SF 3391

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

  1.1                          A bill for an act
  1.2             relating to taxation; exempting certain personal 
  1.3             property from taxation; providing for state aid 
  1.4             payments to local governments; requiring rate 
  1.5             reductions for customers of rate regulated utilities; 
  1.6             providing for state guarantee of local bond 
  1.7             obligations; appropriating money; amending Minnesota 
  1.8             Statutes 1996, sections 124A.24; 272.02, by adding a 
  1.9             subdivision; and 273.1398, subdivision 6, and by 
  1.10            adding subdivisions; Minnesota Statutes 1997 
  1.11            Supplement, sections 272.02, subdivision 1; and 
  1.12            273.13, subdivision 31; proposing coding for new law 
  1.13            in Minnesota Statutes, chapters 216B; and 475A. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.15     Section 1.  Minnesota Statutes 1996, section 124A.24, is 
  1.16  amended to read: 
  1.17     124A.24 [GENERAL EDUCATION LEVY EQUITY.] 
  1.18     Subdivision 1.  [OFF-FORMULA DISTRICTS.] If a district's 
  1.19  general education levy is determined according to section 
  1.20  124A.23, subdivision 3, an amount must be deducted from state 
  1.21  aid authorized in this chapter and chapters 124 and 124B, 
  1.22  receivable for the same school year, and from other state 
  1.23  payments receivable for the same school year authorized in 
  1.24  chapter 273.  The aid in section 124.646 must not be reduced. 
  1.25     The amount of the deduction equals the difference between: 
  1.26     (1) the general education tax rate, according to section 
  1.27  124A.23, times the district's adjusted net tax capacity used to 
  1.28  determine the general education aid for the same school year; 
  1.29  and 
  2.1      (2) the district's general education revenue, excluding 
  2.2   transition revenue and supplemental revenue, for the same school 
  2.3   year, according to section 124A.22. 
  2.4      Subd. 2.  [UTILITY REPLACEMENT AID.] Any amount received by 
  2.5   a district under section 273.1398, subdivision 4a, must be 
  2.6   deducted from state aid authorized in this chapter and chapter 
  2.7   124, receivable for the same school year, and from other state 
  2.8   payments receivable for the same school year authorized in 
  2.9   chapter 273.  The aid in section 124.646 must not be reduced. 
  2.10     Sec. 2.  [216B.169] [ASSURED RATE REDUCTIONS FOR CUSTOMERS 
  2.11  OF RATE REGULATED INDUSTRIES.] 
  2.12     Subdivision 1.  [RATE REDUCTIONS.] The public utilities 
  2.13  commission shall reduce the rates of an electric utility subject 
  2.14  to rate regulation by the commission to reflect reductions in 
  2.15  the utility's ad valorem tax obligation pursuant to section 
  2.16  272.02, subdivision 10.  The commission shall treat these rate 
  2.17  reductions separately from other rate adjustments.  Reductions 
  2.18  in rates under this subdivision shall be distributed among 
  2.19  customer classes in proportion to the contribution the customer 
  2.20  class made to the utility's electric utility generation 
  2.21  equipment ad valorem tax obligation. 
  2.22     Subd. 2.  [SCHEDULE SUBMITTED.] Within 60 days, an electric 
  2.23  utility subject to rate regulation must submit a schedule of 
  2.24  rate reductions to the commission which comply with subdivision 
  2.25  1.  The commission shall have 30 days to accept or modify the 
  2.26  schedule. 
  2.27     Sec. 3.  Minnesota Statutes 1997 Supplement, section 
  2.28  272.02, subdivision 1, is amended to read: 
  2.29     Subdivision 1.  All property described in this section to 
  2.30  the extent herein limited shall be exempt from taxation: 
  2.31     (1) All public burying grounds. 
  2.32     (2) All public schoolhouses. 
  2.33     (3) All public hospitals. 
  2.34     (4) All academies, colleges, and universities, and all 
  2.35  seminaries of learning. 
  2.36     (5) All churches, church property, and houses of worship. 
  3.1      (6) Institutions of purely public charity except parcels of 
  3.2   property containing structures and the structures described in 
  3.3   section 273.13, subdivision 25, paragraph (c), clauses (1), (2), 
  3.4   and (3), or paragraph (d), other than those that qualify for 
  3.5   exemption under clause (25). 
  3.6      (7) All public property exclusively used for any public 
  3.7   purpose. 
  3.8      (8) Except for the taxable personal property enumerated 
  3.9   below, all personal property and the property described in 
  3.10  section 272.03, subdivision 1, paragraphs (c) and (d), shall be 
  3.11  exempt.  
  3.12     The following personal property shall be taxable:  
  3.13     (a) personal property which is part of an 
  3.14  electric generating, transmission, or distribution system or a 
  3.15  pipeline system transporting or distributing water, gas, crude 
  3.16  oil, or petroleum products or mains and pipes used in the 
  3.17  distribution of steam or hot or chilled water for heating or 
  3.18  cooling buildings and structures; 
  3.19     (b) railroad docks and wharves which are part of the 
  3.20  operating property of a railroad company as defined in section 
  3.21  270.80; 
  3.22     (c) personal property defined in section 272.03, 
  3.23  subdivision 2, clause (3); 
  3.24     (d) leasehold or other personal property interests which 
  3.25  are taxed pursuant to section 272.01, subdivision 2; 273.124, 
  3.26  subdivision 7; or 273.19, subdivision 1; or any other law 
  3.27  providing the property is taxable as if the lessee or user were 
  3.28  the fee owner; 
  3.29     (e) manufactured homes and sectional structures, including 
  3.30  storage sheds, decks, and similar removable improvements 
  3.31  constructed on the site of a manufactured home, sectional 
  3.32  structure, park trailer or travel trailer as provided in section 
  3.33  273.125, subdivision 8, paragraph (f); and 
  3.34     (f) flight property as defined in section 270.071.  
  3.35     (9) Personal property used primarily for the abatement and 
  3.36  control of air, water, or land pollution to the extent that it 
  4.1   is so used, and real property which is used primarily for 
  4.2   abatement and control of air, water, or land pollution as part 
  4.3   of an agricultural operation, as a part of a centralized 
  4.4   treatment and recovery facility operating under a permit issued 
  4.5   by the Minnesota pollution control agency pursuant to chapters 
  4.6   115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 
  4.7   and 7045.0020 to 7045.1260, as a wastewater treatment facility 
  4.8   and for the treatment, recovery, and stabilization of metals, 
  4.9   oils, chemicals, water, sludges, or inorganic materials from 
  4.10  hazardous industrial wastes, or as part of an electric 
  4.11  generation system.  For purposes of this clause, personal 
  4.12  property includes ponderous machinery and equipment used in a 
  4.13  business or production activity that at common law is considered 
  4.14  real property. 
  4.15     Any taxpayer requesting exemption of all or a portion of 
  4.16  any real property or any equipment or device, or part thereof, 
  4.17  operated primarily for the control or abatement of air or water 
  4.18  pollution shall file an application with the commissioner of 
  4.19  revenue.  The equipment or device shall meet standards, rules, 
  4.20  or criteria prescribed by the Minnesota pollution control 
  4.21  agency, and must be installed or operated in accordance with a 
  4.22  permit or order issued by that agency.  The Minnesota pollution 
  4.23  control agency shall upon request of the commissioner furnish 
  4.24  information or advice to the commissioner.  On determining that 
  4.25  property qualifies for exemption, the commissioner shall issue 
  4.26  an order exempting the property from taxation.  The equipment or 
  4.27  device shall continue to be exempt from taxation as long as the 
  4.28  permit issued by the Minnesota pollution control agency remains 
  4.29  in effect. 
  4.30     (10) Wetlands.  For purposes of this subdivision, 
  4.31  "wetlands" means:  (i) land described in section 103G.005, 
  4.32  subdivision 15a; (ii) land which is mostly under water, produces 
  4.33  little if any income, and has no use except for wildlife or 
  4.34  water conservation purposes, provided it is preserved in its 
  4.35  natural condition and drainage of it would be legal, feasible, 
  4.36  and economically practical for the production of livestock, 
  5.1   dairy animals, poultry, fruit, vegetables, forage and grains, 
  5.2   except wild rice; or (iii) land in a wetland preservation area 
  5.3   under sections 103F.612 to 103F.616.  "Wetlands" under items (i) 
  5.4   and (ii) include adjacent land which is not suitable for 
  5.5   agricultural purposes due to the presence of the wetlands, but 
  5.6   do not include woody swamps containing shrubs or trees, wet 
  5.7   meadows, meandered water, streams, rivers, and floodplains or 
  5.8   river bottoms.  Exemption of wetlands from taxation pursuant to 
  5.9   this section shall not grant the public any additional or 
  5.10  greater right of access to the wetlands or diminish any right of 
  5.11  ownership to the wetlands. 
  5.12     (11) Native prairie.  The commissioner of the department of 
  5.13  natural resources shall determine lands in the state which are 
  5.14  native prairie and shall notify the county assessor of each 
  5.15  county in which the lands are located.  Pasture land used for 
  5.16  livestock grazing purposes shall not be considered native 
  5.17  prairie for the purposes of this clause.  Upon receipt of an 
  5.18  application for the exemption provided in this clause for lands 
  5.19  for which the assessor has no determination from the 
  5.20  commissioner of natural resources, the assessor shall refer the 
  5.21  application to the commissioner of natural resources who shall 
  5.22  determine within 30 days whether the land is native prairie and 
  5.23  notify the county assessor of the decision.  Exemption of native 
  5.24  prairie pursuant to this clause shall not grant the public any 
  5.25  additional or greater right of access to the native prairie or 
  5.26  diminish any right of ownership to it. 
  5.27     (12) Property used in a continuous program to provide 
  5.28  emergency shelter for victims of domestic abuse, provided the 
  5.29  organization that owns and sponsors the shelter is exempt from 
  5.30  federal income taxation pursuant to section 501(c)(3) of the 
  5.31  Internal Revenue Code of 1986, as amended through December 31, 
  5.32  1992, notwithstanding the fact that the sponsoring organization 
  5.33  receives funding under section 8 of the United States Housing 
  5.34  Act of 1937, as amended. 
  5.35     (13) If approved by the governing body of the municipality 
  5.36  in which the property is located, property not exceeding one 
  6.1   acre which is owned and operated by any senior citizen group or 
  6.2   association of groups that in general limits membership to 
  6.3   persons age 55 or older and is organized and operated 
  6.4   exclusively for pleasure, recreation, and other nonprofit 
  6.5   purposes, no part of the net earnings of which inures to the 
  6.6   benefit of any private shareholders; provided the property is 
  6.7   used primarily as a clubhouse, meeting facility, or recreational 
  6.8   facility by the group or association and the property is not 
  6.9   used for residential purposes on either a temporary or permanent 
  6.10  basis. 
  6.11     (14) To the extent provided by section 295.44, real and 
  6.12  personal property used or to be used primarily for the 
  6.13  production of hydroelectric or hydromechanical power on a site 
  6.14  owned by the federal government, the state, or a local 
  6.15  governmental unit which is developed and operated pursuant to 
  6.16  the provisions of section 103G.535. 
  6.17     (15) If approved by the governing body of the municipality 
  6.18  in which the property is located, and if construction is 
  6.19  commenced after June 30, 1983:  
  6.20     (a) a "direct satellite broadcasting facility" operated by 
  6.21  a corporation licensed by the federal communications commission 
  6.22  to provide direct satellite broadcasting services using direct 
  6.23  broadcast satellites operating in the 12-ghz. band; and 
  6.24     (b) a "fixed satellite regional or national program service 
  6.25  facility" operated by a corporation licensed by the federal 
  6.26  communications commission to provide fixed satellite-transmitted 
  6.27  regularly scheduled broadcasting services using satellites 
  6.28  operating in the 6-ghz. band. 
  6.29  An exemption provided by clause (15) shall apply for a period 
  6.30  not to exceed five years.  When the facility no longer qualifies 
  6.31  for exemption, it shall be placed on the assessment rolls as 
  6.32  provided in subdivision 4.  Before approving a tax exemption 
  6.33  pursuant to this paragraph, the governing body of the 
  6.34  municipality shall provide an opportunity to the members of the 
  6.35  county board of commissioners of the county in which the 
  6.36  facility is proposed to be located and the members of the school 
  7.1   board of the school district in which the facility is proposed 
  7.2   to be located to meet with the governing body.  The governing 
  7.3   body shall present to the members of those boards its estimate 
  7.4   of the fiscal impact of the proposed property tax exemption.  
  7.5   The tax exemption shall not be approved by the governing body 
  7.6   until the county board of commissioners has presented its 
  7.7   written comment on the proposal to the governing body or 30 days 
  7.8   have passed from the date of the transmittal by the governing 
  7.9   body to the board of the information on the fiscal impact, 
  7.10  whichever occurs first. 
  7.11     (16) Real and personal property owned and operated by a 
  7.12  private, nonprofit corporation exempt from federal income 
  7.13  taxation pursuant to United States Code, title 26, section 
  7.14  501(c)(3), primarily used in the generation and distribution of 
  7.15  hot water for heating buildings and structures.  
  7.16     (17) Notwithstanding section 273.19, state lands that are 
  7.17  leased from the department of natural resources under section 
  7.18  92.46. 
  7.19     (18) Electric power distribution lines and their 
  7.20  attachments and appurtenances, that are used primarily for 
  7.21  supplying electricity to farmers at retail.  
  7.22     (19) Transitional housing facilities.  "Transitional 
  7.23  housing facility" means a facility that meets the following 
  7.24  requirements.  (i) It provides temporary housing to individuals, 
  7.25  couples, or families.  (ii) It has the purpose of reuniting 
  7.26  families and enabling parents or individuals to obtain 
  7.27  self-sufficiency, advance their education, get job training, or 
  7.28  become employed in jobs that provide a living wage.  (iii) It 
  7.29  provides support services such as child care, work readiness 
  7.30  training, and career development counseling; and a 
  7.31  self-sufficiency program with periodic monitoring of each 
  7.32  resident's progress in completing the program's goals.  (iv) It 
  7.33  provides services to a resident of the facility for at least 
  7.34  three months but no longer than three years, except residents 
  7.35  enrolled in an educational or vocational institution or job 
  7.36  training program.  These residents may receive services during 
  8.1   the time they are enrolled but in no event longer than four 
  8.2   years.  (v) It is owned and operated or under lease from a unit 
  8.3   of government or governmental agency under a property 
  8.4   disposition program and operated by one or more organizations 
  8.5   exempt from federal income tax under section 501(c)(3) of the 
  8.6   Internal Revenue Code of 1986, as amended through December 31, 
  8.7   1992.  This exemption applies notwithstanding the fact that the 
  8.8   sponsoring organization receives financing by a direct federal 
  8.9   loan or federally insured loan or a loan made by the Minnesota 
  8.10  housing finance agency under the provisions of either Title II 
  8.11  of the National Housing Act or the Minnesota housing finance 
  8.12  agency law of 1971 or rules promulgated by the agency pursuant 
  8.13  to it, and notwithstanding the fact that the sponsoring 
  8.14  organization receives funding under Section 8 of the United 
  8.15  States Housing Act of 1937, as amended. 
  8.16     (20) Real and personal property, including leasehold or 
  8.17  other personal property interests, owned and operated by a 
  8.18  corporation if more than 50 percent of the total voting power of 
  8.19  the stock of the corporation is owned collectively by:  (i) the 
  8.20  board of regents of the University of Minnesota, (ii) the 
  8.21  University of Minnesota Foundation, an organization exempt from 
  8.22  federal income taxation under section 501(c)(3) of the Internal 
  8.23  Revenue Code of 1986, as amended through December 31, 1992, and 
  8.24  (iii) a corporation organized under chapter 317A, which by its 
  8.25  articles of incorporation is prohibited from providing pecuniary 
  8.26  gain to any person or entity other than the regents of the 
  8.27  University of Minnesota; which property is used primarily to 
  8.28  manage or provide goods, services, or facilities utilizing or 
  8.29  relating to large-scale advanced scientific computing resources 
  8.30  to the regents of the University of Minnesota and others. 
  8.31     (21)(a) Small scale wind energy conversion systems 
  8.32  installed after January 1, 1991, and used as an electric power 
  8.33  source are exempt. 
  8.34     "Small scale wind energy conversion systems" are wind 
  8.35  energy conversion systems, as defined in section 216C.06, 
  8.36  subdivision 12, including the foundation or support pad, which 
  9.1   are (i) used as an electric power source; (ii) located within 
  9.2   one county and owned by the same owner; and (iii) produce two 
  9.3   megawatts or less of electricity as measured by nameplate 
  9.4   ratings. 
  9.5      (b) Medium scale wind energy conversion systems installed 
  9.6   after January 1, 1991, are treated as follows:  (i) the 
  9.7   foundation and support pad are taxable; (ii) the associated 
  9.8   supporting and protective structures are exempt for the first 
  9.9   five assessment years after they have been constructed, and 
  9.10  thereafter, 30 percent of the market value of the associated 
  9.11  supporting and protective structures are taxable; and (iii) the 
  9.12  turbines, blades, transformers, and its related equipment, are 
  9.13  exempt.  "Medium scale wind energy conversion systems" are wind 
  9.14  energy conversion systems as defined in section 216C.06, 
  9.15  subdivision 12, including the foundation or support pad, which 
  9.16  are:  (i) used as an electric power source; (ii) located within 
  9.17  one county and owned by the same owner; and (iii) produce more 
  9.18  than two but equal to or less than 12 megawatts of energy as 
  9.19  measured by nameplate ratings. 
  9.20     (c) Large scale wind energy conversion systems installed 
  9.21  after January 1, 1991, are treated as follows:  25 percent of 
  9.22  the market value of all property is taxable, including (i) the 
  9.23  foundation and support pad; (ii) the associated supporting and 
  9.24  protective structures; and (iii) the turbines, blades, 
  9.25  transformers, and its related equipment.  "Large scale wind 
  9.26  energy conversion systems" are wind energy conversion systems as 
  9.27  defined in section 216C.06, subdivision 12, including the 
  9.28  foundation or support pad, which are:  (i) used as an electric 
  9.29  power source; and (ii) produce more than 12 megawatts of energy 
  9.30  as measured by nameplate ratings. 
  9.31     (22) Containment tanks, cache basins, and that portion of 
  9.32  the structure needed for the containment facility used to 
  9.33  confine agricultural chemicals as defined in section 18D.01, 
  9.34  subdivision 3, as required by the commissioner of agriculture 
  9.35  under chapter 18B or 18C. 
  9.36     (23) Photovoltaic devices, as defined in section 216C.06, 
 10.1   subdivision 13, installed after January 1, 1992, and used to 
 10.2   produce or store electric power. 
 10.3      (24) Real and personal property owned and operated by a 
 10.4   private, nonprofit corporation exempt from federal income 
 10.5   taxation pursuant to United States Code, title 26, section 
 10.6   501(c)(3), primarily used for an ice arena or ice rink, and used 
 10.7   primarily for youth and high school programs. 
 10.8      (25) A structure that is situated on real property that is 
 10.9   used for: 
 10.10     (i) housing for the elderly or for low- and moderate-income 
 10.11  families as defined in Title II of the National Housing Act, as 
 10.12  amended through December 31, 1990, and funded by a direct 
 10.13  federal loan or federally insured loan made pursuant to Title II 
 10.14  of the act; or 
 10.15     (ii) housing lower income families or elderly or 
 10.16  handicapped persons, as defined in Section 8 of the United 
 10.17  States Housing Act of 1937, as amended. 
 10.18     In order for a structure to be exempt under (i) or (ii), it 
 10.19  must also meet each of the following criteria: 
 10.20     (A) is owned by an entity which is operated as a nonprofit 
 10.21  corporation organized under chapter 317A; 
 10.22     (B) is owned by an entity which has not entered into a 
 10.23  housing assistance payments contract under Section 8 of the 
 10.24  United States Housing Act of 1937, or, if the entity which owns 
 10.25  the structure has entered into a housing assistance payments 
 10.26  contract under Section 8 of the United States Housing Act of 
 10.27  1937, the contract provides assistance for less than 90 percent 
 10.28  of the dwelling units in the structure, excluding dwelling units 
 10.29  intended for management or maintenance personnel; 
 10.30     (C) operates an on-site congregate dining program in which 
 10.31  participation by residents is mandatory, and provides assisted 
 10.32  living or similar social and physical support services for 
 10.33  residents; and 
 10.34     (D) was not assessed and did not pay tax under chapter 273 
 10.35  prior to the 1991 levy, while meeting the other conditions of 
 10.36  this clause. 
 11.1      An exemption under this clause remains in effect for taxes 
 11.2   levied in each year or partial year of the term of its permanent 
 11.3   financing. 
 11.4      (26) Real and personal property that is located in the 
 11.5   Superior National Forest, and owned or leased and operated by a 
 11.6   nonprofit organization that is exempt from federal income 
 11.7   taxation under section 501(c)(3) of the Internal Revenue Code of 
 11.8   1986, as amended through December 31, 1992, and primarily used 
 11.9   to provide recreational opportunities for disabled veterans and 
 11.10  their families. 
 11.11     (27) Manure pits and appurtenances, which may include 
 11.12  slatted floors and pipes, installed or operated in accordance 
 11.13  with a permit, order, or certificate of compliance issued by the 
 11.14  Minnesota pollution control agency.  The exemption shall 
 11.15  continue for as long as the permit, order, or certificate issued 
 11.16  by the Minnesota pollution control agency remains in effect. 
 11.17     (28) Notwithstanding clause (8), item (a), attached 
 11.18  machinery and other personal property which is part of a 
 11.19  facility containing a cogeneration system as described in 
 11.20  section 216B.166, subdivision 2, paragraph (a), if the 
 11.21  cogeneration system has met the following criteria:  (i) the 
 11.22  system utilizes natural gas as a primary fuel and the 
 11.23  cogenerated steam initially replaces steam generated from 
 11.24  existing thermal boilers utilizing coal; (ii) the facility 
 11.25  developer is selected as a result of a procurement process 
 11.26  ordered by the public utilities commission; and (iii) 
 11.27  construction of the facility is commenced after July 1, 1994, 
 11.28  and before July 1, 1997. 
 11.29     (29) Real property acquired by a home rule charter city, 
 11.30  statutory city, county, town, or school district under a lease 
 11.31  purchase agreement or an installment purchase contract during 
 11.32  the term of the lease purchase agreement as long as and to the 
 11.33  extent that the property is used by the city, county, town, or 
 11.34  school district and devoted to a public use and to the extent it 
 11.35  is not subleased to any private individual, entity, association, 
 11.36  or corporation in connection with a business or enterprise 
 12.1   operated for profit. 
 12.2      Sec. 4.  Minnesota Statutes 1996, section 272.02, is 
 12.3   amended by adding a subdivision to read: 
 12.4      Subd. 10.  [ELECTRIC UTILITY PERSONAL PROPERTY.] Tools, 
 12.5   implements, and machinery integral to an electric generation 
 12.6   system are exempted from property taxes for the 1998 assessment 
 12.7   year and thereafter. 
 12.8      Sec. 5.  Minnesota Statutes 1997 Supplement, section 
 12.9   273.13, subdivision 31, is amended to read: 
 12.10     Subd. 31.  [CLASS 5.] Class 5 property includes:  
 12.11     (1) tools, implements, and machinery of an 
 12.12  electric generating, transmission, or distribution system or a 
 12.13  pipeline system transporting or distributing water, gas, crude 
 12.14  oil, or petroleum products or mains and pipes used in the 
 12.15  distribution of steam or hot or chilled water for heating or 
 12.16  cooling buildings, which are fixtures; 
 12.17     (2) unmined iron ore and low-grade iron-bearing formations 
 12.18  as defined in section 273.14; and 
 12.19     (3) all other property not otherwise classified. 
 12.20     Class 5 property has a class rate of 4.0 percent of market 
 12.21  value for taxes payable in 1998 and thereafter. 
 12.22     Sec. 6.  Minnesota Statutes 1996, section 273.1398, is 
 12.23  amended by adding a subdivision to read: 
 12.24     Subd. 4a.  [UTILITY REPLACEMENT AID.] (a) For property 
 12.25  taxes payable in 1999, each local taxing jurisdiction shall 
 12.26  receive utility replacement aid in an amount equal to the sum of 
 12.27  (1) the taxes payable year 1998 net tax capacity value of tools, 
 12.28  implements, and machinery integral to electric generation 
 12.29  systems multiplied by the jurisdiction's taxes payable year 1998 
 12.30  average net tax capacity local tax rate, plus (2) the taxes 
 12.31  payable year 1998 market value of tools, implements, and 
 12.32  machinery integral to electric generation systems multiplied by 
 12.33  the jurisdiction's taxes payable year 1998 average referendum 
 12.34  market value tax rate.  Each tax rate used in the calculations 
 12.35  required by this paragraph shall exclude the portion of the 
 12.36  property taxes required to be levied for bonded debt under 
 13.1   section 475.61. 
 13.2      (b) For property taxes payable in 2000 through 2008, the 
 13.3   percentage of utility replacement aid paid shall be in 
 13.4   accordance with the following schedule: 
 13.5        Taxes Payable Year         Percentage of Payable 1999
 13.6                                    Utility Replacement Aid
 13.7               2000                       90 percent
 13.8               2001                       80 percent
 13.9               2002                       70 percent
 13.10              2003                       60 percent
 13.11              2004                       50 percent
 13.12              2005                       40 percent
 13.13              2006                       30 percent
 13.14              2007                       20 percent
 13.15              2008                       10 percent
 13.16     For property taxes payable in 2009 and subsequent years, 
 13.17  there shall be no utility replacement aid paid. 
 13.18     (c) If an electric generation facility containing tools, 
 13.19  implements, and machinery that was subject to property taxation 
 13.20  for taxes payable in 1998 ceases to generate electricity for 
 13.21  sale to the consumer before January 1, 2008, the portion of a 
 13.22  local taxing jurisdiction's utility replacement aid attributable 
 13.23  to the facility shall cease to be paid beginning in the 
 13.24  following year. 
 13.25     Sec. 7.  Minnesota Statutes 1996, section 273.1398, is 
 13.26  amended by adding a subdivision to read: 
 13.27     Subd. 4b.  [DEBT REPLACEMENT AID.] (a) For each local 
 13.28  taxing jurisdiction containing property exempted from property 
 13.29  taxes under section 272.02, subdivision 10, the commissioner of 
 13.30  revenue shall determine the ratio of (1) the net tax capacity of 
 13.31  property exempted from property taxes under section 272.02, 
 13.32  subdivision 10, for taxes payable in 1998, to (2) the total net 
 13.33  tax capacity of the jurisdiction for taxes payable in 1998.  By 
 13.34  July 1, 1998, the commissioner shall certify the resulting ratio 
 13.35  to the auditor of each county containing a jurisdiction having a 
 13.36  ratio of at least ten percent. 
 14.1      (b) Each local taxing jurisdiction having a ratio computed 
 14.2   under paragraph (a) of at least ten percent shall be eligible 
 14.3   for debt replacement aid each year, beginning in 1999.  The 
 14.4   amount of aid shall be equal to the ratio determined under 
 14.5   paragraph (a) multiplied by the levy required under section 
 14.6   475.61 to pay principal and interest for bonds issued prior to 
 14.7   March 1, 1998, for the year in which the aid is payable.  Each 
 14.8   county auditor shall report the aid amounts determined under 
 14.9   this subdivision to the commissioner of revenue by April 1 of 
 14.10  the year in which the aid is payable, in a form prescribed by 
 14.11  the commissioner. 
 14.12     Sec. 8.  Minnesota Statutes 1996, section 273.1398, 
 14.13  subdivision 6, is amended to read: 
 14.14     Subd. 6.  [PAYMENT.] The commissioner shall certify the 
 14.15  aids provided in subdivisions 2, 2b, 3, and 5 4a, before 
 14.16  September 1 of the year preceding the distribution year to the 
 14.17  county auditor of the affected local government.  The aids 
 14.18  provided in subdivisions 2, 2b, 3, 4a, and 5 4b, must be paid to 
 14.19  local governments other than school districts at the times 
 14.20  provided in section 477A.015 for payment of local government aid 
 14.21  to taxing jurisdictions, except that the first one-half payment 
 14.22  of disparity reduction aid provided in subdivision 3 must be 
 14.23  paid on or before August 31.  The disparity reduction credit 
 14.24  provided in subdivision 4 must be paid to taxing jurisdictions 
 14.25  other than school districts at the time provided in section 
 14.26  473H.10, subdivision 3.  Aids and credit reimbursements to 
 14.27  school districts must be certified to the commissioner of 
 14.28  children, families, and learning and paid under section 
 14.29  273.1392.  Except for education districts and secondary 
 14.30  cooperatives that receive revenue according to section 124.575, 
 14.31  payment shall not be made to any taxing jurisdiction that has 
 14.32  ceased to levy a property tax.  
 14.33     Sec. 9.  [475A.07] [LOCAL BONDS; STATE GUARANTY.] 
 14.34     Subdivision 1.  [APPLICATION.] This section applies to the 
 14.35  bonds of a local unit of government, if the following conditions 
 14.36  are met: 
 15.1      (1) for taxes payable in 1998, at least 20 percent of the 
 15.2   total net tax capacity of the local government consisted of 
 15.3   property exempted from taxation under section 272.02, 
 15.4   subdivision 10; 
 15.5      (2) the bonds are general obligations to which the full 
 15.6   faith and credit of the local government unit is pledged, 
 15.7   including an unlimited pledge to levy the amount of property 
 15.8   taxes needed to pay the obligations; and 
 15.9      (3) the bonds were outstanding on March 1, 1998, or were 
 15.10  issued to refund bonds that were outstanding on that date. 
 15.11     Subd. 2.  [DEFINITIONS.] (a) For purposes of this section, 
 15.12  the following terms have the meanings given. 
 15.13     (b) "Bond" means any obligation, as defined in section 
 15.14  475.51, subdivision 3, regardless of whether the obligations 
 15.15  were issued under the authority of chapter 475. 
 15.16     (c) "Local government unit" means a statutory or home rule 
 15.17  charter city, county, school district, or special taxing 
 15.18  district with authority to issue general obligation bonds. 
 15.19     Subd. 3.  [STATE GUARANTY.] (a) The state guaranties the 
 15.20  payment of bonds covered by the provisions of this section.  If 
 15.21  a deficiency or a default occurs under any bond covered by this 
 15.22  section, the commissioner of finance shall pay any amount needed 
 15.23  to remedy and correct the deficiency or default.  This guaranty 
 15.24  is permanent and irrevocable. 
 15.25     (b) The guaranty, pledge, and any payment by the 
 15.26  commissioner under paragraph (a) does not relieve the local 
 15.27  governmental unit of its obligation to pay the bonds. 
 15.28     (c) If the commissioner makes a payment under paragraph 
 15.29  (a), the commissioner may recover the amount, plus any 
 15.30  additional costs incurred including interest at the rate 
 15.31  specified in section 297.03, subdivision 1, from the local 
 15.32  governmental unit by: 
 15.33     (1) deducting the amount from state aid payments made to 
 15.34  the local governmental unit; 
 15.35     (2) compelling the levying of property taxes by the local 
 15.36  governmental unit to be paid to the commissioner of finance; 
 16.1      (3) bringing legal action to collect the amounts; or 
 16.2      (4) any combination of the actions in clauses (1) to (3). 
 16.3      Subd. 4.  [APPROPRIATION.] An amount sufficient to provide 
 16.4   any funds needed to pay and administer the guaranty under this 
 16.5   section is appropriated from the general fund to the 
 16.6   commissioner of finance. 
 16.7      Sec. 10.  [DETERMINATION OF ADJUSTED NET TAX CAPACITY.] 
 16.8      The exemption of the electric generation attached machinery 
 16.9   from the property tax base shall be considered a change in net 
 16.10  tax capacity percentage for the purposes of Minnesota Statutes, 
 16.11  section 124.2131. 
 16.12     Sec. 11.  [EFFECTIVE DATE.] 
 16.13     This act is effective beginning with assessment year 1998 
 16.14  and thereafter.