, 1988. The provisions of sections40.127101, 7102, 7104, 7105, 7201, 7202, 7203, 7204, 7205, 7206,40.137207, 7210, 7211, 7301, 7302, 7303, 7304, 7601, 7621, 7622,40.147641, 7642, 7645, 7647, 7651, and 7652 of the Omnibus Budget40.15Reconciliation Act of 1989, Public Law Number 101-239, the40.16provision of section 1401 of the Financial Institutions Reform,40.17Recovery, and Enforcement Act of 1989, Public Law Number 101-73,40.18the provisions of sections 11701 and 11703 of the Revenue40.19Reconciliation Act of 1990, Public Law Number 101-508, and the40.20provisions of sections 1702(g) and 1704(f)(2)(A) and (B) of the40.21Small Business Job Protection Act, Public Law Number 104-188,40.22shall become effective at the time they become effective for40.23federal tax purposes.40.24The Internal Revenue Code of 1986, as amended through40.25December 31, 1989, shall be in effect for taxable years40.26beginning after December 31, 1989. The provisions of sections40.2711321, 11322, 11324, 11325, 11403, 11404, 11410, and 11521 of40.28the Revenue Reconciliation Act of 1990, Public Law Number40.29101-508, and the provisions of sections 13224 and 13261 of the40.30Omnibus Budget Reconciliation Act of 1993, Public Law Number40.31103-66, shall become effective at the time they become effective40.32for federal purposes.40.33The Internal Revenue Code of 1986, as amended through40.34December 31, 1990, shall be in effect for taxable years40.35beginning after December 31, 1990.40.36The provisions of section 13431 of the Omnibus Budget41.1Reconciliation Act of 1993, Public Law Number 103-66, shall41.2become effective at the time they became effective for federal41.3purposes.41.4The Internal Revenue Code of 1986, as amended through41.5December 31, 1991, shall be in effect for taxable years41.6beginning after December 31, 1991.41.7The provisions of sections 1936 and 1937 of the41.8Comprehensive National Energy Policy Act of 1992, Public Law41.9Number 102-486, the provisions of sections 13101, 13114, 13122,41.1013141, 13150, 13151, 13174, 13239, 13301, and 13442 of the41.11Omnibus Budget Reconciliation Act of 1993, Public Law Number41.12103-66, and the provisions of section 1604(a)(1), (2), and (3)41.13of the Taxpayer Relief Act of 1997, Public Law Number 105-34,41.14shall become effective at the time they become effective for41.15federal purposes.41.16The Internal Revenue Code of 1986, as amended through41.17December 31, 1992, shall be in effect for taxable years41.18beginning after December 31, 1992.41.19The provisions of sections 13116, 13121, 13206, 13210,41.2013222, 13223, 13231, 13232, 13233, 13239, 13262, and 13321 of41.21the Omnibus Budget Reconciliation Act of 1993, Public Law Number41.22103-66, the provisions of sections 1703(a), 1703(d), 1703(i),41.231703(l), and 1703(m) of the Small Business Job Protection Act,41.24Public Law Number 104-188, and the provision of section 1604(c)41.25of the Taxpayer Relief Act of 1997, Public Law Number 105-34,41.26shall become effective at the time they become effective for41.27federal purposes.41.28The Internal Revenue Code of 1986, as amended through41.29December 31, 1993, shall be in effect for taxable years41.30beginning after December 31, 1993.41.31The provision of section 741 of Legislation to Implement41.32Uruguay Round of General Agreement on Tariffs and Trade, Public41.33Law Number 103-465, the provisions of sections 1, 2, and 3, of41.34the Self-Employed Health Insurance Act of 1995, Public Law41.35Number 104-7, the provision of section 501(b)(2) of the Health41.36Insurance Portability and Accountability Act, Public Law Number42.1104-191, the provisions of sections 1604 and 1704(p)(1) and (2)42.2of the Small Business Job Protection Act, Public Law Number42.3104-188, and the provisions of sections 1011, 1211(b)(1), and42.41602(f) of the Taxpayer Relief Act of 1997, Public Law Number42.5105-34, shall become effective at the time they become effective42.6for federal purposes.42.7The Internal Revenue Code of 1986, as amended through42.8December 31, 1994, shall be in effect for taxable years42.9beginning after December 31, 1994.42.10The provisions of sections 1119(a), 1120, 1121, 1202(a),42.111444, 1449(b), 1602(a), 1610(a), 1613, and 1805 of the Small42.12Business Job Protection Act, Public Law Number 104-188, the42.13provision of section 511 of the Health Insurance Portability and42.14Accountability Act, Public Law Number 104-191, and the42.15provisions of sections 1174 and 1601(i)(2) of the Taxpayer42.16Relief Act of 1997, Public Law Number 105-34, shall become42.17effective at the time they become effective for federal purposes.42.18The Internal Revenue Code of 1986, as amended through March42.1922, 1996, is in effect for taxable years beginning after42.20December 31, 1995.42.21 The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 42.22 1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 42.23 1616, 1617, 1704(l), and 1704(m) of the Small Business Job 42.24 Protection Act, Public Law Number 104-188, the provisions of 42.25 Public Law Number 104-117, the provisions of sections 313(a) and 42.26 (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 1002, 42.27 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 1087, 42.28 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 1601(f)(5) 42.29 and (h), and 1604(d)(1) of the Taxpayer Relief Act of 1997, 42.30 Public Law Number 105-34, the provisions of section 6010 of the 42.31 Internal Revenue Service Restructuring and Reform Act of 1998, 42.32 Public Law Number 105-206, and the provisions of section 4003 of 42.33 the Omnibus Consolidated and Emergency Supplemental 42.34 Appropriations Act, 1999, Public Law Number 105-277, shall 42.35 become effective at the time they become effective for federal 42.36 purposes. 43.1 The Internal Revenue Code of 1986, as amended through 43.2 December 31, 1996, shall be in effect for taxable years 43.3 beginning after December 31, 1996. 43.4 The provisions of sections 202(a) and (b), 221(a), 225, 43.5 312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 43.6 (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 43.7 1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 43.8 1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 43.9 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 43.10 the provisions of sections 6004, 6005, 6012, 6013, 6015, 6016, 43.11 7002, and 7003 of the Internal Revenue Service Restructuring and 43.12 Reform Act of 1998, Public Law Number 105-206,andthe 43.13 provisions of section 3001 of the Omnibus Consolidated and 43.14 Emergency Supplemental Appropriations Act, 1999, Public Law 43.15 Number 105-277, and the provisions of section 3001 of the 43.16 Miscellaneous Trade and Technical Corrections Act of 1999, 43.17 Public Law Number 106-36, shall become effective at the time 43.18 they become effective for federal purposes. 43.19 The Internal Revenue Code of 1986, as amended through 43.20 December 31, 1997, shall be in effect for taxable years 43.21 beginning after December 31, 1997. 43.22 The provisions of sections 5002, 6009, 6011, and 7001 of 43.23 the Internal Revenue Service Restructuring and Reform Act of 43.24 1998, Public Law Number 105-206, the provisions of section 9010 43.25 of the Transportation Equity Act for the 21st Century, Public 43.26 Law Number 105-178, the provisions of sections 1004, 4002, and 43.27 5301 of the Omnibus Consolidation and Emergency Supplemental 43.28 Appropriations Act, 1999, Public Law Number 105-277,andthe 43.29 provision of section 303 of the Ricky Ray Hemophilia Relief Fund 43.30 Act of 1998, Public Law Number 105-369, and the provisions of 43.31 sections 532, 534, 536, 537, and 538 of the Ticket to Work and 43.32 Work Incentives Improvement Act of 1999, Public Law Number 43.33 106-170, shall become effective at the time they become 43.34 effective for federal purposes. 43.35 The Internal Revenue Code of 1986, as amended through 43.36 December 31, 1998, shall be in effect for taxable years 44.1 beginning after December 31, 1998. 44.2 The Internal Revenue Code of 1986, as amended through 44.3 December 31, 1999, shall be in effect for taxable years 44.4 beginning after December 31, 1999. 44.5 Except as otherwise provided, references to the Internal 44.6 Revenue Code in subdivisions 19a to 19g mean the code in effect 44.7 for purposes of determining net income for the applicable year. 44.8 Sec. 3. Minnesota Statutes 1999 Supplement, section 44.9 290.01, subdivision 31, is amended to read: 44.10 Subd. 31. [INTERNAL REVENUE CODE.] Unless specifically 44.11 defined otherwise, "Internal Revenue Code" means the Internal 44.12 Revenue Code of 1986, as amended through December 31,19981999. 44.13 Sec. 4. Minnesota Statutes 1999 Supplement, section 44.14 290A.03, subdivision 15, is amended to read: 44.15 Subd. 15. [INTERNAL REVENUE CODE.] "Internal Revenue Code" 44.16 means the Internal Revenue Code of 1986, as amended through 44.17 December 31,19981999. 44.18 Sec. 5. Minnesota Statutes 1999 Supplement, section 44.19 291.005, subdivision 1, is amended to read: 44.20 Subdivision 1. Unless the context otherwise clearly 44.21 requires, the following terms used in this chapter shall have 44.22 the following meanings: 44.23 (1) "Federal gross estate" means the gross estate of a 44.24 decedent as valued and otherwise determined for federal estate 44.25 tax purposes by federal taxing authorities pursuant to the 44.26 provisions of the Internal Revenue Code. 44.27 (2) "Minnesota gross estate" means the federal gross estate 44.28 of a decedent after (a) excluding therefrom any property 44.29 included therein which has its situs outside Minnesota and (b) 44.30 including therein any property omitted from the federal gross 44.31 estate which is includable therein, has its situs in Minnesota, 44.32 and was not disclosed to federal taxing authorities. 44.33 (3) "Personal representative" means the executor, 44.34 administrator or other person appointed by the court to 44.35 administer and dispose of the property of the decedent. If 44.36 there is no executor, administrator or other person appointed, 45.1 qualified, and acting within this state, then any person in 45.2 actual or constructive possession of any property having a situs 45.3 in this state which is included in the federal gross estate of 45.4 the decedent shall be deemed to be a personal representative to 45.5 the extent of the property and the Minnesota estate tax due with 45.6 respect to the property. 45.7 (4) "Resident decedent" means an individual whose domicile 45.8 at the time of death was in Minnesota. 45.9 (5) "Nonresident decedent" means an individual whose 45.10 domicile at the time of death was not in Minnesota. 45.11 (6) "Situs of property" means, with respect to real 45.12 property, the state or country in which it is located; with 45.13 respect to tangible personal property, the state or country in 45.14 which it was normally kept or located at the time of the 45.15 decedent's death; and with respect to intangible personal 45.16 property, the state or country in which the decedent was 45.17 domiciled at death. 45.18 (7) "Commissioner" means the commissioner of revenue or any 45.19 person to whom the commissioner has delegated functions under 45.20 this chapter. 45.21 (8) "Internal Revenue Code" means the United States 45.22 Internal Revenue Code of 1986, as amended through December 31, 45.2319981999. 45.24 EFFECTIVE DATE: Sections 1, 2, 4, and 5 are effective the 45.25 day following final enactment, except that the striking of 45.26 language in section 2 is effective for tax years beginning after 45.27 December 31, 1999. Section 3 is effective for tax years 45.28 beginning after December 31, 1999. 45.29 ARTICLE 6 45.30 MOTOR VEHICLE REGISTRATION TAX 45.31 Section 1. Minnesota Statutes 1998, section 168.013, 45.32 subdivision 1a, is amended to read: 45.33 Subd. 1a. [PASSENGER AUTOMOBILE; HEARSE.] (a) On passenger 45.34 automobilesas defined in section 168.011, subdivision 7,and 45.35 hearses, except as otherwise provided, the taxshall beis $10 45.36 plus an additional tax equal to1.251.2 percent of the base 46.1 value. 46.2 (b) Subject to the classification provisionshereinin this 46.3 subdivision, "base value" means the manufacturer's suggested 46.4 retail price of the vehicle, including destination charge, using 46.5 list price information published by the manufacturer or 46.6 determined by the registrar if no suggested retail price exists,46.7and shall. Base value does not include the cost of each 46.8 accessory or item of optional equipment separately added to the 46.9 vehicle and the suggested retail price. 46.10 (c) If the manufacturer's list price information contains a 46.11 single vehicle identification number followed by various 46.12 descriptions and suggested retail prices, the registrar shall 46.13 select from those listings only the lowest price for determining 46.14 base value. 46.15 (d) If unable to determine the base value because the 46.16 vehicle is specially constructed, orfordue to any other 46.17 reason, the registrar may establishsuchthe value upon the cost 46.18 price to the purchaser or owner as evidenced by a certificate of 46.19 cost but not including Minnesota sales or use tax or any local 46.20 sales or other local tax. 46.21 (e) The registrar shall classify every vehicle in its 46.22 proper base value class as follows: 46.23 FROM TO 46.24 $ 0 $199.99 46.25 200 399.99 46.26 and thereafter, consisting of a series of classes successively 46.27 set in brackets having a spread of $200consisting of such, with 46.28 that number of classes aswillrequired to permit classification 46.29 of all vehicles. 46.30 (f) The base value for purposes of this sectionshall beis 46.31 the middle point between the extremes of its class. 46.32 (g) The registrar shall establish the base value, when new, 46.33 of every passenger automobile and hearseregistered prior to the46.34effective date of Extra Session Laws 1971, chapter 31, using 46.35 list price information published by the manufacturer or any 46.36 nationally recognized firm or association compiling such data 47.1 for the automotive industry. If unable to ascertain the base 47.2 value of any registered vehicle inthe foregoingthis manner, 47.3 the registrar may use any other available source or method. The 47.4 tax on all previously registered vehiclesshallmust be computed 47.5 upon the base value thus determined taking into account the 47.6 depreciation provisions of paragraph (h). 47.7 (h)Except as provided in paragraph (i),The annual 47.8 additional tax computed upon the base valueas provided herein47.9 of a passenger automobile or hearse, during the firstand second47.10yearsyear of vehicle lifeshall beis computed upon 100 percent 47.11 of the base value; for thethird and fourth yearssecond year, 47.12 90 percent ofsuchthat value; for thefifth and sixth years, 7547.13 third year, 85 percent of that value; for the fourth year, 75 47.14 percent ofsuchthat value; for theseventhfifth year,6065 47.15 percent ofsuchthat value; for the sixth year, 55 percent of 47.16 that value; for theeighthseventh year,4045 percent of 47.17suchthat value; for thenintheighth year,3035 percent of 47.18suchthat value; for the ninth year, 25 percent of that value; 47.19 for the tenth year, ten percent ofsuchthat value; for the 11th 47.20 and each succeeding year, the sum of$25$20. 47.21In no event shallThe annual additional tax must not be 47.22 less than$25$20. 47.23(i) The annual additional tax under paragraph (h) on a47.24motor vehicle on which the first annual tax was paid before47.25January 1, 1990, must not exceed the tax that was paid on that47.26vehicle the year before.47.27 Sec. 2. [TRANSFER.] 47.28 $75,700,000 is appropriated from the general fund to the 47.29 commissioner of finance for transfer to the highway user tax 47.30 distribution fund. 47.31 EFFECTIVE DATE: Section 1 is effective July 1, 2000, for 47.32 registrations due on or after that date. Section 2 is effective 47.33 July 1, 2000. Section 1 is repealed July 1, 2001, if an 47.34 amendment proposed to the Minnesota Constitution dedicating at 47.35 least 15 percent of the motor vehicle sales tax proceeds to the 47.36 highway user tax distribution fund is not adopted. 48.1 ARTICLE 7 48.2 SALES TAX 48.3 Section 1. Minnesota Statutes 1998, section 297A.01, 48.4 subdivision 3, is amended to read: 48.5 Subd. 3. A "sale" and a "purchase" includes, but is not 48.6 limited to, each of the following transactions: 48.7 (a) Any transfer of title or possession, or both, of 48.8 tangible personal property, whether absolutely or conditionally, 48.9 and the leasing of or the granting of a license to use or 48.10 consume tangible personal property other than manufactured homes 48.11 used for residential purposes for a continuous period of 30 days 48.12 or more, for a consideration in money or by exchange or barter; 48.13 (b) The production, fabrication, printing, or processing of 48.14 tangible personal property for a consideration for consumers who 48.15 furnish either directly or indirectly the materials used in the 48.16 production, fabrication, printing, or processing; 48.17 (c) The furnishing, preparing, or serving for a 48.18 consideration of food, meals, or drinks. "Sale" or "purchase" 48.19 does not include: 48.20 (1) meals or drinks served to patients, inmates, or persons 48.21 residing at hospitals, sanitariums, nursing homes, senior 48.22 citizens homes, and correctional, detention, and detoxification 48.23 facilities; 48.24 (2) meals or drinks purchased for and served exclusively to 48.25 individuals who are 60 years of age or over and their spouses or 48.26 to the handicapped and their spouses by governmental agencies, 48.27 nonprofit organizations, agencies, or churches or pursuant to 48.28 any program funded in whole or part through 42 USCA sections 48.29 3001 through 3045, wherever delivered, prepared or served; or 48.30 (3) meals and lunches served at public and private schools, 48.31 universities, or colleges. 48.32 Notwithstanding section 297A.25, subdivision 2, taxable food or 48.33 meals include, but are not limited to, the following: 48.34 (i) food or drinks sold by the retailer for immediate 48.35 consumption on the retailer's premises. Food and drinks sold 48.36 within a building or grounds which require an admission charge 49.1 for entrance are presumed to be sold for consumption on the 49.2 premises; 49.3 (ii) food or drinks prepared by the retailer for immediate 49.4 consumption either on or off the retailer's premises. For 49.5 purposes of this subdivision, "food or drinks prepared for 49.6 immediate consumption" includes any food product upon which an 49.7 act of preparation including, but not limited to, cooking, 49.8 mixing, sandwich making, blending, heating, or pouring has been 49.9 performed by the retailer so the food product may be immediately 49.10 consumed by the purchaser; 49.11 (iii) ice cream, ice milk, frozen yogurt products, or 49.12 frozen novelties sold in single or individual servings including 49.13 cones, sundaes, and snow cones. For purposes of this 49.14 subdivision, "single or individual servings" does not include 49.15 products when sold in bulk containers or bulk packaging; 49.16 (iv) soft drinks and other beverages including all 49.17 carbonated and noncarbonated beverages or drinks sold in liquid 49.18 form except beverages or drinks which contain milk or milk 49.19 products, beverages or drinks containing 15 or more percent 49.20 fruit juice, and noncarbonated and noneffervescent bottled water 49.21 sold in individual containers of one-half gallon or more in 49.22 size; 49.23 (v) gum, candy, and candy products, except when sold for 49.24 fundraising purposes by a nonprofit organization that provides 49.25 educational and social activities primarily for young people 18 49.26 years of age and under; 49.27 (vi) ice; 49.28 (vii) all food sold from vending machines, except: 49.29 (A) beverages or drinks which contain milk or milk 49.30 products; 49.31 (B) beverages or drinks which contain 15 or more percent 49.32 fruit juice; 49.33 (C) fruit and fruit products; 49.34 (D) vegetables; 49.35 (E) granola bars, breakfast bars, energy bars, and similar 49.36 items; and 50.1 (F) yogurt and pudding; 50.2 (viii) all food for immediate consumption sold from 50.3 concession stands and vehicles; 50.4 (ix) party trays; 50.5 (x) all meals and single servings of packaged snack food 50.6 sold in restaurants and bars; and 50.7 (xi) bakery products: 50.8 (A) prepared by the retailer for consumption on the 50.9 retailer's premises; 50.10 (B) sold at a place that charges admission; 50.11 (C) sold from vending machines; or 50.12 (D) sold in single or individual servings from concession 50.13 stands, vehicles, bars, and restaurants. For purposes of this 50.14 subdivision, "single or individual servings" does not include 50.15 products when sold in bulk containers or bulk packaging. 50.16 For purposes of this subdivision, "premises" means the 50.17 total space and facilities, including buildings, grounds, and 50.18 parking lots that are made available or that are available for 50.19 use by the retailer or customer for the purpose of sale or 50.20 consumption of prepared food and drinks. The premises of a 50.21 caterer is the place where the catered food or drinks are 50.22 served; 50.23 (d) The granting of the privilege of admission to places of 50.24 amusement, recreational areas, or athletic events, except a 50.25 world championship football game sponsored by the national 50.26 football league, and the privilege of having access to and the 50.27 use of amusement devices, tanning facilities, reducing salons, 50.28 steam baths, turkish baths, health clubs, and spas or athletic 50.29 facilities; 50.30 (e) The furnishing for a consideration of lodging and 50.31 related services by a hotel, rooming house, tourist court, motel 50.32 or trailer camp and of the granting of any similar license to 50.33 use real property other than the renting or leasing thereof for 50.34 a continuous period of 30 days or more; 50.35 (f) The furnishing for a consideration of electricity, gas, 50.36 water, or steam for use or consumption within this state, or 51.1 local exchange telephone service, intrastate toll service, and 51.2 interstate toll service, if that service originates from and is 51.3 charged to a telephone located in this state. Telephone service 51.4 does not include services purchased with prepaid telephone 51.5 calling cards. Telephone service includes paging services and 51.6 private communication service, as defined in United States Code, 51.7 title 26, section 4252(d), as amended through December 31, 1991, 51.8 except for private communication service purchased by an agent 51.9 acting on behalf of the state lottery. The furnishing for a 51.10 consideration of access to telephone services by a hotel to its 51.11 guests is a sale under this clause. Sales by municipal 51.12 corporations in a proprietary capacity are included in the 51.13 provisions of this clause. The furnishing of water and sewer 51.14 services for residential use shall not be considered a sale. 51.15 The sale of natural gas to be used as a fuel in vehicles 51.16 propelled by natural gas shall not be considered a sale for the 51.17 purposes of this section; 51.18 (g) The furnishing for a consideration of cable television 51.19 services, including charges for basic service, charges for 51.20 premium service, and any other charges for any other 51.21 pay-per-view, monthly, or similar television services; 51.22 (h) The furnishing for a consideration of parking services, 51.23 whether on a contractual, hourly, or other periodic basis, 51.24 except for parking at a meter; 51.25 (i) The furnishing for a consideration of services listed 51.26 in this paragraph: 51.27(i)(1) laundry and dry cleaning services including 51.28 cleaning, pressing, repairing, altering, and storing clothes, 51.29 linen services and supply, cleaning and blocking hats, and 51.30 carpet, drapery, upholstery, and industrial cleaning. Laundry 51.31 and dry cleaning services do not include services provided by 51.32 coin operated facilities operated by the customer; 51.33(ii)(2) motor vehicle washing, waxing, and cleaning 51.34 services, including services provided by coin-operated 51.35 facilities operated by the customer, and rustproofing, 51.36 undercoating, and towing of motor vehicles; 52.1(iii)(3) building and residential cleaning, maintenance, 52.2 and disinfecting and exterminating services; 52.3(iv)(4) detective services, security services, burglar, 52.4 fire alarm, and armored car services; but not including services 52.5 performed within the jurisdiction they serve by off-duty 52.6 licensed peace officers as defined in section 626.84, 52.7 subdivision 1, or services provided by a nonprofit organization 52.8 for monitoring and electronic surveillance of persons placed on 52.9 in-home detention pursuant to court order or under the direction 52.10 of the Minnesota department of corrections; 52.11(v)(5) pet grooming services; 52.12(vi)(6) lawn care, fertilizing, mowing, spraying and 52.13 sprigging services; garden planting and maintenance; tree, bush, 52.14 and shrub pruning, bracing, spraying, and surgery; indoor plant 52.15 care; tree, bush, shrub and stump removal; and tree trimming for 52.16 public utility lines. Services performed under a construction 52.17 contract for the installation of shrubbery, plants, sod, trees, 52.18 bushes, and similar items are not taxable; 52.19(vii)(7) massages, except when provided by a licensed 52.20 health care facility or professional or upon written referral 52.21 from a licensed health care facility or professional for 52.22 treatment of illness, injury, or disease; and 52.23(viii)(8) the furnishing for consideration of lodging, 52.24 board and care services for animals in kennels and other similar 52.25 arrangements, but excluding veterinary and horse boarding 52.26 services. 52.27 The services listed in this paragraph are taxable under section 52.28 297A.02 if the service is performed wholly within Minnesota or 52.29 if the service is performed partly within and partly without 52.30 Minnesota and the greater proportion of the service is performed 52.31 in Minnesota, based on the cost of performance. In applying the 52.32 provisions of this chapter, the terms "tangible personal 52.33 property" and "sales at retail" include taxable services and the 52.34 provision of taxable services, unless specifically provided 52.35 otherwise. Services performed by an employee for an employer 52.36 are not taxable under this paragraph. Services performed by a 53.1 partnership or association for another partnership or 53.2 association are not taxable under this paragraph if one of the 53.3 entities owns or controls more than 80 percent of the voting 53.4 power of the equity interest in the other entity. Services 53.5 performed between members of an affiliated group of corporations 53.6 are not taxable. For purposes of this section, "affiliated 53.7 group of corporations" includes those entities that would be 53.8 classified as a member of an affiliated group under United 53.9 States Code, title 26, section 1504, as amended through December 53.10 31, 1987, and who are eligible to file a consolidated tax return 53.11 for federal income tax purposes; 53.12 (j) A "sale" and a "purchase" includes the transfer of 53.13 computer software, meaning information and directions that 53.14 dictate the function performed by data processing equipment. A 53.15 "sale" and a "purchase" does not include the design, 53.16 development, writing, translation, fabrication, lease, or 53.17 transfer for a consideration of title or possession of a custom 53.18 computer program; and 53.19 (k) The granting of membership in a club, association, or 53.20 other organization if: 53.21 (1) the club, association, or other organization makes 53.22 available for the use of its members sports and athletic 53.23 facilities (without regard to whether a separate charge is 53.24 assessed for use of the facilities); and 53.25 (2) use of the sports and athletic facilities is not made 53.26 available to the general public on the same basis as it is made 53.27 available to members. 53.28 Granting of membership includes both one-time initiation fees 53.29 and periodic membership dues. Sports and athletic facilities 53.30 include golf courses, tennis, racquetball, handball and squash 53.31 courts, basketball and volleyball facilities, running tracks, 53.32 exercise equipment, swimming pools, and other similar athletic 53.33 or sports facilities. The provisions of this paragraph do not 53.34 apply to camps or other recreation facilities owned and operated 53.35 by an exempt organization under section 501(c)(3) of the 53.36 Internal Revenue Code of 1986, as amended through December 31, 54.1 1992, for educational and social activities for young people 54.2 primarily age 18 and under. 54.3 EFFECTIVE DATE: This section is effective for sales after 54.4 June 30, 2000. 54.5 Sec. 2. Minnesota Statutes 1998, section 297A.01, 54.6 subdivision 15, is amended to read: 54.7 Subd. 15. "Farm machinery" means new or used machinery, 54.8 equipment, implements, accessories, and contrivances used 54.9 directly and principally in the production for sale, but not 54.10 including the processing, of livestock, dairy animals, dairy 54.11 products, poultry and poultry products, fruits, vegetables, 54.12 trees, shrubs, forage, grains and bees and apiary products. 54.13 "Farm machinery" includes: 54.14 (1) machinery for the preparation, seeding or cultivation 54.15 of soil for growing agricultural crops and sod, harvesting and 54.16 threshing of agricultural products, harvesting or mowing of sod, 54.17 and certain machinery for dairy, livestock and poultry farms; 54.18 (2) barn cleaners, milking systems, grain dryers, automatic 54.19 feeding systems and similar installations, whether or not the 54.20 equipment is installed by the seller and becomes part of the 54.21 real property; 54.22 (3) irrigation equipment sold for exclusively agricultural 54.23 use, including pumps, pipe fittings, valves, sprinklers and 54.24 other equipment necessary to the operation of an irrigation 54.25 system when sold as part of an irrigation system, whether or not 54.26 the equipment is installed by the seller and becomes part of the 54.27 real property; 54.28 (4) logging equipment, including chain saws used for 54.29 commercial logging; 54.30 (5) fencing used for the containment of farmed cervidae, as 54.31 defined in section 17.451, subdivision 2; 54.32 (6) primary and backup generator units used to generate 54.33 electricity for the purpose of operating farm machinery, as 54.34 defined in this subdivision, or providing light or space heating 54.35 necessary for the production of livestock, dairy animals, dairy 54.36 products, or poultry and poultry products; and 55.1 (7) aquaculture production equipment as defined in 55.2 subdivision 19. 55.3 Repair or replacement parts for farm machinery shall not be 55.4 included in the definition of farm machinery. 55.5 Tools, shop equipment, grain bins, feed bunks, fencing 55.6 material except fencing material covered by clause (5), 55.7 communication equipment and other farm supplies shall not be 55.8 considered to be farm machinery. "Farm machinery" does not 55.9 include motor vehicles taxed under chapter 297B, snowmobiles, 55.10 snow blowers, lawn mowers except those used in the production of 55.11 sod for sale, garden-type tractors or garden tillers and the 55.12 repair and replacement parts for those vehicles and machines. 55.13 EFFECTIVE DATE: This section is effective for sales and 55.14 purchases occurring after June 30, 2000. 55.15 Sec. 3. Minnesota Statutes 1998, section 297A.15, is 55.16 amended by adding a subdivision to read: 55.17 Subd. 8. [REFUND; APPROPRIATION; COMMUTER RAIL FUEL.] If 55.18 fuel described in section 297A.25, subdivision 7, clause (6), is 55.19 purchased by the operator of the commuter rail system, a refund 55.20 equal to the taxes paid on the fuel must be paid to the operator 55.21 of the commuter rail system. The tax must be imposed and 55.22 collected as if the sales were taxable and the rate under 55.23 section 297A.02, subdivision 1, applied. An application for 55.24 refund must be submitted by the operator of the commuter rail 55.25 system and must include sufficient information to permit the 55.26 commissioner to verify the sales taxes paid. The amount 55.27 required to make the refunds is annually appropriated to the 55.28 commissioner. Interest must be paid on the refund at the rate 55.29 in section 270.76 from 60 days after the date the refund claim 55.30 is filed with the commissioner. 55.31 EFFECTIVE DATE: This section is effective for purchases 55.32 after June 30, 2000. 55.33 Sec. 4. Minnesota Statutes 1998, section 297A.25, 55.34 subdivision 5, is amended to read: 55.35 Subd. 5. [OUTSTATE TRANSPORT OR DELIVERY.] The gross 55.36 receipts from the following sales of, and storage, use, or 56.1 consumption of, tangible personal property are exempt: 56.2 (1) property which, without intermediate use, is shipped or 56.3 transported outside Minnesota by the purchaser and thereafter 56.4 used in a trade or business or is stored, processed, fabricated 56.5 or manufactured into, attached to or incorporated into other 56.6 tangible personal property transported or shipped outside 56.7 Minnesota and thereafter used in a trade or business outside 56.8 Minnesota, and which is not thereafter returned to a point 56.9 within Minnesota, except in the course of interstate commerce 56.10 (storage shall not constitute intermediate use); provided that 56.11 the property is not subject to tax in that state or country to 56.12 which it is transported for storage or use and provided further 56.13 that sales of tangible personal property to be used in other 56.14 states or countries as part of a maintenance contract shall be 56.15 specifically exempt;or56.16 (2) property which the seller delivers to a common carrier 56.17 for delivery outside Minnesota, places in the United States mail 56.18 or parcel post directed to the purchaser outside Minnesota, or 56.19 delivers to the purchaser outside Minnesota by means of the 56.20 seller's own delivery vehicles, and which is not thereafter 56.21 returned to a point within Minnesota, except in the course of 56.22 interstate commerce; or 56.23 (3) aircraft, as defined in section 360.511 and approved by 56.24 the Federal Aviation Administration, and which the seller 56.25 delivers to a purchaser outside Minnesota or which, without 56.26 intermediate use, is shipped or transported outside Minnesota by 56.27 the purchaser, but only if the purchaser is not a resident of 56.28 Minnesota and provided that the aircraft is not thereafter 56.29 returned to a point within Minnesota, except in the course of 56.30 interstate commerce or isolated and occasional use and will be 56.31 registered in another state or country upon its removal from 56.32 Minnesota; this exemption applies even if the purchaser takes 56.33 possession of the aircraft in Minnesota and uses the aircraft in 56.34 the state exclusively for training purposes for a period not to 56.35 exceed ten days prior to removing the aircraft from this state. 56.36 EFFECTIVE DATE: This section is effective for purchases 57.1 made after the date of final enactment. 57.2 Sec. 5. Minnesota Statutes 1998, section 297A.25, 57.3 subdivision 7, is amended to read: 57.4 Subd. 7. [PETROLEUM PRODUCTS.] The gross receipts from the 57.5 sale of and storage, use or consumption of the following 57.6 petroleum products are exempt: 57.7 (1) products upon which a tax has been imposed and paid 57.8 under the provisions of chapter 296A, and no refund has been or 57.9 will be allowed because the buyer used the fuel for nonhighway 57.10 use; 57.11 (2) products which are used in the improvement of 57.12 agricultural land by constructing, maintaining, and repairing 57.13 drainage ditches, tile drainage systems, grass waterways, water 57.14 impoundment, and other erosion control structures; 57.15 (3) products purchased by a transit system receiving 57.16 financial assistance under section 174.24 or 473.384; 57.17 (4) products used in a passenger snowmobile, as defined in 57.18 section 296A.01, subdivision 39, for off-highway business use as 57.19 part of the operations of a resort as provided under section 57.20 296A.16, subdivision 2, clause (2);or57.21 (5) products purchased by a state or a political 57.22 subdivision of a state for use in motor vehicles exempt from 57.23 registration under section 168.012, subdivision 1, paragraph 57.24 (b); or 57.25 (6) products purchased for use as fuel for a commuter rail 57.26 system operating under sections 174.80 to 174.90, provided that 57.27 the tax must be paid on these purchases and a refund of the tax 57.28 applied for as provided in section 297A.15, subdivision 8. 57.29 EFFECTIVE DATE: This section is effective for purchases 57.30 after June 30, 2000. 57.31 Sec. 6. Minnesota Statutes 1999 Supplement, section 57.32 297A.25, subdivision 9, is amended to read: 57.33 Subd. 9. [MATERIALS CONSUMED IN PRODUCTION.] The gross 57.34 receipts from the sale of and the storage, use, or consumption 57.35 of all materials, including chemicals, fuels, petroleum 57.36 products, lubricants, packaging materials, including returnable 58.1 containers used in packaging food and beverage products, feeds, 58.2 seeds, fertilizers, electricity, gas and steam, used or consumed 58.3 in agricultural or industrial production of personal property 58.4 intended to be sold ultimately at retail, whether or not the 58.5 item so used becomes an ingredient or constituent part of the 58.6 property produced are exempt. Seeds, trees, fertilizers, and 58.7 herbicides purchased for use by farmers in the Conservation 58.8 Reserve Program under United States Code, title 16, section 58.9 590h, as amended through December 31, 1991, the Integrated Farm 58.10 Management Program under section 1627 of Public Law Number 58.11 101-624, the Wheat and Feed Grain Programs under sections 301 to 58.12 305 and 401 to 405 of Public Law Number 101-624, and the 58.13 conservation reserve program under sections 103F.505 to 58.14 103F.531, are included in this exemption. Sales to a 58.15 veterinarian of materials used or consumed in the care, 58.16 medication, and treatment of horses and agricultural production 58.17 animals are exempt under this subdivision. Chemicals used for 58.18 cleaning food processing machinery and equipment are included in 58.19 this exemption. Materials, including chemicals, fuels, and 58.20 electricity purchased by persons engaged in agricultural or 58.21 industrial production to treat waste generated as a result of 58.22 the production process are included in this exemption. Such 58.23 production shall include, but is not limited to, research, 58.24 development, design or production of any tangible personal 58.25 property, manufacturing, processing (other than by restaurants 58.26 and consumers) of agricultural products whether vegetable or 58.27 animal, commercial fishing, refining, smelting, reducing, 58.28 brewing, distilling, printing, mining, quarrying, lumbering, 58.29 generating electricity and the production of road building 58.30 materials. Such production shall not include painting, 58.31 cleaning, repairing or similar processing of property except as 58.32 part of the original manufacturing process. Machinery, 58.33 equipment, implements, tools, accessories, appliances, 58.34 contrivances, furniture and fixtures, used in such production 58.35 and fuel, electricity, gas or steam used for space heating or 58.36 lighting, are not included within this exemption; however, 59.1 accessory tools, equipment and other short lived items, which 59.2 are separate detachable units used in producing a direct effect 59.3 upon the product, where such items have an ordinary useful life 59.4 of less than 12 months, are included within the exemption 59.5 provided herein. The following materials, tools, and equipment 59.6 used in metalcasting are exempt under this subdivision: 59.7 crucibles, thermocouple protection sheaths and tubes, stalk 59.8 tubes, refractory materials, molten metal filters and filter 59.9 boxes,anddegassing lances, and base blocks. Electricity used 59.10 to make snow for outdoor use for ski hills, ski slopes, or ski 59.11 trails is included in this exemption. Petroleum and special 59.12 fuels used in producing or generating power for propelling 59.13 ready-mixed concrete trucks on the public highways of this state 59.14 are not included in this exemption. 59.15 EFFECTIVE DATE: This section is effective for sales and 59.16 purchases made after June 30, 2000. 59.17 Sec. 7. Minnesota Statutes 1999 Supplement, section 59.18 297A.25, subdivision 11, is amended to read: 59.19 Subd. 11. [SALES TO GOVERNMENT.] The gross receipts from 59.20 all sales, including sales in which title is retained by a 59.21 seller or a vendor or is assigned to a third party under an 59.22 installment sale or lease purchase agreement under section 59.23 465.71, of tangible personal property to, and all storage, use 59.24 or consumption of such property by, the United States and its 59.25 agencies and instrumentalities, the University of Minnesota, 59.26 state universities, community colleges, technical colleges, 59.27 state academies, the Perpich center for arts education, an 59.28 instrumentality of a political subdivision that is accredited as 59.29 an optional/special function school by the North Central 59.30 Association of Colleges and Schools, school districts, public 59.31 libraries, public library systems, multicounty, multitype 59.32 library systems as defined in section 134.001, county law 59.33 libraries under chapter 134A, state agency libraries, the state 59.34 library under section 480.09, and the legislative reference 59.35 library are exempt. 59.36 As used in this subdivision, "school districts" means 60.1 public school entities and districts of every kind and nature 60.2 organized under the laws of the state of Minnesota, including, 60.3 without limitation, school districts, intermediate school 60.4 districts, education districts, service cooperatives, secondary 60.5 vocational cooperative centers, special education cooperatives, 60.6 joint purchasing cooperatives, telecommunication cooperatives, 60.7 regional management information centers, and any instrumentality 60.8 of a school district, as defined in section 471.59. 60.9 Sales exempted by this subdivision include sales under 60.10 section 297A.01, subdivision 3, paragraph (f). 60.11 Sales to hospitals and nursing homes owned and operated by 60.12 political subdivisions of the state are exempt under this 60.13 subdivision. 60.14 Sales of supplies and equipment used in the operation of an 60.15 ambulance service owned and operated by a political subdivision 60.16 of the state are exempt under this subdivision provided that the 60.17 supplies and equipment are used in the course of providing 60.18 medical care. Sales to a political subdivision of repair and 60.19 replacement parts for emergency rescue vehicles and fire trucks 60.20 and apparatus are exempt under this subdivision. 60.21 Sales to a political subdivision of machinery and 60.22 equipment, except for motor vehicles, used directly for mixed 60.23 municipal solid waste management services at a solid waste 60.24 disposal facility as defined in section 115A.03, subdivision 10, 60.25 are exempt under this subdivision. 60.26 Sales to political subdivisions of chore and homemaking 60.27 services to be provided to elderly or disabled individuals are 60.28 exempt. 60.29 Sales to a town of gravel and of machinery, equipment, and 60.30 accessories, except motor vehicles, used exclusively for road 60.31 and bridge maintenance, and leases of motor vehicles exempt from 60.32 tax under section 297B.03, clause (10), are exempt. 60.33 Sales of telephone services to the department of 60.34 administration that are used to provide telecommunications 60.35 services through the intertechnologies revolving fund are exempt 60.36 under this subdivision. 61.1 This exemption shall not apply to building, construction or 61.2 reconstruction materials purchased by a contractor or a 61.3 subcontractor as a part of a lump-sum contract or similar type 61.4 of contract with a guaranteed maximum price covering both labor 61.5 and materials for use in the construction, alteration, or repair 61.6 of a building or facility except for facilities the construction 61.7 materials of which are exempt under subdivision 65. This 61.8 exemption does not apply to construction materials purchased by 61.9 tax exempt entities or their contractors to be used in 61.10 constructing buildings or facilities which will not be used 61.11 principally by the tax exempt entities. 61.12 This exemption does not apply to the leasing of a motor 61.13 vehicle as defined in section 297B.01, subdivision 5, except for 61.14 leases entered into by the United States or its agencies or 61.15 instrumentalities. 61.16 The tax imposed on sales to political subdivisions of the 61.17 state under this section applies to all political subdivisions 61.18 other than those explicitly exempted under this subdivision, 61.19 notwithstanding section 115A.69, subdivision 6, 116A.25, 61.20 360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2, 61.21 469.127, 473.448, 473.545, or 473.608 or any other law to the 61.22 contrary enacted before 1992. 61.23 Sales exempted by this subdivision include sales made to 61.24 other states or political subdivisions of other states, if the 61.25 sale would be exempt from taxation if it occurred in that state, 61.26 but do not include sales under section 297A.01, subdivision 3, 61.27 paragraphs (c) and (e). 61.28 EFFECTIVE DATE: This section is effective for purchases 61.29 after June 30, 2000. 61.30 Sec. 8. Minnesota Statutes 1998, section 297A.25, 61.31 subdivision 65, is amended to read: 61.32 Subd. 65. [CONSTRUCTION MATERIALS FOR CORRECTIONAL 61.33 FACILITIES.] The gross receipts from the sale of and storage, 61.34 use, or consumption of construction materials and supplies are 61.35 exempt from the tax imposed under this chapter if purchased for 61.36 use in a project to construct or improve an adult or juvenile 62.1 correctional facility in a county, home rule charter city, or 62.2 statutory city, and if the project is mandated by state or 62.3 federal law, rule, or regulation. Construction materials and 62.4 supplies used in a project to construct or improve a building 62.5 used in part as an adult or juvenile correctional facility are 62.6 exempt to the extent they are used for the correctional facility 62.7 and for court facilities related to the detention and 62.8 arraignment process. The exemption applies regardless of 62.9 whether the materials and supplies are purchased by the city or 62.10 county, or by a contractor, subcontractor, or builder under a 62.11 contract with the city or county. 62.12 EFFECTIVE DATE: This section is effective for purchases 62.13 after December 31, 1998. 62.14 Sec. 9. Minnesota Statutes 1998, section 297A.25, is 62.15 amended by adding a subdivision to read: 62.16 Subd. 84. [PATENT, TRADEMARK, AND COPYRIGHT DRAWINGS AND 62.17 DOCUMENTS.] The gross receipts from the sale of, and use, 62.18 storage, distribution, or consumption of a drawing, diagram, or 62.19 similar or related document or a copy of such a document are 62.20 exempt if the document: 62.21 (1) is produced and sold by a patent drafter; and 62.22 (2) is for use in: 62.23 (i) a patent, trademark, or copyright application to be 62.24 filed with government agencies; 62.25 (ii) an application to the federal Food and Drug 62.26 Administration for approval of a medical device; or 62.27 (iii) a judicial or quasi-judicial proceeding, including 62.28 mediation and arbitration, relating to the validity of or legal 62.29 rights under a patent, trademark, or copyright. 62.30 For purposes of this subdivision, a "patent drafter" is a 62.31 person who prepares illustrative documents required in the 62.32 preparation of intellectual property applications. 62.33 EFFECTIVE DATE: This section is retroactively effective 62.34 for sales, use, storage, distribution, or consumption occurring 62.35 on or after January 1, 1993. 62.36 Sec. 10. Minnesota Statutes 1998, section 297A.25, is 63.1 amended by adding a subdivision to read: 63.2 Subd. 85. [CONSTRUCTION MATERIALS FOR QUALIFIED LOW-INCOME 63.3 HOUSING PROJECTS.] Purchases of materials and supplies used or 63.4 consumed in and equipment incorporated into the construction, 63.5 improvement, or expansion of qualified low-income housing 63.6 projects are exempt from the tax imposed under this chapter if 63.7 the owner of the qualified low-income housing project is the 63.8 public housing agency or housing and redevelopment authority of 63.9 a political subdivision. 63.10 This exemption applies regardless of whether the purchases 63.11 are made by the owner of the facility or a contractor. 63.12 For purposes of this exemption, "qualified low-income 63.13 housing project" means: 63.14 (1) a housing or mixed use project in which at least 20 63.15 percent of the residential units meet the income requirements of 63.16 low-income rental housing units as defined in section 273.126; 63.17 (2) a federally assisted low-income housing project 63.18 financed by a mortgage insured or held by the United States 63.19 Department of Housing and Urban Development under United States 63.20 Code, title 12, section 1701s, 1715l(d)(3), 1715l(d)(4), or 63.21 1715z-1; United States Code, title 42, section 1437f; the Native 63.22 American Housing Assistance and Self-Determination Act, United 63.23 States Code, title 25, section 4101 et seq.; or any similar 63.24 successor federal low-income housing program; or 63.25 (3) a project that meets the income requirements that apply 63.26 to: 63.27 (i) a qualified low-income housing project as defined in 63.28 United States Code, title 26, section 42(g); or 63.29 (ii) a project operated in compliance with Internal Revenue 63.30 Service revenue procedure 96-32. 63.31 EFFECTIVE DATE: This section is effective for sales after 63.32 June 30, 2000. 63.33 Sec. 11. Minnesota Statutes 1998, section 297A.25, is 63.34 amended by adding a subdivision to read: 63.35 Subd. 86. [MACHINERY AND EQUIPMENT FOR SKI AREAS.] The 63.36 gross receipts from the sale, storage, use, or consumption of 64.1 tangible personal property used or consumed primarily and 64.2 directly for tramways at ski areas or in snowmaking or 64.3 snow-grooming operations at ski hills, ski slopes, or ski 64.4 trails, including machinery, equipment, fuel, electricity, and 64.5 water additives used in the production and maintenance of 64.6 machine-made snow, are exempt. 64.7 EFFECTIVE DATE: This section is effective for sales after 64.8 June 30, 2000. 64.9 Sec. 12. Laws 1995, chapter 264, article 2, section 44, as 64.10 amended by Laws 1996, chapter 471, article 2, section 27, and 64.11 Laws 1998, chapter 389, article 8, section 33, is amended to 64.12 read: 64.13 Sec. 44. [EFFECTIVE DATE.] 64.14 Section 1 is effective the day following final enactment. 64.15 Sections 3 and 4 are effective June 1, 1995. Section 4 is 64.16 repealed June 1, 2000. 64.17 Sections 5 to 21 and 43, paragraph (a), are effective July 64.18 1, 1995. 64.19 Sections 23, 28, 33, 40, 42, and the part of section 22 64.20 amending language in paragraph (i), clause (vii), are effective 64.21 the day following final enactment. 64.22 Sections 24 and 34 are effective for sales made after 64.23 December 31, 1996. 64.24 Section 25 is effective beginning with leases or rentals 64.25 made after June 30, 1995. 64.26 Section 26 is effective retroactively for sales after May 64.27 31, 1992. 64.28 Section 27 is effective for sales made after June 30, 1995. 64.29 Section 29 and the part of section 22 striking the language 64.30 after paragraph (h) are effective for sales after June 30, 1995. 64.31 Section 32 is effective for sales made after June 30, 1995, 64.32 and before July 1,19992000. 64.33 Sections 35 and 36 are effective for sales or transfers 64.34 made after June 30, 1995. 64.35 Section 38 is effective the day after the governing body of 64.36 the city of Winona complies with Minnesota Statutes, section 65.1 645.021, subdivision 3. 65.2 Section 39 is effective upon compliance by the Minneapolis 65.3 city council with Minnesota Statutes, section 645.021, 65.4 subdivision 3. 65.5 Section 43, paragraph (b), is effective for sales of 900 65.6 information services made after June 30, 1995. 65.7 EFFECTIVE DATE: This section is retroactively effective 65.8 for sales and purchases on or after July 1, 1999. 65.9 Sec. 13. [LOCAL TAXES ON MOTOR VEHICLES PROHIBITED.] 65.10 (a) Except as provided in paragraph (b), after June 30, 65.11 2000, no home rule charter or statutory city, county, or other 65.12 political subdivision may impose a tax on the sale, transfer, or 65.13 use of a motor vehicle that exceeds the tax authorized under 65.14 section 14. 65.15 (b) If, on March 8, 2000, a tax was in effect in a home 65.16 rule charter or statutory city, county, or other political 65.17 subdivision that exceeded the limit imposed under section 14, 65.18 the rate of that tax is reduced as follows: 65.19 (1) for sales or transfers after December 31, 2000, and 65.20 before January 1, 2002, the tax rate in effect on March 8, 2000, 65.21 is reduced by 25 percent; 65.22 (2) for sales or transfers after December 31, 2001, and 65.23 before January 1, 2003, the tax rate in effect on March 8, 2000, 65.24 is reduced by 50 percent; and 65.25 (3) for sales or transfers after December 31, 2002, and 65.26 before January 1, 2004, the tax rate in effect on March 8, 2000, 65.27 is reduced by 75 percent. 65.28 For sales or transfers after December 31, 2003, the political 65.29 subdivision may impose no tax except as authorized under section 65.30 14. 65.31 EFFECTIVE DATE: This section is effective July 1, 2000. 65.32 Sec. 14. [LOCAL EXCISE TAX ON MOTOR VEHICLES AUTHORIZED.] 65.33 Notwithstanding Minnesota Statutes, section 477A.016, or 65.34 any other provision of law, ordinance, or city charter, if a 65.35 sales and use tax on motor vehicles that was imposed by a 65.36 political subdivision is terminated under section 13, the 66.1 political subdivision may impose by ordinance an excise tax of 66.2 up to $20 per motor vehicle, as defined by ordinance, that was 66.3 purchased or acquired from any person engaged within the 66.4 territory of the political subdivision in the business of 66.5 selling motor vehicles at retail. The proceeds of the tax must 66.6 be used for the purposes for which the tax terminated under 66.7 section 13 was used. 66.8 EFFECTIVE DATE: This section is effective July 1, 2000. 66.9 Sec. 15. [DEVELOPMENT OF SALES AND USE TAX COLLECTION 66.10 SYSTEM.] 66.11 Subdivision 1. [AUTHORIZATION TO ENTER INTO MULTISTATE 66.12 DISCUSSIONS.] The commissioner of revenue may enter into 66.13 discussions with states regarding development of a multistate, 66.14 voluntary, streamlined system for sales and use tax collection 66.15 and administration. These discussions will focus on development 66.16 of a system that is capable of determining whether a transaction 66.17 is taxable or exempt, the appropriate tax rate applied to the 66.18 transaction, and the total tax due on the transaction, and shall 66.19 provide a method for collecting and remitting sales and use 66.20 taxes to the state. The system may provide compensation for the 66.21 costs of collecting and remitting sales and use taxes. 66.22 Discussions between the department and other states may result 66.23 in developing and issuing a joint request for information from 66.24 public and private potential parties. The commissioner must 66.25 publish the notices in the State Register. 66.26 Subd. 2. [LIMITED TEST AUTHORIZATION.] (a) The 66.27 commissioner may participate in a sales tax pilot project with 66.28 other states and selected businesses to test a means for 66.29 simplifying sales and use tax administration, and may enter into 66.30 joint agreements for that purpose. 66.31 (b) Agreements to participate in the test will establish 66.32 provisions for the administration, imposition, and collection of 66.33 sales and use taxes resulting in revenues paid by the taxpayer 66.34 that are the same as would be paid under existing law. 66.35 (c) Parties to the agreements are excused from complying 66.36 with the provisions of Minnesota Statutes, chapters 289A and 67.1 297A, to the extent a different procedure is required by the 67.2 agreements. 67.3 (d) Agreements authorized under this section terminate no 67.4 later than December 31, 2001. 67.5 Subd. 3. [DISCLOSURE.] Any agreements entered into under 67.6 subdivision 1 or 2 are subject to the provisions of Minnesota 67.7 Statutes, chapter 270B. 67.8 Subd. 4. [REPORT ON PROJECT.] By March 1, 2002, the 67.9 commissioner shall report to the chairs of the house of 67.10 representatives tax committee and the senate committee on 67.11 taxes. The report must describe the status of multistate 67.12 discussions conducted under subdivision 1 and, if a proposed 67.13 system has been agreed upon by participating states, must also 67.14 recommend whether the state should participate in the system. 67.15 EFFECTIVE DATE: This section is effective the day 67.16 following final enactment. 67.17 Sec. 16. [REPEALER.] 67.18 Minnesota Statutes 1998, section 297A.15, subdivision 7, is 67.19 repealed. 67.20 ARTICLE 8 67.21 SPECIAL TAXES 67.22 Section 1. Minnesota Statutes 1998, section 60A.15, 67.23 subdivision 1, is amended to read: 67.24 Subdivision 1. [DOMESTIC AND FOREIGN COMPANIES.] (a) On or 67.25 before April 1, June 1, and December 1 of each year, every 67.26 domestic and foreign company, including town and farmers' mutual 67.27 insurance companies, domestic mutual insurance companies, marine 67.28 insurance companies, health maintenance organizations, community 67.29 integrated service networks, and nonprofit health service plan 67.30 corporations, shall pay to the commissioner of revenue 67.31 installments equal to one-third of the insurer's total estimated 67.32 tax for the current year. Except as provided in paragraphs (d), 67.33 (e), (h), and (i), installments must be based on a sum equal to 67.34 two percent of the premiums described in paragraph (b). 67.35 (b) Installments under paragraph (a), (d), or (e) are 67.36 percentages of gross premiums less return premiums on all direct 68.1 business received by the insurer in this state, or by its agents 68.2 for it, in cash or otherwise, during such year. 68.3 (c) Failure of a company to make payments of at least 68.4 one-third of either (1) the total tax paid during the previous 68.5 calendar year or (2) 80 percent of the actual tax for the 68.6 current calendar year shall subject the company to the penalty 68.7 and interest provided in this section, unless the total tax for 68.8 the current tax year is $500 or less. 68.9 (d) For health maintenance organizations, nonprofit health 68.10 service plan corporations, and community integrated service 68.11 networks, the installments must be based on an amount determined 68.12 under paragraph (h) or (i). 68.13 (e) For purposes of computing installments for town and 68.14 farmers' mutual insurance companies and for mutual property 68.15 casualty companies with total assets on December 31, 1989, of 68.16 $1,600,000,000 or less, the following rates apply: 68.17 (1) for all life insurance, two percent; 68.18 (2) for town and farmers' mutual insurance companies and 68.19 for mutual property and casualty companies with total assets of 68.20 $5,000,000 or less, on all other coverages, one percent; and 68.21 (3) for mutual property and casualty companies with total 68.22 assets on December 31, 1989, of $1,600,000,000 or less, on all 68.23 other coverages, 1.26 percent. 68.24 (f) If the aggregate amount of premium tax payments under 68.25 this section and the fire marshal tax payments under section 68.26 299F.21 made during a calendar year is equal to or exceeds 68.27 $120,000, all tax payments in the subsequent calendar year must 68.28 be paid by means of a funds transfer as defined in section 68.29 336.4A-104, paragraph (a). The funds transfer payment date, as 68.30 defined in section 336.4A-401, must be on or before the date the 68.31 payment is due. If the date the payment is due is not a funds 68.32 transfer business day, as defined in section 336.4A-105, 68.33 paragraph (a), clause (4), the payment date must be on or before 68.34 the funds transfer business day next following the date the 68.35 payment is due. 68.36 (g) Premiums under medical assistance, general assistance 69.1 medical care, the MinnesotaCare program, and the Minnesota 69.2 comprehensive health insurance plan and all payments, revenues, 69.3 and reimbursements received from the federal government for 69.4 Medicare-related coverage as defined in section 62A.31, 69.5 subdivision 3, paragraph (e), are not subject to tax under this 69.6 section. 69.7 (h) For calendar years 1997, 1998, and 1999, the 69.8 installments for health maintenance organizations, community 69.9 integrated service networks, and nonprofit health service plan 69.10 corporations must be based on an amount equal to one percent of 69.11 premiums described under paragraph (b). Health maintenance 69.12 organizations, community integrated service networks, and 69.13 nonprofit health service plan corporations that have met the 69.14 cost containment goals established under section 62J.04 in the 69.15 individual and small employer market for calendar year 1996 are 69.16 exempt from payment of the tax imposed under this section for 69.17 premiums paid after March 30, 1997, and before April 1, 1998. 69.18 Health maintenance organizations, community integrated service 69.19 networks, and nonprofit health service plan corporations that 69.20 have met the cost containment goals established under section 69.21 62J.04 in the individual and small employer market for calendar 69.22 year 1997 are exempt from payment of the tax imposed under this 69.23 section for premiums paid after March 30, 1998, and before April 69.24 1, 1999. Health maintenance organizations, community integrated 69.25 service networks, and nonprofit health service plan corporations 69.26 that have met the cost containment goals established under 69.27 section 62J.04 in the individual and small employer market for 69.28 calendar year 1998 are exempt from payment of the tax imposed 69.29 under this section for premiums paid after March 30, 1999, and 69.30 before January 1, 2000. 69.31 (i) Health maintenance organizations, community integrated 69.32 service networks, and nonprofit health service plan corporations 69.33 are exempt from the tax imposed under this section on premiums 69.34 received in calendar years 2000 and 2001. 69.35(i) For calendar years after 1999,The commissioner of 69.36 finance shall determine the balance of the health care access 70.1 fund on September 1 of each year beginning September 1,199970.2 2000. If the commissioner determines that there is no 70.3 structural deficit for the next fiscal year, no tax shall be 70.4 imposed under paragraph (d) for thefollowingcalendar year 70.5 beginning six months after the fiscal year has begun. If the 70.6 commissioner determines that there will be a structural deficit 70.7 in the fund for thefollowingfiscal year, then the 70.8 commissioner, in consultation with the commissioner of revenue, 70.9 shall determine the amount needed to eliminate the structural 70.10 deficit and a tax shall be imposed under paragraph (d) for the 70.11followingcalendar year beginning six months after that fiscal 70.12 year has begun. The commissioner shall determine the rate of 70.13 the tax as either one-quarter of one percent, one-half of one 70.14 percent, three-quarters of one percent, or one percent of 70.15 premiums described in paragraph (b), whichever is the lowest of 70.16 those rates that the commissioner determines will produce 70.17 sufficient revenue to eliminate the projected structural 70.18 deficit. The commissioner of finance shall publish in the State 70.19 Register by October 1 of each year the amount of tax to be 70.20 imposed for thefollowingcalendar year.In determining the70.21structural balance of the health care access fund for fiscal70.22years 2000 and 2001, the commissioner shall disregard the70.23transfer amount from the health care access fund to the general70.24fund for expenditures associated with the services provided to70.25pregnant women and children under the age of two enrolled in the70.26MinnesotaCare program.70.27 (j) In approving the premium rates as required in sections 70.28 62L.08, subdivision 8, and 62A.65, subdivision 3, the 70.29 commissioners of health and commerce shall ensure that any 70.30 exemption from the tax as described in paragraphs (h) and (i) is 70.31 reflected in the premium rate. 70.32 EFFECTIVE DATE: This section is effective for taxes on 70.33 premiums received after December 31, 1999. 70.34 Sec. 2. Minnesota Statutes 1998, section 295.50, 70.35 subdivision 9b, is amended to read: 70.36 Subd. 9b. [PATIENT SERVICES.] (a) "Patient services" means 71.1 inpatient and outpatient services and other goods and services 71.2 provided by hospitals, surgical centers, or health care 71.3 providers. They include the following health care goods and 71.4 services provided to a patient or consumer: 71.5 (1) bed and board; 71.6 (2) nursing services and other related services; 71.7 (3) use of hospitals, surgical centers, or health care 71.8 provider facilities; 71.9 (4) medical social services; 71.10 (5) drugs, biologicals, supplies, appliances, and 71.11 equipment; 71.12 (6) other diagnostic or therapeutic items or services; 71.13 (7) medical or surgical services; 71.14 (8) items and services furnished to ambulatory patients not 71.15 requiring emergency care; 71.16 (9) emergency services; and 71.17 (10) covered services listed in section 256B.0625 and in 71.18 Minnesota Rules, parts 9505.0170 to 9505.0475. 71.19 (b) "Patient services" does not include: 71.20 (1) services provided to nursing homes licensed under 71.21 chapter 144A; and 71.22 (2) examinations for purposes of utilization reviews, 71.23 insurance claims or eligibility, litigation, and employment, 71.24 including reviews of medical records for those purposes. 71.25 EFFECTIVE DATE: This section is effective for payments 71.26 received on or after January 1, 2000. 71.27 Sec. 3. Minnesota Statutes 1999 Supplement, section 71.28 295.53, subdivision 1, is amended to read: 71.29 Subdivision 1. [EXEMPTIONS.] (a) The following payments 71.30 are excluded from the gross revenues subject to the hospital, 71.31 surgical center, or health care provider taxes under sections 71.32 295.50 to 295.57: 71.33 (1) payments received for services provided under the 71.34 Medicare program, including payments received from the 71.35 government, and organizations governed by sections 1833 and 1876 71.36 of title XVIII of the federal Social Security Act, United States 72.1 Code, title 42, section 1395, and enrollee deductibles, 72.2 coinsurance, and copayments, whether paid by the Medicare 72.3 enrollee or by a Medicare supplemental coverage as defined in 72.4 section 62A.011, subdivision 3, clause (10). Payments for 72.5 services not covered by Medicare are taxable; 72.6 (2) medical assistance payments including payments received 72.7 directly from the government or from a prepaid plan; 72.8 (3) payments received for home health care services; 72.9 (4) payments received from hospitals or surgical centers 72.10 for goods and services on which liability for tax is imposed 72.11 under section 295.52 or the source of funds for the payment is 72.12 exempt under clause (1), (2), (7), (8), (10),or(13), or (20); 72.13 (5) payments received from health care providers for goods 72.14 and services on which liability for tax is imposed under this 72.15 chapter or the source of funds for the payment is exempt under 72.16 clause (1), (2), (7), (8), (10),or(13), or (20); 72.17 (6) amounts paid for legend drugs, other than nutritional 72.18 products, to a wholesale drug distributor who is subject to tax 72.19 under section 295.52, subdivision 3, reduced by reimbursements 72.20 received for legend drugs under clauses (1), (2), (7), and (8); 72.21 (7) payments received under the general assistance medical 72.22 care program including payments received directly from the 72.23 government or from a prepaid plan; 72.24 (8) payments received for providing services under the 72.25 MinnesotaCare program including payments received directly from 72.26 the government or from a prepaid plan and enrollee deductibles, 72.27 coinsurance, and copayments. For purposes of this clause, 72.28 coinsurance means the portion of payment that the enrollee is 72.29 required to pay for the covered service; 72.30 (9) payments received by a health care provider or the 72.31 wholly owned subsidiary of a health care provider for care 72.32 provided outside Minnesota; 72.33 (10) payments received from the chemical dependency fund 72.34 under chapter 254B; 72.35 (11) payments received in the nature of charitable 72.36 donations that are not designated for providing patient services 73.1 to a specific individual or group; 73.2 (12) payments received for providing patient services 73.3 incurred through a formal program of health care research 73.4 conducted in conformity with federal regulations governing 73.5 research on human subjects. Payments received from patients or 73.6 from other persons paying on behalf of the patients are subject 73.7 to tax; 73.8 (13) payments received from any governmental agency for 73.9 services benefiting the public, not including payments made by 73.10 the government in its capacity as an employer or insurer; 73.11 (14) payments received for services provided by community 73.12 residential mental health facilities licensed under Minnesota 73.13 Rules, parts 9520.0500 to 9520.0690, community support programs 73.14 and family community support programs approved under Minnesota 73.15 Rules, parts 9535.1700 to 9535.1760, and community mental health 73.16 centers as defined in section 245.62, subdivision 2; 73.17 (15) government payments received by a regional treatment 73.18 center; 73.19 (16) payments received for hospice care services; 73.20 (17) payments received by a health care provider for 73.21 hearing aids and related equipment or prescription eyewear 73.22 delivered outside of Minnesota; 73.23 (18) payments received by an educational institution from 73.24 student tuition, student activity fees, health care service 73.25 fees, government appropriations, donations, or grants. Fee for 73.26 service payments and payments for extended coverage are taxable; 73.27 (19) payments received for services provided by: assisted 73.28 living programs and congregate housing programs; and 73.29(20) payments received from nursing homes licensed under73.30chapter 144A for services provided to a nursing home; and73.31(21) payments received for examinations for purposes of73.32utilization reviews, insurance claims or eligibility,73.33litigation, and employment, including reviews of medical records73.34for those purposes.73.35 (20) payments received under the federal Employees Health 73.36 Benefits Act, United States Code, title 5, section 8909(f), as 74.1 amended by the Omnibus Reconciliation Act of 1990. 74.2 (b) Payments received by wholesale drug distributors for 74.3 legend drugs sold directly to veterinarians or veterinary bulk 74.4 purchasing organizations are excluded from the gross revenues 74.5 subject to the wholesale drug distributor tax under sections 74.6 295.50 to 295.59. 74.7 EFFECTIVE DATE: This section is effective for payments 74.8 received on or after January 1, 2000. 74.9 Sec. 4. Minnesota Statutes 1999 Supplement, section 74.10 297E.02, subdivision 1, is amended to read: 74.11 Subdivision 1. [IMPOSITION.] A tax is imposed on all 74.12 lawful gambling other than (1) pull-tab deals or games; (2) 74.13 tipboard deals or games; and (3) items listed in section 74.14 297E.01, subdivision 8, clauses (4) and (5), at the rate of974.15 8.75 percent on the gross receipts as defined in section 74.16 297E.01, subdivision 8, less prizes actually paid. The tax 74.17 imposed by this subdivision is in lieu of the tax imposed by 74.18 section 297A.02 and all local taxes and license fees except a 74.19 fee authorized under section 349.16, subdivision 8, or a tax 74.20 authorized under subdivision 5. 74.21 The tax imposed under this subdivision is payable by the 74.22 organization or party conducting, directly or indirectly, the 74.23 gambling. 74.24 EFFECTIVE DATE: This section is effective July 1, 2000. 74.25 Sec. 5. Minnesota Statutes 1999 Supplement, section 74.26 297E.02, subdivision 4, is amended to read: 74.27 Subd. 4. [PULL-TAB AND TIPBOARD TAX.] (a) A tax is imposed 74.28 on the sale of each deal of pull-tabs and tipboards sold by a 74.29 distributor. The rate of the tax is1.81.75 percent of the 74.30 ideal gross of the pull-tab or tipboard deal. The sales tax 74.31 imposed by chapter 297A on the sale of the pull-tabs and 74.32 tipboards by the distributor is imposed on the retail sales 74.33 price less the tax imposed by this subdivision. The retail sale 74.34 of pull-tabs or tipboards by the organization is exempt from 74.35 taxes imposed by chapter 297A and is exempt from all local taxes 74.36 and license fees except a fee authorized under section 349.16, 75.1 subdivision 8. 75.2 (b) The liability for the tax imposed by this section is 75.3 incurred when the pull-tabs and tipboards are delivered by the 75.4 distributor to the customer or to a common or contract carrier 75.5 for delivery to the customer, or when received by the customer's 75.6 authorized representative at the distributor's place of 75.7 business, regardless of the distributor's method of accounting 75.8 or the terms of the sale. 75.9 The tax imposed by this subdivision is imposed on all sales 75.10 of pull-tabs and tipboards, except the following: 75.11 (1) sales to the governing body of an Indian tribal 75.12 organization for use on an Indian reservation; 75.13 (2) sales to distributors licensed under the laws of 75.14 another state or of a province of Canada, as long as all 75.15 statutory and regulatory requirements are met in the other state 75.16 or province; 75.17 (3) sales of promotional tickets as defined in section 75.18 349.12; and 75.19 (4) pull-tabs and tipboards sold to an organization that 75.20 sells pull-tabs and tipboards under the exemption from licensing 75.21 in section 349.166, subdivision 2. A distributor shall require 75.22 an organization conducting exempt gambling to show proof of its 75.23 exempt status before making a tax-exempt sale of pull-tabs or 75.24 tipboards to the organization. A distributor shall identify, on 75.25 all reports submitted to the commissioner, all sales of 75.26 pull-tabs and tipboards that are exempt from tax under this 75.27 subdivision. 75.28 (c) A distributor having a liability of $120,000 or more 75.29 during a fiscal year ending June 30 must remit all liabilities 75.30 in the subsequent calendar year by a funds transfer as defined 75.31 in section 336.4A-104, paragraph (a). The funds transfer 75.32 payment date, as defined in section 336.4A-401, must be on or 75.33 before the date the tax is due. If the date the tax is due is 75.34 not a funds transfer business day, as defined in section 75.35 336.4A-105, paragraph (a), clause (4), the payment date must be 75.36 on or before the funds transfer business day next following the 76.1 date the tax is due. 76.2 (d) Any customer who purchases deals of pull-tabs or 76.3 tipboards from a distributor may file an annual claim for a 76.4 refund or credit of taxes paid pursuant to this subdivision for 76.5 unsold pull-tab and tipboard tickets. The claim must be filed 76.6 with the commissioner on a form prescribed by the commissioner 76.7 by March 20 of the year following the calendar year for which 76.8 the refund is claimed. The refund must be filed as part of the 76.9 customer's February monthly return. The refund or credit is 76.10 equal to1.81.75 percent of the face value of the unsold 76.11 pull-tab or tipboard tickets, provided that the refund or credit 76.12 will be1.851.775 percent of the face value of the unsold 76.13 pull-tab or tipboard tickets for claims for a refund or credit 76.14 of taxes filed on the February20002001 monthly return. The 76.15 refund claimed will be applied as a credit against tax owing 76.16 under this chapter on the February monthly return. If the 76.17 refund claimed exceeds the tax owing on the February monthly 76.18 return, that amount will be refunded. The amount refunded will 76.19 bear interest pursuant to section 270.76 from 90 days after the 76.20 claim is filed. 76.21 EFFECTIVE DATE: This section is effective July 1, 2000. 76.22 Sec. 6. Minnesota Statutes 1999 Supplement, section 76.23 297E.02, subdivision 6, is amended to read: 76.24 Subd. 6. [COMBINED RECEIPTS TAX.] In addition to the taxes 76.25 imposed under subdivisions 1 and 4, a tax is imposed on the 76.26 combined receipts of the organization. As used in this section, 76.27 "combined receipts" is the sum of the organization's gross 76.28 receipts from lawful gambling less gross receipts directly 76.29 derived from the conduct of bingo, raffles, and paddlewheels, as 76.30 defined in section 297E.01, subdivision 8, for the fiscal year. 76.31 The combined receipts of an organization are subject to a tax 76.32 computed according to the following schedule: 76.33 If the combined receipts for the The tax is: 76.34 fiscal year are: 76.35 Not over $500,000 zero 76.36 Over $500,000, but not over 77.1 $700,0001.81.75 percent of the 77.2 amount over $500,000, but 77.3 not over $700,000 77.4 Over $700,000, but not over 77.5 $900,000$3,600$3,500 plus3.677.6 3.5 percent of the amount 77.7 over $700,000, but 77.8 not over $900,000 77.9 Over $900,000$10,800$10,500 plus5.477.10 5.25 percent of the 77.11 amount over $900,000 77.12 EFFECTIVE DATE: This section is effective July 1, 2000. 77.13 Sec. 7. Minnesota Statutes 1998, section 297F.01, 77.14 subdivision 17, is amended to read: 77.15 Subd. 17. [STAMP.] "Stamp" means the adhesive stamp 77.16 supplied by the commissioner of revenue for use on cigarette 77.17 packages or any other indicia adopted by the commissioner to 77.18 indicate that the tax has been paid. 77.19 EFFECTIVE DATE: This section is effective the day 77.20 following final enactment. 77.21 Sec. 8. Minnesota Statutes 1998, section 297F.08, 77.22 subdivision 2, is amended to read: 77.23 Subd. 2. [TAX DUE; CIGARETTES.] Notwithstanding any other 77.24 provisions of this chapter, the tax due on the return is based 77.25 upon actualheat-appliedstamps purchased during the reporting 77.26 period. 77.27 EFFECTIVE DATE: This section is effective the day 77.28 following final enactment. 77.29 Sec. 9. Minnesota Statutes 1998, section 297F.08, 77.30 subdivision 4, is amended to read: 77.31 Subd. 4. [STAMPS; DESIGN, PRINTING.] The commissioner 77.32 shall adopt the design of two stamps. One stamp must be 77.33 designed for application to cigarette packages destined for 77.34 retail sale on an Indian reservation which is a party to an 77.35 agreement under section 270.60, subdivision 2, and only to those 77.36 packages. A second stamp must be designed for all other 78.1 cigarette packages subject to the provisions of this chapter. 78.2 The commissioner shall arrange for the printing of stamps in 78.3 such amounts and denominations as the commissioner deems 78.4 necessary. All stamps prescribed by the commissioner shall be 78.5 designed and furnished so as to permit identification of the 78.6 distributor that affixed the stamp to the particular package of 78.7 cigarettes, by means of a serial number or other mark on the 78.8 stamp. The commissioner shall maintain for not less than three 78.9 years information identifying which distributor affixed the tax 78.10 stamp to each package of cigarettes, which information shall not 78.11 be confidential or exempt from disclosure to the public. 78.12 EFFECTIVE DATE: This section is effective the day 78.13 following final enactment. 78.14 Sec. 10. Minnesota Statutes 1998, section 297F.08, 78.15 subdivision 5, is amended to read: 78.16 Subd. 5. [DEPOSIT OF PROCEEDS.] The commissioner shall use 78.17 the amounts appropriated by law to purchaseheat-appliedstamps 78.18 for resale. The commissioner shall charge the purchasers for 78.19 the costs of the stamps along with the tax value plus shipping 78.20 costs. The costs recovered along with shipping costs must be 78.21 deposited into the general fund. 78.22 EFFECTIVE DATE: This section is effective the day 78.23 following final enactment. 78.24 Sec. 11. Minnesota Statutes 1998, section 297F.08, 78.25 subdivision 8, is amended to read: 78.26 Subd. 8. [SALE OF STAMPS.] The commissioner may sell 78.27heat-appliedstamps on a credit basis under conditions 78.28 prescribed by the commissioner. The commissioner shall sell the 78.29 stamps at a price which includes the tax after giving effect to 78.30 the discount provided in subdivision 7. The commissioner shall 78.31 recover the actual costs of the stamps from the distributor. 78.32 The commissioner shall annually establish the maximum amount of 78.33heat-appliedstamps that may be purchased each month. 78.34 EFFECTIVE DATE: This section is effective the day 78.35 following final enactment. 78.36 Sec. 12. Minnesota Statutes 1999 Supplement, section 79.1 297F.08, subdivision 8a, is amended to read: 79.2 Subd. 8a. [REVOLVING ACCOUNT.] Aheat-appliedcigarette 79.3 tax stamp revolving account is created. The commissioner shall 79.4 use the amounts in this fund to purchaseheat-appliedstamps for 79.5 resale. The commissioner shall charge distributors for the tax 79.6 value of the stamps they receive along with the commissioner's 79.7 cost to purchase the stamps and ship them to the distributor. 79.8 The stamp purchase and shipping costs recovered must be credited 79.9 to the revolving account and are appropriated to the 79.10 commissioner for the further purchases and shipping costs. The 79.11 revolving account is initially funded by a $40,000 transfer from 79.12 the department of revenue. 79.13 EFFECTIVE DATE: This section is effective the day 79.14 following final enactment. 79.15 Sec. 13. Minnesota Statutes 1998, section 297F.08, 79.16 subdivision 9, is amended to read: 79.17 Subd. 9. [TAX STAMPING MACHINES.] The commissioner shall 79.18 require any person licensed as a distributor to stamp packages 79.19 with aheat-appliedtax stamping machine, approved by the 79.20 commissioner, which shall be provided by the distributor. The 79.21 commissioner shall also supervise and check the operation of the 79.22 machines and shall provide for the payment of the tax on any 79.23 package so stamped, subject to the discount provided in 79.24 subdivision 7. If the commissioner finds that a stamping 79.25 machine is not affixing a legible stamp on the package, the 79.26 commissioner may order the distributor to immediately cease the 79.27 stamping process until the machine is functioning properly. 79.28 EFFECTIVE DATE: This section is effective the day 79.29 following final enactment. 79.30 Sec. 14. [297F.085] [CIGARETTE ENFORCEMENT.] 79.31 Subdivision 1. [PROHIBITIONS.] (a) It is unlawful for any 79.32 person to sell or distribute in this state; to acquire, hold, 79.33 own, possess, or transport, for sale or distribution in this 79.34 state; or to import, or cause to be imported, into this state 79.35 for sale or distribution in this state, any cigarettes: 79.36 (1) the package of which: 80.1 (i) bears any statement, label, stamp, sticker, or notice 80.2 indicating that the manufacturer did not intend the cigarettes 80.3 to be sold, distributed, or used in the United States, 80.4 including, but not limited to, labels stating "For Export Only," 80.5 "U.S. Tax-Exempt," "For Use Outside U.S.," or similar wording; 80.6 or 80.7 (ii) does not comply with all requirements imposed by or 80.8 pursuant to federal law regarding warnings and other information 80.9 on packages of cigarettes manufactured, packaged, or imported 80.10 for sale, distribution, or use in the United States, including, 80.11 but not limited to, the precise warning labels specified in the 80.12 federal Cigarette Labeling and Advertising Act, United States 80.13 Code, title 15, section 1333; 80.14 (2) imported into the United States in violation of United 80.15 States Code, title 26, section 5754, or any other federal law or 80.16 regulation; 80.17 (3) that the person otherwise knows or has reason to know 80.18 the manufacturer did not intend to be sold, distributed, or used 80.19 in the United States; or 80.20 (4) for which there has not been submitted to the secretary 80.21 of the United States Department of Health and Human Services the 80.22 list or lists of the ingredients added to tobacco in the 80.23 manufacture of the cigarettes required by the federal Cigarette 80.24 Labeling and Advertising Act, United States Code, title 15, 80.25 section 1335a. 80.26 (b) It is unlawful for any person to alter the package of 80.27 any cigarettes, prior to sale or distribution to the ultimate 80.28 consumer, so as to remove, conceal, or obscure: 80.29 (1) any statement, label, stamp, sticker, or notice 80.30 described in paragraph (a), clause (1), item (i); or 80.31 (2) any health warning that is not specified in, or does 80.32 not conform with the requirements of the federal Cigarette 80.33 Labeling and Advertising Act, United States Code, title 15, 80.34 section 1333. 80.35 It is unlawful for any person to affix any stamp required under 80.36 this chapter to the package of any cigarettes described in 81.1 paragraph (a) or altered in violation of paragraph (b). 81.2 Subd. 2. [ENFORCEMENT.] (a) The commissioner may revoke or 81.3 suspend the license or licenses of any distributor or subjobber 81.4 for a violation of subdivision 1 or any implementing rule 81.5 promulgated by the commissioner pursuant to the procedures set 81.6 forth in section 297F.04. 81.7 (b) A municipal or county authority that has licensed a 81.8 retailer under section 461.12, subdivision 1, may impose 81.9 administrative sanctions for violations of subdivision 1, 81.10 including suspending or revoking the retailer's license, 81.11 pursuant to the procedures in section 461.12, subdivision 7. 81.12 (c) Cigarettes acquired, held, owned, possessed, 81.13 transported in, imported into, or sold or distributed in this 81.14 state in violation of subdivision 1 shall be deemed contraband 81.15 under section 297F.21, and are subject to seizure and forfeiture 81.16 as provided therein; provided, however, that all such cigarettes 81.17 so seized and forfeited shall be destroyed. Such cigarettes 81.18 shall be deemed contraband whether or not the violation of 81.19 subdivision 1 is knowing. 81.20 (d) In addition to any other remedy provided by law, any 81.21 person that sustains economic damages or commercial injury as a 81.22 result of any violation of subdivision 1 may bring an action for 81.23 appropriate injunctive or other equitable relief, actual 81.24 damages, if any, sustained by reason of the violation, and, as 81.25 determined by the court, interest on the damages from the date 81.26 of the complaint, taxable costs, and reasonable attorney fees. 81.27 If the trier of fact finds that the violation is egregious, it 81.28 may increase recovery to an amount not in excess of three times 81.29 the actual damages sustained by reason of the violation. 81.30 Subd. 3. [UNFAIR TRADE PRACTICES.] A violation of 81.31 subdivision 1 constitutes an unlawful trade practice as provided 81.32 in section 325D.13, and, in addition to any remedies or 81.33 penalties set forth in this section, is subject to any remedies 81.34 or penalties available for a violation of that section. 81.35 Subd. 4. [UNFAIR CIGARETTE SALES.] For purposes of 81.36 sections 325D.30 to 325D.42, cigarettes imported or reimported 82.1 into the United States for sale or distribution under any trade 82.2 name, trade dress, or trademark that is the same as, or is 82.3 confusingly similar to, any trade name, trade dress, or 82.4 trademark used for cigarettes manufactured in the United States 82.5 for sale or distribution in the United States are presumed to 82.6 have been purchased outside of the ordinary channels of trade. 82.7 Subd. 5. [APPLICABILITY.] This section does not apply to 82.8 cigarettes imported or reimported into the United States for 82.9 personal use and cigarettes sold or intended to be sold as 82.10 duty-free merchandise by a duty-free sales enterprise in 82.11 accordance with the provisions of United States Code, title 19, 82.12 section 1555(b), and any implementing regulations; provided, 82.13 however, that this section shall apply to any such cigarettes 82.14 that are brought back into the customs territory for resale 82.15 within the customs territory. 82.16 Subd. 6. [VIOLATION.] A violation of this section is a 82.17 misdemeanor. 82.18 Sec. 15. Minnesota Statutes 1998, section 297F.21, 82.19 subdivision 1, is amended to read: 82.20 Subdivision 1. [CONTRABAND DEFINED.] The following are 82.21 declared to be contraband and therefore subject to civil and 82.22 criminal penalties under this chapter: 82.23 (a) Cigarette packages which do not have stamps affixed to 82.24 them as provided in this chapter, including but not limited to 82.25 (i) packages with illegible stamps and packages with stamps that 82.26 are not complete or whole even if the stamps are legible, and 82.27 (ii) all devices for the vending of cigarettes in which packages 82.28 as defined in item (i) are found, including all contents 82.29 contained within the devices. 82.30 (b) A device for the vending of cigarettes and all packages 82.31 of cigarettes, where the device does not afford at least partial 82.32 visibility of contents. Where any package exposed to view does 82.33 not carry the stamp required by this chapter, it shall be 82.34 presumed that all packages contained in the device are unstamped 82.35 and contraband. 82.36 (c) A device for the vending of cigarettes to which the 83.1 commissioner or authorized agents have been denied access for 83.2 the inspection of contents. In lieu of seizure, the 83.3 commissioner or an agent may seal the device to prevent its use 83.4 until inspection of contents is permitted. 83.5 (d) A device for the vending of cigarettes which does not 83.6 carry the name and address of the owner, plainly marked and 83.7 visible from the front of the machine. 83.8 (e) A device including, but not limited to, motor vehicles, 83.9 trailers, snowmobiles, airplanes, and boats used with the 83.10 knowledge of the owner or of a person operating with the consent 83.11 of the owner for the storage or transportation of more than 83.12 5,000 cigarettes which are contraband under this subdivision. 83.13 When cigarettes are being transported in the course of 83.14 interstate commerce, or are in movement from either a public 83.15 warehouse to a distributor upon orders from a manufacturer or 83.16 distributor, or from one distributor to another, the cigarettes 83.17 are not contraband, notwithstanding the provisions of clause (a). 83.18 (f) Cigarette packages or tobacco products obtained from an 83.19 unlicensed seller. 83.20 (g) Cigarette packages offered for sale or held as 83.21 inventory in violation of section 297F.20, subdivision 7. 83.22 (h) Tobacco products on which the tax has not been paid by 83.23 a licensed distributor. 83.24 (i) Any cigarette packages or tobacco products offered for 83.25 sale or held as inventory for which there is not an invoice from 83.26 a licensed seller as required under section 297F.13, subdivision 83.27 4. 83.28 (j) Cigarette packages which have been imported into the 83.29 United States in violation of United States Code, title 26, 83.30 section 5754. All cigarettes held in violation of that section 83.31 shall be presumed to have entered the United States after 83.32 December 31, 1999, in the absence of proof to the contrary. 83.33 EFFECTIVE DATE: This section, paragraph (i), is effective 83.34 July 1, 2000, and this section, paragraph (j), is effective the 83.35 day following final enactment. 83.36 Sec. 16. Minnesota Statutes 1998, section 297F.21, 84.1 subdivision 3, is amended to read: 84.2 Subd. 3. [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 84.3 DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 84.4 seizure of any alleged contraband, the person making the seizure 84.5 shall make available an inventory of the property seized to the 84.6 person from whom the seizure was made, if known, and file a copy 84.7 with the commissioner. Within ten days after the date of 84.8 service of the inventory, the person from whom the property was 84.9 seized or any person claiming an interest in the property may 84.10 file with the commissioner a demand for a judicial determination 84.11 of the question as to whether the property was lawfully subject 84.12 to seizure and forfeiture. The commissioner, within 60 days, 84.13 shall institute an action in the district court of the county 84.14 where the seizure was made to determine the issue of 84.15 forfeiture. The court shall decide whether the alleged 84.16 contraband is contraband, as defined in subdivision 1. 84.17 (b) The action must be brought in the name of the state and 84.18 must be prosecuted by the county attorney or by the attorney 84.19 general. The court shall hear the action without a jury and 84.20 shall try and determine the issues of fact and law involved. 84.21 (c) When a judgment of forfeiture is entered, the 84.22 commissioner may, unless the judgment is stayed pending an 84.23 appeal, either: 84.24 (1) deliver the forfeited property to the commissioner of 84.25 human services for use by patients in state institutions; 84.26 (2) cause it to be destroyed; or 84.27 (3) cause it to be sold at public auction as provided by 84.28 law. 84.29 (d) If a demand for judicial determination is made and no 84.30 action commenced as provided in this subdivision, the property 84.31 must be released by the commissioner and returned to the person 84.32 entitled to it. If no demand is made, the property seized is 84.33 considered forfeited to the state by operation of law and may be 84.34 disposed of by the commissioner as provided in the case of a 84.35 judgment of forfeiture.When the commissioner is satisfied that84.36a person from whom property is seized was acting in good faith85.1and without intent to evade the tax imposed by this chapter, the85.2commissioner shall release the property seized without further85.3legal proceedings.85.4 EFFECTIVE DATE: This section is effective for alleged 85.5 contraband seized on or after the day following final enactment. 85.6 ARTICLE 9 85.7 PROPERTY TAXES AND AIDS 85.8 Section 1. Minnesota Statutes 1998, section 97A.061, is 85.9 amended by adding a subdivision to read: 85.10 Subd. 4. [OFFSET OF PAYMENTS.] Payments to a county or 85.11 town under this section must be reduced by the amount of payment 85.12 to that county or town under section 477A.12 for the same lands 85.13 in the same year. 85.14 EFFECTIVE DATE: This section is effective for payments 85.15 made in calendar year 2001 and thereafter. 85.16 Sec. 2. Minnesota Statutes 1998, section 97A.061, is 85.17 amended by adding a subdivision to read: 85.18 Subd. 5. [ALLOCATION OF PAYMENTS.] Notwithstanding section 85.19 477A.14, the amounts paid to a county under section 477A.14 for 85.20 lands that are also subject to payment under this section shall 85.21 be allocated within the county in accordance with subdivision 2. 85.22 EFFECTIVE DATE: This section is effective for payments 85.23 made in calendar year 2001 and thereafter. 85.24 Sec. 3. Minnesota Statutes 1999 Supplement, section 85.25 123B.54, is amended to read: 85.26 123B.54 [DEBT SERVICE APPROPRIATION.] 85.27 (a) $33,165,000 in fiscal year 2000, $32,057,000 in fiscal 85.28 year 2001, and $31,280,000 in fiscal year 2002 and each year 85.29 thereafter is appropriated from the general fund to the 85.30 commissioner of children, families, and learning for payment of 85.31 debt service equalization aid under section 123B.53. The 2002 85.32 appropriation includes $3,201,000 for 2001 and $29,079,000 for 85.33 2002. 85.34 (b) The appropriations in paragraph (a) must be reduced by 85.35 the amount of any money specifically appropriated for the same 85.36 purpose in any year from any state fund. 86.1 (c) In addition to any other money specifically 86.2 appropriated for this section, $10,000,000 is appropriated from 86.3 the general fund to the commissioner of children, families, and 86.4 learning each year beginning in fiscal year 2002 for the 86.5 purposes of this section. This represents 100 percent of the 86.6 aid entitlement. 86.7 Sec. 4. Minnesota Statutes 1999 Supplement, section 86.8 272.02, subdivision 39, is amended to read: 86.9 Subd. 39. [ECONOMIC DEVELOPMENT; PUBLIC PURPOSE.] The 86.10 holding of property by a political subdivision of the state for 86.11 later resale for economic development purposes shall be 86.12 considered a public purpose in accordance with subdivision 8 for 86.13 a period not to exceed eight years for property located either: 86.14 (1) in the metropolitan area as defined in section 473.121; 86.15 or 86.16 (2) in a city of over 10,000 population located outside of 86.17 the metropolitan area, 86.18 and 15 years in the remainder of the state. 86.19 The holding of property by a political subdivision of the 86.20 state for later resale (1) which is purchased or held for 86.21 housing purposes, or (2) which meets the conditions described in 86.22 section 469.174, subdivision 10, shall be considered a public 86.23 purpose in accordance with subdivision 8. 86.24 The governing body of the political subdivision which 86.25 acquires property which is subject to this subdivision shall 86.26 after the purchase of the property certify to the city or county 86.27 assessor whether the property is held for economic development 86.28 purposes or housing purposes, or whether it meets the conditions 86.29 of section 469.174, subdivision 10. If the property is acquired 86.30 for economic development purposes and buildings or other 86.31 improvements are constructed after acquisition of the property, 86.32 and if more than one-half of the floor space of the buildings or 86.33 improvements which is available for lease to or use by a private 86.34 individual, corporation, or other entity is leased to or 86.35 otherwise used by a private individual, corporation, or other 86.36 entity the provisions of this subdivision shall not apply to the 87.1 property. This subdivision shall not create an exemption from 87.2 section 272.01, subdivision 2; 272.68; 273.19; or 469.040, 87.3 subdivision 3; or other provision of law providing for the 87.4 taxation of or for payments in lieu of taxes for publicly held 87.5 property which is leased, loaned, or otherwise made available 87.6 and used by a private person. 87.7 EFFECTIVE DATE: This section is effective for taxes levied 87.8 in 2000, payable in 2001, and thereafter. 87.9 Sec. 5. Minnesota Statutes 1999 Supplement, section 87.10 272.02, is amended by adding a subdivision to read: 87.11 Subd. 44. [ELECTRIC GENERATION FACILITY PERSONAL 87.12 PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 87.13 machinery and other personal property which is part of a 87.14 simple-cycle combustion-turbine electric generation facility 87.15 that exceeds 250 megawatts of installed capacity and that meets 87.16 the requirements of this subdivision is exempt. At the time of 87.17 construction, the facility must: 87.18 (1) utilize natural gas as a primary fuel; 87.19 (2) be located within 20 miles of parallel existing 16-inch 87.20 and 12-inch (outside diameter) natural gas pipelines and a 87.21 345-kilovolt high-voltage electric transmission line; and 87.22 (3) be designed to provide peaking, emergency backup, or 87.23 contingency services, and have received a certificate of need 87.24 pursuant to section 216B.243 demonstrating demand for its 87.25 capacity. 87.26 Construction of the facility must be commenced after January 1, 87.27 2000, and before January 1, 2004. Property eligible for this 87.28 exemption does not include electric transmission lines and 87.29 interconnections or gas pipelines and interconnections 87.30 appurtenant to the property or the facility. 87.31 EFFECTIVE DATE: This section is effective for taxes levied 87.32 in 2001, payable in 2002, and thereafter. 87.33 Sec. 6. Minnesota Statutes 1998, section 272.115, 87.34 subdivision 1, is amended to read: 87.35 Subdivision 1. [REQUIREMENT.] Except as otherwise provided 87.36 in subdivision 5, whenever any real estate is sold for a 88.1 consideration in excess of $1,000, whether by warranty deed, 88.2 quitclaim deed, contract for deed or any other method of sale, 88.3 the grantor, grantee or the legal agent of either shall file a 88.4 certificate of value with the county auditor in the county in 88.5 which the property is located when the deed or other document is 88.6 presented for recording. This subdivision does not apply to a 88.7 deed or other document which has been dated and acknowledged on 88.8 or before December 31, 1997. Contract for deeds are subject to 88.9 recording under section 507.235, subdivision 1. Value shall, in 88.10 the case of any deed not a gift, be the amount of the full 88.11 actual consideration thereof, paid or to be paid, including the 88.12 amount of any lien or liens assumed. The items and value of 88.13 personal property transferred with the real property must be 88.14 listed and deducted from the sale price. The certificate of 88.15 value shall include the classification to which the property 88.16 belongs for the purpose of determining the fair market value of 88.17 the property. The certificate shall include financing terms and 88.18 conditions of the sale which are necessary to determine the 88.19 actual, present value of the sale price for purposes of the 88.20 sales ratio study. The commissioner of revenue shall promulgate 88.21 administrative rules specifying the financing terms and 88.22 conditions which must be included on the certificate. Pursuant 88.23 to the authority of the commissioner of revenue in section 88.24 270.066, the certificate of value must include the social 88.25 security number or the federal employer identification number of 88.26 the grantors and grantees. The identification numbers of the 88.27 grantors and grantees are private data on individuals or 88.28 nonpublic data as defined in section 13.02, subdivisions 9 and 88.29 12, but, notwithstanding that section, the private or nonpublic 88.30 data may be disclosed to the commissioner of revenue for 88.31 purposes of tax administration. The information required to be 88.32 shown on the certificate of value is limited to the information 88.33 required as of the date of the acknowledgment on the deed or 88.34 other document to be recorded. 88.35 Sec. 7. Minnesota Statutes 1998, section 273.11, 88.36 subdivision 14, is amended to read: 89.1 Subd. 14. [VACANT LAND PLATTED ON OR AFTER AUGUST 1, 1991, 89.2 AND BEFORE AUGUST 1, 2000.] (a) All land platted on or after 89.3 August 1, 1991, and before August 1, 2000, and not improved with 89.4 a permanent structure, shall be assessed as provided in this 89.5 subdivision. The assessor shall determine the market value of 89.6 each individual lot based upon the highest and best use of the 89.7 property as unplatted land. In establishing the market value of 89.8 the property, the assessor shall consider the sale price of the 89.9 unplatted land or comparable sales of unplatted land of similar 89.10 use and similar availability of public utilities. 89.11 (b) The market value determined in paragraph (a) shall be 89.12 increased as follows for each of the three assessment years 89.13 immediately following the final approval of the plat: one-third 89.14 of the difference between the property's unplatted market value 89.15 as determined under paragraph (a) and the market value based 89.16 upon the highest and best use of the land as platted property 89.17 shall be added in each of the three subsequent assessment years. 89.18 (c) Any increase in market value after the first assessment 89.19 year following the plat's final approval shall be added to the 89.20 property's market value in the next assessment year. 89.21 Notwithstanding paragraph (b), if construction begins before the 89.22 expiration of the three years in paragraph (b), that lot shall 89.23 be eligible for revaluation in the next assessment year. The 89.24 market value of a platted lot determined under this subdivision 89.25 shall not exceed the value of that lot based upon the highest 89.26 and best use of the property as platted land. 89.27 EFFECTIVE DATE: This section is effective for land platted 89.28 after July 31, 2000. 89.29 Sec. 8. Minnesota Statutes 1998, section 273.11, is 89.30 amended by adding a subdivision to read: 89.31 Subd. 14a. [VACANT LAND PLATTED ON OR AFTER AUGUST 1, 89.32 2000.] (a) All land platted on or after August 1, 2000, and not 89.33 improved with a permanent structure, shall be assessed as 89.34 provided in this subdivision. The assessor shall determine the 89.35 market value of each individual lot based upon the highest and 89.36 best use of the property as unplatted land. In establishing the 90.1 market value of the property, the assessor shall consider the 90.2 sale price of the unplatted land or comparable sales of 90.3 unplatted land of similar use and similar availability of public 90.4 utilities. 90.5 (b) The market value determined in paragraph (a) shall be 90.6 increased as follows for each of the six assessment years 90.7 immediately following the final approval of the plat: one-sixth 90.8 of the difference between the property's unplatted market value 90.9 as determined under paragraph (a) and the market value based 90.10 upon the highest and best use of the land as platted property 90.11 shall be added in each of the six subsequent assessment years. 90.12 (c) Any increase in market value after the first assessment 90.13 year following the plat's final approval shall be added to the 90.14 property's market value in the next assessment year. 90.15 Notwithstanding paragraph (b), if construction begins before the 90.16 expiration of the six years in paragraph (b), that lot shall be 90.17 eligible for revaluation in the next assessment year. The 90.18 market value of a platted lot determined under this subdivision 90.19 shall not exceed the value of that lot based upon the highest 90.20 and best use of the property as platted land. 90.21 EFFECTIVE DATE: This section is effective for land platted 90.22 after July 31, 2000. 90.23 Sec. 9. Minnesota Statutes 1999 Supplement, section 90.24 273.124, subdivision 1, is amended to read: 90.25 Subdivision 1. [GENERAL RULE.] (a) Residential real estate 90.26 that is occupied and used for the purposes of a homestead by its 90.27 owner, who must be a Minnesota resident, is a residential 90.28 homestead. 90.29 Agricultural land, as defined in section 273.13, 90.30 subdivision 23, that is occupied and used as a homestead by its 90.31 owner, who must be a Minnesota resident, is an agricultural 90.32 homestead. 90.33 Dates for establishment of a homestead and homestead 90.34 treatment provided to particular types of property are as 90.35 provided in this section. 90.36 Propertyofheld by a trustee,beneficiary, or grantor of91.1 under a trust isnot disqualified from receivingeligible for 91.2 homesteadbenefitsclassification if thehomesteadrequirements 91.3 under this chapter are satisfied. 91.4 The assessor shall require proof, as provided in 91.5 subdivision 13, of the facts upon which classification as a 91.6 homestead may be determined. Notwithstanding any other law, the 91.7 assessor may at any time require a homestead application to be 91.8 filed in order to verify that any property classified as a 91.9 homestead continues to be eligible for homestead status. 91.10 Notwithstanding any other law to the contrary, the department of 91.11 revenue may, upon request from an assessor, verify whether an 91.12 individual who is requesting or receiving homestead 91.13 classification has filed a Minnesota income tax return as a 91.14 resident for the most recent taxable year for which the 91.15 information is available. 91.16 When there is a name change or a transfer of homestead 91.17 property, the assessor may reclassify the property in the next 91.18 assessment unless a homestead application is filed to verify 91.19 that the property continues to qualify for homestead 91.20 classification. 91.21 (b) For purposes of this section, homestead property shall 91.22 include property which is used for purposes of the homestead but 91.23 is separated from the homestead by a road, street, lot, 91.24 waterway, or other similar intervening property. The term "used 91.25 for purposes of the homestead" shall include but not be limited 91.26 to uses for gardens, garages, or other outbuildings commonly 91.27 associated with a homestead, but shall not include vacant land 91.28 held primarily for future development. In order to receive 91.29 homestead treatment for the noncontiguous property, the owner 91.30 must use the property for the purposes of the homestead, and 91.31 must apply to the assessor, both by the deadlines given in 91.32 subdivision 9. After initial qualification for the homestead 91.33 treatment, additional applications for subsequent years are not 91.34 required. 91.35 (c) Residential real estate that is occupied and used for 91.36 purposes of a homestead by a relative of the owner is a 92.1 homestead but only to the extent of the homestead treatment that 92.2 would be provided if the related owner occupied the property. 92.3 For purposes of this paragraph and paragraph (g), "relative" 92.4 means a parent, stepparent, child, stepchild, grandparent, 92.5 grandchild, brother, sister, uncle, aunt, nephew, or niece. 92.6 This relationship may be by blood or marriage. Property that 92.7 has been classified as seasonal recreational residential 92.8 property at any time during which it has been owned by the 92.9 current owner or spouse of the current owner will not be 92.10 reclassified as a homestead unless it is occupied as a homestead 92.11 by the owner; this prohibition also applies to property that, in 92.12 the absence of this paragraph, would have been classified as 92.13 seasonal recreational residential property at the time when the 92.14 residence was constructed. Neither the related occupant nor the 92.15 owner of the property may claim a property tax refund under 92.16 chapter 290A for a homestead occupied by a relative. In the 92.17 case of a residence located on agricultural land, only the 92.18 house, garage, and immediately surrounding one acre of land 92.19 shall be classified as a homestead under this paragraph, except 92.20 as provided in paragraph (d). 92.21 (d) Agricultural property that is occupied and used for 92.22 purposes of a homestead by a relative of the owner, is a 92.23 homestead, only to the extent of the homestead treatment that 92.24 would be provided if the related owner occupied the property, 92.25 and only if all of the following criteria are met: 92.26 (1) the relative who is occupying the agricultural property 92.27 is a son, daughter, grandson, granddaughter, father, or mother 92.28 of the owner of the agricultural property or a sonor, daughter, 92.29 grandson, or granddaughter of the spouse of the owner of the 92.30 agricultural property; 92.31 (2) the owner of the agricultural property must be a 92.32 Minnesota resident; 92.33 (3) the owner of the agricultural property must not receive 92.34 homestead treatment on any other agricultural property in 92.35 Minnesota; and 92.36 (4) the owner of the agricultural property is limited to 93.1 only one agricultural homestead per family under this paragraph. 93.2 Neither the related occupant nor the owner of the property 93.3 may claim a property tax refund under chapter 290A for a 93.4 homestead occupied by a relative qualifying under this 93.5 paragraph. For purposes of this paragraph, "agricultural 93.6 property" means the house, garage, other farm buildings and 93.7 structures, and agricultural land. 93.8 Application must be made to the assessor by the owner of 93.9 the agricultural property to receive homestead benefits under 93.10 this paragraph. The assessor may require the necessary proof 93.11 that the requirements under this paragraph have been met. 93.12 (e) In the case of property owned by a property owner who 93.13 is married, the assessor must not deny homestead treatment in 93.14 whole or in part if only one of the spouses occupies the 93.15 property and the other spouse is absent due to: (1) marriage 93.16 dissolution proceedings, (2) legal separation, (3) employment or 93.17 self-employment in another location, or (4) other personal 93.18 circumstances causing the spouses to live separately, not 93.19 including an intent to obtain two homestead classifications for 93.20 property tax purposes. To qualify under clause (3), the 93.21 spouse's place of employment or self-employment must be at least 93.22 50 miles distant from the other spouse's place of employment, 93.23 and the homesteads must be at least 50 miles distant from each 93.24 other. Homestead treatment, in whole or in part, shall not be 93.25 denied to the owner's spouse who previously occupied the 93.26 residence with the owner if the absence of the owner is due to 93.27 one of the exceptions provided in this paragraph. 93.28 (f) The assessor must not deny homestead treatment in whole 93.29 or in part if: 93.30 (1) in the case of a property owner who is not married, the 93.31 owner is absent due to residence in a nursing home or boarding 93.32 care facility and the property is not otherwise occupied; or 93.33 (2) in the case of a property owner who is married, the 93.34 owner or the owner's spouse or both are absent due to residence 93.35 in a nursing home or boarding care facility and the property is 93.36 not occupied or is occupied only by the owner's spouse. 94.1 (g) If an individual is purchasing property with the intent 94.2 of claiming it as a homestead and is required by the terms of 94.3 the financing agreement to have a relative shown on the deed as 94.4 a coowner, the assessor shall allow a full homestead 94.5 classification. This provision only applies to first-time 94.6 purchasers, whether married or single, or to a person who had 94.7 previously been married and is purchasing as a single individual 94.8 for the first time. The application for homestead benefits must 94.9 be on a form prescribed by the commissioner and must contain the 94.10 data necessary for the assessor to determine if full homestead 94.11 benefits are warranted. 94.12 (h) If residential or agricultural real estate is occupied 94.13 and used for purposes of a homestead by a child of a deceased 94.14 owner and the property is subject to jurisdiction of probate 94.15 court, the child shall receive relative homestead classification 94.16 under paragraph (c) or (d) to the same extent they would be 94.17 entitled to it if the owner was still living, until the probate 94.18 is completed. For purposes of this paragraph, "child" includes 94.19 a relationship by blood or by marriage. 94.20 EFFECTIVE DATE: This section is effective for taxes levied 94.21 in 2000, payable in 2001, and thereafter. 94.22 Sec. 10. Minnesota Statutes 1999 Supplement, section 94.23 273.124, subdivision 14, is amended to read: 94.24 Subd. 14. [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 94.25 (a) Real estate of less than ten acres that is the homestead of 94.26 its owner must be classified as class 2a under section 273.13, 94.27 subdivision 23, paragraph (a), if: 94.28 (1) the parcel on which the house is located is contiguous 94.29 on at least two sides to (i) agricultural land, (ii) land owned 94.30 or administered by the United States Fish and Wildlife Service, 94.31 or (iii) land administered by the department of natural 94.32 resources on which in lieu taxes are paid under sections 477A.11 94.33 to 477A.14; 94.34 (2) its owner also owns a noncontiguous parcel of 94.35 agricultural land that is at least 20 acres; 94.36 (3) the noncontiguous land is located not farther than four 95.1 townships or cities, or a combination of townships or cities 95.2 from the homestead; and 95.3 (4) the agricultural use value of the noncontiguous land 95.4 and farm buildings is equal to at least 50 percent of the market 95.5 value of the house, garage, and one acre of land. 95.6 Homesteads initially classified as class 2a under the 95.7 provisions of this paragraph shall remain classified as class 95.8 2a, irrespective of subsequent changes in the use of adjoining 95.9 properties, as long as the homestead remains under the same 95.10 ownership, the owner owns a noncontiguous parcel of agricultural 95.11 land that is at least 20 acres, and the agricultural use value 95.12 qualifies under clause (4). Homestead classification under this 95.13 paragraph is limited to property that qualified under this 95.14 paragraph for the 1998 assessment. 95.15 (b) Agricultural property consisting of at least 40 acres 95.16 shall be classified homestead, to the same extent as other 95.17 agricultural homestead property, if all of the following 95.18 criteria are met: 95.19 (1) the owner is actively farming the agricultural 95.20 property; 95.21 (2) the owner of the agricultural property is a Minnesota 95.22 resident; 95.23 (3) neither the owner nor the spouse of theagricultural95.24propertyowner claims another agricultural homestead in 95.25 Minnesota; and 95.26 (4) the owner does not live farther than four townships or 95.27 cities, or a combination of four townships or cities, from the 95.28 agricultural property. 95.29 As used in this paragraph, "owner" includes a shareholder of a 95.30 family farm corporation that owns the property or a partner in a 95.31 family farm partnership that owns the property. 95.32 (c) Except as provided in paragraph (e), noncontiguous land 95.33 shall be included as part of a homestead under section 273.13, 95.34 subdivision 23, paragraph (a), only if the homestead is 95.35 classified as class 2a and the detached land is located in the 95.36 same township or city, or not farther than four townships or 96.1 cities or combination thereof from the homestead. Any taxpayer 96.2 of these noncontiguous lands must notify the county assessor 96.3 that the noncontiguous land is part of the taxpayer's homestead, 96.4 and, if the homestead is located in another county, the taxpayer 96.5 must also notify the assessor of the other county. 96.6 (d) Agricultural land used for purposes of a homestead and 96.7 actively farmed by a person holding a vested remainder interest 96.8 in it must be classified as a homestead under section 273.13, 96.9 subdivision 23, paragraph (a). If agricultural land is 96.10 classified class 2a, any other dwellings on the land used for 96.11 purposes of a homestead by persons holding vested remainder 96.12 interests who are actively engaged in farming the property, and 96.13 up to one acre of the land surrounding each homestead and 96.14 reasonably necessary for the use of the dwelling as a home, must 96.15 also be assessed class 2a. 96.16 (e) Agricultural land and buildings that were class 2a 96.17 homestead property under section 273.13, subdivision 23, 96.18 paragraph (a), for the 1997 assessment shall remain classified 96.19 as agricultural homesteads for subsequent assessments if: 96.20 (1) the property owner abandoned the homestead dwelling 96.21 located on the agricultural homestead as a result of the April 96.22 1997 floods; 96.23 (2) the property is located in the county of Polk, Clay, 96.24 Kittson, Marshall, Norman, or Wilkin; 96.25 (3) the agricultural land and buildings remain under the 96.26 same ownership for the current assessment year as existed for 96.27 the 1997 assessment year and continue to be used for 96.28 agricultural purposes; 96.29 (4) the dwelling occupied by the owner is located in 96.30 Minnesota and is within 30 miles of one of the parcels of 96.31 agricultural land that is owned by the taxpayer; and 96.32 (5) the owner notifies the county assessor that the 96.33 relocation was due to the 1997 floods, and the owner furnishes 96.34 the assessor any information deemed necessary by the assessor in 96.35 verifying the change in dwelling. Further notifications to the 96.36 assessor are not required if the property continues to meet all 97.1 the requirements in this paragraph and any dwellings on the 97.2 agricultural land remain uninhabited. 97.3 (f) Agricultural land and buildings that were class 2a 97.4 homestead property under section 273.13, subdivision 23, 97.5 paragraph (a), for the 1998 assessment shall remain classified 97.6 agricultural homesteads for subsequent assessments if: 97.7 (1) the property owner abandoned the homestead dwelling 97.8 located on the agricultural homestead as a result of damage 97.9 caused by a March 29, 1998, tornado; 97.10 (2) the property is located in the county of Blue Earth, 97.11 Brown, Cottonwood, LeSueur, Nicollet, Nobles, or Rice; 97.12 (3) the agricultural land and buildings remain under the 97.13 same ownership for the current assessment year as existed for 97.14 the 1998 assessment year; 97.15 (4) the dwelling occupied by the owner is located in this 97.16 state and is within 50 miles of one of the parcels of 97.17 agricultural land that is owned by the taxpayer; and 97.18 (5) the owner notifies the county assessor that the 97.19 relocation was due to a March 29, 1998, tornado, and the owner 97.20 furnishes the assessor any information deemed necessary by the 97.21 assessor in verifying the change in homestead dwelling. For 97.22 taxes payable in 1999, the owner must notify the assessor by 97.23 December 1, 1998. Further notifications to the assessor are not 97.24 required if the property continues to meet all the requirements 97.25 in this paragraph and any dwellings on the agricultural land 97.26 remain uninhabited. 97.27 EFFECTIVE DATE: This section is effective for taxes levied 97.28 in 2000, payable in 2001, and thereafter. 97.29 Sec. 11. Minnesota Statutes 1998, section 273.124, is 97.30 amended by adding a subdivision to read: 97.31 Subd. 21. [TRUST PROPERTY; HOMESTEAD.] Real property held 97.32 by a trustee under a trust is eligible for classification as 97.33 homestead property if: 97.34 (1) the grantor or surviving spouse of the grantor of the 97.35 trust occupies and uses the property as a homestead; 97.36 (2) a relative or surviving relative of the grantor who 98.1 meets the requirements of subdivision 1, paragraph (c), in the 98.2 case of residential real estate; or subdivision 1, paragraph 98.3 (d), in the case of agricultural property, occupies and uses the 98.4 property as a homestead; 98.5 (3) a family farm corporation, a partnership operating a 98.6 family farm, or a joint farm venture operating a family farm 98.7 rents the property held by a trustee under a trust, and a 98.8 shareholder or partner of the corporation, partnership, or joint 98.9 farm venture occupies and uses the property as a homestead, and 98.10 is actively farming the property on behalf of the corporation, 98.11 partnership, or joint farm venture; or 98.12 (4) a person who has received homestead classification for 98.13 property taxes payable in 2000 on the basis of an unqualified 98.14 legal right under the terms of the trust agreement to occupy the 98.15 property as that person's homestead and who continues to use the 98.16 property as a homestead. 98.17 For purposes of this subdivision, "grantor" is defined as 98.18 the person creating or establishing a testamentary, inter vivos, 98.19 revocable or irrevocable trust by written instrument or through 98.20 the exercise of a power of appointment. 98.21 EFFECTIVE DATE: This section is effective for taxes levied 98.22 in 2000, payable in 2001, and thereafter. 98.23 Sec. 12. Minnesota Statutes 1999 Supplement, section 98.24 273.13, subdivision 24, is amended to read: 98.25 Subd. 24. [CLASS 3.] (a) Commercial and industrial 98.26 property and utility real and personal property is class 3a. 98.27 Each parcel of real property has a class rate of 2.4 percent of 98.28 the first tier of market value, and 3.4 percent of the remaining 98.29 market value, except that in the case of contiguous parcels of 98.30 property owned by the same person or entity, only the value 98.31 equal to the first-tier value of the contiguous parcels 98.32 qualifies for the reduced class rate. For the purposes of this 98.33 subdivision, the first tier means the first $150,000 of market 98.34 value. Real property owned in fee by a utility for transmission 98.35 line right-of-way shall be classified at the class rate for the 98.36 higher tier. All personal property shall be classified at the 99.1 class rate for the higher tier. For purposes of this 99.2 subdivision "personal property" means tools, implements, and 99.3 machinery of an electric generating, transmission, or 99.4 distribution system, or a pipeline system transporting or 99.5 distributing water, gas, crude oil, or petroleum products or 99.6 mains and pipes used in the distribution of steam or hot or 99.7 chilled water for heating or cooling buildings, which are 99.8 fixtures. 99.9 For purposes of this paragraph, parcels are considered to 99.10 be contiguous even if they are separated from each other by a 99.11 road, street, vacant lot, waterway, or other similar intervening 99.12 type of property. 99.13 (b) Employment property defined in section 469.166, during 99.14 the period provided in section 469.170, shall constitute class 99.15 3b. The class rates for class 3b property are determined under 99.16 paragraph (a). 99.17 (c)(1) Subject to the limitations of clause (2), structures 99.18 which are (i) located on property classified as class 3a, (ii) 99.19 constructed under an initial building permit issued after 99.20 January 2, 1996, (iii) located in a transit zone as defined 99.21 under section 473.3915, subdivision 3, (iv) located within the 99.22 boundaries of a school district, and (v) not primarily used for 99.23 retail or transient lodging purposes, shall have a class rate 99.24 equal to the lesser of 2.975 percent or the class rate of the 99.25 second tier of the commercial property rate under paragraph (a) 99.26 on any portion of the market value that does not qualify for the 99.27 first tier class rate under paragraph (a). As used in item (v), 99.28 a structure is primarily used for retail or transient lodging 99.29 purposes if over 50 percent of its square footage is used for 99.30 those purposes. A class rate equal to the lesser of 2.975 99.31 percent or the class rate of the second tier of the commercial 99.32 property class rate under paragraph (a) shall also apply to 99.33 improvements to existing structures that meet the requirements 99.34 of items (i) to (v) if the improvements are constructed under an 99.35 initial building permit issued after January 2, 1996, even if 99.36 the remainder of the structure was constructed prior to January 100.1 2, 1996. For the purposes of this paragraph, a structure shall 100.2 be considered to be located in a transit zone if any portion of 100.3 the structure lies within the zone. If any property once 100.4 eligible for treatment under this paragraph ceases to remain 100.5 eligible due to revisions in transit zone boundaries, the 100.6 property shall continue to receive treatment under this 100.7 paragraph for a period of three years. 100.8 (2) This clause applies to any structure qualifying for the 100.9 transit zone reduced class rate under clause (1) on January 2, 100.10 1999, or any structure meeting any of the qualification criteria 100.11 in item (i) and otherwise qualifying for the transit zone 100.12 reduced class rate under clause (1). Such a structure continues 100.13 to receive the transit zone reduced class rate until the 100.14 occurrence of one of the events in item (ii). Property 100.15 qualifying under item (i)(D), that is located outside of a city 100.16 of the first class, qualifies for the transit zone reduced class 100.17 rate as provided in that item. Property qualifying under item 100.18 (i)(E) qualifies for the transit zone reduced class rate as 100.19 provided in that item. 100.20 (i) A structure qualifies for the rate in this clause if it 100.21 is: 100.22 (A) property for which a building permit was issued before 100.23 December 31, 1998; or 100.24 (B) property for which a building permit was issued before 100.25 June 30, 2001, if: 100.26 (I) at least 50 percent of the land on which the structure 100.27 is to be built has been acquired or is the subject of signed 100.28 purchase agreements or signed options as of March 15, 1998, by 100.29 the entity that proposes construction of the project or an 100.30 affiliate of the entity; 100.31 (II) signed agreements have been entered into with one 100.32 entity or with affiliated entities to lease for the account of 100.33 the entity or affiliated entities at least 50 percent of the 100.34 square footage of the structure or the owner of the structure 100.35 will occupy at least 50 percent of the square footage of the 100.36 structure; and 101.1 (III) one of the following requirements is met: 101.2 the project proposer has submitted the completed data 101.3 portions of an environmental assessment worksheet by December 101.4 31, 1998; or 101.5 a notice of determination of adequacy of an environmental 101.6 impact statement has been published by April 1, 1999; or 101.7 an alternative urban areawide review has been completed by 101.8 April 1, 1999; or 101.9 (C) property for which a building permit is issued before 101.10 July 30, 1999, if: 101.11 (I) at least 50 percent of the land on which the structure 101.12 is to be built has been acquired or is the subject of signed 101.13 purchase agreements as of March 31, 1998, by the entity that 101.14 proposes construction of the project or an affiliate of the 101.15 entity; 101.16 (II) a signed agreement has been entered into between the 101.17 building developer and a tenant to lease for its own account at 101.18 least 200,000 square feet of space in the building; 101.19 (III) a signed letter of intent is entered into by July 1, 101.20 1998, between the building developer and the tenant to lease the 101.21 space for its own account; and 101.22 (IV) the environmental review process required by state law 101.23 was commenced by December 31, 1998; 101.24 (D) property for which an irrevocable letter of credit with 101.25 a housing and redevelopment authority was signed before December 101.26 31, 1998. The structure shall receive the transit zone reduced 101.27 class rate during construction and for the duration of time that 101.28 the original tenants remain in the building. Any unoccupied net 101.29 leasable square footage that is not leased within 36 months 101.30 after the certificate of occupancy has been issued for the 101.31 building shall not be eligible to receive the reduced class 101.32 rate. This reduced class rate applies only ifthea qualifying 101.33 entitythat constructed the structurecontinues to own the 101.34 property; 101.35 (E) property, located in a city of the first class, and for 101.36 which the building permits for the excavation, the parking ramp, 102.1 and the office tower were issued prior to April 1, 1999, shall 102.2 receive the reduced class rate during construction and for the 102.3 first five assessment years immediately following its initial 102.4 occupancy provided that, when completed, at least 25 percent of 102.5 the net leasable square footage must be occupied bythea 102.6 qualifying entityor the parent entity constructing the102.7structureeach year during this time period. In order to 102.8 receive the reduced class rate on the structure in any 102.9 subsequent assessment years, at least 50 percent of the rentable 102.10 square footage must be occupied bythea qualifying entityor102.11the parent entity that constructed the structure. This reduced 102.12 class rate applies only ifthea qualifying entityor the parent102.13entity that constructed the structurecontinues to own the 102.14 property. 102.15 (ii) A structure specified by this clause, other than a 102.16 structure qualifying under clause (i)(D) or (E), shall continue 102.17 to receive the transit zone reduced class rate until the 102.18 occurrence of one of the following events: 102.19 (A) if the structure upon initial occupancy will be owner 102.20 occupied by the entity initially constructing the structure or 102.21 an affiliated entity, the structure receives the reduced class 102.22 rate until the structure ceases to be at least 50 percent 102.23 occupied by the entity or an affiliated entity, provided, if the 102.24 portion of the structure occupied by that entity or an affiliate 102.25 of the entity is less than 85 percent, the transit zone class 102.26 rate reduction for the portion of structure not so occupied 102.27 terminates upon the leasing of such space to any nonaffiliated 102.28 entity; or 102.29 (B) if the structure is leased by a single entity or 102.30 affiliated entity at the time of initial occupancy, the 102.31 structure shall receive the reduced class rate until the 102.32 structure ceases to be at least 50 percent occupied by the 102.33 entity or an affiliated entity, provided, if the portion of the 102.34 structure occupied by that entity or an affiliate of the entity 102.35 is less than 85 percent, the transit zone class rate reduction 102.36 for the portion of structure not so occupied shall terminate 103.1 upon the leasing of such space to any nonaffiliated entity; or 103.2 (C) if the structure meets the criteria in item (i)(C), the 103.3 structure shall receive the reduced class rate until the 103.4 expiration of the initial lease term of the applicable tenants. 103.5 Percentages occupied or leased shall be determined based 103.6 upon net leasable square footage in the structure. The assessor 103.7 shall allocate the value of the structure in the same fashion as 103.8 provided in the general law for portions of any structure 103.9 receiving and not receiving the transit tax class reduction as a 103.10 result of this clause. 103.11 (3) For purposes of paragraph (c), "qualifying entity" 103.12 means the entity owning the property on September 1, 2000, or an 103.13 affiliate of an entity that owned the property on September 1, 103.14 2000. 103.15 EFFECTIVE DATE: This section is effective for property 103.16 taxes payable in 2001 and thereafter. 103.17 Sec. 13. Minnesota Statutes 1999 Supplement, section 103.18 273.13, subdivision 25, is amended to read: 103.19 Subd. 25. [CLASS 4.] (a) Class 4a is residential real 103.20 estate containing four or more units and used or held for use by 103.21 the owner or by the tenants or lessees of the owner as a 103.22 residence for rental periods of 30 days or more. Class 4a also 103.23 includes hospitals licensed under sections 144.50 to 144.56, 103.24 other than hospitals exempt under section 272.02, and contiguous 103.25 property used for hospital purposes, without regard to whether 103.26 the property has been platted or subdivided.Class 4a property103.27in a city with a population of 5,000 or less, that is (1)103.28located outside of the metropolitan area, as defined in section103.29473.121, subdivision 2, or outside any county contiguous to the103.30metropolitan area, and (2) whose city boundary is at least 15103.31miles from the boundary of any city with a population greater103.32than 5,000 has a class rate of 2.15 percent of market value.103.33All otherClass 4a property has a class rate of2.41.95 percent 103.34 of market value.For purposes of this paragraph, population has103.35the same meaning given in section 477A.011, subdivision 3.103.36 (b) Class 4b includes: 104.1 (1) residential real estate containing less than four units 104.2 that does not qualify as class 4bb, other than seasonal 104.3 residential, and recreational; 104.4 (2) manufactured homes not classified under any other 104.5 provision; 104.6 (3) a dwelling, garage, and surrounding one acre of 104.7 property on a nonhomestead farm classified under subdivision 23, 104.8 paragraph (b) containing two or three units; 104.9 (4) unimproved property that is classified residential as 104.10 determined under subdivision 33. 104.11 Class 4b property has a class rate of 1.65 percent of 104.12 market value. 104.13 (c) Class 4bb includes: 104.14 (1) nonhomestead residential real estate containing one 104.15 unit, other than seasonal residential, and recreational; and 104.16 (2) a single family dwelling, garage, and surrounding one 104.17 acre of property on a nonhomestead farm classified under 104.18 subdivision 23, paragraph (b). 104.19 Class 4bb has a class rate of 1.2 percent on the first 104.20 $76,000 of market value and a class rate of 1.65 percent of its 104.21 market value that exceeds $76,000. 104.22 Property that has been classified as seasonal recreational 104.23 residential property at any time during which it has been owned 104.24 by the current owner or spouse of the current owner does not 104.25 qualify for class 4bb. 104.26 (d) Class 4c property includes: 104.27 (1) except as provided in subdivision 22, paragraph (c), 104.28 real property devoted to temporary and seasonal residential 104.29 occupancy for recreation purposes, including real property 104.30 devoted to temporary and seasonal residential occupancy for 104.31 recreation purposes and not devoted to commercial purposes for 104.32 more than 250 days in the year preceding the year of 104.33 assessment. For purposes of this clause, property is devoted to 104.34 a commercial purpose on a specific day if any portion of the 104.35 property is used for residential occupancy, and a fee is charged 104.36 for residential occupancy. In order for a property to be 105.1 classified as class 4c, seasonal recreational residential for 105.2 commercial purposes, at least 40 percent of the annual gross 105.3 lodging receipts related to the property must be from business 105.4 conducted during 90 consecutive days and either (i) at least 60 105.5 percent of all paid bookings by lodging guests during the year 105.6 must be for periods of at least two consecutive nights; or (ii) 105.7 at least 20 percent of the annual gross receipts must be from 105.8 charges for rental of fish houses, boats and motors, 105.9 snowmobiles, downhill or cross-country ski equipment, or charges 105.10 for marina services, launch services, and guide services, or the 105.11 sale of bait and fishing tackle. For purposes of this 105.12 determination, a paid booking of five or more nights shall be 105.13 counted as two bookings. Class 4c also includes commercial use 105.14 real property used exclusively for recreational purposes in 105.15 conjunction with class 4c property devoted to temporary and 105.16 seasonal residential occupancy for recreational purposes, up to 105.17 a total of two acres, provided the property is not devoted to 105.18 commercial recreational use for more than 250 days in the year 105.19 preceding the year of assessment and is located within two miles 105.20 of the class 4c property with which it is used. Class 4c 105.21 property classified in this clause also includes the remainder 105.22 of class 1c resorts provided that the entire property including 105.23 that portion of the property classified as class 1c also meets 105.24 the requirements for class 4c under this clause; otherwise the 105.25 entire property is classified as class 3. Owners of real 105.26 property devoted to temporary and seasonal residential occupancy 105.27 for recreation purposes and all or a portion of which was 105.28 devoted to commercial purposes for not more than 250 days in the 105.29 year preceding the year of assessment desiring classification as 105.30 class 1c or 4c, must submit a declaration to the assessor 105.31 designating the cabins or units occupied for 250 days or less in 105.32 the year preceding the year of assessment by January 15 of the 105.33 assessment year. Those cabins or units and a proportionate 105.34 share of the land on which they are located will be designated 105.35 class 1c or 4c as otherwise provided. The remainder of the 105.36 cabins or units and a proportionate share of the land on which 106.1 they are located will be designated as class 3a. The owner of 106.2 property desiring designation as class 1c or 4c property must 106.3 provide guest registers or other records demonstrating that the 106.4 units for which class 1c or 4c designation is sought were not 106.5 occupied for more than 250 days in the year preceding the 106.6 assessment if so requested. The portion of a property operated 106.7 as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 106.8 nonresidential facility operated on a commercial basis not 106.9 directly related to temporary and seasonal residential occupancy 106.10 for recreation purposes shall not qualify for class 1c or 4c; 106.11 (2) qualified property used as a golf course if: 106.12 (i) it is open to the public on a daily fee basis. It may 106.13 charge membership fees or dues, but a membership fee may not be 106.14 required in order to use the property for golfing, and its green 106.15 fees for golfing must be comparable to green fees typically 106.16 charged by municipal courses; and 106.17 (ii) it meets the requirements of section 273.112, 106.18 subdivision 3, paragraph (d). 106.19 A structure used as a clubhouse, restaurant, or place of 106.20 refreshment in conjunction with the golf course is classified as 106.21 class 3a property; 106.22 (3) real property up to a maximum of one acre of land owned 106.23 by a nonprofit community service oriented organization; provided 106.24 that the property is not used for a revenue-producing activity 106.25 for more than six days in the calendar year preceding the year 106.26 of assessment and the property is not used for residential 106.27 purposes on either a temporary or permanent basis. For purposes 106.28 of this clause, a "nonprofit community service oriented 106.29 organization" means any corporation, society, association, 106.30 foundation, or institution organized and operated exclusively 106.31 for charitable, religious, fraternal, civic, or educational 106.32 purposes, and which is exempt from federal income taxation 106.33 pursuant to section 501(c)(3), (10), or (19) of the Internal 106.34 Revenue Code of 1986, as amended through December 31, 1990. For 106.35 purposes of this clause, "revenue-producing activities" shall 106.36 include but not be limited to property or that portion of the 107.1 property that is used as an on-sale intoxicating liquor or 3.2 107.2 percent malt liquor establishment licensed under chapter 340A, a 107.3 restaurant open to the public, bowling alley, a retail store, 107.4 gambling conducted by organizations licensed under chapter 349, 107.5 an insurance business, or office or other space leased or rented 107.6 to a lessee who conducts a for-profit enterprise on the 107.7 premises. Any portion of the property which is used for 107.8 revenue-producing activities for more than six days in the 107.9 calendar year preceding the year of assessment shall be assessed 107.10 as class 3a. The use of the property for social events open 107.11 exclusively to members and their guests for periods of less than 107.12 24 hours, when an admission is not charged nor any revenues are 107.13 received by the organization shall not be considered a 107.14 revenue-producing activity; 107.15 (4) post-secondary student housing of not more than one 107.16 acre of land that is owned by a nonprofit corporation organized 107.17 under chapter 317A and is used exclusively by a student 107.18 cooperative, sorority, or fraternity for on-campus housing or 107.19 housing located within two miles of the border of a college 107.20 campus; 107.21 (5) manufactured home parks as defined in section 327.14, 107.22 subdivision 3;and107.23 (6) real property that is actively and exclusively devoted 107.24 to indoor fitness, health, social, recreational, and related 107.25 uses, is owned and operated by a not-for-profit corporation, and 107.26 is located within the metropolitan area as defined in section 107.27 473.121, subdivision 2; and 107.28 (7) a leased or privately owned noncommercial aircraft 107.29 storage hangar that is not exempt under section 272.01, 107.30 subdivision 2, and the land on which it is located, provided 107.31 that: 107.32 (i) the land is on an airport owned or operated by a city, 107.33 town, county, metropolitan airports commission, or group 107.34 thereof; and 107.35 (ii) the land lease, or any ordinance or other signed 107.36 agreement restricting the use of the leased premise, prohibits 108.1 commercial activity performed at the hangar. 108.2 If a hangar classified under this clause is sold after the 108.3 effective date of this act, a bill of sale must be filed by the 108.4 new owner with the county assessor of the county where the 108.5 property is located within 60 days of the sale. 108.6 Class 4c property has a class rate of 1.65 percent of 108.7 market value, except that (i) each parcel of seasonal 108.8 residential recreational property not used for commercial 108.9 purposes has the same class rates as class 4bb property, (ii) 108.10 manufactured home parks assessed under clause (5) havethe same108.11 a class rateas class 4b propertyof 1.2 percent, and (iii) 108.12 property described in paragraph (d), clause (4), has the same 108.13 class rate as the rate applicable to the first tier of class 4bb 108.14 nonhomestead residential real estate under paragraph (c). 108.15 (e) Class 4d property is qualifying low-income rental 108.16 housing certified to the assessor by the housing finance agency 108.17 under sections 273.126 and 462A.071. Class 4d includes land in 108.18 proportion to the total market value of the building that is 108.19 qualifying low-income rental housing. For all properties 108.20 qualifying as class 4d, the market value determined by the 108.21 assessor must be based on the normal approach to value using 108.22 normal unrestricted rents. 108.23 Class 4d property has a class rate of one percent of market 108.24 value. 108.25 EFFECTIVE DATE: The provisions of clause (7) are effective 108.26 for taxes levied in 2000, payable in 2001 only. The reminder of 108.27 this section is effective for taxes levied in 2000, payable in 108.28 2001, and thereafter. 108.29 Sec. 14. Minnesota Statutes 1999 Supplement, section 108.30 273.1382, subdivision 1b, is amended to read: 108.31 Subd. 1b. [EDUCATION AGRICULTURAL CREDIT.] Property 108.32 classified as class 2a agricultural homestead or class 2b 108.33 agricultural nonhomestead or timberland is eligible for 108.34 education agricultural credit. The credit is equal to5488.5 108.35 percent, in the case of agricultural homestead property, or 50108.36percent, in the case of agricultural nonhomestead property or109.1timberland,of the property's net tax capacity times the 109.2 education credit tax rate determined in subdivision 1. The net 109.3 tax capacity of class 2a property attributable to the house, 109.4 garage, and surrounding one acre of land is not eligible for the 109.5 credit under this subdivision. 109.6 EFFECTIVE DATE: This section is effective for taxes 109.7 payable in 2001, and thereafter. 109.8 Sec. 15. Minnesota Statutes 1999 Supplement, section 109.9 273.1398, subdivision 1a, is amended to read: 109.10 Subd. 1a. [TAX BASE DIFFERENTIAL.] (a) For aids payable in 109.11 2000, the tax base differential is: 109.12 (1) 0.45 percent of the assessment year 1998 taxable market 109.13 value of class 2a agricultural homestead property, excluding the 109.14 house, garage, and surrounding one acre of land, between 109.15 $115,000 and $600,000 and over 320 acres, minus the value over 109.16 $600,000 that is less than 320 acres; plus 109.17 (2) 0.5 percent of the assessment year 1998 taxable market 109.18 value of noncommercial seasonal recreational residential 109.19 property over $75,000 in value; plus 109.20 (3) for purposes of computing the fiscal disparity 109.21 adjustment only, 0.2 percent of the assessment year 1998 taxable 109.22 market value of class 3 commercial-industrial property over 109.23 $150,000. 109.24 (b) For the purposes of the distribution of homestead and 109.25 agricultural credit aid for aids payable in 2000, the 109.26 commissioner of revenue shall use the best information available 109.27 as of June 30, 1999, to make an estimate of the value described 109.28 in paragraph (a), clause (1). The commissioner shall adjust the 109.29 distribution of homestead and agricultural credit aid for aids 109.30 payable in 2001 and subsequent years if new information 109.31 regarding the value described in paragraph (a), clause (1), 109.32 becomes available after June 30, 1999. 109.33 (c) For aids payable in 2001, the tax base differential is: 109.34 (1) 0.45 percent of the assessment year 1999 taxable market 109.35 value of class 4a property that had a class rate of 2.4 percent 109.36 for taxes payable in 2000, plus 0.2 percent of the assessment 110.1 year 1999 taxable market value of class 4a property that had a 110.2 class rate of 2.15 percent of taxes payable in 2000; plus 110.3 (2) 0.45 percent of the assessment year 1999 taxable market 110.4 value of manufactured home parks classified under section 110.5 273.13, subdivision 25, paragraph (d), clause (5). 110.6 EFFECTIVE DATE: This section is effective for aids payable 110.7 in 2001, and thereafter. 110.8 Sec. 16. Minnesota Statutes 1998, section 273.1398, 110.9 subdivision 4, is amended to read: 110.10 Subd. 4. [DISPARITY REDUCTION CREDIT.] (a) Beginning with 110.11 taxes payable in 1989, class 4a, class 3a, and class 3b property 110.12 qualifies for a disparity reduction credit if: (1) the property 110.13 is located in a border city that has an enterprise zone 110.14 designated pursuant to section 469.168, subdivision 4; (2) the 110.15 property is located in a city with a population greater than 110.16 2,500 and less than 35,000 according to the 1980 decennial 110.17 census; (3) the city is adjacent to a city in another state or 110.18 immediately adjacent to a city adjacent to a city in another 110.19 state; and (4) the adjacent city in the other state has a 110.20 population of greater than 5,000 and less than 75,000. 110.21 (b) The credit is an amount sufficient to reduce (i) the 110.22 taxes levied on class 4a property to2.31.95 percent of the 110.23 property's market value and (ii) the tax on class 3a and class 110.24 3b property to 2.3 percent of market value. 110.25 (c) The county auditor shall annually certify the costs of 110.26 the credits to the department of revenue. The department shall 110.27 reimburse local governments for the property taxes foregone as 110.28 the result of the credits in proportion to their total levies. 110.29 Sec. 17. Minnesota Statutes 1999 Supplement, section 110.30 273.1398, subdivision 4a, is amended to read: 110.31 Subd. 4a. [AID OFFSET FOR COURT COSTS.] (a) By July 15, 110.32 1999, the supreme court shall determine and certify to the 110.33 commissioner of revenue for each county, other than counties 110.34 located in the eighth judicial district, the county's share of 110.35 the costs assumed under Laws 1999, chapter 216, article 7, 110.36 during the fiscal year beginning July 1, 2000, less an amount 111.1 equal to the county's share of transferred fines collected by 111.2 the district courts in the county during calendar year 1998. 111.3 (b) Payments to a county under subdivision 2 or section 111.4 273.166 for calendar year 2000 must be permanently reduced by an 111.5 amount equal to 75 percent of the net cost to the state for 111.6 assumption of district court costs as certified in paragraph (a). 111.7 (c) Payments to a county under subdivision 2 or section 111.8 273.166 for calendar year 2001 must be permanently reduced by an 111.9 amount equal to 25 percent of the net cost to the state for 111.10 assumption of district court costs as certified in paragraph (a). 111.11 (d) Payments to a county under subdivision 2 for calendar 111.12 year 2001 are permanently increased by an amount equal to 7.5 111.13 percent of the county's share of transferred fines collected by 111.14 the district courts in the county during calendar year 1998, as 111.15 determined under paragraph (a). 111.16 EFFECTIVE DATE: This section is effective for aids payable 111.17 in 2001. 111.18 Sec. 18. Minnesota Statutes 1998, section 273.37, 111.19 subdivision 3, is amended to read: 111.20 Subd. 3. Taxable wind energy conversion systems, as 111.21 defined in section 216C.06, subdivision 12, which are not owned, 111.22 operated, and exclusively controlled by the owner of the land 111.23 upon which the system is situated, must be listed and assessed 111.24 by the commissioner of revenue as personal property in the name 111.25 of the owner of the system in the taxing district where it is 111.26 situated. 111.27 EFFECTIVE DATE: This section is effective for the 2000 111.28 assessment and thereafter. 111.29 Sec. 19. [273.372] [PROCEEDINGS AND APPEALS; UTILITY 111.30 VALUATIONS.] 111.31 An appeal by a utility company concerning the exemption, 111.32 valuation, or classification on property for which the 111.33 commissioner of revenue has provided the county with 111.34 commissioner's orders or recommended values must be brought 111.35 against the commissioner in tax court or in district court of 111.36 the county where the property is located, and not against the 112.1 county or taxing district where the property is located. If the 112.2 appeal to a court is of an order of the commissioner, it must be 112.3 brought under chapter 271. If the appeal is brought under 112.4 chapter 278, the procedures in that chapter apply. This 112.5 provision applies to the property contained under sections 112.6 273.33, 273.35, 273.36, and 273.37, but only if the appealed 112.7 values have remained unchanged from those provided to the county 112.8 by the commissioner. If the exemption, valuation, or 112.9 classification being appealed has been changed by the county, 112.10 then the action must be brought under chapter 278 in the county 112.11 where the property is located. 112.12 Upon filing of any appeal by a utility company against the 112.13 commissioner, the commissioner shall give notice by first class 112.14 mail to each county which would be affected by the appeal. 112.15 Companies that submit the reports under section 273.371 by 112.16 the date specified in that section, or by the date specified by 112.17 the commissioner in an extension, may appeal administratively to 112.18 the commissioner under the procedures in section 270.11, 112.19 subdivision 6, prior to bringing an action in tax court or in 112.20 district court, however, instituting an administrative appeal 112.21 with the commissioner does not change or modify the deadline in 112.22 section 278.01 for bringing an action in tax court or district 112.23 court. 112.24 EFFECTIVE DATE: This section is effective for appeals made 112.25 on property for assessment year 1999 and thereafter. 112.26 Sec. 20. Minnesota Statutes 1998, section 275.065, 112.27 subdivision 3, is amended to read: 112.28 Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 112.29 county auditor shall prepare and the county treasurer shall 112.30 deliver after November 10 and on or before November 24 each 112.31 year, by first class mail to each taxpayer at the address listed 112.32 on the county's current year's assessment roll, a notice of 112.33 proposed property taxes. 112.34 (b) The commissioner of revenue shall prescribe the form of 112.35 the notice. 112.36 (c) The notice must inform taxpayers that it contains the 113.1 amount of property taxes each taxing authority proposes to 113.2 collect for taxes payable the following year. In the case of a 113.3 town, or in the case of the state determined portion of the 113.4 school district levy, the final tax amount will be its proposed 113.5 tax. The notice must clearly state that each taxing authority, 113.6 including regional library districts established under section 113.7 134.201, and including the metropolitan taxing districts as 113.8 defined in paragraph (i), but excluding all other special taxing 113.9 districts and towns, will hold a public meeting to receive 113.10 public testimony on the proposed budget and proposed or final 113.11 property tax levy, or, in case of a school district, on the 113.12 current budget and proposed property tax levy unless the taxing 113.13 authority either: (1) elects to provide information under 113.14 subdivision 9; or (2) is exempt under subdivision 6c. It must 113.15 clearly state the time and place of each taxing authority's 113.16 meeting and an address where comments will be received by mail. 113.17 (d) The notice must state for each parcel: 113.18 (1) the market value of the property as determined under 113.19 section 273.11, and used for computing property taxes payable in 113.20 the following year and for taxes payable in the current year as 113.21 each appears in the records of the county assessor on November 1 113.22 of the current year; and, in the case of residential property, 113.23 whether the property is classified as homestead or 113.24 nonhomestead. The notice must clearly inform taxpayers of the 113.25 years to which the market values apply and that the values are 113.26 final values; 113.27 (2) the items listed below, shown separately by county, 113.28 city or town, state determined school tax net of the education 113.29 homestead credit under section 273.1382, voter approved school 113.30 levy, other local school levy, and the sum of the special taxing 113.31 districts, and as a total of all taxing authorities: 113.32 (i) the actual tax for taxes payable in the current year; 113.33 (ii) the tax change due to spending factors, defined as the 113.34 proposed tax minus the constant spending tax amount; 113.35 (iii) the tax change due to other factors, defined as the 113.36 constant spending tax amount minus the actual current year tax; 114.1 and 114.2 (iv) the proposed tax amount. 114.3 In the case of a town or the state determined school tax, 114.4 the final tax shall also be its proposed tax unless the town 114.5 changes its levy at a special town meeting under section 114.6 365.52. If a school district has certified under section 114.7 126C.17, subdivision 9, that a referendum will be held in the 114.8 school district at the November general election, the county 114.9 auditor must note next to the school district's proposed amount 114.10 that a referendum is pending and that, if approved by the 114.11 voters, the tax amount may be higher than shown on the notice. 114.12 In the case of the city of Minneapolis, the levy for the 114.13 Minneapolis library board and the levy for Minneapolis park and 114.14 recreation shall be listed separately from the remaining amount 114.15 of the city's levy. In the case of a parcel where tax increment 114.16 or the fiscal disparities areawide tax under chapter 276A or 114.17 473F applies, the proposed tax levy on the captured value or the 114.18 proposed tax levy on the tax capacity subject to the areawide 114.19 tax must each be stated separately and not included in the sum 114.20 of the special taxing districts; and 114.21 (3) the increase or decrease between the total taxes 114.22 payable in the current year and the total proposed taxes, 114.23 expressed as a percentage. 114.24 For purposes of this section, the amount of the tax on 114.25 homesteads qualifying under the senior citizens' property tax 114.26 deferral program under chapter 290B is the total amount of 114.27 property tax before subtraction of the deferred property tax 114.28 amount. 114.29 (e) The notice must clearly state that the proposed or 114.30 final taxes do not include the following: 114.31 (1) special assessments; 114.32 (2) levies approved by the voters after the date the 114.33 proposed taxes are certified, including bond referenda, school 114.34 district levy referenda, and levy limit increase referenda; 114.35 (3) amounts necessary to pay cleanup or other costs due to 114.36 a natural disaster occurring after the date the proposed taxes 115.1 are certified; 115.2 (4) amounts necessary to pay tort judgments against the 115.3 taxing authority that become final after the date the proposed 115.4 taxes are certified; and 115.5 (5) the contamination tax imposed on properties which 115.6 received market value reductions for contamination. 115.7 (f) Except as provided in subdivision 7, failure of the 115.8 county auditor to prepare or the county treasurer to deliver the 115.9 notice as required in this section does not invalidate the 115.10 proposed or final tax levy or the taxes payable pursuant to the 115.11 tax levy. 115.12 (g) If the notice the taxpayer receives under this section 115.13 lists the property as nonhomestead, and satisfactory 115.14 documentation is provided to the county assessor by the 115.15 applicable deadline, and the property qualifies for the 115.16 homestead classification in that assessment year, the assessor 115.17 shall reclassify the property to homestead for taxes payable in 115.18 the following year. 115.19 (h) In the case of class 4 residential property used as a 115.20 residence for lease or rental periods of 30 days or more, the 115.21 taxpayer must either: 115.22 (1) mail or deliver a copy of the notice of proposed 115.23 property taxes to each tenant, renter, or lessee; or 115.24 (2) post a copy of the notice in a conspicuous place on the 115.25 premises of the property. 115.26 The notice must be mailed or posted by the taxpayer by 115.27 November 27 or within three days of receipt of the notice, 115.28 whichever is later. A taxpayer may notify the county treasurer 115.29 of the address of the taxpayer, agent, caretaker, or manager of 115.30 the premises to which the notice must be mailed in order to 115.31 fulfill the requirements of this paragraph. 115.32 (i) For purposes of this subdivision, subdivisions 5a and 115.33 6, "metropolitan special taxing districts" means the following 115.34 taxing districts in the seven-county metropolitan area that levy 115.35 a property tax for any of the specified purposes listed below: 115.36 (1) metropolitan council under section 473.132, 473.167, 116.1 473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 116.2 (2) metropolitan airports commission under section 473.667, 116.3 473.671, or 473.672; and 116.4 (3) metropolitan mosquito control commission under section 116.5 473.711. 116.6 For purposes of this section, any levies made by the 116.7 regional rail authorities in the county of Anoka, Carver, 116.8 Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 116.9 398A shall be included with the appropriate county's levy and 116.10 shall be discussed at that county's public hearing or stated in 116.11 the county's Internet posting as provided in subdivision 9. 116.12 (j) If a statutory or home rule charter city or a town has 116.13 exercised the local levy option provided by section 473.388, 116.14 subdivision 7, it may include in the notice of its proposed 116.15 taxes the amount of its proposed taxes attributable to its 116.16 exercise of the option. In the first year of the city or town's 116.17 exercise of this option, the statement shall include an estimate 116.18 of the reduction of the metropolitan council's tax on the parcel 116.19 due to exercise of that option. The metropolitan council's levy 116.20 shall be adjusted accordingly. 116.21 Sec. 21. Minnesota Statutes 1999 Supplement, section 116.22 275.065, subdivision 5a, is amended to read: 116.23 Subd. 5a. [PUBLIC ADVERTISEMENT.] (a) Unless exempt under 116.24 subdivision 6c, a city that has a population of more than 2,500, 116.25 county, a metropolitan special taxing district as defined in 116.26 subdivision 3, paragraph (i), a regional library district 116.27 established under section 134.201, or school district shall 116.28 advertise in a newspaper a notice of its intent to: 116.29 (1) adopt a budget and property tax levy or, in the case of 116.30 a school district, to review its current budget and proposed 116.31 property taxes payable in the following year, at a public 116.32 hearing; or 116.33 (2) post information as provided in subdivision 9. 116.34 The notice must be published not less than two business days nor 116.35 more than six business days before the hearing or the posting of 116.36 information. 117.1 The advertisement must be at least one-eighth page in size 117.2 of a standard-size or a tabloid-size newspaper. The 117.3 advertisement must not be placed in the part of the newspaper 117.4 where legal notices and classified advertisements appear. The 117.5 advertisement must be published in an official newspaper of 117.6 general circulation in the taxing authority. The newspaper 117.7 selected must be one of general interest and readership in the 117.8 community, and not one of limited subject matter. The 117.9 advertisement must appear in a newspaper that is published at 117.10 least once per week. 117.11 For purposes of this section, the metropolitan special 117.12 taxing district's advertisement must only be published in the 117.13 Minneapolis Star and Tribune and the Saint Paul Pioneer Press. 117.14 (b) The advertisement for school districts, metropolitan 117.15 special taxing districts, and regional library districts that 117.16 are not exempt under subdivision 6c and do not elect to post 117.17 information as provided in subdivision 9 must be in the 117.18 following form, except that the notice for a school district may 117.19 include references to the current budget in regard to proposed 117.20 property taxes. 117.21 "NOTICE OF 117.22 PROPOSED PROPERTY TAXES 117.23 (School District/Metropolitan 117.24 Special Taxing District/Regional 117.25 Library District) of ......... 117.26 The governing body of ........ will soon hold budget hearings 117.27 and vote on the property taxes for (metropolitan special taxing 117.28 district/regional library district services that will be 117.29 provided in (year)/school district services that will be 117.30 provided in (year) and (year)). 117.31 NOTICE OF PUBLIC HEARING: 117.32 All concerned citizens are invited to attend a public hearing 117.33 and express their opinions on the proposed (school 117.34 district/metropolitan special taxing district/regional library 117.35 district) budget and property taxes, or in the case of a school 117.36 district, its current budget and proposed property taxes, 118.1 payable in the following year. The hearing will be held on 118.2 (Month/Day/Year) at (Time) at (Location, Address)." 118.3 (c) The advertisement for cities and counties that are not 118.4 exempt under subdivision 6c and do not elect to post information 118.5 as provided in subdivision 9 must be in the following form. 118.6 "NOTICE OF PROPOSED 118.7 TOTAL BUDGET AND PROPERTY TAXES 118.8 The (city/county) governing body or board of commissioners will 118.9 hold a public hearing to discuss the budget and to vote on the 118.10 amount of property taxes to collect for services the 118.11 (city/county) will provide in (year). 118.12 118.13 SPENDING: The total budget amounts below compare 118.14 (city's/county's) (year) total actual budget with the amount the 118.15 (city/county) proposes to spend in (year). 118.16 118.17 (Year) Total Proposed (Year) Change from 118.18 Actual Budget Budget (Year)-(Year) 118.19 118.20 $....... $....... ...% 118.21 118.22 TAXES: The property tax amounts below compare that portion of 118.23 the current budget levied in property taxes in (city/county) for 118.24 (year) with the property taxes the (city/county) proposes to 118.25 collect in (year). 118.26 118.27 (Year) Property Proposed (Year) Change from 118.28 Taxes Property Taxes (Year)-(Year) 118.29 118.30 $....... $....... ...% 118.31 118.32 ATTEND THE PUBLIC HEARING 118.33 All (city/county) residents are invited to attend the public 118.34 hearing of the (city/county) to express your opinions on the 118.35 budget and the proposed amount of (year) property taxes. The 118.36 hearing will be held on: 119.1 (Month/Day/Year/Time) 119.2 (Location/Address) 119.3 If the discussion of the budget cannot be completed, a time and 119.4 place for continuing the discussion will be announced at the 119.5 hearing. You are also invited to send your written comments to: 119.6 (City/County) 119.7 (Location/Address)" 119.8 (d) The advertisement for taxing authorities that elect to 119.9 post information under subdivision 9 must be in the following 119.10 form. 119.11 "NOTICE OF 119.12 PROPOSED PROPERTY TAX INFORMATION 119.13 The governing body of ........ will provide detailed information 119.14 on its proposed budget and property taxes for the upcoming 119.15 calendar year on an Internet Web site. The address of that Web 119.16 site is ......... This information is provided in lieu of 119.17 conducting a public meeting on the budget and proposed property 119.18 taxes. A resident of ........ or an owner of property located 119.19 in ........ may request that a copy of the information provided 119.20 at the Web site be mailed to the resident or property owner. 119.21 This information may be requested by contacting: 119.22 name (name) 119.23 at (mailing address) 119.24 or (telephone number) 119.25 or (e-mail address)" 119.26 (e) For purposes of this subdivision, the budget amounts 119.27 listed on the advertisement mean: 119.28 (1) for cities, the total government fund expenditures, as 119.29 defined by the state auditor under section 471.6965, less any 119.30 expenditures for improvements or services that are specially 119.31 assessed or charged under chapter 429, 430, 435, or the 119.32 provisions of any other law or charter; and 119.33 (2) for counties, the total government fund expenditures, 119.34 as defined by the state auditor under section 375.169, less any 119.35 expenditures for direct payments to recipients or providers for 119.36 the human service aids listed below: 120.1 (i) Minnesota family investment program under chapters 256J 120.2 and 256K; 120.3 (ii) medical assistance under sections 256B.041, 120.4 subdivision 5, and 256B.19, subdivision 1; 120.5 (iii) general assistance medical care under section 120.6 256D.03, subdivision 6; 120.7 (iv) general assistance under section 256D.03, subdivision 120.8 2; 120.9 (v) emergency assistance under section 256J.48; 120.10 (vi) Minnesota supplemental aid under section 256D.36, 120.11 subdivision 1; 120.12 (vii) preadmission screening under section 256B.0911, and 120.13 alternative care grants under section 256B.0913; 120.14 (viii) general assistance medical care claims processing, 120.15 medical transportation and related costs under section 256D.03, 120.16 subdivision 4; 120.17 (ix) medical transportation and related costs under section 120.18 256B.0625, subdivisions 17 to 18a; 120.19 (x) group residential housing under section 256I.05, 120.20 subdivision 8, transferred from programs in clauses (iv) and 120.21 (vi); or 120.22 (xi) any successor programs to those listed in clauses (i) 120.23 to (x). 120.24(e)(f) A city with a population of over 500 but not more 120.25 than 2,500 must advertise by posted notice as defined in section 120.26 645.12, subdivision 1. The advertisement must be posted at the 120.27 time provided in paragraph (a). It must be in the form required 120.28 in paragraph (b). 120.29(f)(g) For purposes of this subdivision, the population of 120.30 a city is the most recent population as determined by the state 120.31 demographer under section 4A.02. 120.32(g)(h) The commissioner of revenue, subject to the 120.33 approval of the chairs of the house and senate tax committees, 120.34 shall prescribe the form and format of the advertisement. 120.35 Sec. 22. Minnesota Statutes 1998, section 275.065, is 120.36 amended by adding a subdivision to read: 121.1 Subd. 6c. [EXEMPTION FROM PUBLIC HEARING REQUIREMENT.] A 121.2 taxing authority is exempt from the requirement to hold a public 121.3 hearing under this section if its total proposed tax does not 121.4 exceed its total tax payable in the current year by more than 121.5 one percent. 121.6 Sec. 23. Minnesota Statutes 1998, section 275.065, 121.7 subdivision 8, is amended to read: 121.8 Subd. 8. [HEARING.] (a) Notwithstanding any other 121.9 provision of law, Ramsey county, the city of St. Paul, and 121.10 independent school district No. 625are authorized to and, 121.11 except as provided in paragraph (b), shall hold their initial 121.12 public hearing jointly. The hearing must be held on the second 121.13 Tuesday of December each year. The advertisement required in 121.14 subdivision 5a may be a joint advertisement. The hearing is 121.15 otherwise subject to the requirements of this section. 121.16 Ramsey county is authorized to hold an additional initial 121.17 hearing or hearings as provided under this section, provided 121.18 that any additional hearings must not conflict with the initial 121.19 or continuation hearing dates of the other taxing districts. 121.20 However, if Ramsey county elects not to holdsuchadditional 121.21 initial hearing or hearings, the joint initial hearing required 121.22 by this subdivision must be held in a St. Paul location 121.23 convenient to residents of Ramsey county. 121.24 (b) Ramsey county, the city of St. Paul, and independent 121.25 school district No. 625 may each be exempt from the requirement 121.26 to participate in a joint public hearing under paragraph (a), if 121.27 that entity qualifies under subdivision 6c or elects to post 121.28 information under subdivision 9. 121.29 Sec. 24. Minnesota Statutes 1998, section 275.065, is 121.30 amended by adding a subdivision to read: 121.31 Subd. 9. [ALTERNATIVE TO HEARING; INFORMATION POSTED ON 121.32 INTERNET.] A taxing authority that proposes to increase its levy 121.33 over the tax payable in the current year by no more than the 121.34 percentage increase in the implicit price deflator may elect to 121.35 provide information on an Internet Web site as required under 121.36 this subdivision in lieu of conducting a hearing under 122.1 subdivision 6 or 6b. The posted information must include the 122.2 following information: 122.3 SPENDING: The total budget amounts below compare (the taxing 122.4 authority's) (year) total actual budget with the amount the 122.5 (taxing authority) proposes to spend in (year). 122.6 122.7 (Year) Total Proposed (Year) Change from 122.8 Actual Budget Budget (Year)-(Year) 122.9 122.10 $....... $....... ...% 122.11 122.12 TAXES: The property tax amounts below compare that portion of 122.13 the current budget levied in property taxes in (the taxing 122.14 authority) for (year) with the property taxes the (taxing 122.15 authority) proposes to collect in (year). 122.16 122.17 (Year) Property Proposed (Year) Change from 122.18 Taxes Property Taxes (Year)-(Year) 122.19 122.20 $....... $....... ...% 122.21 The budget amounts have the meaning provided in subdivision 122.22 5a, paragraph (e). The specific purposes for which property tax 122.23 revenues are being increased must be set forth. 122.24 The posting must also provide the name, mailing address, 122.25 telephone number, and e-mail address of an individual who will 122.26 respond to inquiries about the budget and tax information posted 122.27 on the Web site. This information is required to be posted by 122.28 the first business day after November 28. 122.29 Sec. 25. Minnesota Statutes 1998, section 275.066, is 122.30 amended to read: 122.31 275.066 [SPECIAL TAXING DISTRICTS; DEFINITION.] 122.32 For the purposes of property taxation and property tax 122.33 state aids, the term "special taxing districts" includes the 122.34 following entities: 122.35 (1) watershed districts under chapter 103D; 122.36 (2) sanitary districts under sections 115.18 to 115.37; 123.1 (3) regional sanitary sewer districts under sections 115.61 123.2 to 115.67; 123.3 (4) regional public library districts under section 123.4 134.201; 123.5 (5) park districts under chapter 398; 123.6 (6) regional railroad authorities under chapter 398A; 123.7 (7) hospital districts under sections 447.31 to 447.38; 123.8 (8) St. Cloud metropolitan transit commission under 123.9 sections 458A.01 to 458A.15; 123.10 (9) Duluth transit authority under sections 458A.21 to 123.11 458A.37; 123.12 (10) regional development commissions under sections 123.13 462.381 to 462.398; 123.14 (11) housing and redevelopment authorities under sections 123.15 469.001 to 469.047; 123.16 (12) port authorities under sections 469.048 to 469.068; 123.17 (13) economic development authorities under sections 123.18 469.090 to 469.1081; 123.19 (14) metropolitan council under sections 473.123 to 123.20 473.549; 123.21 (15) metropolitan airports commission under sections 123.22 473.601 to 473.680; 123.23 (16) metropolitan mosquito control commission under 123.24 sections 473.701 to 473.716; 123.25 (17) Morrison county rural development financing authority 123.26 under Laws 1982, chapter 437, section 1; 123.27 (18) Croft Historical Park District under Laws 1984, 123.28 chapter 502, article 13, section 6; 123.29 (19) East Lake county medical clinic district under Laws 123.30 1989, chapter 211, sections 1 to 6; 123.31 (20) Floodwood area ambulance district under Laws 1993, 123.32 chapter 375, article 5, section 39;and123.33 (21) Middle Mississippi River Watershed Management 123.34 Organization under sections 103B.211 and 103B.241; and 123.35 (22) any other political subdivision of the state of 123.36 Minnesota, excluding counties, school districts, cities, and 124.1 towns, that has the power to adopt and certify a property tax 124.2 levy to the county auditor, as determined by the commissioner of 124.3 revenue. 124.4 EFFECTIVE DATE: This section is effective for taxes levied 124.5 in 2000, payable in 2001, and thereafter. 124.6 Sec. 26. Minnesota Statutes 1999 Supplement, section 124.7 275.71, subdivision 4, is amended to read: 124.8 Subd. 4. [PROPERTY TAX LEVY LIMIT.] For taxes levied in 124.91998 and1999, the property tax levy limit for a local 124.10 governmental unit is equal to its adjusted levy limit base 124.11 determined under subdivision 3 plus any additional levy 124.12 authorized under section 275.73, which is levied against net tax 124.13 capacity, reduced by the sum of (1) the total amount of aids 124.14 that the local governmental unit is certified to receive under 124.15 sections 477A.011 to 477A.014, (2) homestead and agricultural 124.16 aids it is certified to receive under section 273.1398, (3) 124.17 local performance aid it is certified to receive under section 124.18 477A.05, (4) taconite aids under sections 298.28 and 298.282 124.19 including any aid which was required to be placed in a special 124.20 fund for expenditure in the next succeeding year but excluding 124.21 amounts allocated under section 298.28, subdivision 2, paragraph 124.22 (b), (5) flood loss aid under section 273.1383, and (6) 124.23 low-income housing aid under sections 477A.06 and 477A.065. 124.24 EFFECTIVE DATE: This section is effective for taxes levied 124.25 in 1999, payable in 2000. 124.26 Sec. 27. Minnesota Statutes 1998, section 276.19, 124.27 subdivision 1, is amended to read: 124.28 Subdivision 1. [NOTICE OF OVERPAYMENT.] If an overpayment 124.29 of property tax arises on a parcelfor any reasondue to receipt 124.30 of a payment that exceeds the total amount of the tax required 124.31 to be paid on the property tax statement, the responsible county 124.32 official shall promptly notify the payer by regular mail that 124.33 the overpayment has occurred. The notice must state the amount 124.34 of overpayment and identify the parcel on which the overpayment 124.35 occurred. The notice must also instruct the payer how to claim 124.36 the overpayment and advise that the overpayment is subject to 125.1 forfeiture under this section. If the name or address of the 125.2 payer is not known, the notice of unclaimed overpayment must be 125.3 mailed to the taxpayer of record in the office of the county 125.4 auditor. 125.5 EFFECTIVE DATE: This section is effective for overpayment 125.6 of taxes made the day following final enactment and thereafter 125.7 and applies only to taxes levied in 1999, payable in 2000, and 125.8 thereafter. 125.9 Sec. 28. [278.14] [REFUNDS OF MISTAKENLY BILLED TAXES.] 125.10 Subdivision 1. [APPLICABILITY.] A county must pay a refund 125.11 of a mistakenly billed tax as provided in this section. As used 125.12 in this section, "mistakenly billed tax" means an amount of 125.13 property tax that was billed, to the extent the amount billed 125.14 exceeds the accurate tax amount due to a misclassification of 125.15 property or a mathematical error in the calculation of the tax, 125.16 together with any penalty or interest paid on that amount. This 125.17 section applies only to taxes payable in the current year and 125.18 the two prior years. As used in this section, "mathematical 125.19 error" is limited to an error in: 125.20 (1) converting the market value of a property to tax 125.21 capacity; 125.22 (2) application of the tax rate to the property's tax 125.23 capacity; or 125.24 (3) calculation of or eligibility for a credit. 125.25 Subd. 2. [PROCEDURE.] A refund of mistakenly billed tax 125.26 must be paid upon verification of a claim made in a written 125.27 application by the owner of the property or upon discovery of 125.28 the mistakenly billed tax by the county. Refunds of 125.29 overpayments will be made as provided in section 278.12. 125.30 Subd. 3. [APPEALS.] If the county rejects a claim by a 125.31 property owner under subdivision 2, it must notify the property 125.32 owner of that decision within 90 days of receipt of the claim. 125.33 The property owner may appeal that decision to the tax court 125.34 within 60 days after receipt of a notice from the county of the 125.35 decision. Relief granted by the tax court is limited to current 125.36 year taxes, and taxes in the two prior years. 126.1 EFFECTIVE DATE: This section is effective for overpayment 126.2 of taxes made the day following final enactment and thereafter 126.3 and applies only to taxes levied in 1999, payable in 2000, and 126.4 thereafter. 126.5 Sec. 29. Minnesota Statutes 1999 Supplement, section 126.6 290B.03, subdivision 1, is amended to read: 126.7 Subdivision 1. [PROGRAM QUALIFICATIONS.] The 126.8 qualifications for the senior citizens' property tax deferral 126.9 program are as follows: 126.10 (1) the property must be owned and occupied as a homestead 126.11 by a person 65 years of age or older. In the case of a married 126.12 couple, both of the spouses must be at least 65 years old at the 126.13 time the first property tax deferral is granted, regardless of 126.14 whether the property is titled in the name of one spouse or both 126.15 spouses, or titled in another way that permits the property to 126.16 have homestead status; 126.17 (2) the total household income of the qualifying 126.18 homeowners, as defined in section 290A.03, subdivision 5, for 126.19 the calendar year preceding the year of the initial application 126.20 may not exceed $60,000; 126.21 (3) the homestead must have been owned and occupied as the 126.22 homestead of at least one of the qualifying homeowners for at 126.23 least 15 years prior to the year the initial application is 126.24 filed; 126.25 (4)there are no delinquent property taxes, penalties, or126.26interest on the homesteaded property;126.27(5) there are no delinquent special assessments on the126.28homesteaded property;126.29(6)there are no state or federal tax liens or judgment 126.30 liens on the homesteaded property; 126.31(7)(5) there are no mortgages or other liens on the 126.32 property that secure future advances, except for those subject 126.33 to credit limits that result in compliance with clause(8)(6); 126.34 and 126.35(8)(6) the total unpaid balances of debts secured by 126.36 mortgages and other liens on the property, including unpaid 127.1 special assessments and delinquent property taxes, penalties, 127.2 and interest, but not including property taxes payable during 127.3 the year, does not exceed3075 percent of the assessor's 127.4 estimated market value for the year. 127.5 Sec. 30. Minnesota Statutes 1998, section 290B.04, is 127.6 amended by adding a subdivision to read: 127.7 Subd. 7. [PAYMENT OF DELINQUENT TAXES AND 127.8 ASSESSMENTS.] Upon approval of a senior citizen's initial 127.9 application, the commissioner of revenue shall pay to the 127.10 treasurer of the county where the property is located the amount 127.11 of any delinquent property taxes, penalties, interest, and 127.12 delinquent special assessments on the property which is the 127.13 subject of the application. 127.14 Sec. 31. Minnesota Statutes 1999 Supplement, section 127.15 290B.05, subdivision 1, is amended to read: 127.16 Subdivision 1. [DETERMINATION BY COMMISSIONER.] The 127.17 commissioner shall determine each qualifying homeowner's "annual 127.18 maximum property tax amount" following approval of the 127.19 homeowner's initial application and following the receipt of a 127.20 resumption of eligibility certification. The "annual maximum 127.21 property tax amount" equals three percent of the homeowner's 127.22 total household income for the year preceding either the initial 127.23 application or the resumption of eligibility certification, 127.24 whichever is applicable. Following approval of the initial 127.25 application, the commissioner shall determine the qualifying 127.26 homeowner's "maximum allowable deferral." No tax may be 127.27 deferred relative to the appropriate assessment year for any 127.28 homeowner whose total household income for the previous year 127.29 exceeds $60,000. No tax shall be deferred in any year in which 127.30 the homeowner does not meet the program qualifications in 127.31 section 290B.03. The maximum allowable total deferral is equal 127.32 to 75 percent of the assessor's estimated market value for the 127.33 year, less the balance of any mortgage loans and other amounts 127.34 secured by liens against the property at the time of 127.35 application, including any unpaid special assessments and any 127.36 delinquent property taxes, penalties, and interest, but not 128.1 including property taxes payable during the year. 128.2 Sec. 32. Minnesota Statutes 1998, section 290B.05, 128.3 subdivision 3, is amended to read: 128.4 Subd. 3. [CALCULATION OF DEFERRED PROPERTY TAX AMOUNT.] 128.5 When final property tax amounts for the following year have been 128.6 determined, the county auditor shall calculate the "deferred 128.7 property tax amount." The deferred property tax amount is equal 128.8 to the lesser of (1) the maximum allowable deferral for the 128.9 year; or (2) the difference between the total amount of property 128.10 taxes levied upon the qualifying homestead by all taxing 128.11 jurisdictions and the maximum property tax amount. Any special 128.12 assessments levied by any local unit of government must not be 128.13 included in the total tax used to calculate the deferred tax 128.14 amount.No deferral of the current year's property taxes is128.15allowed if there are any delinquent property taxes or delinquent128.16special assessments for any previous year.Any tax attributable 128.17 to new improvements made to the property after the initial 128.18 application has been approved under section 290B.04, subdivision 128.19 2, must be excluded when determining any subsequent deferred 128.20 property tax amount. The county auditor shall annually, on or 128.21 before April 15, certify to the commissioner of revenue the 128.22 property tax deferral amounts determined under this subdivision 128.23 by property and by owner. 128.24 Sec. 33. Minnesota Statutes 1998, section 290B.07, is 128.25 amended to read: 128.26 290B.07 [LIEN; DEFERRED PORTION.] 128.27 (a) Payment by the state to the county treasurer 128.28 of property taxes, penalties, interest, or special assessments 128.29 deferred under thissectionchapter is deemed a loan from the 128.30 state to the program participant. The commissioner must compute 128.31 the interest as provided in section 270.75, subdivision 5, but 128.32 not to exceed five percent, and maintain records of the total 128.33 deferred amount and interest for each participant. Interest 128.34 shall accrue beginning September 1 of the payable year for which 128.35 the taxes are deferred. Any deferral made under this chapter 128.36 shall not be construed as delinquent property taxes. 129.1 The lien created under section 272.31 continues to secure 129.2 payment by the taxpayer, or by the taxpayer's successors or 129.3 assigns, of the amount deferred, including interest, with 129.4 respect to all years for which amounts are deferred. The lien 129.5 for deferred taxes and interest has the same priority as any 129.6 other lien under section 272.31, except that liens, including 129.7 mortgages, recorded or filed prior to the recording or filing of 129.8 the notice under section 290B.04, subdivision 2, have priority 129.9 over the lien for deferred taxes and interest. A seller's 129.10 interest in a contract for deed, in which a qualifying homeowner 129.11 is the purchaser or an assignee of the purchaser, has priority 129.12 over deferred taxes and interest on deferred taxes, regardless 129.13 of whether the contract for deed is recorded or filed. The lien 129.14 for deferred taxes and interest for future years has the same 129.15 priority as the lien for deferred taxes and interest for the 129.16 first year, which is always higher in priority than any 129.17 mortgages or other liens filed, recorded, or created after the 129.18 notice recorded or filed under section 290B.04, subdivision 2. 129.19 The county treasurer or auditor shall maintain records of the 129.20 deferred portion and shall list the amount of deferred taxes for 129.21 the year and the cumulative deferral and interest for all 129.22 previous years as a lien against the property. In any 129.23 certification of unpaid taxes for a tax parcel, the county 129.24 auditor shall clearly distinguish between taxes payable in the 129.25 current year, deferred taxes and interest, and delinquent 129.26 taxes. Payment of the deferred portion becomes due and owing at 129.27 the time specified in section 290B.08. Upon receipt of the 129.28 payment, the commissioner shall issue a receipt for it to the 129.29 person making the payment upon request and shall notify the 129.30 auditor of the county in which the parcel is located, within ten 129.31 days, identifying the parcel to which the payment applies. Upon 129.32 receipt by the commissioner of revenue of collected funds in the 129.33 amount of the deferral, the state's loan to the program 129.34 participant is deemed paid in full. 129.35 (b) If property for which taxes have been deferred under 129.36 this chapter forfeits under chapter 281 for nonpayment of a 130.1 nondeferred property tax amount, or because of nonpayment of 130.2 amounts previously deferred following a termination under 130.3 section 290B.08, the lien for the taxes deferred under this 130.4 chapter, plus interest and costs, shall be canceled by the 130.5 county auditor as provided in section 282.07. However, 130.6 notwithstanding any other law to the contrary, any proceeds from 130.7 a subsequent sale of the property under chapter 282 or another 130.8 law, must be used to first reimburse the county's forfeited tax 130.9 sale fund for any direct costs of selling the property or any 130.10 costs directly related to preparing the property for sale, and 130.11 then to reimburse the state for the amount of the canceled 130.12 lien. Within 90 days of the receipt of any sale proceed to 130.13 which the state is entitled under these provisions, the county 130.14 auditor must pay those funds to the commissioner of revenue by 130.15 warrant for deposit in the general fund. No other deposit, use, 130.16 distribution, or release of gross sale proceeds or receipts may 130.17 be made by the county until payments sufficient to fully 130.18 reimburse the state for the canceled lien amount have been 130.19 transmitted to the commissioner. 130.20 EFFECTIVE DATE: This section and sections 26 to 29 apply 130.21 to all homeowners and all property taxes deferred beginning in 130.22 payable 2001, including those homeowners who initially qualified 130.23 under this program for taxes payable in 1999 or 2000, except 130.24 that if a homeowner did not qualify for any property tax 130.25 deferral for payable 2000 because of the percentage threshold in 130.26 Minnesota Statutes, section 290B.03, subdivision 1, paragraph 130.27 (8), or the prohibition on qualification of owners of property 130.28 with delinquent taxes or special assessments, and now qualifies 130.29 for the program with the changes in those provisions, the 130.30 homeowner may apply to the commissioner by July 1, 2000, and 130.31 request a retroactive qualification into the program for taxes 130.32 payable in 2000. The commissioner of revenue shall notify the 130.33 county auditor of such eligible taxpayers. The commissioner 130.34 shall make payment to the county for the appropriate amount due 130.35 for taxes payable in 2000, and the county treasurer shall refund 130.36 the taxpayer for any excess tax amount that the taxpayer has 131.1 paid to the county. 131.2 Sec. 34. Minnesota Statutes 1998, section 290B.08, 131.3 subdivision 1, is amended to read: 131.4 Subdivision 1. [TERMINATION.] (a) The deferral of taxes 131.5 granted under this chapter terminates when one of the following 131.6 occurs: 131.7 (1) the property is sold or transferred; 131.8 (2) the death oftheall qualifying 131.9homeowner(s)homeowners; 131.10 (3) the homeowner notifies the commissioner in writing that 131.11 the homeowner desires to discontinue the deferral; or 131.12 (4) the property no longer qualifies as a homestead. 131.13 (b) A property is not terminated from the program because 131.14 no deferred property tax amount is determined on the homestead 131.15 for any given year after the homestead's initial enrollment into 131.16 the program. 131.17 EFFECTIVE DATE: This section is effective for deferrals of 131.18 property taxes payable in 2001 and thereafter. 131.19 Sec. 35. Minnesota Statutes 1998, section 290B.08, 131.20 subdivision 2, is amended to read: 131.21 Subd. 2. [PAYMENT UPON TERMINATION.] Upon the termination 131.22 of the deferral under subdivision 1, the amount of deferred 131.23 taxesand, penalties, interest, and special assessments, plus 131.24 the recording or filing fees under both section 290B.04, 131.25 subdivision 2, and this subdivision becomes due and payable to 131.26 the commissioner within 90 days of termination of the deferral 131.27 for terminations under subdivision 1, paragraph (a), clauses (1) 131.28 and (2), and within one year of termination of the deferral for 131.29 terminations under subdivision 1, paragraph (a), clauses (3) and 131.30 (4). No additional interest is due on the deferral if timely 131.31 paid. On receipt of payment, the commissioner shall within ten 131.32 days notify the auditor of the county in which the parcel is 131.33 located, identifying the parcel to which the payment applies and 131.34 shall remit the recording or filing fees under section 290B.04, 131.35 subdivision 2, and this subdivision to the auditor. A notice of 131.36 termination of deferral, containing the legal description and 132.1 the recording or filing data for the notice of qualification for 132.2 deferral under section 290B.04, subdivision 2, shall be prepared 132.3 and recorded or filed by the county auditor in the same office 132.4 in which the notice of qualification for deferral under section 132.5 290B.04, subdivision 2, was recorded or filed, and the county 132.6 auditor shall mail a copy of the notice of termination to the 132.7 property owner. The property owner shall pay the recording or 132.8 filing fees. Upon recording or filing of the notice of 132.9 termination of deferral, the notice of qualification for 132.10 deferral under section 290B.04, subdivision 2, and the lien 132.11 created by it are discharged. If the deferral is not timely 132.12 paid, the penalty, interest, lien, forfeiture, and other rules 132.13 for the collection of ad valorem property taxes apply. 132.14 Sec. 36. Minnesota Statutes 1998, section 290B.09, 132.15 subdivision 2, is amended to read: 132.16 Subd. 2. [APPROPRIATION.] An amount sufficient to pay the 132.17 total amount of property tax determined under subdivision 1, 132.18 plus any amounts paid under section 290B.04, subdivision 7, is 132.19 annually appropriated from the general fund to the commissioner 132.20 of revenue. 132.21 EFFECTIVE DATE: This section and section 32 apply to all 132.22 homeowners and all property taxes deferred beginning in payable 132.23 2001, including those homeowners who initially qualified under 132.24 this program for taxes payable in 1999 or 2000, except that if a 132.25 homeowner did not qualify for any property tax deferral for 132.26 payable 2000 because of the percentage threshold in Minnesota 132.27 Statutes, section 290B.03, subdivision 1, paragraph (8), or the 132.28 prohibition on qualification of owners of property with 132.29 delinquent taxes or special assessments, and now qualifies for 132.30 the program with the changes in those provisions, the homeowner 132.31 may apply to the commissioner by July 1, 2000, and request a 132.32 retroactive qualification into the program for taxes payable in 132.33 2000. The commissioner of revenue shall notify the county 132.34 auditor of such eligible taxpayers. The commissioner shall make 132.35 payment to the county for the appropriate amount due for taxes 132.36 payable in 2000, and the county treasurer shall refund the 133.1 taxpayer for any excess tax amount that the taxpayer has paid to 133.2 the county. 133.3 Sec. 37. Minnesota Statutes 1998, section 429.011, 133.4 subdivision 2a, is amended to read: 133.5 Subd. 2a. [MUNICIPALITY.] "Municipality" also includes a 133.6 county in the case of construction, reconstruction, or 133.7 improvement of a county state-aid highway or county highway as 133.8 defined in section 160.02 including curbs and gutters and storm 133.9 sewersand includes; a county exercising its powers and duties 133.10 under section 444.075, subdivision 1; and a county for expenses 133.11 not paid for under section 403.113, subdivision 3, paragraph 133.12 (b), clause (3). 133.13 Sec. 38. Minnesota Statutes 1998, section 429.011, 133.14 subdivision 5, is amended to read: 133.15 Subd. 5. [IMPROVEMENT.] "Improvement" means any type of 133.16 improvement made under authority granted by section 429.021,133.17and. In the case of a county, improvement is limited to: 133.18 (1) the construction, reconstruction, or improvement of a 133.19 county state-aid highway or county highway including curbs and 133.20 gutters and storm sewers; and 133.21 (2) the purchase, installation, or replacement of signs, 133.22 posts, and markers for addressing related to the operation of 133.23 enhanced 911 telephone service. 133.24 Sec. 39. Minnesota Statutes 1998, section 429.021, 133.25 subdivision 1, is amended to read: 133.26 Subdivision 1. [IMPROVEMENTS AUTHORIZED.] The council of a 133.27 municipality shall have power to make the following improvements: 133.28 (1) To acquire, open, and widen any street, and to improve 133.29 the same by constructing, reconstructing, and maintaining 133.30 sidewalks, pavement, gutters, curbs, and vehicle parking strips 133.31 of any material, or by grading, graveling, oiling, or otherwise 133.32 improving the same, including the beautification thereof and 133.33 including storm sewers or other street drainage and connections 133.34 from sewer, water, or similar mains to curb lines. 133.35 (2) To acquire, develop, construct, reconstruct, extend, 133.36 and maintain storm and sanitary sewers and systems, including 134.1 outlets, holding areas and ponds, treatment plants, pumps, lift 134.2 stations, service connections, and other appurtenances of a 134.3 sewer system, within and without the corporate limits. 134.4 (3) To construct, reconstruct, extend, and maintain steam 134.5 heating mains. 134.6 (4) To install, replace, extend, and maintain street lights 134.7 and street lighting systems and special lighting systems. 134.8 (5) To acquire, improve, construct, reconstruct, extend, 134.9 and maintain water works systems, including mains, valves, 134.10 hydrants, service connections, wells, pumps, reservoirs, tanks, 134.11 treatment plants, and other appurtenances of a water works 134.12 system, within and without the corporate limits. 134.13 (6) To acquire, improve and equip parks, open space areas, 134.14 playgrounds, and recreational facilities within or without the 134.15 corporate limits. 134.16 (7) To plant trees on streets and provide for their 134.17 trimming, care, and removal. 134.18 (8) To abate nuisances and to drain swamps, marshes, and 134.19 ponds on public or private property and to fill the same. 134.20 (9) To construct, reconstruct, extend, and maintain dikes 134.21 and other flood control works. 134.22 (10) To construct, reconstruct, extend, and maintain 134.23 retaining walls and area walls. 134.24 (11) To acquire, construct, reconstruct, improve, alter, 134.25 extend, operate, maintain, and promote a pedestrian skyway 134.26 system. Such improvement may be made upon a petition pursuant 134.27 to section 429.031, subdivision 3. 134.28 (12) To acquire, construct, reconstruct, extend, operate, 134.29 maintain, and promote underground pedestrian concourses. 134.30 (13) To acquire, construct, improve, alter, extend, 134.31 operate, maintain, and promote public malls, plazas or 134.32 courtyards. 134.33 (14) To construct, reconstruct, extend, and maintain 134.34 district heating systems. 134.35 (15) To construct, reconstruct, alter, extend, operate, 134.36 maintain, and promote fire protection systems in existing 135.1 buildings, but only upon a petition pursuant to section 429.031, 135.2 subdivision 3. 135.3 (16) To acquire, construct, reconstruct, improve, alter, 135.4 extend, and maintain highway sound barriers. 135.5 (17) To improve, construct, reconstruct, extend, and 135.6 maintain gas and electric distribution facilities owned by a 135.7 municipal gas or electric utility. 135.8 (18) To purchase, install, and replace signs, posts, and 135.9 other markers for addressing related to the operation of 135.10 enhanced 911 telephone service. 135.11 Sec. 40. Minnesota Statutes 1998, section 429.031, 135.12 subdivision 1, is amended to read: 135.13 Subdivision 1. [PREPARATION OF PLANS, NOTICE OF HEARING.] 135.14 (a) Before the municipality awards a contract for an improvement 135.15 or orders it made by day labor, or before the municipality may 135.16 assess any portion of the cost of an improvement to be made 135.17 under a cooperative agreement with the state or another 135.18 political subdivision for sharing the cost of making the 135.19 improvement, the council shall hold a public hearing on the 135.20 proposed improvement following two publications in the newspaper 135.21 of a notice stating the time and place of the hearing, the 135.22 general nature of the improvement, the estimated cost, and the 135.23 area proposed to be assessed. The two publications must be a 135.24 week apart, and the hearing must be at least three days after 135.25 the second publication. Not less than ten days before the 135.26 hearing, notice of the hearing must also be mailed to the owner 135.27 of each parcel within the area proposed to be assessed with a 135.28 reasonable estimate of the amount to be assessed against each 135.29 parcel, but failure to give mailed notice or any defects in the 135.30 notice does not invalidate the proceedings. For the purpose of 135.31 giving mailed notice, owners are those shown as owners on the 135.32 records of the county auditor or, in any county where tax 135.33 statements are mailed by the county treasurer, on the records of 135.34 the county treasurer; but other appropriate records may be used 135.35 for this purpose. For properties that are tax exempt or subject 135.36 to taxation on a gross earnings basis and are not listed on the 136.1 records of the county auditor or the county treasurer, the 136.2 owners may be ascertained by any practicable means, and mailed 136.3 notice must be given them as provided in this subdivision. 136.4 (b) Before the adoption of a resolution ordering the 136.5 improvement, the council shall secure from the city engineer or 136.6 some other competent person of its selection a report advising 136.7 it in a preliminary way as to whether the proposed improvement 136.8 is necessary, cost-effective, and feasible and as to whether it 136.9 should best be made as proposed or in connection with some other 136.10 improvement. The report must also include the estimated cost of 136.11 the improvement as recommended with a reasonable estimate of the 136.12 amount to be assessed against each parcel. No error or omission 136.13 in the report invalidates the proceeding unless it materially 136.14 prejudices the interests of an owner. 136.15 (c) If the report is not prepared by an employee of a 136.16 municipality, the compensation for preparing the report under 136.17 this subdivision must be based on the following factors: 136.18 (1) the time and labor required; 136.19 (2) the experience and knowledge of the preparer; 136.20 (3) the complexity and novelty of the problems involved; 136.21 and 136.22 (4) the extent of the responsibilities assumed. 136.23 (d) The compensation must not be based primarily on a 136.24 percentage of the estimated cost of the improvement. 136.25 (e) The council may also take other steps prior to the 136.26 hearing, including, among other things, the preparation of plans 136.27 and specifications and the advertisement for bids that will in 136.28 its judgment provide helpful information in determining the 136.29 desirability and feasibility of the improvement. 136.30 (f) The hearing may be adjourned from time to time, and a 136.31 resolution ordering the improvement may be adopted at any time 136.32 within six months after the date of the hearing by vote of a 136.33 majority of all members of the council when the improvement has 136.34 been petitioned for by the owners of not less than 35 percent in 136.35 frontage of the real property abutting on the streets named in 136.36 the petition as the location of the improvement. When there has 137.1 been no such petition, the resolution may be adopted only by 137.2 vote of four-fifths of all members of the council; provided that 137.3 if the mayor of the municipality is a member of the council but 137.4 has no vote or votes only in case of a tie, the mayor is not 137.5 deemed to be a member for the purpose of determining a 137.6 four-fifths majority vote. 137.7 (g) The resolution ordering the improvement may reduce, but 137.8 not increase, the extent of the improvement as stated in the 137.9 notice of hearing. 137.10 Sec. 41. Minnesota Statutes 1998, section 469.040, is 137.11 amended by adding a subdivision to read: 137.12 Subd. 5. [DESIGNATED HOUSING CORPORATIONS.] Property 137.13 located within the exterior boundaries of the White Earth Indian 137.14 reservation that is owned by the tribe's designated housing 137.15 entity as defined in United States Code, title 25, section 4103, 137.16 paragraph 21, and that is a housing project or a housing 137.17 development project, as defined in section 469.002, subdivisions 137.18 13 and 15, is exempt from all real and personal property taxes 137.19 of the city, county, state, or any political subdivision 137.20 thereof, but the property is subject to subdivision 3. A copy 137.21 of those portions of the annual reports submitted on behalf of 137.22 the housing entity to the secretary of the United States 137.23 Department of Housing and Urban Development for the project that 137.24 contain information sufficient to determine the amount due under 137.25 subdivision 3 satisfies the reporting requirements of 137.26 subdivision 3 for the project. 137.27 Sec. 42. Minnesota Statutes 1999 Supplement, section 137.28 473.39, subdivision 1g, is amended to read: 137.29 Subd. 1g. [OBLIGATIONS; 2000-2002.] In addition to the 137.30 authority in subdivisions 1a, 1b, 1c, 1d, and 1e, the council 137.31 may issue certificates of indebtedness, bonds, or other 137.32 obligations under this section in an amount not exceeding 137.33$36,000,000$55,400,000, which may be used for capital 137.34 expenditures, other than for construction, maintenance, or 137.35 operation of light rail transit, as prescribed in the council's 137.36 transit capital improvement program and for related costs, 138.1 including the costs of issuance and sale of the obligations. 138.2 The funds must be proportionally spent on capital improvement 138.3 projects as recommended by the regional transit capital 138.4 evaluation committee. This section applies in the counties of 138.5 Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. 138.6 Sec. 43. Minnesota Statutes 1998, section 473.39, is 138.7 amended by adding a subdivision to read: 138.8 Subd. 1h. [OBLIGATIONS.] (a) After July 1, 2001, in 138.9 addition to the authority in subdivisions 1a, 1b, 1c, 1d, 1e, 138.10 and 1g, the council may issue certificates of indebtedness, 138.11 bonds, or other obligations under this section for capital 138.12 expenditures as prescribed in the council's regional transit 138.13 master plan and transit capital improvement program and for 138.14 related costs including the costs of issuance and sale of the 138.15 obligations. The amount of the obligations issued under this 138.16 subdivision in any year may not exceed an amount equal to the 138.17 following limitations, except as provided in this subdivision: 138.18 (1) for 2002, the limitation is $40,000,000; and 138.19 (2) for each subsequent year, the limitation is equal to 138.20 the previous year's limitation calculated under this subdivision 138.21 adjusted for inflation using the United States Department of 138.22 Labor's Bureau of Labor Statistics Minneapolis-St. Paul Consumer 138.23 Price Index for All Urban Consumers (CPI-U) for the previous 138.24 taxes payable year or three percent, whichever amount is less. 138.25 (b) In any year in which the council does not issue 138.26 obligations totaling the limitation calculated under this 138.27 subdivision, the council's limitation for the following year is 138.28 increased by the difference between the previous year's 138.29 limitation calculated under this subdivision and the amount 138.30 issued in the previous year, or 20 percent of the previous 138.31 year's limitation, whichever is less. Any limitation increase 138.32 carried forward under this subdivision is available only in the 138.33 following year and is not a permanent increase in the annual 138.34 limitation calculated under this subdivision. 138.35 Sec. 44. Minnesota Statutes 1999 Supplement, section 138.36 477A.011, subdivision 36, is amended to read: 139.1 Subd. 36. [CITY AID BASE.] (a) Except as provided in 139.2 paragraphs (b) to(k)(n), "city aid base" means, for each city, 139.3 the sum of the local government aid and equalization aid it was 139.4 originally certified to receive in calendar year 1993 under 139.5 Minnesota Statutes 1992, section 477A.013, subdivisions 3 and 5, 139.6 and the amount of disparity reduction aid it received in 139.7 calendar year 1993 under Minnesota Statutes 1992, section 139.8 273.1398, subdivision 3. 139.9 (b) For aids payable in 1996 and thereafter, a city that in 139.10 1992 or 1993 transferred an amount from governmental funds to 139.11 its sewer and water fund, which amount exceeded its net levy for 139.12 taxes payable in the year in which the transfer occurred, has a 139.13 "city aid base" equal to the sum of (i) its city aid base, as 139.14 calculated under paragraph (a), and (ii) one-half of the 139.15 difference between its city aid distribution under section 139.16 477A.013, subdivision 9, for aids payable in 1995 and its city 139.17 aid base for aids payable in 1995. 139.18 (c) The city aid base for any city with a population less 139.19 than 500 is increased by $40,000 for aids payable in calendar 139.20 year 1995 and thereafter, and the maximum amount of total aid it 139.21 may receive under section 477A.013, subdivision 9, paragraph 139.22 (c), is also increased by $40,000 for aids payable in calendar 139.23 year 1995 only, provided that: 139.24 (i) the average total tax capacity rate for taxes payable 139.25 in 1995 exceeds 200 percent; 139.26 (ii) the city portion of the tax capacity rate exceeds 100 139.27 percent; and 139.28 (iii) its city aid base is less than $60 per capita. 139.29 (d) The city aid base for a city is increased by $20,000 in 139.30 1998 and thereafter and the maximum amount of total aid it may 139.31 receive under section 477A.013, subdivision 9, paragraph (c), is 139.32 also increased by $20,000 in calendar year 1998 only, provided 139.33 that: 139.34 (i) the city has a population in 1994 of 2,500 or more; 139.35 (ii) the city is located in a county, outside of the 139.36 metropolitan area, which contains a city of the first class; 140.1 (iii) the city's net tax capacity used in calculating its 140.2 1996 aid under section 477A.013 is less than $400 per capita; 140.3 and 140.4 (iv) at least four percent of the total net tax capacity, 140.5 for taxes payable in 1996, of property located in the city is 140.6 classified as railroad property. 140.7 (e) The city aid base for a city is increased by $200,000 140.8 in 1999 and thereafter and the maximum amount of total aid it 140.9 may receive under section 477A.013, subdivision 9, paragraph 140.10 (c), is also increased by $200,000 in calendar year 1999 only, 140.11 provided that: 140.12 (i) the city was incorporated as a statutory city after 140.13 December 1, 1993; 140.14 (ii) its city aid base does not exceed $5,600; and 140.15 (iii) the city had a population in 1996 of 5,000 or more. 140.16 (f) The city aid base for a city is increased by $450,000 140.17 in 1999 to 2008 and the maximum amount of total aid it may 140.18 receive under section 477A.013, subdivision 9, paragraph (c), is 140.19 also increased by $450,000 in calendar year 1999 only, provided 140.20 that: 140.21 (i) the city had a population in 1996 of at least 50,000; 140.22 (ii) its population had increased by at least 40 percent in 140.23 the ten-year period ending in 1996; and 140.24 (iii) its city's net tax capacity for aids payable in 1998 140.25 is less than $700 per capita. 140.26 (g) Beginning in 2002, the city aid base for a city is 140.27 equal to the sum of its city aid base in 2001 and the amount of 140.28 additional aid it was certified to receive under section 477A.06 140.29 in 2001. For 2002 only, the maximum amount of total aid a city 140.30 may receive under section 477A.013, subdivision 9, paragraph 140.31 (c), is also increased by the amount it was certified to receive 140.32 under section 477A.06 in 2001. 140.33 (h) The city aid base for a city is increased by $150,000 140.34 for aids payable in 2000 and thereafter, and the maximum amount 140.35 of total aid it may receive under section 477A.013, subdivision 140.36 9, paragraph (c), is also increased by $150,000 in calendar year 141.1 2000 only, provided that: 141.2 (1) the city has a population that is greater than 1,000 141.3 and less than 2,500; 141.4 (2) its commercial and industrial percentage for aids 141.5 payable in 1999 is greater than 45 percent; and 141.6 (3) the total market value of all commercial and industrial 141.7 property in the city for assessment year 1999 is at least 15 141.8 percent less than the total market value of all commercial and 141.9 industrial property in the city for assessment year 1998. 141.10 (i) The city aid base for a city is increased by $200,000 141.11 in 2000 and thereafter, and the maximum amount of total aid it 141.12 may receive under section 477A.013, subdivision 9, paragraph 141.13 (c), is also increased by $200,000 in calendar year 2000 only, 141.14 provided that: 141.15 (1) the city had a population in 1997 of 2,500 or more; 141.16 (2) the net tax capacity of the city used in calculating 141.17 its 1999 aid under section 477A.013 is less than $650 per 141.18 capita; 141.19 (3) the pre-1940 housing percentage of the city used in 141.20 calculating 1999 aid under section 477A.013 is greater than 12 141.21 percent; 141.22 (4) the 1999 local government aid of the city under section 141.23 477A.013 is less than 20 percent of the amount that the formula 141.24 aid of the city would have been if the need increase percentage 141.25 was 100 percent; and 141.26 (5) the city aid base of the city used in calculating aid 141.27 under section 477A.013 is less than $7 per capita. 141.28 (j) The city aid base for a city is increased by $225,000 141.29 in calendar years 2000 to 2002 and the maximum amount of total 141.30 aid it may receive under section 477A.013, subdivision 9, 141.31 paragraph (c), is also increased by $225,000 in calendar year 141.32 2000 only, provided that: 141.33 (1) the city had a population of at least 5,000; 141.34 (2) its population had increased by at least 50 percent in 141.35 the ten-year period ending in 1997; 141.36 (3) the city is located outside of the Minneapolis-St. Paul 142.1 metropolitan statistical area as defined by the United States 142.2 Bureau of the Census; and 142.3 (4) the city received less than $30 per capita in aid under 142.4 section 477A.013, subdivision 9, for aids payable in 1999. 142.5 (k) The city aid base for a city is increased by $102,000 142.6 in 2000 and thereafter, and the maximum amount of total aid it 142.7 may receive under section 477A.013, subdivision 9, paragraph 142.8 (c), is also increased by $102,000 in calendar year 2000 only, 142.9 provided that: 142.10 (1) the city has a population in 1997 of 2,000 or more; 142.11 (2) the net tax capacity of the city used in calculating 142.12 its 1999 aid under section 477A.013 is less than $455 per 142.13 capita; 142.14 (3) the net levy of the city used in calculating 1999 aid 142.15 under section 477A.013 is greater than $195 per capita; and 142.16 (4) the 1999 local government aid of the city under section 142.17 477A.013 is less than 38 percent of the amount that the formula 142.18 aid of the city would have been if the need increase percentage 142.19 was 100 percent. 142.20 (l) In addition to the increase the city receives under 142.21 section 45, the city aid base for a city is increased by $23,000 142.22 in 2001 and thereafter, and the maximum amount of total aid it 142.23 may receive under section 477A.013, subdivision 9, paragraph 142.24 (c), is also increased by $32,000 in calendar year 2001 only, 142.25 provided that: 142.26 (1) the city has a population in 1998 that is greater than 142.27 200 but less than 500; 142.28 (2) the city's revenue need used in calculating aids 142.29 payable in 2000 was greater than $200 per capita; 142.30 (3) the city net tax capacity for the city, used in 142.31 calculating aids available in 2000 was equal to or less than 142.32 $200 per capita; 142.33 (4) the city aid base of the city used in calculating aid 142.34 under section 477A.013 is less than $65 per capita; and 142.35 (5) the city's formula aid for aids payable in 2000 was 142.36 greater than zero. 143.1 (m) In addition to the increase the city receives under 143.2 section 45, the city aid base for a city is increased by 143.3 $100,000 in 2001 and thereafter, and the maximum amount of total 143.4 aid it may receive under section 477A.013, subdivision 9, 143.5 paragraph (c), is also increased by $184,000 in calendar year 143.6 2001 only, provided that: 143.7 (1) the net tax capacity of the city used in calculating 143.8 its 2000 aid under section 477A.013 is less than $810 per 143.9 capita; 143.10 (2) the population of the city declined more than two 143.11 percent between 1988 and 1998; 143.12 (3) the net levy of the city used in calculating 2000 aid 143.13 under section 477A.013 is greater than $240 per capita; and 143.14 (4) the city received less than $36 per capita in aid under 143.15 section 477A.013, subdivision 9, for aids payable in 2000. 143.16 (n) The city aid base for a city is increased by $7,200 in 143.17 2001 and thereafter, and the maximum amount of total aid it may 143.18 receive under section 477A.013, subdivision 9, paragraph (c), is 143.19 also increased by $7,200 in calendar year 2001 only, provided 143.20 that: 143.21 (1) the city had a population in 1998 that is greater than 143.22 200 but less than 500; 143.23 (2) the city's commercial industrial percentage used in 143.24 calculating aids payable in 2000 was less than ten percent; 143.25 (3) more than 25 percent of the city's population was 60 143.26 years old or older according to the 1990 census; 143.27 (4) the city aid base of the city used in calculating aid 143.28 under section 477A.013 is less than $15 per capita; and 143.29 (5) the city's formula aid for aids payable in 2000 was 143.30 greater than zero. 143.31 EFFECTIVE DATE: This section is effective beginning with 143.32 aids payable in 2001 and thereafter. 143.33 Sec. 45. Minnesota Statutes 1998, section 477A.011, is 143.34 amended by adding a subdivision to read: 143.35 Subd. 38. [TEMPORARY BASE ADJUSTMENT.] (a) The city aid 143.36 base for a city is increased as provided in paragraph (b) in 144.1 2001 and 2002 only, and the maximum amount of total aid it may 144.2 receive under section 477A.013, subdivision 9, paragraph (c), is 144.3 also increased as provided in paragraph (b) in calendar year 144.4 2001 only, provided that: 144.5 (1) it had a population in 1999 of 5,000 or less; 144.6 (2) the per capita net tax capacity of the city calculated 144.7 using its 1999 population and 1999 net tax capacity is equal to 144.8 or less than 110 percent of the average 1999 per capita net tax 144.9 capacity for all cities; and 144.10 (3) the 2001 local government aid of the city under section 144.11 477A.013 after reductions made under sections 273.1399, 144.12 subdivision 5; and 477A.014, subdivision 5, but before 144.13 adjustment under this subdivision is less than 64 percent of the 144.14 amount that the formula aid of the city would have been if the 144.15 need increase percentage was 100 percent. 144.16 (b) The adjustment is equal to the positive difference, if 144.17 any, between: 144.18 (1) 64 percent of the amount that the formula aid of the 144.19 city would have been for aid payable in 2001 if the need 144.20 increase percentage was 100 percent; and 144.21 (2) the 2001 local government aid of the city under section 144.22 477A.013 after reductions made under sections 273.1399, 144.23 subdivision 5, and 477A.014, subdivision 5, but before 144.24 adjustment under this subdivision. 144.25 Sec. 46. Minnesota Statutes 1998, section 477A.0121, 144.26 subdivision 4, is amended to read: 144.27 Subd. 4. [PUBLIC DEFENDER COSTS.] Each calendar year, 1.5 144.28 percent of the total appropriation for this section, other than 144.29 the amount appropriated under section 477A.03, subdivision 2, 144.30 paragraph (b)(ii), shall be retained by the commissioner of 144.31 revenue to make reimbursements to the commissioner of finance 144.32 for payments made under section 611.27. The reimbursements 144.33 shall be to defray the additional costs associated with 144.34 court-ordered counsel under section 611.27. Any retained 144.35 amounts not used for reimbursement in a year shall be included 144.36 in the next distribution of county criminal justice aid that is 145.1 certified to the county auditors for the purpose of property tax 145.2 reduction for the next taxes payable year. 145.3 Sec. 47. Minnesota Statutes 1998, section 477A.0121, is 145.4 amended by adding a subdivision to read: 145.5 Subd. 4a. [USE OF INCREASED FUNDING.] (a) The distribution 145.6 formula in subdivision 3 does not apply to $5,000,000 of the aid 145.7 provided under section 477A.03, subdivision 2, paragraph (b)(ii). 145.8 (b) $1,000,000 of the aid provided under section 477A.03, 145.9 subdivision 2, paragraph (b)(ii), is to be used to increase the 145.10 number of probation officers managing intensive supervised 145.11 release caseloads. The commissioner of corrections shall 145.12 distribute these funds proportionately based on current unmet 145.13 needs, including distribution to areas of the state that are not 145.14 currently served by an intensive supervised release caseload. 145.15 (c) $4,000,000 of the aid provided under section 477A.03, 145.16 subdivision 2, paragraph (b)(ii), is to be used for enhanced 145.17 supervision of adult felony sex offenders by employing 145.18 additional probation officers to reduce the caseloads of 145.19 probation officers supervising sex offenders on probation or 145.20 supervised release. The commissioner of corrections shall 145.21 determine statewide eligibility for these funds according to the 145.22 formula contained in section 401.10. Each Community Corrections 145.23 Act jurisdiction and the probation and supervised release unit 145.24 of the department of corrections shall submit to the 145.25 commissioner of corrections an analysis of need along with a 145.26 plan to meet these needs and reduce adult felony sex offender 145.27 caseloads. Upon approval of the plans, the non-Community 145.28 Corrections Act portion of these funds shall be appropriated to 145.29 the department of corrections and the distribution shall be 145.30 based on statewide need. The Community Corrections Act funds 145.31 shall be disbursed as grants to each Community Corrections Act 145.32 jurisdiction. These appropriations may not be used to supplant 145.33 existing state or county probation officer positions. 145.34 Sec. 48. [477A.0123] [CHARITY CARE AID.] 145.35 Subdivision 1. [PURPOSE.] The purpose of charity care aid 145.36 is to prevent or reduce the reliance on county property taxes to 146.1 meet the cost of providing medical care to individuals who are 146.2 indigent and who do not reside in the county. 146.3 Subd. 2. [QUALIFICATION.] A county qualifies for payment 146.4 in 2001 and 2002 only under this section if it contains a 146.5 hospital that has a medical assistance disproportionate 146.6 population adjustment as determined under section 256.969, 146.7 subdivision 9, greater than 16 percent. 146.8 Subd. 3. [REPORTS BY HOSPITALS AND COUNTIES.] (a) By June 146.9 1 of 2000 and 2001, a hospital described in subdivision 2 must 146.10 file a report with the county in which it is located setting 146.11 forth its audited financial statements and a schedule setting 146.12 forth the aggregate amount of charity care for the previous 146.13 calendar year that meets the following criteria: 146.14 (1) the patient is from a county other than the county in 146.15 which the hospital is located; and 146.16 (2) the hospital has made a preliminary determination that: 146.17 (i) the patient is not eligible for any public health care 146.18 program or it cannot be determined whether the person is 146.19 eligible for any public health care program; and 146.20 (ii) the person is uninsured or it cannot be determined if 146.21 the person is uninsured or the person has insufficient resources 146.22 to pay the cost of services delivered by the hospital. 146.23 (b) By July 1 of 2000 and 2001, each county must report to 146.24 the commissioner of revenue the total amount of charity care 146.25 reported to it by hospitals under this subdivision. 146.26 Subd. 4. [AMOUNT OF AID.] (a) Subject to the limitation in 146.27 paragraph (b), payment to a county under this section is equal 146.28 to the aggregate amount of charity care, as reported under 146.29 subdivision 3. 146.30 (b) The total of all payments under this section each year 146.31 may not exceed $10,000,000. If the amounts reported under 146.32 subdivision 3 for all counties exceeds $10,000,000 for a year, 146.33 the distributions to each county must be allocated in proportion 146.34 to the total amount of uncompensated care reported to the 146.35 commissioner by the county so that the total of the payments for 146.36 the year does not exceed $10,000,000. 147.1 Subd. 5. [PAYMENT DATES.] The aid amounts must be paid as 147.2 provided in section 477A.015. 147.3 Subd. 6. [USE OF FUNDS.] Each county that receives a 147.4 payment under this section must remit all charity care aid funds 147.5 to hospitals described in subdivision 2 that apply to the county 147.6 for reimbursement. If the aid a county receives is less than 147.7 the total amount of uncompensated care reported by eligible 147.8 hospitals in the county, the aid amounts remitted to the 147.9 hospitals must be proportional to the amounts reported. 147.10 Subd. 7. [REPORT TO THE COMMISSIONER.] By March 15 of the 147.11 year following the year when the aid was received, each county 147.12 that receives the aid must file a report with the commissioner 147.13 of revenue describing how charity care aids were spent, and 147.14 verifying that they were paid to hospitals described in 147.15 subdivision 2 for charity care purposes for individuals who do 147.16 not reside in the county. 147.17 Subd. 8. [NOTICE TO COUNTIES.] The commissioner of revenue 147.18 shall annually notify the governing body of each county, 147.19 providing information, to the extent available to the 147.20 commissioner, regarding the amount of reimbursements paid under 147.21 this section attributable to care provided to residents of that 147.22 county. 147.23 Subd. 9. [APPROPRIATIONS.] The amounts sufficient to make 147.24 the payments under this section are appropriated from the 147.25 general fund to the commissioner of revenue. 147.26 EFFECTIVE DATE: This section is effective for aids payable 147.27 in 2001 and 2002. 147.28 Sec. 49. Minnesota Statutes 1999 Supplement, section 147.29 477A.03, subdivision 2, is amended to read: 147.30 Subd. 2. [ANNUAL APPROPRIATION.] (a) A sum sufficient to 147.31 discharge the duties imposed by sections 477A.011 to 477A.014 is 147.32 annually appropriated from the general fund to the commissioner 147.33 of revenue. 147.34 (b)(i) Aid payments to counties under section 477A.0121 are 147.35 limited to $20,265,000 in 1996. Aid payments to counties under 147.36 section 477A.0121 are limited to $27,571,625 in 1997. For aid 148.1 payable in 1998 and thereafter, the total aids paid under 148.2 section 477A.0121 are the amounts certified to be paid in the 148.3 previous year, adjusted for inflation as provided under 148.4 subdivision 3. 148.5 (ii) Aid payments to counties under section 477A.0121 are 148.6 further increased by an additional $10,000,000 in 2001 and 2002 148.7 only; these amounts are not subject to an adjustment for 148.8 inflation under section 477A.03, subdivision 2, paragraph (b). 148.9 (c)(i) For aids payable in 1998 and thereafter, the total 148.10 aids paid to counties under section 477A.0122 are the amounts 148.11 certified to be paid in the previous year, adjusted for 148.12 inflation as provided under subdivision 3. 148.13 (ii) Aid payments to counties under section 477A.0122 in 148.14 2000 are further increased by an additional $20,000,000 in 2000. 148.15 (d) Aid payments to cities in 1999 under section 477A.013, 148.16 subdivision 9, are limited to $380,565,489. For aids payable in 148.17 2000 and 2001, the total aids paid under section 477A.013, 148.18 subdivision 9, are the amounts certified to be paid in the 148.19 previous year, adjusted for inflation as provided under 148.20 subdivision 3. For aids payable in20022003, the total aids 148.21 paid under section 477A.013, subdivision 9, are the amounts 148.22 certified to be paid in the previous year, adjusted for 148.23 inflation as provided under subdivision 3, and increased by the 148.24 amount certified to be paid in 2001 under section 477A.06. For 148.25 aids payable in 2003 and thereafter, the total aids paid under 148.26 section 477A.013, subdivision 9, are the amounts certified to be 148.27 paid in the previous year, adjusted for inflation as provided 148.28 under subdivision 3. The additional amount authorized under 148.29 subdivision 4 is not included when calculating the appropriation 148.30 limits under this paragraph. 148.31 Sec. 50. Minnesota Statutes 1998, section 477A.03, is 148.32 amended by adding a subdivision to read: 148.33 Subd. 5. [2001 AND 2002 ADJUSTMENT.] The appropriation 148.34 under subdivision 2 for aid payable in 2001 is increased by 148.35 $6,700,000. This amount is included in the base appropriation 148.36 subject to the inflation adjustment under subdivision 3 for aid 149.1 payable in 2002 only. 149.2 Sec. 51. Minnesota Statutes 1999 Supplement, section 149.3 477A.06, subdivision 1, is amended to read: 149.4 Subdivision 1. [ELIGIBILITY.] (a) For assessment years 149.51998, 1999, and2000 and 2001, for all class 4d property on 149.6 which construction was begun before January 1, 1999, the 149.7 assessor shall determine the difference between the actual net 149.8 tax capacity and the net tax capacity that would be determined 149.9 for the property if the class rates for assessment year 1997 149.10 were in effect. 149.11 (b) In calendar years 2001 and 2002, each city that is an 149.12 impacted community shall be eligible for aid equal to (i) the 149.13 amount by which the difference determined in paragraph (a) for 149.14 the corresponding assessment year exceeds one percent of the 149.15 city's total taxable net tax capacity for taxes payable in 1998, 149.16 multiplied by (ii) the city government's average local tax rate 149.17 for taxes payable in 1998. 149.18(b)(c) In calendar years1999, 2000, and2001 and 2002, 149.19 each city that is not an impacted community shall be eligible 149.20 for aid equal to (i) the amount by which the sum of the 149.21 differences determined inclauseparagraph (a) for the 149.22 corresponding assessment year exceedstwo1.5 percent of the 149.23 city's total taxable net tax capacity for taxes payable in 1998, 149.24 multiplied by (ii) the city government's average local tax rate 149.25 for taxes payable in 1998. 149.26 (d) For purposes of this section, "impacted community" 149.27 means a home rule or statutory city that meets all of the 149.28 following requirements: 149.29 (1) the city has at least 250 multifamily housing units, 149.30 excluding duplexes, converted duplexes, triplexes, senior 149.31 assisted living facilities, and student housing; 149.32 (2) the city has at least 25 percent of its multifamily 149.33 housing units classified as class 4d property; and 149.34 (3) the city meets the 1.5 percent requirement for aid 149.35 payments under paragraph (c). 149.36 EFFECTIVE DATE: This section is effective for aid paid in 150.1 calendar years 2001 and 2002. 150.2 Sec. 52. Minnesota Statutes 1998, section 477A.06, 150.3 subdivision 2, is amended to read: 150.4 Subd. 2. [CERTIFICATION.] (a) The county assessor shall 150.5 notify the commissioner of revenue of the amount determined 150.6 under subdivision 1, paragraph (b), clause (i), for any city 150.7 that is an impacted community by June 30 of the assessment year, 150.8 in a form prescribed by the commissioner. 150.9 (b) The county assessor shall notify the commissioner of 150.10 revenue of the amount determined under subdivision 1, 150.11 paragraph(b)(c), clause (i), for any city that is not an 150.12 impacted community which qualifies for aid under this section by 150.13 June 30 of the assessment year, in a form prescribed by the 150.14 commissioner. 150.15 (c) The commissioner shall notify each city of its 150.16 qualifying aid amount by August 15 of the assessment year. 150.17 EFFECTIVE DATE: This section is effective for aid paid in 150.18 calendar years 2001 and 2002. 150.19 Sec. 53. Minnesota Statutes 1998, section 477A.06, 150.20 subdivision 3, is amended to read: 150.21 Subd. 3. [APPROPRIATION; PAYMENT.] (a) The commissioner 150.22 shall pay each city its qualifying aid amount on or before July 150.23 20 of each year. An amount sufficient to pay the aid authorized 150.24 under this section is appropriated to the commissioner of 150.25 revenue from the property tax reform account in fiscal years 150.26 2000 and 2001, and from the general fund in fiscal year 2002. 150.27 (b) For fiscal years 2001and, 2002, and 2003, the amount 150.28 of aid appropriated under this section may not exceed $1,500,000 150.29 each year. 150.30 (c) If the total amount of aid that would otherwise be 150.31 payable under the formula in this section exceeds the maximum 150.32 allowed under paragraph (b), the amount of aid for each city is 150.33 reduced proportionately to equal the limit. 150.34 Sec. 54. Minnesota Statutes 1998, section 477A.11, 150.35 subdivision 1, is amended to read: 150.36 Subdivision 1. [TERMS.] For the purpose ofLaws 1979,151.1Chapter 303, Article 8, Sections 1 to 5sections 477A.11 to 151.2 477A.145, the terms defined in this section have the meanings 151.3 given them. 151.4 EFFECTIVE DATE: This section applies to payments made in 151.5 calendar year 2001 and thereafter. 151.6 Sec. 55. Minnesota Statutes 1998, section 477A.12, is 151.7 amended to read: 151.8 477A.12 [ANNUAL APPROPRIATIONS; LANDS ELIGIBLE; 151.9 CERTIFICATION OF ACREAGE.] 151.10 (a)There isAs an offset for expenses incurred by counties 151.11 and towns in support of natural resources lands, the following 151.12 amounts are annually appropriated to the commissioner of natural 151.13 resources from the general fund forpayment to counties within151.14the state an amount equal totransfer to the commissioner of 151.15 revenue. The commissioner of revenue shall pay the transferred 151.16 funds to counties as required by sections 477A.11 to 477A.145. 151.17 The amounts are: 151.18 (1) for acquired natural resources land, $3, as adjusted 151.19 for inflation under section 477A.145, multiplied by the total 151.20 number of acres of acquired natural resources land or,beginning151.21July 1, 1996,at the county's option three-fourths of one 151.22 percent of the appraised value of all acquired natural resources 151.23 land in the county, whichever is greater; 151.24 (2) 75 cents, as adjusted for inflation under section 151.25 477A.145, multiplied by the number of acres of 151.26 county-administered other natural resources land; and 151.27 (3) 37.5 cents, as adjusted for inflation under section 151.28 477A.145, multiplied by the number of acres of 151.29 commissioner-administered other natural resources land located 151.30 in each county as of July 1 of each year prior to the payment 151.31 year. 151.32 (b) Lands for which payments in lieu are made pursuant to 151.33 section 97A.061, subdivision 3, and Laws 1973, chapter 567, 151.34 shall not be eligible for payments under this section. Each 151.35 county auditor shall certify to the department of natural 151.36 resources during July of each year prior to the payment year the 152.1 number of acres of county-administered other natural resources 152.2 land within the county. The department of natural resources 152.3 may, in addition to the certification of acreage, require 152.4 descriptive lists of land so certified. The commissioner of 152.5 natural resources shall determine and certify to the 152.6 commissioner of revenue by March 1 of the payment year: 152.7 (1) the number of acres and most recent appraised value of 152.8 acquired natural resources landandwithin each county; 152.9 (2) the number of acres of commissioner-administered 152.10 natural resources land within each county; and 152.11 (3) the number of acres of county-administered other 152.12 natural resources land within each county, based on the reports 152.13 filed by each county auditor with the commissioner of natural 152.14 resources. 152.15 The commissioner of revenue shall determine the 152.16 distributions provided for in this section using the number of 152.17 acres and appraised values certified by the commissioner of 152.18 natural resources by March 1 of the payment year. 152.19 (c) For the purposes of this section, the appraised value 152.20 of acquired natural resources land is the purchase price for the 152.21 first five years after acquisition. The appraised value of 152.22 acquired natural resources land received as a donation is the 152.23 value determined for the commissioner of natural resources by a 152.24 licensed appraiser, or the county assessor's estimated market 152.25 value if no appraisal is done. The appraised value must be 152.26 determined by the county assessor every five years after the 152.27 land is acquired. 152.28 EFFECTIVE DATE: This section applies to payments made in 152.29 calendar year 2001 and thereafter. 152.30 Sec. 56. Minnesota Statutes 1998, section 477A.13, is 152.31 amended to read: 152.32 477A.13 [TIME OF PAYMENT, DEDUCTIONS.] 152.33 Payments to the countiesshallof the amounts determined 152.34 under section 477A.12 must be made by the commissioner of 152.35 revenue from the general fundduring the month of July of the152.36year next following certification. There shall be deducted from153.1amounts paid any amounts paid to a county or township during the153.2preceding year pursuant to sections 97A.061, subdivisions 1 and153.32, and 272.68, subdivision 3, with respect to the lands153.4certified pursuant to section 477A.12at the time provided in 153.5 section 477A.015 for the first installment of local government 153.6 aid. 153.7 EFFECTIVE DATE: This section applies to payments made in 153.8 calendar year 2001 and thereafter. 153.9 Sec. 57. Minnesota Statutes 1998, section 477A.14, is 153.10 amended to read: 153.11 477A.14 [USE OF FUNDS.] 153.12FortyExcept as provided in section 97A.061, subdivision 5, 153.13 40 percent of the total payment to the county shall be deposited 153.14 in the county general revenue fund to be used to provide 153.15 property tax levy reduction. The remainder shall be distributed 153.16 by the county in the following priority: 153.17 (a) 37.5 cents, as adjusted for inflation under section 153.18 477A.145, for each acre of county-administered other natural 153.19 resources land shall be deposited in a resource development fund 153.20 to be created within the county treasury for use in resource 153.21 development, forest management, game and fish habitat 153.22 improvement, and recreational development and maintenance of 153.23 county-administered other natural resources land. Any county 153.24 receiving less than $5,000 annually for the resource development 153.25 fund may elect to deposit that amount in the county general 153.26 revenue fund; 153.27 (b) From the funds remaining, within 30 days of receipt of 153.28 the payment to the county, the county treasurer shall pay each 153.29 organized township 30 centsper, as adjusted for inflation under 153.30 section 477A.145, for each acre of acquired natural resources 153.31 land and 7.5 centsper, as adjusted for inflation under section 153.32 477A.145, for each acre of other natural resources land located 153.33 within its boundaries. Payments for natural resources lands not 153.34 located in an organized township shall be deposited in the 153.35 county general revenue fund. Payments to counties and townships 153.36 pursuant to this paragraph shall be used to provide property tax 154.1 levy reduction, except that of the payments for natural 154.2 resources lands not located in an organized township, the county 154.3 may allocate the amount determined to be necessary for 154.4 maintenance of roads in unorganized townships. Provided that, 154.5 if the total payment to the county pursuant to section 477A.12 154.6 is not sufficient to fully fund the distribution provided for in 154.7 this clause, the amount available shall be distributed to each 154.8 township and the county general revenue fund on a pro rata 154.9 basis; and 154.10 (c) Any remaining funds shall be deposited in the county 154.11 general revenue fund. Provided that, if the distribution to the 154.12 county general revenue fund exceeds $35,000, the excess shall be 154.13 used to provide property tax levy reduction. 154.14 EFFECTIVE DATE: This section applies to payments made in 154.15 calendar year 2001 and thereafter. 154.16 Sec. 58. [477A.145] [INFLATION ADJUSTMENT.] 154.17 In 2001 and each year thereafter, the amounts required to 154.18 be adjusted for inflation in sections 477A.12 and 477A.14 shall 154.19 be increased to an amount equal to: (1) the amount before the 154.20 inflation adjustment multiplied by (2) one plus the percentage 154.21 increase in the implicit price deflator for government 154.22 consumption expenditures and gross investment for state and 154.23 local governments prepared by the Bureau of Economic Analysis of 154.24 the United States Department of Commerce for the period starting 154.25 with 1980 and ending with the calendar year prior to the year in 154.26 which aid is paid. 154.27 EFFECTIVE DATE: This section applies to payments made in 154.28 calendar year 2001 and thereafter. 154.29 Sec. 59. Minnesota Statutes 1999 Supplement, section 154.30 505.08, subdivision 3, is amended to read: 154.31 Subd. 3. [PREMATURE REFERENCE TO PLAT; FORFEITURE.] Any 154.32 person who shall dispose of,or lease, or offer to sellany land 154.33 included in a plat by reference to the plat before the same is 154.34 recorded, shall forfeit to the county $100 for each lot, or part 154.35 of a lot, so disposed of,or leased, or offered; and any 154.36 official, land surveyor, or person whose duty it is to comply 155.1 with any of the provisions of this chapter, shall forfeit not 155.2 less than $100 for each month during which compliance is 155.3 delayed. All forfeitures under this chapter shall be recovered 155.4 in an action brought in the name of the county. Notwithstanding 155.5 any provisions of this subdivision to the contrary, this 155.6 subdivision shall not apply to an offer to sell or lease a unit 155.7 in a proposed common interest community as defined in chapter 155.8 515B. 155.9 Sec. 60. Laws 1995, First Special Session chapter 3, 155.10 article 15, section 25, is amended to read: 155.11 Sec. 25. [HOMESTEAD AND AGRICULTURAL CREDIT ADJUSTMENT.] 155.12 (a) For the computation of homestead and agricultural aid 155.13 for taxes payable in 1996, the commissioner of revenue shall 155.14 reduce a school district's homestead and agricultural aid by an 155.15 amount equal to the lesser of: (1) 25 percent of the amount of 155.16 the district's homestead and agricultural aid for calendar year 155.17 1995; or (2) an amount equal to one percent times the district's 155.18 adjusted net tax capacity for assessment year 1994. 155.19 (b) Prior to the computation of homestead and agricultural 155.20 aid for taxes payable in 1997, the commissioner of revenue shall 155.21 reduce the school district's homestead and agricultural aid by 155.22 an amount equal to the lesser of: (1) 50 percent of the amount 155.23 of the district's homestead and agricultural aid for calendar 155.24 year 1995; or (2) an amount equal to one percent times the 155.25 district's adjusted net tax capacity for assessment year 1994. 155.26 (c) Prior to the computation of homestead and agricultural 155.27 aid for taxes payable in 1998, the commissioner of revenue shall 155.28 reduce a school district's homestead and agricultural aid by an 155.29 amount equal to the lesser of: (1) 75 percent of the amount of 155.30 the district's homestead and agricultural aid for calendar year 155.31 1995; or (2) an amount equal to one percent times the district's 155.32 adjusted net tax capacity for assessment year 1994. 155.33 (d) Prior to the computation of homestead and agricultural 155.34 aid for taxes payable in 1999, the commissioner of revenue shall 155.35 reduce a school district's homestead and agricultural aid by an 155.36 amount equal to the lesser of: (1) the amount of the district's 156.1 homestead and agricultural aid for calendar year 1995; or (2) an 156.2 amount equal to one percent times the district's adjusted net 156.3 tax capacity for assessment year 1994. 156.4 (e) Prior to the computation of homestead and agricultural 156.5 aid for taxes payable in 2000and later years, the commissioner 156.6 of revenue shall reduce a school district's homestead and 156.7 agricultural aid by an amount equal to the lesser of: (1) any 156.8 remaining amount of the district's homestead and agricultural 156.9 aid; or (2) an amount equal to one percent times the district's 156.10 adjusted net tax capacity for assessment year 1994. 156.11 (f) Prior to the computation of homestead and agricultural 156.12 credit aid for taxes payable in 2001 and later years, the 156.13 commissioner of revenue shall reduce that portion of a school 156.14 district's homestead and agricultural credit aid first paid to a 156.15 district in calendar year 2000 or an earlier calendar year by an 156.16 amount equal to the lesser of: (1) any remaining amount of the 156.17 portion of the district's homestead and agricultural credit aid 156.18 first paid to a district in calendar year 2000 or an earlier 156.19 calendar year; or (2) an amount equal to one percent times the 156.20 district's adjusted net tax capacity for assessment year 1994. 156.21 Sec. 61. [LOCAL GOVERNMENT AID; ST. AUGUSTA TOWNSHIP (THE 156.22 CITY OF VENTURA).] 156.23 For aids payable in 2001 only, an additional aid payment of 156.24 $75,000 shall be paid to St. Augusta township or its succeeding 156.25 municipal government (the city of Ventura). This aid shall be 156.26 paid out of the city aid appropriation under Minnesota Statutes, 156.27 section 477A.03, subdivision 2, paragraph (d). The aid under 156.28 this section must not be included in calculating aid paid under 156.29 Minnesota Statutes, section 477A.013, subdivision 9, or any 156.30 other law, or of any limitations on levies or expenditures. 156.31 EFFECTIVE DATE: This section is effective for aids payable 156.32 in calendar year 2000 only. 156.33 Sec. 62. [CAPITOL REGION WATERSHED DISTRICT LEVY LIMIT.] 156.34 The capitol region watershed district managers may levy an 156.35 annual ad valorem tax of 0.02418 percent of taxable market value 156.36 or $200,000, whichever is less, under Minnesota Statutes, 157.1 section 103D.905, subdivision 3, notwithstanding the levy limits 157.2 in that subdivision. 157.3 EFFECTIVE DATE: This section is effective for taxes levied 157.4 in 2000, payable in 2001, and thereafter. 157.5 Sec. 63. [EVELETH-GILBERT JOINT RECREATION BOARD TAX.] 157.6 The Eveleth-Gilbert joint recreation board may levy a tax 157.7 on the taxable property situated in the territory of independent 157.8 school district No. 2154, Eveleth-Gilbert, in accordance with 157.9 this section. Property in territory in the school district may 157.10 be made subject to the tax permitted by this section by the 157.11 agreement of the governing body or town board of the city or 157.12 town where it is located. The agreement may be by resolution of 157.13 a governing body or town board or by a joint powers agreement 157.14 pursuant to Minnesota Statutes, section 471.59. If levied, the 157.15 tax is in addition to all other taxes on the property subject to 157.16 it that are permitted to be levied for park and recreation 157.17 purposes by the cities and towns other than taxes levied for the 157.18 support of the joint recreation board. The tax must be 157.19 disregarded in the calculation of all other rate or per capita 157.20 tax levy limitations imposed by charter. A city or town may 157.21 withdraw its agreement to future taxes by notice to the 157.22 recreation board and the county auditor unless provided 157.23 otherwise by a joint powers agreement. The tax shall be 157.24 collected by the St. Louis county auditor and treasurer and paid 157.25 directly to the Eveleth-Gilbert joint recreation board. This 157.26 section applies in the cities of Eveleth and Gilbert and in the 157.27 town of Fayal, all in St. Louis county. 157.28 Sec. 64. [LAKE OF THE WOODS AND KOOCHICHING COUNTIES; 157.29 EXPENDITURES FOR ROAD AND BRIDGE PURPOSES.] 157.30 (a) Notwithstanding Minnesota Statutes, section 163.06, 157.31 subdivisions 4 and 5, the county board of Lake of the Woods 157.32 county, by resolution, may expend the proceeds of the levy under 157.33 Minnesota Statutes, section 163.06, in any organized or 157.34 unorganized township or portion thereof in the county. 157.35 (b) Notwithstanding Minnesota Statutes, section 163.06, 157.36 subdivisions 4 and 5, the county board of Koochiching county, by 158.1 resolution, may expend the proceeds of the levy under Minnesota 158.2 Statutes, section 163.06, in any organized or unorganized 158.3 township or portion thereof in the county. 158.4 EFFECTIVE DATES: This section is effective for Lake of the 158.5 Woods county upon approval by and compliance with Minnesota 158.6 Statutes, section 645.021, subdivision 3. This section is 158.7 effective for Koochiching county upon approval by and compliance 158.8 with Minnesota Statutes, section 645.021, subdivision 3. 158.9 Sec. 65. [ST. LOUIS COUNTY; CAPITAL IMPROVEMENT PLAN 158.10 DEFINITION.] 158.11 For St. Louis county, the St. Louis county heritage and 158.12 arts center is included in the definition of "capital 158.13 improvement" in Minnesota Statutes, section 373.40, subdivision 158.14 1. 158.15 EFFECTIVE DATE: This section is effective upon approval by 158.16 the governing body of St. Louis county, and compliance with 158.17 Minnesota Statutes, section 645.021, subdivision 3. 158.18 Sec. 66. [STUDY OF TAXATION OF FOREST LAND.] 158.19 Subdivision 1. [AUTHORIZATION.] The commissioner of 158.20 revenue, in cooperation with the Minnesota forest resources 158.21 council, shall study the taxation of forest land in this state. 158.22 The study shall include a review of the current application of 158.23 property taxes to these lands and a review and comparison with 158.24 other forest land tax policies. It shall also include 158.25 recommendations for changes in tax policy: 158.26 (1) to encourage forest productivity; 158.27 (2) to maintain land in forest cover; 158.28 (3) to encourage the application of sustainable site level 158.29 forest management guidelines; 158.30 (4) to address impacts on local government revenues; and 158.31 (5) for changes in tax rates. 158.32 The study shall be completed and transmitted to the chairs of 158.33 the house and senate tax committees by December 1, 2000. 158.34 Subd. 2. [APPROPRIATION.] $50,000 is appropriated from the 158.35 general fund in fiscal year 2000 to the commissioner of revenue 158.36 for completion of the study required in this section. This 159.1 appropriation is available until December 31, 2000. 159.2 ARTICLE 10 159.3 LOCAL DEVELOPMENT 159.4 Section 1. Minnesota Statutes 1998, section 238.08, 159.5 subdivision 3, is amended to read: 159.6 Subd. 3. [MUNICIPAL OPERATION.] Nothing in this chapter 159.7 shall be construed to limit any municipality from the right to 159.8 construct, purchase, and operateacable communications 159.9systemsystems, or, to operate facilities and channels for 159.10 community television, including, but not limited to, public, 159.11 educational, and governmental access and local origination 159.12 programming. Any municipal system, including the operation of 159.13 community television by a municipality, shall be subject to this 159.14 chapter to the same extent as would any nonpublic cable 159.15 communications system. 159.16 Sec. 2. Minnesota Statutes 1998, section 273.1399, 159.17 subdivision 1, is amended to read: 159.18 Subdivision 1. [DEFINITIONS.] For purposes of this 159.19 section, the following terms have the meanings given. 159.20 (a) "Qualifying captured net tax capacity" means the 159.21 following amounts: 159.22 (1) The captured net tax capacity of a new or the expanded 159.23 part of an existing economic development tax increment financing 159.24 district, for which certification was requested after April 30, 159.25 1990. 159.26 (2) The captured net tax capacity of a new or the expanded 159.27 part of an existing tax increment financing district, other than 159.28 an economic development district, for which certification was 159.29 requested after April 30, 1990, multiplied by the following 159.30 percentage based on the number of years that have elapsed since 159.31 the assessment year of the original net tax capacity. In no 159.32 case may the final amounts be less than zero or greater than the 159.33 total captured net tax capacity of the district. 159.34 Number of Renewal and All other 159.35 years Renovation Districts 159.36 Districts 160.1 0 to 5 0 0 160.2 6 12.5 6.25 160.3 7 25 12.5 160.4 8 37.5 18.75 160.5 9 50 25 160.6 10 62.5 31.25 160.7 11 75 37.5 160.8 12 87.5 43.75 160.9 13 100 50 160.10 14 100 56.25 160.11 15 100 62.5 160.12 16 100 68.75 160.13 17 100 75 160.14 18 100 81.25 160.15 19 100 87.5 160.16 20 100 93.75 160.17 21 or more 100 100 160.18 (3) The following rules apply to a hazardous substance 160.19 subdistrict. The applicable percentage under clause (2) must be 160.20 determined under the "all other districts" category. The number 160.21 of years must be measured from the date of certification of the 160.22 subdistrict for purposes of the additional captured net tax 160.23 capacity resulting from the reduction in the subdistrict's or 160.24 site's original net tax capacity. After termination of the 160.25 overlying district, captured net tax capacity includes the full 160.26 amount that is captured by the subdistrict. 160.27 (4) Qualified captured tax capacity does not include the 160.28 captured tax capacity of exempt districts under subdivisions 6 160.29 and 7. 160.30 (b) The terms defined in section 469.174 have the meanings 160.31 given in that section. 160.32 (c) "Qualified housing district" means: 160.33 (1) a housing district for a residential rental project or 160.34 projects in which the only properties receiving assistance from 160.35 revenues derived from tax increments from the district meet all 160.36 of the requirements for a low-income housing credit under 161.1 section 42 of the Internal Revenue Code of 1986, as amended 161.2 through December 31, 1992, regardless of whether the project 161.3 actually receives a low-income housing credit; or 161.4 (2) a housing district for a single family home ownership 161.5 project or projects in which at least 95 percent of the home 161.6 purchasers have incomes that do not exceed 70 percent of the 161.7 area median gross income for a family of four. 161.8 EFFECTIVE DATE: This section is effective the day 161.9 following final enactment, and applies to all districts that are 161.10 subject to the underlying law. 161.11 Sec. 3. Minnesota Statutes 1998, section 428A.11, is 161.12 amended by adding a subdivision to read: 161.13 Subd. 7. [AUTHORITY.] "Authority" means an economic 161.14 development authority or housing and redevelopment authority 161.15 created pursuant to section 469.003, 469.004, or 469.091. 161.16 Sec. 4. Minnesota Statutes 1998, section 428A.11, is 161.17 amended by adding a subdivision to read: 161.18 Subd. 8. [IMPLEMENTING ENTITY.] "Implementing entity" 161.19 means the city or authority designated in the enabling ordinance 161.20 as responsible for implementing and administering the housing 161.21 improvement area. 161.22 Sec. 5. Minnesota Statutes 1998, section 428A.13, 161.23 subdivision 1, is amended to read: 161.24 Subdivision 1. [ORDINANCE.] The governing body of the city 161.25 may adopt an ordinance establishingaone or more housing 161.26 improvementareaareas. The ordinance must specifically 161.27 describe the portion of the city to be included in the area, the 161.28 basis for the imposition of the fees, and the number of years 161.29 the fee will be in effect. In addition, the ordinance must 161.30 include findings that without the housing improvement area, the 161.31 proposed improvements could not be made by the condominium 161.32 associations or housing unit owners, and the designation is 161.33 needed to maintain and preserve the housing units within the 161.34 housing improvement area. The ordinance shall designate the 161.35 implementing entity. The ordinance may not be adopted until a 161.36 public hearing has been held regarding the ordinance. The 162.1 ordinance may be amended by the governing body of the city, 162.2 provided the governing body complies with the public hearing 162.3 notice provisions of subdivision 2. Within 30 days after 162.4 adoption of the ordinance under this subdivision, the governing 162.5 body shall send a copy of the ordinance to the commissioner of 162.6 revenue. 162.7 Sec. 6. Minnesota Statutes 1998, section 428A.13, 162.8 subdivision 3, is amended to read: 162.9 Subd. 3. [PROPOSED HOUSING IMPROVEMENTS.] At the public 162.10 hearing held under subdivision 2, thecityproposed implementing 162.11 entity shall provide a preliminary listing of the housing 162.12 improvements to be made in the area. The listing shall identify 162.13 those improvements, if any, that are proposed to be made to all 162.14 or a portion of the common elements of a condominium. The 162.15 listing shall also identify those housing units that have 162.16 completed the proposed housing improvements and are proposed to 162.17 be exempted from a portion of the fee. In preparing the list 162.18 thecityproposed implementing entity shall consult with the 162.19 residents of the area and the condominium associations. 162.20 Sec. 7. Minnesota Statutes 1998, section 428A.14, 162.21 subdivision 1, is amended to read: 162.22 Subdivision 1. [AUTHORITY.] Fees may be imposed by the 162.23cityimplementing entity on the housing units within the housing 162.24 improvement area at a rate, term, or amount sufficient to 162.25 produce revenue required to provide housing improvements in the 162.26 area to reimburse the implementing entity for advances made to 162.27 pay for the housing improvements or to pay principal of, 162.28 interest on, and premiums, if any, on bonds issued by the 162.29 implementing entity under section 428A.16. The fee can be 162.30 imposed on the basis of the tax capacity of the housing unit, or 162.31 the total amount of square footage of the housing unit, or a 162.32 method determined by the council and specified in the resolution. 162.33 Before the imposition of the fees, a hearing must be held and 162.34 notice must be published in the official newspaper at least 162.35 seven days before the hearing and shall be mailed at least seven 162.36 days before the hearing to any housing unit owner subject to a 163.1 fee. For purposes of this section, the notice must also include: 163.2 (1) a statement that all interested persons will be given 163.3 an opportunity to be heard at the hearing regarding a proposed 163.4 housing improvement fee; 163.5 (2) the estimated cost of improvements including 163.6 administrative costs to be paid for in whole or in part by the 163.7 fee imposed under the ordinance; 163.8 (3) the amount to be charged against the particular 163.9 property; 163.10 (4) the right of the property owner to prepay the entire 163.11 fee; 163.12 (5) the number of years the fee will be in effect; and 163.13 (6) a statement that the petition requirements of section 163.14 428A.12 have either been met or do not apply to the proposed fee. 163.15 Within six months of the public hearing, thecity163.16 implementing entity may adopt a resolution imposing a fee within 163.17 the area not exceeding the amount expressed in the notice issued 163.18 under this section. 163.19 Prior to adoption of the resolution approving the fee, the 163.20 condominium associations located in the housing improvement area 163.21 shall submit to thecityimplementing entity a financial plan 163.22 prepared by an independent third party, acceptable to thecity163.23 implementing entity and associations, that provides for the 163.24 associations to finance maintenance and operation of the common 163.25 elements in the condominium and a long-range plan to conduct and 163.26 finance capital improvements. 163.27 Sec. 8. Minnesota Statutes 1998, section 428A.15, is 163.28 amended to read: 163.29 428A.15 [COLLECTION OF FEES.] 163.30 Thecityimplementing entity may provide for the collection 163.31 of the housing improvement fees according to the terms of 163.32 section 428A.05. 163.33 Sec. 9. Minnesota Statutes 1998, section 428A.16, is 163.34 amended to read: 163.35 428A.16 [BONDS.] 163.36 At any time after a contract for the construction of all or 164.1 part of an improvement authorized under sections 428A.11 to 164.2 428A.20 has been entered into or the work has been ordered, the 164.3governing body of the cityimplementing entity may issue 164.4 obligations in the amount it deems necessary to defray in whole 164.5 or in part the expense incurred and estimated to be incurred in 164.6 making the improvement, including every item of cost from 164.7 inception to completion and all fees and expenses incurred in 164.8 connection with the improvement or the financing. 164.9 The obligations are payable primarily out of the proceeds 164.10 of the fees imposed under section 428A.14, or from any other 164.11 special assessments or revenues available to be pledged for 164.12 their payment under charter or statutory authority, or from two 164.13 or more of those sources. The governing body of the city, or if 164.14 the governing bodies are the same or consist of identical 164.15 membership, the authority may, by resolution adopted prior to 164.16 the sale of obligations, pledge the full faith, credit, and 164.17 taxing power of the city toassurebonds issued by it to ensure 164.18 payment of the principal and interest if the proceeds of the 164.19 fees in the area are insufficient to pay the principal and 164.20 interest. The obligations must be issued in accordance with 164.21 chapter 475, except that an election is not required, and the 164.22 amount of the obligations are not included in determination of 164.23 the net debt of the city under the provisions of any law or 164.24 charter limiting debt. 164.25 Sec. 10. Minnesota Statutes 1998, section 428A.17, is 164.26 amended to read: 164.27 428A.17 [ADVISORY BOARD.] 164.28 Thegoverning body of the cityimplementing entity may 164.29 create and appoint an advisory board for the housing improvement 164.30 area in the city to advise thegoverning bodyimplementing 164.31 entity in connection with the planning and construction of 164.32 housing improvements. In appointing the board, thecouncil164.33 implementing entity shall consider for membership members of 164.34 condominium associations located in the housing improvement 164.35 area. The advisory board shall make recommendations to 164.36 thegoverning bodyimplementing entity to provide improvements 165.1 or impose fees within the housing improvement area. Before the 165.2 adoption of a proposal by thegoverning bodyimplementing entity 165.3 to provide improvements within the housing improvement area, the 165.4 advisory board of the housing improvement area shall have an 165.5 opportunity to review and comment upon the proposal. 165.6 Sec. 11. Minnesota Statutes 1998, section 428A.19, is 165.7 amended to read: 165.8 428A.19 [ANNUAL REPORTS.] 165.9 Each condominium association located within the housing 165.10 improvement area must, by August 15 annually, submit a copy of 165.11 its audited financial statements to thecityimplementing entity. 165.12 The city may also, as part of the enabling ordinance, require 165.13 the submission of other relevant information from the 165.14 associations. 165.15 Sec. 12. Minnesota Statutes 1998, section 428A.21, is 165.16 amended to read: 165.17 428A.21 [SUNSET.] 165.18 No new housing improvement areas may be established under 165.19 sections 428A.11 to 428A.20 after June 30,20012005. After 165.20 June 30,20012005, a city may establish a housing improvement 165.21 area, provided that it receives enabling legislation authorizing 165.22 the establishment of the area. 165.23 Sec. 13. [465.717] [CREATION OF CORPORATIONS BY POLITICAL 165.24 SUBDIVISIONS.] 165.25 Subdivision 1. [STATUTORY AUTHORIZATION REQUIRED.] A 165.26 county, home rule charter city, statutory city, town, school 165.27 district, or other political subdivision, including a joint 165.28 powers entity operating under section 471.59 may not create a 165.29 corporation, whether for profit or not for profit, unless 165.30 explicitly authorized to do so by law. 165.31 Subd. 2. [AUTHORITY TO INCORPORATE A JOINT POWERS ENTITY.] 165.32 A joint powers entity created under section 471.59 may 165.33 incorporate itself as a nonprofit under chapter 317A. A 165.34 corporation created under this subdivision shall comply with 165.35 every law that applies to the participating political 165.36 subdivisions and shall possess no greater authority or power 166.1 than that held by the joint powers entity itself. 166.2 Sec. 14. [465.719] [EXISTING CORPORATIONS CREATED BY 166.3 POLITICAL SUBDIVISIONS.] 166.4 Subdivision 1. [DEFINITIONS.] The following definitions 166.5 apply to this section: 166.6 (a) "Political subdivision" means a county, a statutory or 166.7 home rule charter city, a town, a school district, or other 166.8 political subdivision of the state. Political subdivision 166.9 includes a political subdivision acting individually or jointly 166.10 as provided under section 471.59. 166.11 (b) "Corporation" means a corporation created by a 166.12 political subdivision before May 31, 1997, in which (1) the 166.13 corporation's articles of incorporation or bylaws provide for 166.14 the governing body of the political subdivision to serve as a 166.15 corporation's governing board; (2) the articles of incorporation 166.16 or bylaws provide for members of the governing body of the 166.17 political subdivision to be automatically appointed to the board 166.18 solely by virtue of their appointment or election to office and 166.19 they constitute a majority of the corporation's board members; 166.20 or (3) the governing body of the political subdivision approves 166.21 the budget or expenditures of the corporation for purposes other 166.22 than those related to oversight of public grants or loans made 166.23 to the corporation under a competitive process for which other 166.24 entities are eligible. Corporation does not include: 166.25 (1) a corporation established under chapters 453, 453A, or 166.26 sections 119A.374 to 119A.376; 245.62 to 245.66; 166.27 (2) a nonprofit corporation created to raise funds for use 166.28 by a political subdivision if less than a majority of the board 166.29 of directors of the corporation are members of the governing 166.30 body of the political subdivision appointed to the board of 166.31 directors by virtue of their election to office; or 166.32 (3) a corporation created by a political subdivision 166.33 pursuant to state statute or special law or federal law. 166.34 Subd. 2. [RESOLUTION REQUIRED.] In order to provide for 166.35 the continued existence of a corporation created by a political 166.36 subdivision, the political subdivision, or its successor, that 167.1 created the corporation must adopt a resolution at a regularly 167.2 scheduled meeting of the governing body of the political 167.3 subdivision. The resolution must include the information 167.4 required in subdivisions 4 to 9. If a resolution is not adopted 167.5 within three years of the effective date of this section, the 167.6 board of directors of the corporation shall direct and authorize 167.7 an officer or designee of the corporation to file with the 167.8 secretary of state immediately a notice of intent to dissolve 167.9 the corporation and then as soon as possible, complete 167.10 dissolution of the corporation as provided in the corporation's 167.11 articles of incorporation and bylaws, and the law under which 167.12 the corporation was formed. 167.13 Subd. 3. [AMENDED ARTICLES OF INCORPORATION, BYLAWS.] If 167.14 the political subdivision adopts a resolution under subdivision 167.15 2, the board of directors of the corporation shall direct and 167.16 authorize an officer or designee of the corporation to file 167.17 amended articles of incorporation, if necessary, as soon as 167.18 practicable after adoption of the resolution to make the 167.19 articles of incorporation consistent with the resolution and to 167.20 provide for the application of the laws under subdivision 10. 167.21 Thereafter, the corporation may not amend its articles of 167.22 incorporation unless the political subdivision adopts a 167.23 resolution in support of the change as provided in subdivision 2 167.24 for ratifying existing corporations. 167.25 Subd. 4. [EXISTING CONTRACTS.] If on the effective date of 167.26 this section the corporation has contracts or other obligations 167.27 that are inconsistent with any requirement of this section, the 167.28 resolution may provide for the delayed application of that 167.29 requirement for the time necessary to avoid a breach or 167.30 impairment of the contract or obligation. 167.31 Subd. 5. [NEED FOR CORPORATION.] The resolution must make 167.32 a detailed and specific finding regarding the purpose of the 167.33 corporation, and why the corporation is the best alternative for 167.34 accomplishing the purpose. 167.35 Subd. 6. [AUTHORITIES AND POWERS OF CORPORATION 167.36 LIMITED.] The resolution must specify what authorities and 168.1 powers the corporation possesses. The authorities and powers of 168.2 the corporation must not exceed the authorities and powers of 168.3 the political subdivision that created it, except as otherwise 168.4 authorized in this section. 168.5 Subd. 7. [BOARD MEMBERSHIP.] If a majority of the 168.6 corporation's governing board includes elected or appointed 168.7 officials of the political subdivision creating the corporation, 168.8 the resolution must make a detailed and specific finding 168.9 regarding the purpose of those officials serving on the board, 168.10 and why the corporation cannot accomplish its purpose unless 168.11 those officials serve on the board. Alternatively, the 168.12 resolution may provide for other board membership and the 168.13 articles of incorporation amended to be consistent with the 168.14 resolution. 168.15 Subd. 8. [ALLOCATION OF ASSETS AND LIABILITIES.] If a 168.16 corporation is created by more than one political subdivision, 168.17 each political subdivision that ratifies creation of the 168.18 corporation must adopt a resolution required by this section 168.19 and, among other requirements, each resolution must specify and 168.20 agree with the resolution of the other political subdivisions as 168.21 to how the assets and liabilities of the corporation are 168.22 allocated or attributed to each political subdivision, 168.23 including, but not limited to, for the purposes of any 168.24 applicable levy or debt limits. 168.25 Subd. 9. [APPLICATION OF OTHER LAWS.] A corporation 168.26 created by a political subdivision under this section must 168.27 comply with every law that applies to the political subdivision, 168.28 as if the corporation is a part of the political subdivision, 168.29 unless the resolution ratifying creation of the corporation 168.30 specifically exempts the corporation from part or all of a law. 168.31 If the resolution exempts the corporation from part or all of a 168.32 law, the resolution must make a detailed and specific finding as 168.33 to why the corporation cannot fulfill its purpose if the 168.34 corporation is subject to that law. A corporation may not be 168.35 exempted from section 471.705, the Minnesota Open Meeting Law, 168.36 sections 138.163 to 138.25, the Records Management Act, or 169.1 Chapter 13, the Minnesota Government Data Practices Act. Laws 169.2 that apply to a political subdivision that also apply to a 169.3 corporation created by a political subdivision under this 169.4 subdivision include, but are not limited to: 169.5 (1) section 471.705, the Minnesota Open Meeting Law; 169.6 (2) chapter 13, the Minnesota Government Data Practices 169.7 Act; 169.8 (3) section 471.345, the Uniform Municipal Contracting Law; 169.9 (4) sections 43A.17, limiting the compensation of employees 169.10 based on the governor's salary; 471.991 to 471.999, providing 169.11 for equitable pay; and 465.72 and 465.722, governing severance 169.12 pay; 169.13 (5) section 275.065, providing for truth-in-taxation 169.14 hearings. If any tax revenues of the political subdivision will 169.15 be appropriated to the corporation, the corporation's annual 169.16 operating and capital budgets must be included in the 169.17 truth-in-taxation hearing of the political subdivision that 169.18 created the corporation; 169.19 (6) if the corporation issues debt, its debt is included in 169.20 the political subdivision's debt limit if it would be included 169.21 if issued by the political subdivision, and issuance of the debt 169.22 is subject to the election and other requirements of chapter 475 169.23 and section 471.69; 169.24 (7) section 471.895, prohibiting acceptance of gifts from 169.25 interested parties, and sections 471.87 to 471.89, relating to 169.26 interests in contracts; 169.27 (8) chapter 466, relating to municipal tort liability; 169.28 (9) chapter 118A, requiring deposit insurance or bond or 169.29 pledged collateral for deposits; 169.30 (10) chapter 118A, restricting investments; 169.31 (11) section 471.346, requiring ownership of vehicles to be 169.32 identified; 169.33 (12) sections 471.38 to 471.41, requiring claims to be in 169.34 writing, itemized, and approved by the governing board before 169.35 payment can be made; and 169.36 (13) the corporation cannot make advances of pay, make or 170.1 guarantee loans to employees, or provide in-kind benefits unless 170.2 authorized by law. 170.3 Subd. 10. [TAXES USED FOR PUBLIC PURPOSE.] If the 170.4 political subdivision has authority under other law to 170.5 appropriate tax revenues for use by the corporation, those funds 170.6 must be appropriated and used only for public purposes. 170.7 Subd. 11. [AUDIT.] A corporation created by a political 170.8 subdivision that receives public money from the political 170.9 subdivision, other than grants or loans made under a competitive 170.10 process for which other entities are eligible, must be audited 170.11 annually by either a certified public accountant or the state 170.12 auditor. Except as provided below, the audit report must be 170.13 presented at a regularly scheduled meeting of the governing body 170.14 of the political subdivision that created the corporation. The 170.15 audit report must be made available to individuals after 170.16 presentation of the audit report to the governing body of the 170.17 political subdivision. The data classification of an audit 170.18 performed by the office of the state auditor is governed by 170.19 chapter 6. 170.20 Subd. 12. [STATE AUDITOR POWERS.] The state auditor has 170.21 the same powers with regard to a corporation created by a 170.22 political subdivision as the state auditor has with regard to 170.23 the political subdivision that created the corporation. 170.24 Subd. 13. [DATA.] (a) The following government data of a 170.25 corporation subject to this section that are provided by a 170.26 private business are private data on individuals or nonpublic 170.27 data, as defined in section 13.02: 170.28 (1) trade secret information, as defined in section 13.37; 170.29 and 170.30 (2) financial statements; credit reports; business plans; 170.31 income and expense projections; customer lists; balance sheets; 170.32 income tax returns; and design, market, and feasibility studies 170.33 not paid for with public funds. 170.34 (b) The following government data of the corporation are 170.35 private data on individuals or nonpublic data, as defined in 170.36 section 13.02: 171.1 (1) trade secret information, as defined in section 13.02; 171.2 (2) other data, to the extent the corporation is competing 171.3 with other organizations providing the same goods or services 171.4 and disclosure of the data would impair the ability of the 171.5 corporation to compete; and 171.6 (3) data identified in section 13.491 collected or received 171.7 by a transit organization. 171.8 Sec. 15. Minnesota Statutes 1998, section 469.003, 171.9 subdivision 5, is amended to read: 171.10 Subd. 5. [COMMISSIONERS.] An authority shall consist 171.11 offiveup to seven commissioners, who shall be residents of the 171.12 area of operation of the authority, who shall be appointed after 171.13 the resolution becomes finally effective. If any additional 171.14 commissioners are appointed, one of the commissioners must be 171.15 appointed in accordance with the requirements of the Code of 171.16 Federal Regulations, title 24, part 964. 171.17 Sec. 16. Minnesota Statutes 1998, section 469.006, 171.18 subdivision 1, is amended to read: 171.19 Subdivision 1. [COUNTY COMMISSIONERS.] When the governing 171.20 body of a county adopts a resolution under section 469.004, the 171.21 governing body shall appoint five persons or the number of 171.22 commissioners for the governing body, plus up to two additional 171.23 commissioners, as commissioners of the county authority. If any 171.24 additional commissioners are appointed, one of the commissioners 171.25 must be appointed in accordance with the requirements of the 171.26 Code of Federal Regulations, title 24, part 964. The membership 171.27 of the commission will reflect an areawide distribution on a 171.28 representative basis. The commissioners who are first appointed 171.29 shall be designated to serve for terms of one, two, three, four, 171.30 and five years respectively, from the date of their 171.31 appointment. Thereafter commissioners shall be appointed for a 171.32 term of office of five years except that all vacancies shall be 171.33 filled for the unexpired term. Persons may be appointed as 171.34 commissioners if they reside within the boundaries or area, and 171.35 are otherwise eligible for the appointments under sections 171.36 469.001 to 469.047. 172.1 Sec. 17. Minnesota Statutes 1998, section 469.006, 172.2 subdivision 2, is amended to read: 172.3 Subd. 2. [MULTICOUNTY COMMISSIONERS.] The governing body 172.4 in the case of a county, and the mayor with the approval of the 172.5 governing body in the case of a city, of each political 172.6 subdivision included in a multicounty authority shall appoint 172.7 one person as a commissioner of the authority at or after the 172.8 time of the adoption of the resolution establishing the 172.9 authority. 172.10 In the case of a multicounty authority comprising only two 172.11 or three political subdivisions, the appointing authorities of 172.12 the participating political subdivisions shall each appoint one 172.13 additional commissioner whose term of office shall be as 172.14 provided for a commissioner of a multicounty authority. If any 172.15 additional commissioners are appointed, one of the commissioners 172.16 must be appointed in accordance with the requirements of the 172.17 Code of Federal Regulations, title 24, part 964. 172.18 In the case of a multicounty authority comprising more than 172.19 three political subdivisions, the appointing authorities of the 172.20 participating political subdivisions may each appoint one 172.21 additional commissioner whose term of office shall be as 172.22 provided for a commissioner of a multicounty authority. The 172.23 housing and redevelopment authority board of commissioners of a 172.24 multicounty authority may appoint one or two additional 172.25 commissioners in order to comply with the requirements of the 172.26 Code of Federal Regulations, title 24, part 964. The 172.27 appointment must be approved by a majority of the commissioners 172.28 of each of the political subdivisions comprising the multicounty 172.29 authority. 172.30 When the area of operation of a multicounty authority is 172.31 increased to include an additional political subdivision, the 172.32 appointing authority of each additional political subdivision 172.33 shall appoint one or, if appropriate, two commissioners of the 172.34 multicounty authority. 172.35 The appointing authority of each political subdivision 172.36 shall appoint the successors of the commissioner appointed by 173.1 it. The commissioners of a multicounty authority shall be 173.2 appointed for terms of five years except that all vacancies 173.3 shall be filled for the unexpired terms. 173.4 Sec. 18. Minnesota Statutes 1998, section 469.011, 173.5 subdivision 4, is amended to read: 173.6 Subd. 4. [EXPENSES; COMPENSATION.] Each commissioner may 173.7 receive necessary expenses, including traveling expenses, 173.8 incurred in the performance of duties. Each commissioner may be 173.9 paid up to$55$75 for attending each regular and special 173.10 meeting of the authority. Commissioners who are full-time state 173.11 employees or full-time employees of the political subdivisions 173.12 of the state may not receive the daily payment, but they may 173.13 suffer no loss in compensation or benefits from the state or a 173.14 political subdivision as a result of their service on the board. 173.15 Commissioners who are elected officials may receive the daily 173.16 payment for a particular day only if they do not receive any 173.17 other daily payment for public service on that day. 173.18 Commissioners who are full-time state employees or full-time 173.19 employees of the political subdivisions of the state may receive 173.20 the expenses provided for in this subdivision unless the 173.21 expenses are reimbursed by another source. 173.22 Sec. 19. Minnesota Statutes 1998, section 469.174, 173.23 subdivision 10, is amended to read: 173.24 Subd. 10. [REDEVELOPMENT DISTRICT.] (a) "Redevelopment 173.25 district" means a type of tax increment financing district 173.26 consisting of a project, or portions of a project, within which 173.27 the authority finds by resolution that one of the following 173.28 conditions, reasonably distributed throughout the district, 173.29 exists: 173.30 (1) parcels consisting of 70 percent of the area of the 173.31 district are occupied by buildings, streets, utilities, or other 173.32 improvements and more than 50 percent of the buildings, not 173.33 including outbuildings, are structurally substandard to a degree 173.34 requiring substantial renovation or clearance; or 173.35 (2) the property consists of vacant, unused, underused, 173.36 inappropriately used, or infrequently used railyards, rail 174.1 storage facilities,orexcessive or vacated railroad 174.2 rights-of-way, or tank facilities, as defined in section 174.3 115C.02, subdivision 15, with a capacity in excess of 1,000,000 174.4 gallons, located adjacent to rail facilities. 174.5 (b) For purposes of this subdivision, "structurally 174.6 substandard" shall mean containing defects in structural 174.7 elements or a combination of deficiencies in essential utilities 174.8 and facilities, light and ventilation, fire protection including 174.9 adequate egress, layout and condition of interior partitions, or 174.10 similar factors, which defects or deficiencies are of sufficient 174.11 total significance to justify substantial renovation or 174.12 clearance. 174.13 (c) A building is not structurally substandard if it is in 174.14 compliance with the building code applicable to new buildings or 174.15 could be modified to satisfy the building code at a cost of less 174.16 than 15 percent of the cost of constructing a new structure of 174.17 the same square footage and type on the site. The municipality 174.18 may find that a building is not disqualified as structurally 174.19 substandard under the preceding sentence on the basis of 174.20 reasonably available evidence, such as the size, type, and age 174.21 of the building, the average cost of plumbing, electrical, or 174.22 structural repairs, or other similar reliable evidence. The 174.23 municipality may not make such a determination without an 174.24 interior inspection of the property, but need not have an 174.25 independent, expert appraisal prepared of the cost of repair and 174.26 rehabilitation of the building. An interior inspection of the 174.27 property is not required, if the municipality finds that (1) the 174.28 municipality or authority is unable to gain access to the 174.29 property after using its best efforts to obtain permission from 174.30 the party that owns or controls the property; and (2) the 174.31 evidence otherwise supports a reasonable conclusion that the 174.32 building is structurally substandard. Items of evidence that 174.33 support such a conclusion include recent fire or police 174.34 inspections, on-site property tax appraisals or housing 174.35 inspections, exterior evidence of deterioration, or other 174.36 similar reliable evidence. Written documentation of the 175.1 findings and reasons why an interior inspection was not 175.2 conducted must be made and retained under section 469.175, 175.3 subdivision 3, clause (1). 175.4 (d) A parcel is deemed to be occupied by a structurally 175.5 substandard building for purposes of the finding under paragraph 175.6 (a) if all of the following conditions are met: 175.7 (1) the parcel was occupied by a substandard building 175.8 within three years of the filing of the request for 175.9 certification of the parcel as part of the district with the 175.10 county auditor; 175.11 (2) the substandard building was demolished or removed by 175.12 the authority or the demolition or removal was financed by the 175.13 authority or was done by a developer under a development 175.14 agreement with the authority; 175.15 (3) the authority found by resolution before the demolition 175.16 or removal that the parcel was occupied by a structurally 175.17 substandard building and that after demolition and clearance the 175.18 authority intended to include the parcel within a district; and 175.19 (4) upon filing the request for certification of the tax 175.20 capacity of the parcel as part of a district, the authority 175.21 notifies the county auditor that the original tax capacity of 175.22 the parcel must be adjusted as provided by section 469.177, 175.23 subdivision 1, paragraph (h). 175.24 (e) For purposes of this subdivision, a parcel is not 175.25 occupied by buildings, streets, utilities, or other improvements 175.26 unless 15 percent of the area of the parcel contains 175.27 improvements. 175.28 (f) For districts consisting of two or more noncontiguous 175.29 areas, each area must qualify as a redevelopment district under 175.30 paragraph (a) to be included in the district, and the entire 175.31 area of the district must satisfy paragraph (a). 175.32 EFFECTIVE DATE: This section is effective for districts or 175.33 additions to the geographic area of a district for which request 175.34 for certification is made after June 30, 2000. 175.35 Sec. 20. Minnesota Statutes 1998, section 469.175, 175.36 subdivision 1a, is amended to read: 176.1 Subd. 1a. [INCLUSION OF COUNTY ROAD COSTS.] (a) The county 176.2 board may require the authority to pay all or a portion of the 176.3 cost of county road improvements out of increment revenues, if 176.4 the following conditions occur: 176.5 (1) the proposed tax increment financing plan or an 176.6 amendment to the plan contemplates construction of a development 176.7 that will, in the judgment of the county, substantially increase 176.8 the use of county roads requiring construction of road 176.9 improvements or other road costs; and 176.10 (2) the road improvements or other road costs are not 176.11 scheduled for construction within five years under the county 176.12 capital improvement plan orotherwithin five years under 176.13 another formally adopted county plan, and in the opinion of the 176.14 county, would not reasonably be expected to be needed within the 176.15 reasonably foreseeable future if the tax increment financing 176.16 plan were not implemented. 176.17 (b) If the county elects to use increments to finance the 176.18 road improvements, the county must notify the authority and 176.19 municipality within 30 days after receipt of the information on 176.20 the proposed tax increment district under subdivision 2. The 176.21 notice must include the estimated cost of the road improvements 176.22 and schedule for construction and payment of the cost. The 176.23 authority must include the improvements in the tax increment 176.24 financing plan. The improvements may be financed with the 176.25 proceeds of tax increment bonds or the authority and the county 176.26 may agree that the county will finance the improvements with 176.27 county funds to be repaid in installments, with or without 176.28 interest, out of increment revenues. If the cost of the road 176.29 improvements and other project costs exceed the projected amount 176.30 of the increment revenues, the county and authority shall 176.31 negotiate an agreement, modifying the development plan or 176.32 proposed road improvements that will permit financing of the 176.33 costs before the tax increment financing plan may be approved. 176.34 EFFECTIVE DATE: This section is effective for districts, 176.35 or expansions of the geographic area of districts, for which 176.36 certification is requested after the day following final 177.1 enactment of this act. 177.2 Sec. 21. Minnesota Statutes 1998, section 469.175, 177.3 subdivision 5, is amended to read: 177.4 Subd. 5. [ANNUAL DISCLOSURE.](a) The authority shall177.5annually submit to the county board, the county auditor, the177.6school board, state auditor and, if the authority is other than177.7the municipality, the governing body of the municipality, a177.8report of the status of the district. The report shall include177.9the following information: the amount and the source of revenue177.10in the account, the amount and purpose of expenditures from the177.11account, the amount of any pledge of revenues, including177.12principal and interest on any outstanding bonded indebtedness,177.13the original net tax capacity of the district and any177.14subdistrict, the captured net tax capacity retained by the177.15authority, the captured net tax capacity shared with other177.16taxing districts, the tax increment received, and any additional177.17information necessary to demonstrate compliance with any177.18applicable tax increment financing plan. The authority must177.19submit the annual report for a year on or before August 1 of the177.20next year.177.21(b)An annual statement showingthe tax increment received177.22and expended in that year, the original net tax capacity,177.23captured net tax capacity, amount of outstanding bonded177.24indebtedness, the amount of the district's and any subdistrict's177.25increments paid to other governmental bodies, the amount paid177.26for administrative costs, the sum of increments paid, directly177.27or indirectly, for activities and improvements located outside177.28of the district,for each district the information required to 177.29 be reported under subdivision 6, paragraph (c), clauses (1), 177.30 (2), (3), (11), (12), (20), and (21); the amounts of tax 177.31 increment received and expended in the reporting period; and any 177.32 additional information the authority deems necessaryshallmust 177.33 be published in a newspaper of general circulation in the 177.34 municipality that approved the tax increment financing plan.If177.35the fiscal disparities contribution under chapter 276A or 473F177.36for the district is computed under section 469.177, subdivision178.13, paragraph (a), the annual statement must disclose that fact178.2and indicate the amount of increased property tax imposed on178.3other properties in the municipality as a result of the fiscal178.4disparities contribution. The commissioner of revenue shall178.5prescribe the form of this statement and the method for178.6calculating the increased property taxes.The annual statement 178.7 must inform readers that additional information regarding each 178.8 district may be obtained from the authority, and must explain 178.9 how the additional information may be requested. The authority 178.10 must publish the annual statement for a year no later than 178.11 August 15 of the next year. The authority must identify the 178.12 newspaper of general circulation in the municipality to which 178.13 the annual statement has been or will be submitted for 178.14 publication and provide a copy of the annual statement to 178.15 the county board, the county auditor, the school board, the 178.16 state auditor, and, if the authority is other than the 178.17 municipality, the governing body of the municipality on or 178.18 before August 1 of the year in which the statement must be 178.19 published. 178.20 (c) The disclosureand reportingrequirements imposed by 178.21 this subdivision apply to districts certified before, on, or 178.22 after August 1, 1979. 178.23 EFFECTIVE DATE: This section is effective for reports due 178.24 in 2001 and subsequent years. 178.25 Sec. 22. Minnesota Statutes 1998, section 469.175, 178.26 subdivision 6, is amended to read: 178.27 Subd. 6. [ANNUAL FINANCIAL REPORTING.] (a) The state 178.28 auditor shall develop a uniform system of accounting and 178.29 financial reporting for tax increment financing districts. The 178.30 system of accounting and financial reporting shall, as nearly as 178.31 possible: 178.32 (1) provide for full disclosure of the sources and uses of 178.33 public funds in the district; 178.34 (2) permit comparison and reconciliation with the affected 178.35 local government's accounts and financial reports; 178.36 (3) permit auditing of the funds expended on behalf of a 179.1 district, including a single district that is part of a 179.2 multidistrict project or that is funded in part or whole through 179.3 the use of a development account funded with tax increments from 179.4 other districts or with other public money; 179.5 (4) be consistent with generally accepted accounting 179.6 principles. 179.7 (b) The authority must annually submit to the state auditor 179.8 a financial report in compliance with paragraph (a). Copies of 179.9 the report must also be provided to the countyand school179.10district boardsauditor and to the governing body of the 179.11 municipality, if the authority is not the municipality. To the 179.12 extent necessary to permit compliance with the requirement of 179.13 financial reporting, the county and any other appropriate local 179.14 government unit or private entity must provide the necessary 179.15 records or information to the authority or the state auditor as 179.16 provided by the system of accounting and financial reporting 179.17 developed pursuant to paragraph (a). The authority must submit 179.18 the annual report for a year on or before August 1 of the next 179.19 year. 179.20 (c) The annual financial report must also include the 179.21 following items: 179.22 (1) the original net tax capacity of the district and any 179.23 subdistrict under section 469.177, subdivision 1; 179.24 (2) the net tax capacity for the reporting period of the 179.25 district and any subdistrict; 179.26 (3) the captured net tax capacity of the district,179.27including the amount of any captured net tax capacity shared179.28with other taxing districts; 179.29(3)(4) any fiscal disparity deduction from the captured 179.30 net tax capacity under section 469.177, subdivision 3; 179.31 (5) the captured net tax capacity retained for tax 179.32 increment financing under section 469.177, subdivision 2, 179.33 paragraph (a), clause (1); 179.34 (6) any captured net tax capacity distributed among 179.35 affected taxing districts under section 469.177, subdivision 2, 179.36 paragraph (a), clause (2); 180.1 (7) the type of district; 180.2 (8) the date the municipality approved the tax increment 180.3 financing plan and the date of approval of any modification of 180.4 the tax increment financing plan, the approval of which requires 180.5 notice, discussion, a public hearing, and findings under 180.6 subdivision 4, paragraph (a); 180.7 (9) the date the authority first requested certification of 180.8 the original net tax capacity of the district and the date of 180.9 the request for certification regarding any parcel added to the 180.10 district; 180.11 (10) the date the county auditor first certified the 180.12 original net tax capacity of the district and the date of 180.13 certification of the original net tax capacity of any parcel 180.14 added to the district; 180.15 (11) the month and year in which the authority has received 180.16 or anticipates it will receive the first increment from the 180.17 district; 180.18 (12) the date the district must be decertified; 180.19 (13) for the reporting period and prior years of the 180.20 district, the actual amount received from, at least, the 180.21 following categories: 180.22 (i) tax increments paid by the captured net tax capacity 180.23 retained for tax increment financing under section 469.177, 180.24 subdivision 2, paragraph (a), clause (1), but excluding any 180.25 excess taxes; 180.26 (ii) tax increments that are interest or other investment 180.27 earnings on or from tax increments; 180.28 (iii) tax increments that are proceeds from the sale or 180.29 lease of property, tangible or intangible, purchased by the 180.30 authority with tax increments; 180.31 (iv) tax increments that are repayments of loans or other 180.32 advances made by the authority with tax increments; 180.33 (v) bond or loan proceeds; 180.34 (vi) special assessments; 180.35 (vii) grants; and 180.36 (viii) transfers from funds not exclusively associated with 181.1 the district; 181.2 (14) for the reporting period and for thedurationprior 181.3 years of the district, the amount budgeted under the tax 181.4 increment financing plan, and the actual amount expended for, at 181.5 least, the following categories: 181.6 (i) acquisition of land and buildings through condemnation 181.7 or purchase; 181.8 (ii) site improvements or preparation costs; 181.9 (iii) installation of public utilities, parking facilities, 181.10 streets, roads, sidewalks, or other similar public improvements; 181.11 (iv) administrative costs, including the allocated cost of 181.12 the authority; 181.13 (v) public park facilities, facilities for social, 181.14 recreational, or conference purposes, or other similar public 181.15 improvements; and 181.16 (vi) transfers to funds not exclusively associated with the 181.17 district; 181.18(4)(15) for properties sold to developers, the total cost 181.19 of the property to the authority and the price paid by the 181.20 developer;and181.21(5) the amount of increments rebated or paid to developers181.22or property owners for privately financed improvements or other181.23qualifying costs.181.24 (16) the amount of any payments and the value of any 181.25 in-kind benefits, such as physical improvements and the use of 181.26 building space, that are paid or financed with tax increments 181.27 and are provided to another governmental unit other than the 181.28 municipality during the reporting period; 181.29 (17) the amount of any payments for activities and 181.30 improvements located outside of the district that are paid for 181.31 or financed with tax increments; 181.32 (18) the amount of payments of principal and interest that 181.33 are made during the reporting period on any nondefeased: 181.34 (i) general obligation tax increment financing bonds; 181.35 (ii) other tax increment financing bonds; and 181.36 (iii) notes and pay-as-you-go contracts; 182.1 (19) the principal amount, at the end of the reporting 182.2 period, of any nondefeased: 182.3 (i) general obligation tax increment financing bonds; 182.4 (ii) other tax increment financing bonds; and 182.5 (iii) notes and pay-as-you-go contracts; 182.6 (20) the amount of principal and interest payments that are 182.7 due for the current calendar year on any nondefeased: 182.8 (i) general obligation tax increment financing bonds; 182.9 (ii) other tax increment financing bonds; and 182.10 (iii) notes and pay-as-you-go contracts; 182.11 (21) if the fiscal disparities contribution under chapter 182.12 276A or 473F for the district is computed under section 469.177, 182.13 subdivision 3, paragraph (a), the amount of increased property 182.14 taxes imposed on other properties in the municipality that 182.15 approved the tax increment financing plan as a result of the 182.16 fiscal disparities contribution; 182.17 (22) whether the tax increment financing plan or other 182.18 governing document permits increment revenues to be expended: 182.19 (i) to pay bonds, the proceeds of which were or may be 182.20 expended on activities outside of the district; 182.21 (ii) for deposit into a common bond fund from which money 182.22 may be expended on activities located outside of the district; 182.23 or 182.24 (iii) to otherwise finance activities located outside of 182.25 the tax increment financing district; and 182.26 (23) any additional information the state auditor may 182.27 require. 182.28 (d) The commissioner of revenue shall prescribe the method 182.29 of calculating the increased property taxes under paragraph (c), 182.30 clause (21), and the form of the statement disclosing this 182.31 information on the annual statement under subdivision 5. 182.32 (e) The reporting requirements imposed by this subdivision 182.33 apply to districts certified before, on, and after August 1, 182.34 1979. 182.35 EFFECTIVE DATE: This section is effective for reports due 182.36 in 2001 and subsequent years. 183.1 Sec. 23. Minnesota Statutes 1998, section 469.176, 183.2 subdivision 1b, is amended to read: 183.3 Subd. 1b. [DURATION LIMITS; TERMS.] (a) No tax increment 183.4 shall in any event be paid to the authority 183.5 (1) after 25 years from date of receipt by the authority of 183.6 the first tax increment for a mined underground space 183.7 development district, 183.8 (2) after 15 years after receipt by the authority of the 183.9 first increment for a renewal and renovation district, 183.10 (3) after 20 years after receipt by the authority of the 183.11 first increment for a soils condition district, 183.12 (4) after nine yearsfrom the date of theafter receipt, or183.1311 years from approval of the tax increment financing plan,183.14whichever is less,by the authority of the first increment for 183.15 an economic development district for which the request for 183.16 certification was made after May 31, 1993; and after eight years 183.17 after receipt by the authority of the first increment for an 183.18 economic development district for which the request for 183.19 certification was made before June 1, 1993, 183.20 (5) for a housing district or a redevelopment district, 183.21 after 20 years from the date of receipt by the authority of the 183.22 first tax increment by the authority pursuant to section 183.23 469.175, subdivision 1, paragraph (b); or, if no provision is 183.24 made under section 469.175, subdivision 1, paragraph (b), after 183.25 25 years from the date of receipt by the authority of the first 183.26 increment. 183.27 (b) For purposes of determining a duration limit under this 183.28 subdivision or subdivision 1e that is based on the receipt of an 183.29 increment, any increments from taxes payable in the year in 183.30 which the district terminates shall be paid to the authority. 183.31 This paragraph does not affect a duration limitcalculated from183.32the date of approval of the tax increment financing plan or183.33 based on the recovery of costs or to a duration limit under 183.34 subdivision 1c. This paragraph does not supersede the 183.35 restrictions on payment of delinquent taxes in subdivision 1f. 183.36 EFFECTIVE DATE: This section is effective on May 1, 2000, 184.1 and applies to any economic development district that: 184.2 (1) is requested for certification after May 1, 2000; 184.3 (2) was requested for certification after July 31, 1979, 184.4 and as of May 1, 2000, has not reached its maximum duration 184.5 under the law in effect on the date the district was requested 184.6 for certification; or 184.7 (3) was requested for certification after July 31, 1979, 184.8 and the authority received tax increment from the county after 184.9 the duration limit calculated from the date of approval of the 184.10 plan, but within the duration limit if this section had been in 184.11 effect on the date the district was requested for certification. 184.12 Sec. 24. Minnesota Statutes 1998, section 469.1763, is 184.13 amended by adding a subdivision to read: 184.14 Subd. 7. [HOUSING DEVELOPMENTS.] (a) The restrictions in 184.15 subdivisions 2 through 4 do not apply to increments spent 184.16 exclusively to assist a housing development. 184.17 (b) For purposes of this subdivision, the following terms 184.18 have the meanings given. 184.19 (1) "Housing development" or "development" means housing 184.20 that meets the requirements for a qualified low-income building 184.21 as that term is used in section 42 of the Internal Revenue Code. 184.22 (2) "To assist" means amounts spent to: 184.23 (i) acquire and prepare the site; 184.24 (ii) acquire, construct, or rehabilitate buildings or other 184.25 improvements; and 184.26 (iii) make public improvements directly related to the 184.27 development. 184.28 (c) For a development, the amount of the tax increments 184.29 that qualifies under this subdivision is limited to the 184.30 qualified basis for the development, as defined under section 184.31 42(c) of the Internal Revenue Code, less the amount of any tax 184.32 credit the development is allowed under section 42 of the 184.33 Internal Revenue Code. 184.34 EFFECTIVE DATE: This section applies to increments spent 184.35 after July 1, 2000. 184.36 Sec. 25. [FINDINGS.] 185.1 The legislature finds that: 185.2 (1) the legislature has directed the metropolitan airports 185.3 commission to develop a plan to mitigate aircraft noise 185.4 associated with the operation of the Minneapolis/St. Paul 185.5 International Airport; 185.6 (2) the metropolitan airports commission has developed a 185.7 noise mitigation plan in conjunction with communities adjacent 185.8 to the airport and is in the process of updating its FAR Part 185.9 150 noise mitigation program for submission to and approval by 185.10 the Federal Aviation Administration; 185.11 (3) the legislature also established the governor's airport 185.12 community stabilization funding task force that recommended 185.13 further mitigation funding to address federal, state, and local 185.14 participation in mitigation of noise and other impacts 185.15 associated with expansion of the Minneapolis/St. Paul 185.16 International Airport at its present location; 185.17 (4) the task force concluded that: 185.18 (i) the metropolitan airports commission has committed 185.19 significant resources toward mitigating the negative impacts 185.20 associated with airport expansion, but the FAR Part 150 noise 185.21 program is insufficient to address all impacts; 185.22 (ii) the metropolitan airports commission is neither 185.23 capable of, nor should it be required to, finance mitigation of 185.24 all airport impacts; 185.25 (iii) the decision to keep and expand the airport at its 185.26 current location was a state decision, and as such, the state 185.27 should be a financial partner in mitigation projects resulting 185.28 from the expansion of the airport; and 185.29 (iv) no single funding source is adequate for the range and 185.30 scope of proposed mitigation activities; and 185.31 (5) appropriate measures to mitigate adverse impacts 185.32 include, but are not limited to, insulation, redevelopment and 185.33 housing replacement activities, and property value assurance and 185.34 expenditures for all such measures are for a public purpose. 185.35 Sec. 26. [DEFINITIONS.] 185.36 Subdivision 1. [APPLICATION.] For the purposes of sections 186.1 25 to 29, the terms defined in this section have the meanings 186.2 given them. 186.3 Subd. 2. [AIRPORT IMPACT DISTRICT.] "Airport impact 186.4 district" means an airport impact tax increment financing 186.5 district described in section 28. 186.6 Subd. 3. [AIRPORT IMPACT ZONE.] "Airport impact zone" 186.7 means a contiguous or noncontiguous geographic area designated 186.8 by a city and approved by the council as part of a mitigation 186.9 plan under section 27. 186.10 Subd. 4. [CITY.] "City" means the cities of Bloomington, 186.11 Burnsville, Eagan, Mendota Heights, Minneapolis, Richfield, and 186.12 St. Paul or any of them. 186.13 Subd. 5. [COUNCIL.] "Council" means the metropolitan 186.14 council. 186.15 Subd. 6. [GOVERNING BODY.] "Governing body" means the city 186.16 council of a city. 186.17 Subd. 7. [HOUSING REPLACEMENT ACTIVITIES.] "Housing 186.18 replacement activities" means rehabilitation, acquisition, 186.19 demolition relocation assistance, relocation of existing 186.20 dwelling units, and construction of new dwelling units, for the 186.21 purpose of replacing dwelling units eliminated by airport 186.22 mitigation activities. 186.23 Subd. 8. [IMPACT REPORT.] "Impact report" means a written 186.24 report identifying airport impacts adopted by a city under 186.25 section 27. 186.26 Subd. 9. [MITIGATION PLAN.] "Mitigation plan" means a plan 186.27 for airport impact mitigation developed by a city and approved 186.28 by the council under section 27. 186.29 Subd. 10. [OBLIGATION.] "Obligation" has the meaning given 186.30 it in Minnesota Statutes, section 475.51, subdivision 3. The 186.31 term includes obligations issued to refund prior obligations 186.32 issued under sections 25 to 29. 186.33 Subd. 11. [SCHOOL DISTRICT.] "School district" means a 186.34 school district whose jurisdiction includes all or any portion 186.35 of a city. 186.36 Sec. 27. [AIRPORT IMPACT MITIGATION PLANNING.] 187.1 Subdivision 1. [IMPACT REPORT.] A city may study and 187.2 identify airport impacts and the scope of those impacts on the 187.3 city. At the conclusion of an impact study, a city must adopt a 187.4 report of the impacts on the city. In studying airport impacts 187.5 and preparing a report, a city must take into account airport 187.6 noise impacts and additional environmental, transportation, and 187.7 economic impacts associated with expansion of the 187.8 Minneapolis/St. Paul International Airport. A city must also 187.9 consider and incorporate the overhead noise guidelines 187.10 established by the Federal Aviation Administration and 187.11 recommendations of the low frequency noise policy committee 187.12 concerning noise impacts. 187.13 Subd. 2. [MITIGATION PLAN.] (a) After adopting an airport 187.14 impact report, a city must develop an airport mitigation plan 187.15 for an airport impact zone in the city. In developing the 187.16 mitigation plan, a city must seek to determine the most 187.17 effective measures for mitigating the impacts identified in the 187.18 impact report. A city may consider any measures for mitigating 187.19 airport impacts, including, but not limited to, noise insulation 187.20 of residential and commercial buildings, land use conversion, 187.21 development of housing to replace units lost through mitigation 187.22 activities, and property value assurance programs. The 187.23 mitigation plan must include: 187.24 (1) designated boundaries of the airport impact zone; 187.25 (2) a description of recommended impact mitigation 187.26 measures; 187.27 (3) if the plan includes establishment of one or more 187.28 airport impact tax increment financing districts, the proposed 187.29 boundaries of each district consistent with the terms of section 187.30 28; 187.31 (4) if the plan includes conversion of residential land 187.32 use, a description of proposed housing replacement activities; 187.33 (5) estimates of costs of the recommended mitigation 187.34 measures and possible financing sources; 187.35 (6) an analysis of the feasibility of property tax 187.36 abatement under Minnesota Statutes, sections 469.1813 to 188.1 469.1815, as a financing source; and 188.2 (7) the estimated amount of obligations, if any, to be 188.3 issued under section 29, including a description of the proposed 188.4 security for the obligations and whether the city requests 188.5 credit enhancement by the council as provided in section 29, 188.6 subdivision 2. 188.7 (b) Before initial approval of a mitigation plan, a city 188.8 must conduct a public hearing after publishing at least ten days 188.9 before the hearing a notice in a newspaper of general 188.10 circulation in the city. The hearing notice must state that the 188.11 mitigation plan and the mitigation report are available for 188.12 review in the administrative offices of the city. After initial 188.13 approval of the mitigation plan by the governing body, the city 188.14 must submit the mitigation plan and the mitigation report to the 188.15 council for approval, and must also submit copies to the 188.16 metropolitan airports commission for review and comment. No 188.17 more than 60 days after receipt of the city's submission, the 188.18 council must approve, disapprove, or otherwise comment on the 188.19 mitigation plan. Failure by the council to approve or comment 188.20 within 60 days is considered approval of the mitigation plan. 188.21 An action described in a mitigation plan must not be financed by 188.22 the mitigation fund or an airport impact district until the 188.23 mitigation plan has been approved by the council and then 188.24 approved by the governing body. 188.25 (c) Before approving any mitigation plan, the council must 188.26 establish criteria for evaluating proposed airport impact zones, 188.27 airport impact districts, and mitigation measures. The council 188.28 must consult with the cities and the metropolitan airports 188.29 commission in developing the criteria. The council must approve 188.30 final criteria by December 31, 2000. Any mitigation plan 188.31 approved under sections 25 to 29 must be consistent with the 188.32 criteria established under this paragraph. 188.33 (d) A mitigation plan may be changed for the following 188.34 purposes after the notice, hearing, and approvals required for 188.35 approval of the original plan to: 188.36 (1) increase the total estimated cost of mitigation 189.1 activities; 189.2 (2) increase the total estimated amount of obligations to 189.3 be issued; 189.4 (3) secure any obligations by the pledge described in 189.5 section 29, subdivision 2, if the pledge was not included in the 189.6 original plan; 189.7 (4) expand the boundaries of an airport impact zone; 189.8 (5) create or expand the boundaries of an airport impact 189.9 district; or 189.10 (6) add mitigation activities beyond the scope of 189.11 activities described in the original plan. 189.12 (e) Expenditures to implement a mitigation plan are not 189.13 considered a business subsidy under Minnesota Statutes, sections 189.14 116J.993 to 116J.995. 189.15 Sec. 28. [AIRPORT IMPACT TAX INCREMENT FINANCING 189.16 DISTRICTS.] 189.17 Subdivision 1. [AUTHORIZATION.] A city may establish one 189.18 or more airport impact tax increment financing districts within 189.19 an airport impact zone. At least 75 percent of the area of an 189.20 airport impact district must be located within the 60 DNL 189.21 contour surrounding the Minneapolis/St. Paul International 189.22 Airport. The boundaries of each district must be described in a 189.23 mitigation plan. 189.24 Subd. 2. [SPECIAL RULES.] (a) An airport impact district 189.25 is considered a redevelopment district within the meaning of, 189.26 and is subject to, Minnesota Statutes, sections 469.174 to 189.27 469.179, except as otherwise provided in this subdivision. For 189.28 the purposes of Minnesota Statutes, section 469.174, subdivision 189.29 8, "project" means an airport impact zone described in section 189.30 27. 189.31 (b) For the purposes of Minnesota Statutes, section 189.32 469.174, subdivision 10, the governing body must find that 189.33 parcels consisting of 70 percent of the area of the district are 189.34 occupied by buildings, streets, utilities, or other 189.35 improvements, and more than 50 percent of the buildings, not 189.36 including outbuildings, currently or upon completion of airport 190.1 expansion are reasonably expected to experience airport impacts 190.2 identified in the mitigation plan to a degree requiring land use 190.3 conversion to accommodate uses compatible with the airport. 190.4 This finding may be made at the time of approval of the 190.5 mitigation plan. 190.6 (c) For the purposes of Minnesota Statutes, section 190.7 469.1763, subdivision 2, the in-district percentage is 75 190.8 percent, except that any expenditures within the boundaries of 190.9 any other airport impact tax increment financing district in the 190.10 city are considered activities within the district whenever made 190.11 notwithstanding anything to the contrary in Minnesota Statutes, 190.12 section 469.1763, subdivision 3, and the 25 percent pooling 190.13 percentage may be used only to pay for administrative expenses 190.14 and housing replacement activities. 190.15 (d) For the purposes of Minnesota Statutes, section 190.16 469.176, subdivision 4j, the cost of correcting conditions that 190.17 allow designation of the airport impact district includes the 190.18 cost of a mitigation measure described in an approved mitigation 190.19 plan. 190.20 (e) Minnesota Statutes, sections 273.1399 and 469.1782, 190.21 subdivision 1, do not apply to the district if the city elects 190.22 either or both of the following: 190.23 (1) the exemption under Minnesota Statutes, section 190.24 273.1399, subdivision 6, paragraph (d); or 190.25 (2) at least 15 percent of the revenue generated from tax 190.26 increments from the airport impact district in any year is 190.27 deposited in the housing replacement account of the city and 190.28 spent for housing replacement activities described in the 190.29 mitigation plan. 190.30 (f) Housing replacement activities may be located in the 190.31 city within or outside the airport impact district. 190.32 (g) Minnesota Statutes, chapter 473F, does not apply to 190.33 property within an airport impact district beginning in the 190.34 first year in which tax increment is paid to the city and 190.35 continuing until decertification of the district. Tax increment 190.36 from the district is calculated according to Minnesota Statutes, 191.1 section 469.177, subdivision 3, paragraph (a), without regard to 191.2 the fiscal disparities provisions of Minnesota Statutes, chapter 191.3 473F. 191.4 Sec. 29. [BONDS; SECURITY.] 191.5 Subdivision 1. [TERMS.] (a) A city may issue obligations 191.6 secured by: 191.7 (1) tax increments; 191.8 (2) abatements; 191.9 (3) any other revenues available to the city under law; or 191.10 (4) any combination of revenue described in clauses (1) to 191.11 (3). 191.12 (b) The proceeds of obligations must be used to pay or 191.13 reimburse any costs to implement a mitigation plan, including, 191.14 without limitation, costs of preparing the impact report and the 191.15 mitigation plan. The governing body may provide by resolution 191.16 that the obligations are additionally secured by the full faith 191.17 and credit of the city. Notwithstanding any other law or 191.18 charter provision, voter approval is not required and net debt 191.19 limits do not apply to obligations issued under this section. 191.20 Obligations secured in whole or in part with tax increments from 191.21 an airport impact district must be issued according to sections 191.22 25 to 29 and Minnesota Statutes, section 469.178. 191.23 Subd. 2. [METROPOLITAN AREA CREDIT ENHANCEMENT 191.24 PROGRAM.] (a) The council may establish an airport impact 191.25 mitigation bond credit enhancement program as provided in this 191.26 section. The council may pledge its full faith and credit and 191.27 taxing powers to obligations issued under sections 25 to 29 if: 191.28 (1) the city so requests and the council approves that 191.29 pledge as part of the city's mitigation plan; and 191.30 (2) the council finds that revenues pledged for payment of 191.31 the obligations will produce, as estimated at the time of the 191.32 pledge, at least 125 percent of the principal and interest due 191.33 on the obligations. 191.34 (b) The pledge must be made by resolution of the council. 191.35 Voter approval of obligations secured by the pledge described in 191.36 this subdivision is not required and net debt limits do not 192.1 apply. 192.2 (c) Before pledging its full faith and credit, the council 192.3 must, in consultation with the cities and the metropolitan 192.4 airports commission, establish criteria for approving requests 192.5 for credit enhancement under this section. The criteria may 192.6 contain limits on the total amount of obligations that may be 192.7 credit enhanced under this subdivision. 192.8 (d) If there is a deficiency in revenues pledged to 192.9 obligations credit enhanced under this subdivision, the council 192.10 must levy a tax against all taxable property in the metropolitan 192.11 area and advance the proceeds of the levy to the city for 192.12 deposit in the debt service fund for the obligations. The city 192.13 must reimburse the council for the advance to the extent the 192.14 deficient revenues are later collected. 192.15 (e) Taxes levied by the council because of credit 192.16 enhancement under this subdivision do not affect the amount or 192.17 rate of taxes that may be levied by the council for other 192.18 purposes and are not subject to limit as to rate or amount. 192.19 (f) The council and each city that participates in the 192.20 credit enhancement program may enter into agreements they 192.21 determine to be necessary to implement the credit enhancement 192.22 program. The agreements may extend over any period, 192.23 notwithstanding any law to the contrary. 192.24 EFFECTIVE DATE: Sections 25, 26, 27, and 29 do not require 192.25 local approval because Minnesota Statutes, section 645.023, 192.26 subdivision 1, paragraph (a), applies. Sections 25, 26, 27, and 192.27 29 are effective June 1, 2000. Section 28 is effective for each 192.28 of the cities of Bloomington, Burnsville, Eagan, Mendota 192.29 Heights, Minneapolis, Richfield, and St. Paul the day after the 192.30 governing body of each city and its chief clerical officer, 192.31 together with the governing body of each affected county and 192.32 school district and its chief clerical officer, timely complete 192.33 their compliance with Minnesota Statutes, sections 469.1782, 192.34 subdivision 2, and 645.021, subdivisions 2 and 3. 192.35 Sec. 30. [BROOKLYN PARK EDA; TIF DISTRICT NO. 18.] 192.36 The 1998 amendments to Minnesota Statutes, section 469.176, 193.1 subdivision 7, as set forth in Laws 1998, chapter 389, article 193.2 11, section 6, apply to the Brooklyn Park economic development 193.3 authority's tax increment financing district No. 18, 193.4 notwithstanding the effective date of the amendments. 193.5 EFFECTIVE DATE: This section is effective the day after 193.6 the governing body of the city of Brooklyn Park and its chief 193.7 clerical officer timely complete their compliance with Minnesota 193.8 Statutes, section 645.021, subdivisions 2 and 3. 193.9 Sec. 31. [CITY OF FOUNTAIN; TIF DURATION EXTENSION.] 193.10 The governing body of the city of Fountain may extend the 193.11 duration of tax increment financing district 1-1 through 193.12 December 31, 2008, notwithstanding the provision of Minnesota 193.13 Statutes, section 469.176, subdivision 1b. The extension under 193.14 this section is intended to correct an error in calculation of 193.15 the increment after a division of a parcel in the tax increment 193.16 financing district. As a result, the provisions of Minnesota 193.17 Statutes, section 469.1782, subdivision 1, do not apply to the 193.18 district. 193.19 EFFECTIVE DATE: This section is effective the day after 193.20 the governing bodies of the city, county, and school district, 193.21 and their chief clerical officers, timely complete their 193.22 compliance with Minnesota Statutes, sections 469.1782, 193.23 subdivision 2, and 645.021, subdivisions 2 and 3. 193.24 Sec. 32. [MENDOTA HEIGHTS TAX INCREMENT FINANCING 193.25 DISTRICT; CONTINUATION.] 193.26 Notwithstanding the provisions of Minnesota Statutes, 193.27 section 469.1764, or any other law, tax increment financing 193.28 district No. 1 established by the city of Mendota Heights in 193.29 1981 shall continue in effect for its original authorized 193.30 duration, subject to the condition that, except for expenditures 193.31 to pay preexisting obligations described in Minnesota Statutes, 193.32 section 469.1764, subdivision 5, paragraphs (b) and (c), all 193.33 future expenditures of tax increment shall not exceed $4,500,000 193.34 and shall be limited to the city's freeway road project 193.35 substantially as described in the city's application for a grant 193.36 from the livable communities demonstration account of the 194.1 metropolitan livable communities fund. 194.2 EFFECTIVE DATE: This section is effective the day after 194.3 approval by the governing body of the city of Mendota Heights 194.4 and compliance with Minnesota Statutes, section 645.021, 194.5 subdivision 3. 194.6 Sec. 33. [REDEVELOPMENT DISTRICT FOR MINNEAPOLIS CENTRAL 194.7 LIBRARY.] 194.8 Subdivision 1. [AUTHORIZATION.] Upon approval of the 194.9 governing body of the city of Minneapolis by resolution, the 194.10 Minneapolis community development agency may establish a 194.11 redevelopment tax increment financing district to finance the 194.12 construction of the Minneapolis central library. The governing 194.13 body may approve establishment of the district only if it makes 194.14 a finding that at least 60 percent of the cost of the project 194.15 will be paid for from sources of financing other than tax 194.16 increments. The district is a redevelopment district subject to 194.17 Minnesota Statutes, sections 469.174 to 469.179, except as 194.18 provided in this section. 194.19 Subd. 2. [DISTRICT AREA.] If approved, the boundaries of 194.20 the district are as follows: 194.21 Starting at the point of intersection of the southeasterly 194.22 line of Marquette Avenue and the southwesterly line of 194.23 Fifth Street South, thence northwesterly along the 194.24 southwesterly line of Fifth Street South to its 194.25 intersection with the northwesterly line of Nicollet Mall, 194.26 thence northeasterly along the northwesterly line of 194.27 Nicollet Mall to its intersection with the southwesterly 194.28 line of Fourth Street South, thence northwesterly along the 194.29 southwesterly line of Fourth Street South to its 194.30 intersection with the northwesterly line of Hennepin 194.31 Avenue, thence northeasterly along the northwesterly line 194.32 of Hennepin Avenue to its intersection with the 194.33 northeasterly line of Washington Avenue, thence 194.34 southeasterly along the northeasterly line of Washington 194.35 Avenue to its intersection with the southeasterly line of 194.36 Nicollet Mall, extended, thence southwesterly along the 195.1 southeasterly line of Nicollet Mall to its intersection 195.2 with the northeasterly line of Third Street South, thence 195.3 southeasterly along the northeasterly line of Third Street 195.4 South to its intersection with the southeasterly line of 195.5 Marquette Avenue, thence southwesterly along the 195.6 southeasterly line of Marquette Avenue to the point of 195.7 beginning. All in the city of Minneapolis, county of 195.8 Hennepin. 195.9 Subd. 3. [EXCEPTIONS TO APPLICABILITY OF GENERAL LAW.] (a) 195.10 Notwithstanding the requirements of Minnesota Statutes, section 195.11 469.174, subdivision 10, the district is a redevelopment 195.12 district. 195.13 (b) Minnesota Statutes, section 469.176, subdivisions 4g 195.14 and 4j, do not apply to tax increment revenue generated by the 195.15 district. 195.16 (c) Minnesota Statutes, section 469.1782, subdivision 1, 195.17 does not apply to the district. 195.18 Subd. 4. [DURATION OF DISTRICT.] Notwithstanding the 195.19 provisions of Minnesota Statutes, section 469.176, subdivision 195.20 1b, no tax increment may be paid to the authority after 30 years 195.21 from the date of receipt by the authority of the first increment. 195.22 EFFECTIVE DATE: This section is effective upon compliance 195.23 with Minnesota Statutes, sections 469.1782, subdivision 2, and 195.24 645.021, subdivision 3. 195.25 Sec. 34. [MINNEAPOLIS COMMUNITY DEVELOPMENT AGENCY; 195.26 HOUSING DISTRICT.] 195.27 Subdivision 1. [AUTHORIZATION.] Upon approval of the 195.28 governing body of the city of Minneapolis, the Minneapolis 195.29 community development agency may establish a housing tax 195.30 increment financing district comprised of the property 195.31 identified as property identification number 27-029-24-34-0025, 195.32 known as 215 Oak Grove Street, for the purpose of preserving 195.33 affordable housing that meets the requirements of Minnesota 195.34 Statutes, section 469.174, subdivision 11. 195.35 Subd. 2. [ORIGINAL NET TAX CAPACITY.] Notwithstanding the 195.36 provisions of Minnesota Statutes, sections 469.174, subdivision 196.1 7, and 469.177, subdivision 1, the original net tax capacity of 196.2 the district shall be zero. 196.3 EFFECTIVE DATE: This section is effective upon compliance 196.4 by the city of Minneapolis with the requirements of Minnesota 196.5 Statutes, section 645.021, subdivisions 2 and 3. 196.6 Sec. 35. [ST. PAUL HOUSING AND REDEVELOPMENT AUTHORITY; 196.7 HOUSING DISTRICT.] 196.8 Subdivision 1. [AUTHORIZATION.] The governing body of the 196.9 housing and redevelopment authority of the city of St. Paul may 196.10 create a tax increment financing housing district as provided in 196.11 this section for a development containing both owner-occupied 196.12 and residential rental units for mixed income occupancy. 196.13 Subd. 2. [AREA.] The housing district authorized in this 196.14 section may only be created in the northeast quadrant of 196.15 downtown St. Paul, which is defined as the approximately 15-acre 196.16 area bounded by Interstate 94 on the north and east, Jackson 196.17 Street on the west, and Seventh Street on the south, together 196.18 with the west side of Jackson Street to midblock between 196.19 Interstate 94 and Seventh Street. 196.20 Subd. 3. [INCOME REQUIREMENTS FOR COMBINED OWNER-OCCUPIED 196.21 AND RESIDENTIAL RENTAL DEVELOPMENT.] (a) Notwithstanding the 196.22 income requirements in Minnesota Statutes, section 469.174, 196.23 subdivision 11, or 469.1761, a housing district in the northeast 196.24 quadrant means a type of tax increment financing district that 196.25 consists of a project, or a portion of a project, intended for 196.26 occupancy, in part, by persons of low and moderate income as 196.27 defined in chapter 462A, Title II, of the National Housing Act 196.28 of 1934; the National Housing Act of 1959; the United States 196.29 Housing Act of 1937, as amended; Title V of the Housing Act of 196.30 1949, as amended; any other similar present or future federal, 196.31 state, or municipal legislation, or the regulations promulgated 196.32 under any of those acts, as further set forth in this section. 196.33 Twenty percent of the units in the development in the housing 196.34 district must be occupied by individuals whose family income is 196.35 equal to or less than 50 percent of area median gross income and 196.36 an additional 60 percent of the units in the development in the 197.1 housing district must be occupied by individuals whose family 197.2 income is equal to or less than 115 percent of area median gross 197.3 income. Twenty percent of the units in the development in the 197.4 housing district shall not be subject to any income limitations. 197.5 (b) For purposes of this section, family income means the 197.6 median gross income for the area as determined under section 42 197.7 of the Internal Revenue Code of 1986, as amended. The income 197.8 requirements of this subdivision shall be deemed to be satisfied 197.9 if the sum of qualified owner-occupied units and qualified 197.10 residential rental units equals the required total number of 197.11 qualified units. Owner-occupied units must be initially 197.12 purchased and occupied by individuals whose family income 197.13 satisfies the income requirements of this subdivision. For 197.14 residential rental property, the income requirements of this 197.15 subdivision apply for the duration of the tax increment district. 197.16 (c) The development in the housing district, but not the 197.17 project, does not qualify under this subdivision if the fair 197.18 market value of the improvements which are constructed for 197.19 commercial uses or for uses other than owner-occupied and rental 197.20 mixed-income housing consists of more than 20 percent of the 197.21 total fair market value of the planned improvements in the 197.22 development plan or agreement. The fair market value of the 197.23 improvements may be determined using the cost of construction, 197.24 capitalized income, or other appropriate method of estimating 197.25 market value. 197.26 EFFECTIVE DATE: This section is effective the day after 197.27 the governing body of the city of St. Paul and its chief 197.28 clerical officer timely comply with Minnesota Statutes, section 197.29 645.021, subdivisions 2 and 3. 197.30 Sec. 36. [WASHINGTON COUNTY HRA INCREASED TO SEVEN.] 197.31 Notwithstanding Minnesota Statutes, section 469.006, 197.32 subdivision 1, the Washington county housing and redevelopment 197.33 authority has seven members. The county board must appoint one 197.34 member from each county commissioner district after receiving a 197.35 recommendation for the position from the district's county 197.36 commissioner. One housing and redevelopment commissioner must 198.1 be appointed by the county board to represent the county at 198.2 large. One authority member must be appointed by the county 198.3 board from among county residents who are directly assisted by 198.4 the public housing agency as defined in Code of Federal 198.5 Regulations, title 24, part 964. The first appointee to an 198.6 at-large position serves for two years; thereafter the term is 198.7 three years. The first appointee to the position requiring one 198.8 directly assisted by the public housing agency serves for one 198.9 year; thereafter the term is three years. 198.10 EFFECTIVE DATE: This section is effective the day after 198.11 the governing body of Washington county and its chief clerical 198.12 officer timely complete their compliance with Minnesota 198.13 Statutes, section 645.021, subdivisions 2 and 3. 198.14 Sec. 37. [WINONA TAX INCREMENT FINANCING DISTRICT; 198.15 RATIFICATION OF EXPENDITURE.] 198.16 For tax increment financing district No. 2, approved by the 198.17 city of Winona on August 1, 1980, the expenditure of tax 198.18 increments before January 1, 1998, to finance, in part, the 198.19 construction of improvements to the existing municipal 198.20 wastewater treatment plant is ratified and deemed an expenditure 198.21 within the geographic area of the tax increment financing 198.22 district, and Minnesota Statutes, section 469.1764, does not 198.23 apply to the tax increment financing district. 198.24 EFFECTIVE DATE: This section is effective upon approval by 198.25 the Winona city council and compliance with Minnesota Statutes, 198.26 section 645.021. 198.27 Sec. 38. [CLARIFICATION.] 198.28 Existing corporations that reported to the state auditor 198.29 under Minnesota Statutes 1998, section 465.715, subdivision 3, 198.30 but do not meet the definition of a corporation under section 198.31 14, subdivision 1, paragraph (b), remain as established and are 198.32 not affected by this act or by Minnesota Statutes, section 198.33 465.715. 198.34 Sec. 39. [REPEALER.] 198.35 (a) Minnesota Statutes 1998, section 469.175, subdivision 198.36 6a, is repealed. 199.1 (b) Minnesota Statutes 1998, section 465.715, subdivisions 199.2 1, 2, and 3; and Minnesota Statutes 1999 Supplement, section 199.3 465.715, subdivision 1a, are repealed. 199.4 EFFECTIVE DATE: Paragraph (a) of this section is effective 199.5 for reports due in 2001 and subsequent years. 199.6 ARTICLE 11 199.7 MISCELLANEOUS 199.8 Section 1. Minnesota Statutes 1998, section 16A.46, is 199.9 amended to read: 199.10 16A.46 [LOST OR DESTROYED WARRANT DUPLICATE; INDEMNITY.] 199.11 The commissioner may issue a duplicate to an owner if the 199.12 loss or destruction of an unpaid warrant is documented by 199.13 affidavit. When the duplicate is issued, the original is void. 199.14 The commissioner may require an indemnity bond from the 199.15 applicant to the state for double the amount of the warrant for 199.16 anyone damaged by the issuance of the duplicate. The 199.17 commissioner may refuse to issue a duplicate of an unpaid state 199.18 warrant. If the commissioner acts in good faith the 199.19 commissioner is not liable, whether the application is granted 199.20 or denied. For an unpaid refund or rebate issued under a tax 199.21 law administered by the commissioner of revenue that has been 199.22 lost or destroyed, an affidavit is not required for the 199.23 commissioner to issue a duplicate if the duplicate is issued to 199.24 the same name and social security number as the original warrant 199.25 and that information is verified on a tax return filed by the 199.26 recipient. 199.27 EFFECTIVE DATE: This section is effective the day 199.28 following final enactment. 199.29 Sec. 2. Minnesota Statutes 1999 Supplement, section 199.30 16D.09, subdivision 2, is amended to read: 199.31 Subd. 2. [NOTIFICATION OF ACTION BY DEPARTMENT OF 199.32 REVENUE.] When the department of revenue has determined that a 199.33 debt is uncollectible and has written off that debt as provided 199.34 in subdivision 1, the commissioner of revenue must make a 199.35 reasonable attempt to notify the debtor of that action and of 199.36 the release of any liens imposed under section 270.69 related to 200.1 that debt, within 30 days after the determination has been 200.2 reported to the commissioner of finance. A lien imposed under 200.3 section 270.69 need not be released unless after the write-off 200.4 of uncollectible debt there is no remaining collectible 200.5 liability recorded on the lien. 200.6 EFFECTIVE DATE: This section is effective for debts 200.7 written off on or after the day following final enactment. 200.8 Sec. 3. Minnesota Statutes 1998, section 270.063, is 200.9 amended by adding a subdivision to read: 200.10 Subd. 4. [FEDERAL TAX REFUND OFFSET FEES.] For fees 200.11 charged by the department of the treasury of the United States 200.12 for the offset of federal tax refunds that are deducted from the 200.13 refund amounts remitted to the commissioner, the unpaid debts of 200.14 the taxpayers whose refunds are being offset to satisfy the 200.15 debts shall be reduced only by the actual amount of the refund 200.16 payments received by the commissioner. 200.17 EFFECTIVE DATE: This section is effective for offsets of 200.18 refunds made on or after the day following final enactment. 200.19 Sec. 4. Minnesota Statutes 1998, section 270.07, 200.20 subdivision 5, is amended to read: 200.21 Subd. 5. [CREDIT OF OVERPAYMENT TO DELINQUENT TAX 200.22 LIABILITIES.] Notwithstanding any other provision of law to the 200.23 contrary, in the case of an overpayment of any tax collected by 200.24 the commissioner of revenue, the commissioner must apply the 200.25 amount of the overpayment first to debts for child support as 200.26 provided in section 270A.10, and then may creditthe amount of200.27suchany remaining overpayment against any uncontested 200.28 delinquent tax liability on the part of the taxpayer who made 200.29 the overpayment. An overpayment may be credited against a tax 200.30 liability under this subdivision only if the uncontested 200.31 delinquent liability has been assessed within ten years of the 200.32 date on which the overpayment is credited. However, this 200.33 limitation shall not be applicable if the delinquent liability 200.34 has been entered into judgment or if legal action is pending for 200.35 collection of the liability or for renewal of the judgment. An 200.36 amount paid as tax shall constitute an overpayment even if in 201.1 fact there was no tax liability with respect to which such 201.2 amount was paid. 201.3 EFFECTIVE DATE: This section is effective for claims 201.4 submitted after June 30, 2001. 201.5 Sec. 5. Minnesota Statutes 1999 Supplement, section 201.6 270.65, is amended to read: 201.7 270.65 [DATE OF ASSESSMENT; DEFINITION.] 201.8 For purposes of taxes administered by the commissioner, the 201.9 term "date of assessment" means the date a liability reported on 201.10 a return wasfiledentered into the records of the commissioner 201.11 or the date a return should have been filed, whichever is later; 201.12 or, in the case of taxes determined by the commissioner, "date 201.13 of assessment" means the date of the order assessing taxes or 201.14 date of the return made by the commissioner; or, in the case of 201.15 an amended return filed by the taxpayer, the assessment date is 201.16 the date additional liability reported on the return, if any, 201.17 wasfiled withentered into the records of the commissioner; or, 201.18 in the case of a check from a taxpayer that is dishonored and 201.19 results in an erroneous refund being given to the taxpayer, 201.20 remittance of the check is deemed to be an assessment and the 201.21 "date of assessment" is the date the check was received by the 201.22 commissioner. 201.23 EFFECTIVE DATE: This section is effective for assessments 201.24 made on or after the date of final enactment. 201.25 Sec. 6. Minnesota Statutes 1999 Supplement, section 201.26 270A.03, subdivision 2, is amended to read: 201.27 Subd. 2. [CLAIMANT AGENCY.] "Claimant agency" means any 201.28 state agency, as defined by section 14.02, subdivision 2, the 201.29 regents of the University of Minnesota, any district court of 201.30 the state, any county, any statutory or home rule charter city 201.31 presenting a claim for a municipal hospital or a public 201.32 library or a municipal ambulance service, a hospital district, a 201.33 private nonprofit hospital that leases its building from the 201.34 county in which it is located, any public agency responsible for 201.35 child support enforcement, any public agency responsible for the 201.36 collection of court-ordered restitution, and any public agency 202.1 established by general or special law that is responsible for 202.2 the administration of a low-income housing program. 202.3 EFFECTIVE DATE: This section is effective for claims 202.4 submitted after June 30, 2000. 202.5 Sec. 7. Minnesota Statutes 1998, section 270A.10, is 202.6 amended to read: 202.7 270A.10 [PRIORITY OF CLAIMS.] 202.8 If two or more debts, in a total amount exceeding the 202.9 debtor's refund, are submitted for setoff, the priority of 202.10 payment shall be as follows: First,any delinquent tax202.11obligations of the debtor which are owed to the department shall202.12be satisfiedthe refund must be applied to debts for child 202.13 support based on the order in time in which the commissioner 202.14 received the debts. Secondly,the refund shall be applied to202.15debts for child support based on the order in time in which the202.16commissioner received the debtsany delinquent tax obligations 202.17 of the debtor that are owed to the department must be satisfied. 202.18 Thirdly, the refund shall be applied to payment of restitution 202.19 obligations. Fourthly, the refund shall be applied to the 202.20 remaining debts based on the order in time in which the 202.21 commissioner received the debts. 202.22 EFFECTIVE DATE: This section is effective for claims 202.23 submitted after June 30, 2001. 202.24 Sec. 8. Minnesota Statutes 1998, section 289A.35, is 202.25 amended to read: 202.26 289A.35 [ASSESSMENTS; COMMISSIONER FILED RETURNS.] 202.27 The commissionershallhas the authority to make 202.28 determinations, corrections, and assessments with respect to 202.29 state taxes, including interest, additions to taxes, and 202.30 assessable penalties. The commissioner may audit and adjust the 202.31 taxpayer's computation of federal taxable income, items of 202.32 federal tax preferences, or federal credit amounts to make them 202.33 conform with the provisions of chapter 290 or section 298.01. 202.34 If a taxpayer fails to file a required return, the commissioner, 202.35 from information in the commissioner's possession or obtainable 202.36 by the commissioner, may make a return for the taxpayer. The 203.1 return will be prima facie correct and valid. If a return has 203.2 been filed, the commissioner shallexamineenter the liability 203.3 reported on the return and may make any audit or investigation 203.4 that is considered necessary. The commissioner may use 203.5 statistical or other sampling techniques consistent with 203.6 generally accepted auditing standards in examining returns or 203.7 records and making assessments. 203.8 EFFECTIVE DATE: This section is effective the day 203.9 following final enactment. 203.10 Sec. 9. Minnesota Statutes 1998, section 290A.15, is 203.11 amended to read: 203.12 290A.15 [CLAIM APPLIED AGAINST OUTSTANDING LIABILITY.] 203.13 The amount of any claim otherwise payable under this 203.14 chapter must be applied by the commissioner first to debts for 203.15 child support as provided in section 270A.10, and then may be 203.16 applied by the commissioner against any delinquent tax liability 203.17 of the claimant or spouse of the claimant payable to the 203.18 department of revenue. 203.19 EFFECTIVE DATE: This section is effective for claims 203.20 submitted after June 30, 2001. 203.21 Sec. 10. Minnesota Statutes 1999 Supplement, section 203.22 383D.74, is amended to read: 203.23 383D.74 [DAKOTA COUNTY; ADMINISTRATIVE PENALTIES.] 203.24 Subdivision 1. [PENALTIES.] The Dakota county board may 203.25 impose an administrative penalty for violation of an ordinance 203.26 enacted under chapter 103F. No penalty may be imposed unless 203.27 the owner has received notice, served personally or by mail, of 203.28 the alleged violation and an opportunity for a hearing before a 203.29 person authorized by the county board to conduct the hearing. A 203.30 decision that a violation occurred must be in writing. The 203.31 amount of the penalty with interest may not exceed the amount 203.32 allowed for a single misdemeanor violation. A person aggrieved 203.33 by a decision under this section may have the decision reviewed 203.34 in the district court. If a penalty imposed under this section 203.35 is unpaid for more than 60 days after the date when payment is 203.36 due, the county board may certify the penalty to the county 204.1 auditor for collection to the same extent and in the same manner 204.2 provided by law for the assessment and collection of real estate 204.3 taxes. 204.4 Subd. 2. [EXPIRATION.] The authority to impose a penalty 204.5 under this section expires on December 31,20002005. 204.6 EFFECTIVE DATE: This section is effective the day 204.7 following final enactment. 204.8 Sec. 11. [PROPERTY TAX REFORM ACCOUNT TRANSFER.] 204.9 (a) On June 30, 2000, the commissioner of finance shall 204.10 transfer from the property tax reform account established in 204.11 Minnesota Statutes, section 16A.1521, to the unrestricted 204.12 general fund balance any remaining balance in the account except 204.13 for amounts allocated for county criminal justice aid under 204.14 article 9, section 49, low-income housing aid under article 9, 204.15 section 53, or local government aid increases to small cities 204.16 under article 9, section 50. 204.17 (b) Notwithstanding Minnesota Statutes, section 16A.152, 204.18 subdivision 2, the commissioner of finance shall not allocate 204.19 any money in fiscal year 2001 to the property tax reform account 204.20 based on the forecast in November 1999. 204.21 Sec. 12. [APPROPRIATION; LEGISLATIVE AUDITOR.] 204.22 $50,000 is appropriated from the general fund to the 204.23 legislative auditor to audit the appropriations to the 204.24 department of revenue for administration of the property tax 204.25 rebates in Laws 1997, chapter 231, article 16, section 29; and 204.26 Laws 1998, chapter 389, article 1, section 4; and the 204.27 appropriation for administration of the sales tax rebate in Laws 204.28 1999, chapter 243, article 1, section 3. The purpose of this 204.29 audit is to determine whether the funds appropriated were 204.30 expended consistent with the purpose of the appropriations. The 204.31 legislative auditor shall report the findings of the audit to 204.32 the legislature by January 1, 2001. 204.33 Sec. 13. [HISTORIC PRESERVATION GRANTS.] 204.34 (a) $1,500,000 is appropriated from the general fund to the 204.35 commissioner of trade and economic development for a grant to 204.36 the Minneapolis community development agency to be used to 205.1 provide assistance to a historic preservation project for the 205.2 rehabilitation of the Brew House, a building located on property 205.3 designated in the National Register of Historic Places as the 205.4 Minneapolis Brewing Company Historic District. 205.5 (b) $350,000 is appropriated to the commissioner of 205.6 administration for a grant to the city of St. Paul to be used to 205.7 provide assistance to a historic preservation project for the 205.8 preservation of the Armstrong House, a registered national 205.9 landmark property and local designated heritage preservation 205.10 site. This appropriation is contingent upon the completion of 205.11 the sale of the property to the city of St. Paul. 205.12 Sec. 14. [APPROPRIATION; COMMISSIONER OF REVENUE.] 205.13 $....... is appropriated from the general fund to the 205.14 commissioner of revenue to pay the cost of administration of 205.15 this act. 205.16 Sec. 15. [REPEALER.] 205.17 Minnesota Rules, part 8160.0300, subpart 4, is repealed. 205.18 EFFECTIVE DATE: This section is effective for assessments 205.19 made on or after the day following final enactment.