SF 821

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

  1.1                          A bill for an act 
  1.2             relating to taxation; providing property tax reform; 
  1.3             providing for a state takeover of K-12 education 
  1.4             costs; setting state property tax rates; providing 
  1.5             that school operating referenda will be levied as an 
  1.6             income tax surtax; modifying class rates for local 
  1.7             property taxation; reforming the property tax 
  1.8             treatment of low-income housing; expanding the 
  1.9             property tax refund program; providing the 
  1.10            truth-in-budgeting program; modifying state property 
  1.11            tax aid programs; imposing and changing civil 
  1.12            penalties; appropriating money; amending Minnesota 
  1.13            Statutes 1996, sections 122.247, subdivision 3; 
  1.14            122.45, subdivision 3a; 122.531, subdivisions 4a and 
  1.15            9; 122.533; 122.535, subdivision 6; 124.239, 
  1.16            subdivision 5; 124.2601, subdivisions 2 and 3; 
  1.17            124.2711, subdivisions 1 and 5; 124.2713, subdivision 
  1.18            1; 124.2714; 124.2715, subdivision 1; 124.2716, 
  1.19            subdivision 2; 124.2725, subdivisions 2, 6, 13, and 
  1.20            14; 124.2726, subdivisions 1 and 3; 124.2727, 
  1.21            subdivision 6a; 124.312, subdivision 5; 124.313; 
  1.22            124.3201, subdivision 1; 124.4945; 124.574, 
  1.23            subdivision 2c; 124.83, subdivision 3; 124.91, 
  1.24            subdivisions 1, 2, 5, and 7; 124.912, subdivisions 1, 
  1.25            3, 6, and 7; 124.914, subdivisions 1, 2, 3, and 4; 
  1.26            124.916, subdivisions 1, 2, 3, and 4; 124.918, 
  1.27            subdivision 8, and by adding a subdivision; 124A.22, 
  1.28            subdivision 1; 124A.292, subdivision 2; 271.01, 
  1.29            subdivision 5; 273.11, subdivision 1a; 273.121; 
  1.30            273.124, subdivisions 13, 14, and by adding a 
  1.31            subdivision; 273.13, subdivisions 1, 21b, 22, 23, 24, 
  1.32            25, and by adding subdivisions; 273.135, subdivision 
  1.33            2; 273.1391, subdivision 2; 273.1398, subdivision 6; 
  1.34            274.01; 274.13, by adding subdivisions; 275.065, 
  1.35            subdivisions 3, 5a, 6, and by adding a subdivision; 
  1.36            275.08, subdivision 1b; 276.04, subdivision 2; 
  1.37            276A.01, subdivisions 4, 5, and 16; 276A.04; 276A.05, 
  1.38            subdivisions 1 and 5; 276A.06, subdivisions 2, 3, 5, 
  1.39            and 7; 290.06, by adding a subdivision; 290A.03, 
  1.40            subdivisions 6, 11, and 13; 290A.04, subdivisions 1, 
  1.41            2, 2h, and 6; 290A.07, subdivision 1; 290A.19; 298.24, 
  1.42            subdivision 1; 298.28, subdivisions 2, 3, 4, 5, and by 
  1.43            adding subdivisions; 473F.02, subdivisions 4, 5, and 
  1.44            24; 473F.06; 473F.07, subdivisions 1 and 5; 473F.08, 
  1.45            subdivisions 2, 3, 5, and 6; 477A.011, subdivisions 
  1.46            20, 35, 37, and by adding subdivisions; 477A.013, 
  2.1             subdivisions 1, 8, and 9; and 477A.03, subdivision 2; 
  2.2             proposing coding for new law in Minnesota Statutes, 
  2.3             chapters 124A; 273; 290; 462A; and 477A; repealing 
  2.4             Minnesota Statutes 1996, sections 124.2134; 124.225, 
  2.5             subdivisions 1, 3a, 7a, 7b, 7d, 7e, 7f, 8a, 8k, 8l, 
  2.6             8m, 9, 10, 13, 14, 15, 16, and 17; 124.226; 124.2442; 
  2.7             124.2601, subdivisions 4, 5, and 6; 124.2711, 
  2.8             subdivisions 2a and 3; 124.2713, subdivisions 6, 6a, 
  2.9             6b, and 7; 124.2715, subdivisions 2 and 3; 124.2716, 
  2.10            subdivisions 3 and 4; 124.2725, subdivisions 3, 4, 5, 
  2.11            and 7; 124.2727, subdivisions 6b, 6c, and 9; 124.314, 
  2.12            subdivision 2; 124.321; 124.91, subdivision 4; 
  2.13            124.912, subdivision 2; 124A.029; 124A.03, 
  2.14            subdivisions 1b, 1c, 1d, 1e, 1f, 1g, 1h, 1i, 2, 2a, 
  2.15            2b, 3b, and 3c; 124A.0311; 124A.22, subdivisions 4a, 
  2.16            4b, 8a, 8b, 13d, and 13e; 124A.23, subdivisions 1, 2, 
  2.17            3, and 4; 124A.26, subdivisions 2 and 3; 124A.292, 
  2.18            subdivisions 3 and 4; 124A.697; 124A.698; 124A.70, 
  2.19            subdivisions 1, 2, 3a, and 5; 124A.71; 124A.711; 
  2.20            124A.72; 124A.73; 270B.12, subdivision 11; 273.13, 
  2.21            subdivisions 21a, 31, and 32; 273.1315; 273.1317; 
  2.22            273.1318; 273.1398, subdivisions 2, 2c, 2d, 3, and 3a; 
  2.23            273.1399; 273.166; 275.02; 275.08, subdivisions 1c and 
  2.24            1d; 275.61; 276.012; 276A.06, subdivision 9; 290A.03, 
  2.25            subdivisions 12a and 14; 290A.04, subdivision 2h; 
  2.26            290A.055; 290A.07, subdivisions 2a and 3; 290A.26; and 
  2.27            473F.08, subdivision 8a; Laws 1992, chapter 499, 
  2.28            article 7, section 31; and Laws 1995, chapter 264, 
  2.29            article 4, as amended. 
  2.30  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.31                             ARTICLE 1
  2.32               PROPERTY TAX CLASSIFICATION AND RATES
  2.33     Section 1.  Minnesota Statutes 1996, section 273.121, is 
  2.34  amended to read: 
  2.35     273.121 [VALUATION OF REAL PROPERTY, NOTICE.] 
  2.36     Any county assessor or city assessor having the powers of a 
  2.37  county assessor, valuing or classifying taxable real property 
  2.38  shall in each year notify those persons whose property is to be 
  2.39  assessed or reclassified that year if the person's address is 
  2.40  known to the assessor, otherwise the occupant of the property.  
  2.41  The notice shall be in writing and shall be sent by ordinary 
  2.42  mail at least ten days before the meeting of the local board of 
  2.43  review or equalization.  It shall contain:  (1) the market 
  2.44  value, (2) the limited market value under section 273.11, 
  2.45  subdivision 1a, (3) the qualifying amount of any improvements 
  2.46  under section 273.11, subdivision 16, (4) the market value 
  2.47  subject to taxation after subtracting the amount of any 
  2.48  qualifying improvements, (5) a note that the property's tax will 
  2.49  be based upon the equalized market value, which has not yet been 
  2.50  determined but which is directly computed from the market value 
  3.1   subject to taxation, (6) the new classification, (6) (7) a note 
  3.2   that if the property is homestead and at least 35 years old, 
  3.3   improvements made to the property may be eligible for a 
  3.4   valuation exclusion under section 273.11, subdivision 16, (7) (8)
  3.5   the assessor's office address, and (8) (9) the dates, places, 
  3.6   and times set for the meetings of the local board of review or 
  3.7   equalization and the county board of equalization.  If the 
  3.8   assessment roll is not complete, the notice shall be sent by 
  3.9   ordinary mail at least ten days prior to the date on which the 
  3.10  board of review has adjourned.  The assessor shall attach to the 
  3.11  assessment roll a statement that the notices required by this 
  3.12  section have been mailed.  Any assessor who is not provided 
  3.13  sufficient funds from the assessor's governing body to provide 
  3.14  such notices, may make application to the commissioner of 
  3.15  revenue to finance such notices.  The commissioner of revenue 
  3.16  shall conduct an investigation and, if satisfied that the 
  3.17  assessor does not have the necessary funds, issue a 
  3.18  certification to the commissioner of finance of the amount 
  3.19  necessary to provide such notices.  The commissioner of finance 
  3.20  shall issue a warrant for such amount and shall deduct such 
  3.21  amount from any state payment to such county or municipality.  
  3.22  The necessary funds to make such payments are hereby 
  3.23  appropriated.  Failure to receive the notice shall in no way 
  3.24  affect the validity of the assessment, the resulting tax, the 
  3.25  procedures of any board of review or equalization, or the 
  3.26  enforcement of delinquent taxes by statutory means. 
  3.27     Sec. 2.  Minnesota Statutes 1996, section 273.124, 
  3.28  subdivision 14, is amended to read: 
  3.29     Subd. 14.  [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 
  3.30  (a) Real estate of less than ten acres that is the homestead of 
  3.31  its owner must be classified as class 2a qualifies for treatment 
  3.32  as an agricultural homestead under section 273.13, subdivision 
  3.33  23, paragraph (a), if:  
  3.34     (1) the parcel on which the house is located is contiguous 
  3.35  on at least two sides to (i) agricultural land, (ii) land owned 
  3.36  or administered by the United States Fish and Wildlife Service, 
  4.1   or (iii) land administered by the department of natural 
  4.2   resources on which in lieu taxes are paid under sections 477A.11 
  4.3   to 477A.14; 
  4.4      (2) its owner also owns a noncontiguous parcel of 
  4.5   agricultural land that is at least 20 acres; 
  4.6      (3) the noncontiguous land is located not farther than two 
  4.7   townships or cities, or a combination of townships or cities 
  4.8   from the homestead; and 
  4.9      (4) the agricultural use value of the noncontiguous land 
  4.10  and farm buildings is equal to at least 50 percent of the market 
  4.11  value of the house, garage, and one acre of land. 
  4.12     Homesteads initially classified as class 2a qualifying 
  4.13  under the provisions of this subdivision shall remain classified 
  4.14  as class 2a qualified, irrespective of subsequent changes in the 
  4.15  use of adjoining properties, as long as the homestead remains 
  4.16  under the same ownership, the owner owns a noncontiguous parcel 
  4.17  of agricultural land that is at least 20 acres, and the 
  4.18  agricultural use value qualifies under clause (4). 
  4.19     (b) Noncontiguous land shall be included as part of a an 
  4.20  agricultural homestead under section 273.13, subdivision 23, 
  4.21  paragraph (a), only if the homestead is classified as class 2a 
  4.22  and the detached land is located in the same township or city, 
  4.23  or not farther than two townships or cities or combination 
  4.24  thereof from the remainder of the homestead.  
  4.25     (c) Agricultural land used for purposes of a homestead and 
  4.26  actively farmed by a person holding a vested remainder interest 
  4.27  in it must be classified as a homestead under section 273.13, 
  4.28  subdivision 23, paragraph (a).  If agricultural land is 
  4.29  classified class 2a qualifies for homestead treatment, any other 
  4.30  dwellings on the land used for purposes of a homestead as a 
  4.31  residence by persons holding vested remainder interests who are 
  4.32  actively engaged in farming the property, and up to one acre of 
  4.33  the land surrounding each homestead dwelling and reasonably 
  4.34  necessary for the use of the dwelling as a home, must also be 
  4.35  assessed class 2a qualify for homestead treatment. 
  4.36     Sec. 3.  Minnesota Statutes 1996, section 273.124, is 
  5.1   amended by adding a subdivision to read: 
  5.2      Subd. 19.  [LEASE-PURCHASE PROGRAM.] Qualifying buildings 
  5.3   and appurtenances, together with the land on which they are 
  5.4   located, are classified as homesteads, if the following 
  5.5   qualifications are met: 
  5.6      (1) the property is leased for up to a five-year period by 
  5.7   the occupant under a lease-purchase program administered by the 
  5.8   Minnesota housing finance agency or a housing and redevelopment 
  5.9   authority under sections 469.001 to 469.047; 
  5.10     (2) the occupant's income is no greater than 80 percent of 
  5.11  the county or area median income, adjusted for family size; 
  5.12     (3) the building consists of one or two dwelling units; 
  5.13     (4) the lease agreement provides that part of the lease 
  5.14  payment is escrowed as a nonrefundable down payment on the 
  5.15  housing; 
  5.16     (5) the administering agency verifies the occupant's income 
  5.17  eligibility and certifies to the county assessor that the 
  5.18  occupant meets the income standards; and 
  5.19     (6) the property owner applies to the county assessor by 
  5.20  May 30 of each year. 
  5.21     For purposes of this subdivision, "qualifying buildings and 
  5.22  appurtenances" means a one- or two-unit residential building 
  5.23  which was unoccupied, abandoned, and boarded for at least six 
  5.24  months.  
  5.25     Sec. 4.  [273.126] [QUALIFYING LOW-INCOME RENTAL HOUSING.] 
  5.26     Subdivision 1.  [QUALIFYING RULES.] The market value of a 
  5.27  rental housing unit qualifies for assessment under subclass 4x 
  5.28  if: 
  5.29     (1) it is occupied by individuals meeting the income limits 
  5.30  under subdivision 2; 
  5.31     (2) a rent restriction agreement under subdivision 3 
  5.32  applies; 
  5.33     (3) the unit meets the minimum housing quality standards 
  5.34  under subdivision 4; and 
  5.35     (4) the Minnesota housing finance agency certifies to the 
  5.36  local assessor that the unit qualifies. 
  6.1      Subd. 2.  [INCOME LIMITS.] (a) In order to qualify under 
  6.2   subclass 4x, a unit must be occupied by an individual or 
  6.3   individuals whose income is at or below 60 percent of the median 
  6.4   area gross income.  If the resident's income met the requirement 
  6.5   when the resident first occupied the unit, the income of the 
  6.6   resident continues to qualify. 
  6.7      (b) For purposes of this section, "median area gross income"
  6.8   means the greater of (1) the median gross income for the area 
  6.9   determined under section 42 of the Internal Revenue Code of 
  6.10  1986, as amended through December 31, 1995, or (2) the median 
  6.11  gross income for the state.  The median gross income must be 
  6.12  adjusted for family size. 
  6.13     (c) The owner or manager of the property may comply with 
  6.14  this subdivision by obtaining written statements from the 
  6.15  residents, at least annually, that their incomes are at or below 
  6.16  the limit.  
  6.17     Subd. 3.  [RENT RESTRICTIONS.] (a) In order to qualify 
  6.18  under subclass 4x, a unit must be subject to a rent restriction 
  6.19  agreement with the housing finance agency for a period of at 
  6.20  least five years.  The agreement must be in effect and apply to 
  6.21  the rents to be charged for the year in which the property taxes 
  6.22  are payable.  The agreement must provide that the restrictions 
  6.23  apply to each year of the period, regardless of whether the unit 
  6.24  is occupied by an individual with qualifying income or whether 
  6.25  subclass 4x applies.  The rent restriction agreement must 
  6.26  provide for rents for the unit to be no higher than 30 percent 
  6.27  of 60 percent of the median area gross income.  The definition 
  6.28  of median area gross income specified in this section applies. 
  6.29     (b) If the owner or manager does not comply with the rent 
  6.30  restriction agreement, the provisions of subdivision 5 apply.  
  6.31  The additional taxes for purposes of subdivision 5 for a 
  6.32  violation are the lesser of (1) increased taxes under 
  6.33  subdivision 5 for any year of the period in which subclass 4x 
  6.34  did not apply or (2) 150 percent of the rent charged in excess 
  6.35  of the rent restriction agreement. 
  6.36     Subd. 4.  [MINIMUM HOUSING STANDARDS.] In order to qualify 
  7.1   under subclass 4x, a unit must be certified by the housing 
  7.2   finance agency to meet the minimum housing standards established 
  7.3   under section 462A.071. 
  7.4      Subd. 5.  [ADDITIONAL TAXES.] Notwithstanding the 
  7.5   provisions of section 273.01, 274.01, or any other law, if the 
  7.6   assessor determines that the provisions of this section have not 
  7.7   been met for any period during which a unit was classified under 
  7.8   subclass 4x, an additional tax is imposed.  The additional tax 
  7.9   equals the tax which would have been imposed if the property had 
  7.10  not been classified under subclass 4x, and the tax actually 
  7.11  imposed, during the period of noncompliance.  The additional tax 
  7.12  must be extended against the property on the tax list for the 
  7.13  current year.  No interest or penalties may be levied on 
  7.14  additional taxes if timely paid.  The tax imposed by this 
  7.15  subdivision is a lien upon the property assessed to the same 
  7.16  extent and for the same duration as other taxes imposed on the 
  7.17  property. 
  7.18     Sec. 5.  Minnesota Statutes 1996, section 273.13, 
  7.19  subdivision 1, is amended to read: 
  7.20     Subdivision 1.  [HOW CLASSIFIED.] All real and personal 
  7.21  property subject to a general property tax and not subject to 
  7.22  any gross earnings or other lieu in-lieu tax is hereby 
  7.23  classified for purposes of taxation as provided by this section. 
  7.24  All of a property's taxable value must be assigned to the 
  7.25  classes defined in this section provided, however, that the 
  7.26  value may be split into more than one class. 
  7.27     Sec. 6.  Minnesota Statutes 1996, section 273.13, is 
  7.28  amended by adding a subdivision to read: 
  7.29     Subd. 1a.  [CLASS RATES; LOCAL PROPERTY TAXES.] The 
  7.30  following class rates apply to each class of property described 
  7.31  in this section in determining net tax capacity for levying 
  7.32  local property taxes: 
  7.33           Class                            Class rate
  7.34      1 (residential)                       1.0 percent
  7.35      2 (agricultural)                      0.5 percent
  7.36      3 (commercial-industrial)             2.0 percent
  8.1       4 (apartment)                         1.5 percent
  8.2      Sec. 7.  Minnesota Statutes 1996, section 273.13, is 
  8.3   amended by adding a subdivision to read: 
  8.4      Subd. 1b.  [TAX RATES; STATE PROPERTY TAX.] A state tax is 
  8.5   imposed on each parcel of property equal to the property's 
  8.6   equalized market value multiplied by the applicable rate: 
  8.7       Class                           State tax rate
  8.8   1 (residential)                     1.2 percent
  8.9   2 (agricultural)                    1.2 percent
  8.10  3 (commercial-industrial)           2.4 percent
  8.11  4 (apartments)                      1.2 percent
  8.12     All property classified as subclass 1x, 2x, 3x, or 4x is 
  8.13  exempt from the state property tax. 
  8.14     Sec. 8.  Minnesota Statutes 1996, section 273.13, is 
  8.15  amended by adding a subdivision to read:  
  8.16     Subd. 1c.  [TRANSITION STATE TAX RATES.] (a) The state tax 
  8.17  rate applying to class 4 property which does not qualify as 
  8.18  subclass 4a or 4x, and which does not qualify for taxation under 
  8.19  paragraph (c), is 1.6 percent for taxes payable in 1999 and 1.49 
  8.20  percent for taxes payable in 2000. 
  8.21     (b) The state tax rate applying to subclass 4a property is 
  8.22  0.8 percent for taxes payable in 1999 and one percent for taxes 
  8.23  payable in 2000. 
  8.24     (c)(1) The state tax rates under this paragraph apply for 
  8.25  property taxes payable in 1999 to 2002 for class 4 properties 
  8.26  which do not qualify as subclass 4x property, but 
  8.27     (i) which were classified as class 4c or class 4d for taxes 
  8.28  payable in 1998, or 
  8.29     (ii) which are constructed or substantially rehabilitated 
  8.30  during calendar year 1997 and would have qualified as class 4c 
  8.31  or class 4d for taxes payable in 1999 under section 273.13, 
  8.32  subdivision 25.  
  8.33     (2) To qualify for the state tax rates under this 
  8.34  paragraph, the building's owner must annually certify to the 
  8.35  assessor in writing that the property, building, or unit 
  8.36  continues to qualify under the laws in effect and applicable to 
  9.1   its classification for taxes payable in 1998. 
  9.2      (3) A property no longer qualifies under this paragraph: 
  9.3      (i) if it is transferred or sold; or 
  9.4      (ii) if loans, that have a principal amount equal to more 
  9.5   than 25 percent of the property's market value and that are 
  9.6   secured by the property, are refinanced. 
  9.7      (4) For the market value of properties described in this 
  9.8   paragraph, the following state tax rates apply: 
  9.9      (i) for taxes payable in 1999, a state tax rate of 0.4 
  9.10  percent; 
  9.11     (ii) for taxes payable in 2000, a state tax rate of 0.6 
  9.12  percent; 
  9.13     (iii) for taxes payable in 2001, a state tax rate of 0.8 
  9.14  percent; and 
  9.15     (iv) for taxes payable in 2002, a state tax rate of one 
  9.16  percent. 
  9.17     Sec. 9.  Minnesota Statutes 1996, section 273.13, 
  9.18  subdivision 21b, is amended to read: 
  9.19     Subd. 21b.  [EQUALIZED MARKET VALUE; NET TAX CAPACITY.] (a) 
  9.20  Gross tax capacity means the product of the appropriate gross 
  9.21  class rates in this section and market values. Equalized market 
  9.22  value means a property's value determined under section 273.11, 
  9.23  divided by the most recent assessment/sales ratio applicable to 
  9.24  the property, considering both the type of property and the 
  9.25  location of the property, as determined under section 124.2131, 
  9.26  subdivision 1. 
  9.27     (b) Net tax capacity means the product of the appropriate 
  9.28  net class rates in this section and equalized market values. 
  9.29     Sec. 10.  Minnesota Statutes 1996, section 273.13, 
  9.30  subdivision 22, is amended to read: 
  9.31     Subd. 22.  [CLASS 1.] (a) Except as provided in subdivision 
  9.32  23, Class 1 property consists of real estate which is (1) used 
  9.33  for residential and used for homestead purposes is class 1.  The 
  9.34  market value of class 1a property must be determined based upon 
  9.35  the value of the house, garage, and land., including residential 
  9.36  structures on agricultural property, or (2) devoted to temporary 
 10.1   and seasonal residential occupancy for recreation purposes.  
 10.2      (b) A residential property qualifies for class 1 only if it 
 10.3   contains no more than three housing units. 
 10.4      (c) Seasonal recreational property qualifies for class 1 
 10.5   only if it is not used for commercial purposes for more than 250 
 10.6   days in the year preceding the year of assessment.  For purposes 
 10.7   of this paragraph, property is devoted to a commercial purpose 
 10.8   on a specific day if any portion of the property is used for 
 10.9   residential occupancy, and a fee is charged for residential 
 10.10  occupancy.  
 10.11     (d) Class 1 includes commercial use real property used 
 10.12  exclusively for recreational purposes in conjunction with class 
 10.13  1 property devoted to temporary and seasonal residential 
 10.14  occupancy for recreational purposes, up to a total of two acres, 
 10.15  provided the property is not devoted to commercial recreational 
 10.16  use for more than 250 days in the year preceding the year of 
 10.17  assessment and is located within two miles of the class 1 
 10.18  property with which it is used.  Owners of real property devoted 
 10.19  to temporary and seasonal residential occupancy for recreational 
 10.20  purposes and all or a portion of which was devoted to commercial 
 10.21  purposes for not more than 250 days in the year preceding the 
 10.22  year of assessment desiring classification as class 1, must 
 10.23  submit a declaration to the assessor designating the cabins or 
 10.24  units occupied for 250 days or less in the year preceding the 
 10.25  year of assessment by January 15 of the assessment year.  Those 
 10.26  cabins or units and a proportionate share of the land on which 
 10.27  they are located will be designated class 1 as otherwise 
 10.28  provided.  The remainder of the cabins or units and a 
 10.29  proportionate share of the land on which they are located will 
 10.30  be designated as class 3.  The owner of property desiring 
 10.31  designation as class 1 property must provide guest registers or 
 10.32  other records demonstrating that the units for which class 1 
 10.33  designation is sought were not occupied for more than 250 days 
 10.34  in the year preceding the assessment if so requested.  The 
 10.35  portion of a property operated as a (1) restaurant, (2) bar, (3) 
 10.36  gift shop, and (4) other nonresidential facility operated on a 
 11.1   commercial basis not directly related to temporary and seasonal 
 11.2   residential occupancy for recreational purposes shall not 
 11.3   qualify for class 1. 
 11.4      The first $72,000 of market value of class 1a property has 
 11.5   a net class rate of one percent of its market value and a gross 
 11.6   class rate of 2.17 percent of its market value.  For taxes 
 11.7   payable in 1992, the market value of class 1a property that 
 11.8   exceeds $72,000 but does not exceed $115,000 has a class rate of 
 11.9   two percent of its market value; and the market value of class 
 11.10  1a property that exceeds $115,000 has a class rate of 2.5 
 11.11  percent of its market value.  For taxes payable in 1993 and 
 11.12  thereafter, the market value of class 1a property that exceeds 
 11.13  $72,000 has a class rate of two percent. 
 11.14     (b) Class 1b property includes homestead real estate or 
 11.15  homestead manufactured homes used for the purposes of a 
 11.16  homestead by 
 11.17     (1) any blind person, or the blind person and the blind 
 11.18  person's spouse; or 
 11.19     (2) any person, hereinafter referred to as "veteran," who: 
 11.20     (i) served in the active military or naval service of the 
 11.21  United States; and 
 11.22     (ii) is entitled to compensation under the laws and 
 11.23  regulations of the United States for permanent and total 
 11.24  service-connected disability due to the loss, or loss of use, by 
 11.25  reason of amputation, ankylosis, progressive muscular 
 11.26  dystrophies, or paralysis, of both lower extremities, such as to 
 11.27  preclude motion without the aid of braces, crutches, canes, or a 
 11.28  wheelchair; and 
 11.29     (iii) has acquired a special housing unit with special 
 11.30  fixtures or movable facilities made necessary by the nature of 
 11.31  the veteran's disability, or the surviving spouse of the 
 11.32  deceased veteran for as long as the surviving spouse retains the 
 11.33  special housing unit as a homestead; or 
 11.34     (3) any person who: 
 11.35     (i) is permanently and totally disabled and 
 11.36     (ii) receives 90 percent or more of total income from 
 12.1      (A) aid from any state as a result of that disability; or 
 12.2      (B) supplemental security income for the disabled; or 
 12.3      (C) workers' compensation based on a finding of total and 
 12.4   permanent disability; or 
 12.5      (D) social security disability, including the amount of a 
 12.6   disability insurance benefit which is converted to an old age 
 12.7   insurance benefit and any subsequent cost of living increases; 
 12.8   or 
 12.9      (E) aid under the federal Railroad Retirement Act of 1937, 
 12.10  United States Code Annotated, title 45, section 228b(a)5; or 
 12.11     (F) a pension from any local government retirement fund 
 12.12  located in the state of Minnesota as a result of that 
 12.13  disability; or 
 12.14     (G) pension, annuity, or other income paid as a result of 
 12.15  that disability from a private pension or disability plan, 
 12.16  including employer, employee, union, and insurance plans and 
 12.17     (iii) has household income as defined in section 290A.03, 
 12.18  subdivision 5, of $50,000 or less; or 
 12.19     (4) any person who is permanently and totally disabled and 
 12.20  whose household income as defined in section 290A.03, 
 12.21  subdivision 5, is 150 percent or less of the federal poverty 
 12.22  level. 
 12.23     Property is classified and assessed under clause (4) only 
 12.24  if the government agency or income-providing source certifies, 
 12.25  upon the request of the homestead occupant, that the homestead 
 12.26  occupant satisfies the disability requirements of this paragraph.
 12.27     Property is classified and assessed pursuant to clause (1) 
 12.28  only if the commissioner of economic security certifies to the 
 12.29  assessor that the homestead occupant satisfies the requirements 
 12.30  of this paragraph.  
 12.31     Permanently and totally disabled for the purpose of this 
 12.32  subdivision means a condition which is permanent in nature and 
 12.33  totally incapacitates the person from working at an occupation 
 12.34  which brings the person an income.  The first $32,000 market 
 12.35  value of class 1b property has a net class rate of .45 percent 
 12.36  of its market value and a gross class rate of .87 percent of its 
 13.1   market value.  The remaining market value of class 1b property 
 13.2   has a gross or net class rate using the rates for class 1 or 
 13.3   class 2a property, whichever is appropriate, of similar market 
 13.4   value.  
 13.5      (c) Class 1c property is (e) Class 1 includes commercial 
 13.6   use real property that abuts a lakeshore line and is devoted to 
 13.7   temporary and seasonal residential occupancy for recreational 
 13.8   purposes but not devoted to commercial purposes for more than 
 13.9   250 days in the year preceding the year of assessment, and that 
 13.10  includes a portion used as a homestead by the owner, which 
 13.11  includes a dwelling occupied as a homestead by a shareholder of 
 13.12  a corporation that owns the resort or a partner in a partnership 
 13.13  that owns the resort, even if the title to the homestead is held 
 13.14  by the corporation or partnership.  For purposes of this clause, 
 13.15  property is devoted to a commercial purpose on a specific day if 
 13.16  any portion of the property, excluding the portion used 
 13.17  exclusively as a homestead, is used for residential occupancy 
 13.18  and a fee is charged for residential occupancy.  Class 1c 
 13.19  property has a class rate of one percent of total market value 
 13.20  for taxes payable in 1993 and thereafter with the following 
 13.21  limitation:  the area of the property must not exceed 100 feet 
 13.22  of lakeshore footage for each cabin or campsite located on the 
 13.23  property up to a total of 800 feet and 500 feet in depth, 
 13.24  measured away from the lakeshore.  
 13.25     (f) Subclass 1x consists of the first tier of market value 
 13.26  of each class 1 property that (1) is used for residential 
 13.27  purposes and qualifies as a homestead under section 273.124, (2) 
 13.28  is used for noncommercial seasonal recreational residential 
 13.29  purposes, or (3) is used for homestead commercial seasonal 
 13.30  recreational residential purposes as defined in paragraph (e).  
 13.31     (g) The valuation limit for the first tier in paragraph 
 13.32  (f), clauses (1) and (2), is $115,000, adjusted for inflation 
 13.33  under subdivision 34.  The valuation limit for the first tier in 
 13.34  paragraph (f), clause (3), is $230,000, adjusted for inflation 
 13.35  under subdivision 34.  
 13.36     Sec. 11.  Minnesota Statutes 1996, section 273.13, 
 14.1   subdivision 23, is amended to read: 
 14.2      Subd. 23.  [CLASS 2.] (a) Class 2a 2 property is consists 
 14.3   of agricultural land including any improvements that is 
 14.4   homesteaded and structures used for agricultural purposes.  In 
 14.5   the case of a property qualifying as an agricultural homestead 
 14.6   under section 273.124, the market value of the house and garage 
 14.7   and immediately surrounding one acre of land has the same class 
 14.8   rates as class 1a property under subdivision 22.  The value of 
 14.9   the remaining land including improvements up to $115,000 has a 
 14.10  net class rate of .45 percent of market value and a gross class 
 14.11  rate of 1.75 percent of market value.  The remaining value of 
 14.12  class 2a property over $115,000 of market value that does not 
 14.13  exceed 320 acres has a net class rate of one percent of market 
 14.14  value, and a gross class rate of 2.25 percent of market value.  
 14.15  The remaining property over the $115,000 market value in excess 
 14.16  of 320 acres has a class rate of 1.5 percent of market value, 
 14.17  and a gross class rate of 2.25 percent of market value is class 
 14.18  1 property and the remainder of the homestead is class 2.  
 14.19     (b) Class 2b 2 includes property that is (1) real estate, 
 14.20  rural in character and used exclusively for growing trees for 
 14.21  timber, lumber, and wood and wood products; (2) real estate that 
 14.22  is not improved with a structure and is used exclusively for 
 14.23  growing trees for timber, lumber, and wood and wood products, if 
 14.24  the owner has participated or is participating in a cost-sharing 
 14.25  program for afforestation, reforestation, or timber stand 
 14.26  improvement on that particular property, administered or 
 14.27  coordinated by the commissioner of natural resources; (3) real 
 14.28  estate that is nonhomestead agricultural land; or (4) (3) a 
 14.29  landing area or public access area of a privately owned public 
 14.30  use airport.  Class 2b property has a net class rate of 1.5 
 14.31  percent of market value, and a gross class rate of 2.25 percent 
 14.32  of market value.  
 14.33     (c) Agricultural land as used in this section means 
 14.34  contiguous acreage of ten acres or more, primarily used during 
 14.35  the preceding year for agricultural purposes.  Agricultural use 
 14.36  may include pasture, timber, waste, unusable wild land, and land 
 15.1   included in state or federal farm or conservation programs.  
 15.2   "Agricultural purposes" as used in this section means the 
 15.3   raising or cultivation of agricultural products.  Land enrolled 
 15.4   in the Reinvest in Minnesota program under sections 103F.505 to 
 15.5   103F.531 or the federal Conservation Reserve Program as 
 15.6   contained in Public Law Number 99-198, and consisting of a 
 15.7   minimum of ten contiguous acres, shall be classified as 
 15.8   agricultural.  Agricultural classification for property shall be 
 15.9   determined with respect to the use of the whole parcel, and not 
 15.10  based upon the market value of any residential structures on the 
 15.11  parcel or contiguous parcels under the same ownership. 
 15.12     (d) Real estate of less than ten acres used principally for 
 15.13  raising or cultivating agricultural products, shall be 
 15.14  considered as agricultural land, if it is not used primarily for 
 15.15  residential purposes.  
 15.16     (e) The term "agricultural products" as used in this 
 15.17  subdivision includes:  
 15.18     (1) livestock, dairy animals, dairy products, poultry and 
 15.19  poultry products, fur-bearing animals, horticultural and nursery 
 15.20  stock described in sections 18.44 to 18.61, fruit of all kinds, 
 15.21  vegetables, forage, grains, bees, and apiary products by the 
 15.22  owner; 
 15.23     (2) fish bred for sale and consumption if the fish breeding 
 15.24  occurs on land zoned for agricultural use; 
 15.25     (3) the commercial boarding of horses if the boarding is 
 15.26  done in conjunction with raising or cultivating agricultural 
 15.27  products as defined in clause (1); 
 15.28     (4) property which is owned and operated by nonprofit 
 15.29  organizations used for equestrian activities, excluding racing; 
 15.30  and 
 15.31     (5) game birds and waterfowl bred and raised for use on a 
 15.32  shooting preserve licensed under section 97A.115.  
 15.33     (f) If a parcel used for agricultural purposes is also used 
 15.34  for commercial or industrial purposes, including but not limited 
 15.35  to:  
 15.36     (1) wholesale and retail sales; 
 16.1      (2) processing of raw agricultural products or other goods; 
 16.2      (3) warehousing or storage of processed goods; and 
 16.3      (4) office facilities for the support of the activities 
 16.4   enumerated in clauses (1), (2), and (3), 
 16.5   the assessor shall classify the part of the parcel used for 
 16.6   agricultural purposes as class 1b, 2a, or 2b, whichever is 
 16.7   appropriate 2, and the remainder in the class appropriate to its 
 16.8   use.  The grading, sorting, and packaging of raw agricultural 
 16.9   products for first sale is considered an agricultural purpose.  
 16.10  A greenhouse or other building where horticultural or nursery 
 16.11  products are grown that is also used for the conduct of retail 
 16.12  sales must be classified as agricultural if it is primarily used 
 16.13  for the growing of horticultural or nursery products from seed, 
 16.14  cuttings, or roots and occasionally as a showroom for the retail 
 16.15  sale of those products.  Use of a greenhouse or building only 
 16.16  for the display of already grown horticultural or nursery 
 16.17  products does not qualify as an agricultural purpose.  
 16.18     The assessor shall determine and list separately on the 
 16.19  records the market value of the homestead dwelling and the one 
 16.20  acre of land on which that dwelling is located.  If any farm 
 16.21  buildings or structures are located on this homesteaded acre of 
 16.22  land, their market value shall not be included in this separate 
 16.23  determination.  
 16.24     (g) To qualify for classification under paragraph (b), 
 16.25  clause (4) (3), a privately owned public use airport must be 
 16.26  licensed as a public airport under section 360.018.  For 
 16.27  purposes of paragraph (b), clause (4) (3), "landing area" means 
 16.28  that part of a privately owned public use airport properly 
 16.29  cleared, regularly maintained, and made available to the public 
 16.30  for use by aircraft and includes runways, taxiways, aprons, and 
 16.31  sites upon which are situated landing or navigational aids.  A 
 16.32  landing area also includes land underlying both the primary 
 16.33  surface and the approach surfaces that comply with all of the 
 16.34  following:  
 16.35     (i) the land is properly cleared and regularly maintained 
 16.36  for the primary purposes of the landing, taking off, and taxiing 
 17.1   of aircraft; but that portion of the land that contains 
 17.2   facilities for servicing, repair, or maintenance of aircraft is 
 17.3   not included as a landing area; 
 17.4      (ii) the land is part of the airport property; and 
 17.5      (iii) the land is not used for commercial or residential 
 17.6   purposes. 
 17.7      The land contained in a landing area under paragraph (b), 
 17.8   clause (4) (3), must be described and certified by the 
 17.9   commissioner of transportation.  The certification is effective 
 17.10  until it is modified, or until the airport or landing area no 
 17.11  longer meets the requirements of paragraph (b), clause (4) (3).  
 17.12  For purposes of paragraph (b), clause (4) (3), "public access 
 17.13  area" means property used as an aircraft parking ramp, apron, or 
 17.14  storage hangar, or an arrival and departure building in 
 17.15  connection with the airport. 
 17.16     (h) Subclass 2x consists of the first tier of class 2 
 17.17  market value of each homestead agricultural property.  The 
 17.18  valuation limit for the first tier is $200,000, adjusted for 
 17.19  inflation under subdivision 34. 
 17.20     Sec. 12.  Minnesota Statutes 1996, section 273.13, 
 17.21  subdivision 24, is amended to read: 
 17.22     Subd. 24.  [CLASS 3.] (a) Class 3 consists of commercial 
 17.23  and industrial property and utility real and personal 
 17.24  property, except class 5 property as identified in subdivision 
 17.25  31, clause (1), is class 3a.  It has a class rate of three 
 17.26  percent including: 
 17.27     (1) tools, implements, and machinery of an electric 
 17.28  generating, transmission, or distribution system or a pipeline 
 17.29  system transporting or distributing water, gas, crude oil, or 
 17.30  petroleum products or mains and pipes used in the distribution 
 17.31  of steam or hot or chilled water for heating or cooling 
 17.32  buildings, which are fixtures; 
 17.33     (2) unmined iron ore and low-grade iron-bearing formations 
 17.34  as defined in section 273.14; and 
 17.35     (3) all other property not otherwise classified. 
 17.36     (b) Subclass 3x consists of the first $100,000 $60,000 of 
 18.1   each class 3 property's market value for taxes payable in 1993 
 18.2   and thereafter, and 5.06 percent of the market value over 
 18.3   $100,000., provided that in the case of 
 18.4   state-assessed commercial, industrial, and utility property 
 18.5   owned by one person or entity, only one parcel has a reduced 
 18.6   class rate on the first $100,000 of market value. is eligible 
 18.7   for inclusion in subclass 3x, and provided that in the case of 
 18.8   other commercial, industrial, and utility property owned by one 
 18.9   person or entity, only one parcel in each county has a reduced 
 18.10  class rate on the first $100,000 of market value is eligible for 
 18.11  inclusion in subclass 3x, except that: 
 18.12     (1) if the market value of the parcel is less than 
 18.13  $100,000 $60,000, and additional parcels are owned by the same 
 18.14  person or entity in the same city or town within that 
 18.15  county, the reduced class rate shall be applied up to a combined 
 18.16  total market value of $100,000 $60,000 for all parcels owned by 
 18.17  the same person or entity in the same city or town within the 
 18.18  county is eligible for subclass 3x; 
 18.19     (2) in the case of grain, fertilizer, and feed elevator 
 18.20  facilities, as defined in section 18C.305, subdivision 1, or 
 18.21  232.21, subdivision 8, the limitation to one parcel per owner 
 18.22  per county for the reduced class rate inclusion in subclass 3x 
 18.23  shall not apply, but there shall be a limit of $100,000 of 
 18.24  preferential subclass 3x value per site of contiguous parcels 
 18.25  owned by the same person or entity.  Only the value of the 
 18.26  elevator portion of each parcel shall qualify for treatment 
 18.27  under this clause.  For purposes of this subdivision, contiguous 
 18.28  parcels include parcels separated only by a railroad or public 
 18.29  road right-of-way; and 
 18.30     (3) in the case of property owned by a nonprofit charitable 
 18.31  organization that qualifies for tax exemption under section 
 18.32  501(c)(3) of the Internal Revenue Code of 1986, as amended 
 18.33  through December 31, 1993, if the property is used as a business 
 18.34  incubator, the limitation to one parcel per owner per county for 
 18.35  the reduced class rate inclusion in subclass 3x shall not apply, 
 18.36  provided that the reduced rate applies only to the first 
 19.1   $100,000 $60,000 of value per parcel owned by the 
 19.2   organization qualifies as subclass 3x.  As used in this clause, 
 19.3   a "business incubator" is a facility used for the development of 
 19.4   nonretail businesses, offering access to equipment, space, 
 19.5   services, and advice to the tenant businesses, for the purpose 
 19.6   of encouraging economic development, diversification, and job 
 19.7   creation in the area served by the organization. 
 19.8      To receive the reduced class rate subclass 3x 
 19.9   classification on additional parcels under clause (1), (2), or 
 19.10  (3), the taxpayer must notify the county assessor that the 
 19.11  taxpayer owns more than one parcel that qualifies under clause 
 19.12  (1), (2), or (3). 
 19.13     (b) Employment property defined in section 469.166, during 
 19.14  the period provided in section 469.170, shall constitute class 
 19.15  3b and has a class rate of 2.3 percent of the first $50,000 of 
 19.16  market value and 3.6 percent of the remainder, except that for 
 19.17  employment property located in a border city enterprise zone 
 19.18  designated pursuant to section 469.168, subdivision 4, paragraph 
 19.19  (c), the class rate of the first $100,000 of market value and 
 19.20  the class rate of the remainder is determined under paragraph 
 19.21  (a), unless the governing body of the city designated as an 
 19.22  enterprise zone determines that a specific parcel shall be 
 19.23  assessed pursuant to the first clause of this sentence.  The 
 19.24  governing body may provide for assessment under the first clause 
 19.25  of the preceding sentence only for property which is located in 
 19.26  an area which has been designated by the governing body for the 
 19.27  receipt of tax reductions authorized by section 469.171, 
 19.28  subdivision 1. 
 19.29     (c) Structures which are (i) located on property classified 
 19.30  as class 3a, (ii) constructed under an initial building permit 
 19.31  issued after January 2, 1996, (iii) located in a transit zone as 
 19.32  defined under section 473.3915, subdivision 3, (iv) located 
 19.33  within the boundaries of a school district, and (v) not 
 19.34  primarily used for retail or transient lodging purposes, shall 
 19.35  have a class rate of four percent on that portion of the market 
 19.36  value in excess of $100,000 and any market value under $100,000 
 20.1   that does not qualify for the three percent class rate under 
 20.2   paragraph (a).  As used in item (v), a structure is primarily 
 20.3   used for retail or transient lodging purposes if over 50 percent 
 20.4   of its square footage is used for those purposes.  The four 
 20.5   percent rate shall also apply to improvements to existing 
 20.6   structures that meet the requirements of items (i) to (v) if the 
 20.7   improvements are constructed under an initial building permit 
 20.8   issued after January 2, 1996, even if the remainder of the 
 20.9   structure was constructed prior to January 2, 1996.  For the 
 20.10  purposes of this paragraph, a structure shall be considered to 
 20.11  be located in a transit zone if any portion of the structure 
 20.12  lies within the zone.  If any property once eligible for 
 20.13  treatment under this paragraph ceases to remain eligible due to 
 20.14  revisions in transit zone boundaries, the property shall 
 20.15  continue to receive treatment under this paragraph for a period 
 20.16  of three years. 
 20.17     Sec. 13.  Minnesota Statutes 1996, section 273.13, 
 20.18  subdivision 25, is amended to read: 
 20.19     Subd. 25.  [CLASS 4.] (a) Class 4a is 4 consists of 
 20.20  residential real estate containing four or more units and used 
 20.21  or held for use by the owner or by the tenants or lessees of the 
 20.22  owner as a residence for rental periods of 30 days or more.  
 20.23  Class 4a 4 also includes all property described in paragraph 
 20.24  (c), and hospitals licensed under sections 144.50 to 144.56, 
 20.25  other than hospitals exempt under section 272.02, and contiguous 
 20.26  property used for hospital purposes, without regard to whether 
 20.27  the property has been platted or subdivided.  Class 4a 
 20.28     (b) Subclass 4a consists of property in a city with a 
 20.29  population of 5,000 or less, that is (1) located outside of the 
 20.30  metropolitan area, as defined in section 473.121, subdivision 2, 
 20.31  or outside any county contiguous to the metropolitan area, and 
 20.32  (2) whose city boundary is at least 15 miles from the boundary 
 20.33  of any city with a population greater than 5,000 has a class 
 20.34  rate of 2.3 percent of market value for taxes payable in 1996 
 20.35  and thereafter.  All other class 4a property has a class rate of 
 20.36  3.4 percent of market value for taxes payable in 1996 and 
 21.1   thereafter.  For purposes of this paragraph, population has the 
 21.2   same meaning given in section 477A.011, subdivision 3. 
 21.3      (b) Class 4b includes: 
 21.4      (1) residential real estate containing less than four 
 21.5   units, other than seasonal residential, and recreational; 
 21.6      (2) manufactured homes not classified under any other 
 21.7   provision; 
 21.8      (3) a dwelling, garage, and surrounding one acre of 
 21.9   property on a nonhomestead farm classified under subdivision 23, 
 21.10  paragraph (b).  
 21.11     Class 4b property has a class rate of 2.8 percent of market 
 21.12  value for taxes payable in 1992, 2.5 percent of market value for 
 21.13  taxes payable in 1993, and 2.3 percent of market value for taxes 
 21.14  payable in 1994 and thereafter. 
 21.15     (c) Class 4c property includes: 
 21.16     (1) a structure that is:  
 21.17     (i) situated on real property that is used for 
 21.18     housing for the elderly or for low- and moderate-income 
 21.19  families as defined in Title II, as amended through December 31, 
 21.20  1990, of the National Housing Act or the Minnesota housing 
 21.21  finance agency law of 1971, as amended, or rules promulgated by 
 21.22  the agency and financed by a direct federal loan or federally 
 21.23  insured loan made pursuant to Title II of the Act; or 
 21.24     (ii) situated on real property that is used for housing the 
 21.25  elderly or for low- and moderate-income families as defined by 
 21.26  the Minnesota housing finance agency law of 1971, as amended, or 
 21.27  rules adopted by the agency pursuant thereto and financed by a 
 21.28  loan made by the Minnesota housing finance agency pursuant to 
 21.29  the provisions of the act.  
 21.30     This clause applies only to property of a nonprofit or 
 21.31  limited dividend entity.  Property is classified as class 4c 
 21.32  under this clause for 15 years from the date of the completion 
 21.33  of the original construction or substantial rehabilitation, or 
 21.34  for the original term of the loan.  
 21.35     (2) a structure that is: 
 21.36     (i) situated upon real property that is used for housing 
 22.1   lower income families or elderly or handicapped persons, as 
 22.2   defined in section 8 of the United States Housing Act of 1937, 
 22.3   as amended; and 
 22.4      (ii) owned by an entity which has entered into a housing 
 22.5   assistance payments contract under section 8 which provides 
 22.6   assistance for 100 percent of the dwelling units in the 
 22.7   structure, other than dwelling units intended for management or 
 22.8   maintenance personnel.  Property is classified as class 4c under 
 22.9   this clause for the term of the housing assistance payments 
 22.10  contract, including all renewals, or for the term of its 
 22.11  permanent financing, whichever is shorter; and 
 22.12     (3) a qualified low-income building as defined in section 
 22.13  42(c)(2) of the Internal Revenue Code of 1986, as amended 
 22.14  through December 31, 1990, that (i) receives a low-income 
 22.15  housing credit under section 42 of the Internal Revenue Code of 
 22.16  1986, as amended through December 31, 1990; or (ii) meets the 
 22.17  requirements of that section and receives public financing, 
 22.18  except financing provided under sections 469.174 to 469.179, 
 22.19  which contains terms restricting the rents; or (iii) meets the 
 22.20  requirements of section 273.1317.  Classification pursuant to 
 22.21  this clause is limited to a term of 15 years.  The public 
 22.22  financing received must be from at least one of the following 
 22.23  sources:  government issued bonds exempt from taxes under 
 22.24  section 103 of the Internal Revenue Code of 1986, as amended 
 22.25  through December 31, 1993, the proceeds of which are used for 
 22.26  the acquisition or rehabilitation of the building; programs 
 22.27  under section 221(d)(3), 202, or 236, of Title II of the 
 22.28  National Housing Act; rental housing program funds under Section 
 22.29  8 of the United States Housing Act of 1937 or the market rate 
 22.30  family graduated payment mortgage program funds administered by 
 22.31  the Minnesota housing finance agency that are used for the 
 22.32  acquisition or rehabilitation of the building; public financing 
 22.33  provided by a local government used for the acquisition or 
 22.34  rehabilitation of the building, including grants or loans from 
 22.35  federal community development block grants, HOME block grants, 
 22.36  or residential rental bonds issued under chapter 474A; or other 
 23.1   rental housing program funds provided by the Minnesota housing 
 23.2   finance agency for the acquisition or rehabilitation of the 
 23.3   building. 
 23.4      For all properties described in clauses (1), (2), and (3) 
 23.5   and in paragraph (d), the market value determined by the 
 23.6   assessor must be based on the normal approach to value using 
 23.7   normal unrestricted rents unless the owner of the property 
 23.8   elects to have the property assessed under Laws 1991, chapter 
 23.9   291, article 1, section 55.  If the owner of the property elects 
 23.10  to have the market value determined on the basis of the actual 
 23.11  restricted rents, as provided in Laws 1991, chapter 291, article 
 23.12  1, section 55, the property will be assessed at the rate 
 23.13  provided for class 4a or class 4b property, as appropriate.  
 23.14  Properties described in clauses (1)(ii), (3), and (4) may apply 
 23.15  to the assessor for valuation under Laws 1991, chapter 291, 
 23.16  article 1, section 55.  The land on which these structures are 
 23.17  situated has the class rate given in paragraph (b) if the 
 23.18  structure contains fewer than four units, and the class rate 
 23.19  given in paragraph (a) if the structure contains four or more 
 23.20  units.  This clause applies only to the property of a nonprofit 
 23.21  or limited dividend entity.  
 23.22     (4) a parcel of land, not to exceed one acre, and its 
 23.23  improvements or a parcel of unimproved land, not to exceed one 
 23.24  acre, if it is owned by a neighborhood real estate trust and at 
 23.25  least 60 percent of the dwelling units, if any, on all land 
 23.26  owned by the trust are leased to or occupied by lower income 
 23.27  families or individuals.  This clause does not apply to any 
 23.28  portion of the land or improvements used for nonresidential 
 23.29  purposes.  For purposes of this clause, a lower income family is 
 23.30  a family with an income that does not exceed 65 percent of the 
 23.31  median family income for the area, and a lower income individual 
 23.32  is an individual whose income does not exceed 65 percent of the 
 23.33  median individual income for the area, as determined by the 
 23.34  United States Secretary of Housing and Urban Development.  For 
 23.35  purposes of this clause, "neighborhood real estate trust" means 
 23.36  an entity which is certified by the governing body of the 
 24.1   municipality in which it is located to have the following 
 24.2   characteristics: 
 24.3      (a) it is a nonprofit corporation organized under chapter 
 24.4   317A; 
 24.5      (b) it has as its principal purpose providing housing for 
 24.6   lower income families in a specific geographic community 
 24.7   designated in its articles or bylaws; 
 24.8      (c) it limits membership with voting rights to residents of 
 24.9   the designated community; and 
 24.10     (d) it has a board of directors consisting of at least 
 24.11  seven directors, 60 percent of whom are members with voting 
 24.12  rights and, to the extent feasible, 25 percent of whom are 
 24.13  elected by resident members of buildings owned by the trust; and 
 24.14     (5) except as provided in subdivision 22, paragraph (c), 
 24.15  real property devoted to temporary and seasonal residential 
 24.16  occupancy for recreation purposes, including real property 
 24.17  devoted to temporary and seasonal residential occupancy for 
 24.18  recreation purposes and not devoted to commercial purposes for 
 24.19  more than 250 days in the year preceding the year of 
 24.20  assessment.  For purposes of this clause, property is devoted to 
 24.21  a commercial purpose on a specific day if any portion of the 
 24.22  property is used for residential occupancy, and a fee is charged 
 24.23  for residential occupancy.  Class 4c also includes commercial 
 24.24  use real property used exclusively for recreational purposes in 
 24.25  conjunction with class 4c property devoted to temporary and 
 24.26  seasonal residential occupancy for recreational purposes, up to 
 24.27  a total of two acres, provided the property is not devoted to 
 24.28  commercial recreational use for more than 250 days in the year 
 24.29  preceding the year of assessment and is located within two miles 
 24.30  of the class 4c property with which it is used.  Class 4c 
 24.31  property classified in this clause also includes the remainder 
 24.32  of class 1c resorts.  Owners of real property devoted to 
 24.33  temporary and seasonal residential occupancy for recreation 
 24.34  purposes and all or a portion of which was devoted to commercial 
 24.35  purposes for not more than 250 days in the year preceding the 
 24.36  year of assessment desiring classification as class 1c or 4c, 
 25.1   must submit a declaration to the assessor designating the cabins 
 25.2   or units occupied for 250 days or less in the year preceding the 
 25.3   year of assessment by January 15 of the assessment year.  Those 
 25.4   cabins or units and a proportionate share of the land on which 
 25.5   they are located will be designated class 1c or 4c as otherwise 
 25.6   provided.  The remainder of the cabins or units and a 
 25.7   proportionate share of the land on which they are located will 
 25.8   be designated as class 3a.  The first $100,000 of the market 
 25.9   value of the remainder of the cabins or units and a 
 25.10  proportionate share of the land on which they are located shall 
 25.11  have a class rate of three percent.  The owner of property 
 25.12  desiring designation as class 1c or 4c property must provide 
 25.13  guest registers or other records demonstrating that the units 
 25.14  for which class 1c or 4c designation is sought were not occupied 
 25.15  for more than 250 days in the year preceding the assessment if 
 25.16  so requested.  The portion of a property operated as a (1) 
 25.17  restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 
 25.18  facility operated on a commercial basis not directly related to 
 25.19  temporary and seasonal residential occupancy for recreation 
 25.20  purposes shall not qualify for class 1c or 4c; 
 25.21     (c) Subclass 4x property includes: 
 25.22     (1) qualifying low-income rental housing certified to the 
 25.23  assessor by the housing finance agency under sections 273.126 
 25.24  and 462A.071.  Subclass 4x includes land in proportion to the 
 25.25  total market value of the building that is qualifying low-income 
 25.26  rental housing.  For all properties qualifying as subclass 4x, 
 25.27  the market value determined by the assessor must be based in the 
 25.28  normal approach to value using normal unrestricted rents; 
 25.29     (6) (2) real property up to a maximum of one acre of land 
 25.30  owned by a nonprofit community service oriented organization; 
 25.31  provided that the property is not used for a revenue-producing 
 25.32  activity for more than six days in the calendar year preceding 
 25.33  the year of assessment and the property is not used for 
 25.34  residential purposes on either a temporary or permanent basis.  
 25.35  For purposes of this clause, a "nonprofit community service 
 25.36  oriented organization" means any corporation, society, 
 26.1   association, foundation, or institution organized and operated 
 26.2   exclusively for charitable, religious, fraternal, civic, or 
 26.3   educational purposes, and which is exempt from federal income 
 26.4   taxation pursuant to section 501(c)(3), (10), or (19) of the 
 26.5   Internal Revenue Code of 1986, as amended through December 31, 
 26.6   1990.  For purposes of this clause, "revenue-producing 
 26.7   activities" shall include but not be limited to property or that 
 26.8   portion of the property that is used as an on-sale intoxicating 
 26.9   liquor or 3.2 percent malt liquor establishment licensed under 
 26.10  chapter 340A, a restaurant open to the public, bowling alley, a 
 26.11  retail store, gambling conducted by organizations licensed under 
 26.12  chapter 349, an insurance business, or office or other space 
 26.13  leased or rented to a lessee who conducts a for-profit 
 26.14  enterprise on the premises.  Any portion of the property which 
 26.15  is used for revenue-producing activities for more than six days 
 26.16  in the calendar year preceding the year of assessment shall be 
 26.17  assessed as class 3a 3.  The use of the property for social 
 26.18  events open exclusively to members and their guests for periods 
 26.19  of less than 24 hours, when an admission is not charged nor any 
 26.20  revenues are received by the organization shall not be 
 26.21  considered a revenue-producing activity; 
 26.22     (7) (3) post-secondary student housing of not more than one 
 26.23  acre of land that is owned by a nonprofit corporation organized 
 26.24  under chapter 317A and is used exclusively by a student 
 26.25  cooperative, sorority, or fraternity for on-campus housing or 
 26.26  housing located within two miles of the border of a college 
 26.27  campus; and 
 26.28     (8) (4) manufactured home parks as defined in section 
 26.29  327.14, subdivision 3. 
 26.30     Class 4c property has a class rate of 2.3 percent of market 
 26.31  value, except that (i) for each parcel of seasonal residential 
 26.32  recreational property not used for commercial purposes under 
 26.33  clause (5) the first $72,000 of market value on each parcel has 
 26.34  a class rate of 1.75 percent for taxes payable in 1997 and 1.5 
 26.35  percent for taxes payable in 1998 and thereafter, and the market 
 26.36  value of each parcel that exceeds $72,000 has a class rate of 
 27.1   2.5 percent, and (ii) manufactured home parks assessed under 
 27.2   clause (8) have a class rate of two percent for taxes payable in 
 27.3   1996, and thereafter.  
 27.4      (d) Class 4d property includes: 
 27.5      (1) a structure that is: 
 27.6      (i) situated on real property that is used for housing for 
 27.7   the elderly or for low and moderate income families as defined 
 27.8   by the Farmers Home Administration; 
 27.9      (ii) located in a municipality of less than 10,000 
 27.10  population; and 
 27.11     (iii) financed by a direct loan or insured loan from the 
 27.12  Farmers Home Administration.  Property is classified under this 
 27.13  clause for 15 years from the date of the completion of the 
 27.14  original construction or for the original term of the loan.  
 27.15     The class rates in paragraph (c), clauses (1), (2), and (3) 
 27.16  and this clause apply to the properties described in them, only 
 27.17  in proportion to occupancy of the structure by elderly or 
 27.18  handicapped persons or low and moderate income families as 
 27.19  defined in the applicable laws unless construction of the 
 27.20  structure had been commenced prior to January 1, 1984; or the 
 27.21  project had been approved by the governing body of the 
 27.22  municipality in which it is located prior to June 30, 1983; or 
 27.23  financing of the project had been approved by a federal or state 
 27.24  agency prior to June 30, 1983.  For those properties, 4c or 4d 
 27.25  classification is available only for those units meeting the 
 27.26  requirements of section 273.1318. 
 27.27     Classification under this clause is only available to 
 27.28  property of a nonprofit or limited dividend entity. 
 27.29     In the case of a structure financed or refinanced under any 
 27.30  federal or state mortgage insurance or direct loan program 
 27.31  exclusively for housing for the elderly or for housing for the 
 27.32  handicapped, a unit shall be considered occupied so long as it 
 27.33  is actually occupied by an elderly or handicapped person or, if 
 27.34  vacant, is held for rental to an elderly or handicapped person. 
 27.35     (2) For taxes payable in 1992, 1993, and 1994, only, 
 27.36  buildings and appurtenances, together with the land upon which 
 28.1   they are located, leased by the occupant under the community 
 28.2   lending model lease-purchase mortgage loan program administered 
 28.3   by the Federal National Mortgage Association, provided the 
 28.4   occupant's income is no greater than 60 percent of the county or 
 28.5   area median income, adjusted for family size and the building 
 28.6   consists of existing single family or duplex housing.  The lease 
 28.7   agreement must provide for a portion of the lease payment to be 
 28.8   escrowed as a nonrefundable down payment on the housing.  To 
 28.9   qualify under this clause, the taxpayer must apply to the county 
 28.10  assessor by May 30 of each year.  The application must be 
 28.11  accompanied by an affidavit or other proof required by the 
 28.12  assessor to determine qualification under this clause. 
 28.13     (3) Qualifying buildings and appurtenances, together with 
 28.14  the land upon which they are located, leased for a period of up 
 28.15  to five years by the occupant under a lease-purchase program 
 28.16  administered by the Minnesota housing finance agency or a 
 28.17  housing and redevelopment authority authorized under sections 
 28.18  469.001 to 469.047, provided the occupant's income is no greater 
 28.19  than 80 percent of the county or area median income, adjusted 
 28.20  for family size, and the building consists of two or less 
 28.21  dwelling units.  The lease agreement must provide for a portion 
 28.22  of the lease payment to be escrowed as a nonrefundable down 
 28.23  payment on the housing.  The administering agency shall verify 
 28.24  the occupants income eligibility and certify to the county 
 28.25  assessor that the occupant meets the income criteria under this 
 28.26  paragraph.  To qualify under this clause, the taxpayer must 
 28.27  apply to the county assessor by May 30 of each year.  For 
 28.28  purposes of this section, "qualifying buildings and 
 28.29  appurtenances" shall be defined as one or two unit residential 
 28.30  buildings which are unoccupied and have been abandoned and 
 28.31  boarded for at least six months. 
 28.32     Class 4d property has a class rate of two percent of market 
 28.33  value except that property classified under clause (3), shall 
 28.34  have the same class rate as class 1a property. 
 28.35     (e) Residential rental property that would otherwise be 
 28.36  assessed as class 4 property under paragraph (a); paragraph (b), 
 29.1   clauses (1) and (3); paragraph (c), clause (1), (2), (3), or 
 29.2   (4), is assessed at the class rate applicable to it under 
 29.3   Minnesota Statutes 1988, section 273.13, if it is found to be a 
 29.4   substandard building under section 273.1316.  Residential rental 
 29.5   property that would otherwise be assessed as class 4 property 
 29.6   under paragraph (d) is assessed at 2.3 percent of market value 
 29.7   if it is found to be a substandard building under section 
 29.8   273.1316. 
 29.9      (f) Class 4e property consists of the residential portion 
 29.10  of any structure located within a city that was converted from 
 29.11  nonresidential use to residential use, provided that: 
 29.12     (1) the structure had formerly been used as a warehouse; 
 29.13     (2) the structure was originally constructed prior to 1940; 
 29.14     (3) the conversion was done after December 31, 1995, but 
 29.15  before January 1, 2003; and 
 29.16     (4) the conversion involved an investment of at least 
 29.17  $25,000 per residential unit. 
 29.18     Class 4e property has a class rate of 2.3 percent, provided 
 29.19  that a structure is eligible for class 4e classification only in 
 29.20  the 12 assessment years immediately following the conversion. 
 29.21     Sec. 14.  Minnesota Statutes 1996, section 273.13, is 
 29.22  amended by adding a subdivision to read: 
 29.23     Subd. 34.  [INFLATION ADJUSTMENT.] Beginning for property 
 29.24  taxes assessed in 1999, payable in 2000, the commissioner shall 
 29.25  annually adjust the valuation limits specified in subdivisions 
 29.26  22 and 23 for inflation.  The commissioner shall make the 
 29.27  inflation adjustments in accordance with section 290.06, 
 29.28  subdivision 2d, except that for purposes of this subdivision the 
 29.29  percentage increase shall be determined from the year ending on 
 29.30  August 31, 1997, to the year ending on August 31 of the year 
 29.31  preceding the assessment year.  The commissioner shall round the 
 29.32  valuation limits to the nearest $1,000 value.  The commissioner 
 29.33  shall annually announce the adjusted valuation limits at the 
 29.34  same time provided under section 290.06.  The determination of 
 29.35  the commissioner under this subdivision is not a rule under the 
 29.36  Administrative Procedure Act. 
 30.1      Sec. 15.  Minnesota Statutes 1996, section 275.08, 
 30.2   subdivision 1b, is amended to read: 
 30.3      Subd. 1b.  [COMPUTATION OF TAX RATES.] The amounts 
 30.4   certified to be levied against net tax capacity under section 
 30.5   275.07 by an individual local government unit shall be divided 
 30.6   by the total net tax capacity of all taxable properties within 
 30.7   the local government unit's taxing jurisdiction.  The resulting 
 30.8   ratio, the local government's local tax rate, multiplied by each 
 30.9   property's net tax capacity shall be each property's net tax 
 30.10  capacity tax for that local government unit before reduction by 
 30.11  any credits.  The sum of the state tax, if any, plus each local 
 30.12  government's tax is the property's total property tax, before 
 30.13  reduction by any credits. 
 30.14     Any amount certified to the county auditor to be levied 
 30.15  against market value shall be divided by the total referendum 
 30.16  market value of all taxable properties within the taxing 
 30.17  district.  The resulting ratio, the taxing district's new 
 30.18  referendum tax rate, multiplied by each property's referendum 
 30.19  market value shall be each property's new referendum tax before 
 30.20  reduction by any credits.  For the purposes of this subdivision, 
 30.21  "referendum market value" means the market value as defined in 
 30.22  section 124A.02, subdivision 3b. 
 30.23     Sec. 16.  Minnesota Statutes 1996, section 290.06, is 
 30.24  amended by adding a subdivision to read: 
 30.25     Subd. 25.  [PROPERTY TAX CREDIT FOR DISABLED.] (a) A 
 30.26  disabled individual may claim a credit against the tax imposed 
 30.27  by this chapter equal to 50 percent of the ad valorem homestead 
 30.28  property tax paid during the taxable year.  The maximum credit 
 30.29  allowed to an individual or a married couple for the year is 
 30.30  $300.  Homestead tax means the tax paid on the individual's or 
 30.31  married couple's principal residence, classified as class 1 
 30.32  under section 273.13, subdivision 22. 
 30.33     (b) If the amount of the credit under this subdivision 
 30.34  exceeds the claimant's liability for tax, the commissioner shall 
 30.35  refund the excess to the individual.  An amount sufficient to 
 30.36  pay the refunds is appropriated to the commissioner from the 
 31.1   general fund. 
 31.2      (c) For purposes of this subdivision, a disabled person 
 31.3   means: 
 31.4      (1) a blind person; 
 31.5      (2) a person who: 
 31.6      (i) served in the active military or naval service of the 
 31.7   United States; 
 31.8      (ii) is entitled to compensation under the laws and 
 31.9   regulations of the United States for permanent and total 
 31.10  service-connected disability due to the loss, or loss of use, by 
 31.11  reason of amputation, ankylosis, progressive muscular 
 31.12  dystrophies, or paralysis of both lower extremities, such as to 
 31.13  preclude motion without the aid of braces, crutches, canes, or a 
 31.14  wheelchair; and 
 31.15     (iii) has acquired a special housing unit with special 
 31.16  fixtures or movable facilities made necessary by the nature of 
 31.17  the veteran's disability; 
 31.18     (3) the surviving spouse of a deceased individual who 
 31.19  qualified under clause (2), for as long as the surviving spouse 
 31.20  uses the special housing unit as the spouse's principal 
 31.21  residence; 
 31.22     (4) any person who: 
 31.23     (i) is permanently and totally disabled; and 
 31.24     (ii) receives 90 percent or more of the person's total 
 31.25  income from one or more of the following: 
 31.26     (A) aid from any state as a result of that disability; 
 31.27     (B) supplemental security income for the disabled; 
 31.28     (C) workers' compensation based on a finding of total and 
 31.29  permanent disability; 
 31.30     (D) social security disability, including the amount of a 
 31.31  disability insurance benefit which is converted to an old-age 
 31.32  insurance benefit and any subsequent cost-of-living increases; 
 31.33     (E) aid under the federal Railroad Retirement Act of 1937, 
 31.34  United States Code Annotated, title 45, section 228b(a)5; 
 31.35     (F) a pension from any local government retirement fund 
 31.36  located in the state of Minnesota as a result of that 
 32.1   disability; 
 32.2      (G) pension, annuity, or other income paid as a result of 
 32.3   that disability from a private pension or disability plan, 
 32.4   including employer, employee, union, and insurance plans; and 
 32.5      (iii) has household income as defined in section 290A.03, 
 32.6   subdivision 5, of $50,000 or less; or 
 32.7      (5) any person who is permanently and totally disabled and 
 32.8   whose household income as defined in section 290A.03, 
 32.9   subdivision 5, is 150 percent or less of the federal poverty 
 32.10  level. 
 32.11     Permanently and totally disabled for purposes of this 
 32.12  subdivision means a condition that is permanent and totally 
 32.13  incapacitates the person from working at an occupation which 
 32.14  brings the person an income. 
 32.15     Sec. 17.  [462A.071] [CERTIFICATION OF HOUSING QUALIFYING 
 32.16  FOR REDUCED PROPERTY TAX RATE.] 
 32.17     Subdivision 1.  [CERTIFICATION.] By June 30 of each year, 
 32.18  the agency must certify to local assessors the units of 
 32.19  low-income rental properties that qualify for subclass 4x under 
 32.20  sections 273.126 and 273.13.  In making these certifications, 
 32.21  the agency may rely on the application and supporting 
 32.22  information supplied by the property owner as to compliance with 
 32.23  the income limits under subdivision 2 and satisfaction of the 
 32.24  minimum housing quality standards under subdivision 4. 
 32.25     Subd. 2.  [APPLICATION.] (a) In order to qualify for 
 32.26  certification under subdivision 1, the owner or manager of the 
 32.27  property must annually apply to the agency.  The application 
 32.28  must be in the form prescribed by the agency, contain the 
 32.29  information required by the agency, and be submitted by the date 
 32.30  and time specified by the agency. 
 32.31     (b) Each application must include: 
 32.32     (1) the property tax identification number; 
 32.33     (2) the number, type, and size of units the applicant seeks 
 32.34  to qualify as low-income housing under subclass 4x; 
 32.35     (3) the number, type, and size of units in the property for 
 32.36  which the applicant is not seeking qualification, if any; 
 33.1      (4) a certification that the property has been inspected by 
 33.2   a qualified inspector within the past three years and meets the 
 33.3   minimum housing quality standards or is exempt from the 
 33.4   inspection requirement under subdivision 4; 
 33.5      (5) information documenting compliance with the income 
 33.6   limits; 
 33.7      (6) an executed agreement to restrict rents meeting the 
 33.8   requirements specified by the agency or executed leases for the 
 33.9   units for which qualification as low-income housing as subclass 
 33.10  4x under section 273.13 is sought and the rent schedule; and 
 33.11     (7) any additional information the agency deems appropriate 
 33.12  to require. 
 33.13     (c) The applicant must pay a per-unit application fee to be 
 33.14  set by the agency.  The application fee charged by the agency 
 33.15  must approximately equal the costs of processing and reviewing 
 33.16  the applications.  The fee must be deposited in the general fund.
 33.17     Subd. 3.  [AGREEMENT TO RESTRICT RENTS.] The agency may 
 33.18  prescribe one or more standard form agreements to restrict rents 
 33.19  that meet the requirements of section 273.126, subdivision 3.  
 33.20  The agency may require applicants to execute a rent restriction 
 33.21  agreement in this form as a condition of entering an agreement 
 33.22  to restrict rents. 
 33.23     Subd. 4.  [MINIMUM HOUSING QUALITY STANDARDS.] (a) To 
 33.24  qualify for taxation under subclass 4x under section 273.13, a 
 33.25  unit must meet the housing maintenance code of the local unit of 
 33.26  government in which the unit is located, if such a code has been 
 33.27  adopted, or the housing quality standards adopted by the United 
 33.28  States Department of Housing and Urban Development. 
 33.29     (b) In order to meet the minimum housing quality standards, 
 33.30  a building must be inspected by an independent designated 
 33.31  inspector at least once every three years.  The inspector must 
 33.32  certify that the building complies with the minimum standards.  
 33.33  The property owner must pay the cost of the inspection. 
 33.34     (c) The agency may exempt from the inspection requirement 
 33.35  housing units that are financed by a governmental entity and 
 33.36  subject to regular inspection or other compliance checks with 
 34.1   regard to minimum housing quality.  
 34.2      Written certification must be supplied, however, showing 
 34.3   that these exempt units have been inspected within the last 
 34.4   three years and comply with the requirements under the public 
 34.5   financing or local requirements. 
 34.6      Subd. 5.  [HOUSING INSPECTORS.] (a) Housing inspections 
 34.7   required by this section may be conducted by any persons 
 34.8   employed by or under contract with a state agency or a local 
 34.9   unit of government to conduct property inspections in connection 
 34.10  with a state or federal housing program or by persons charged by 
 34.11  the governing body of a political subdivision with the 
 34.12  responsibility of enforcing provisions of local housing law, 
 34.13  building, or housing maintenance code.  The inspector must be 
 34.14  independent of the owner or manager of the inspected property. 
 34.15     (b) The agency must maintain a list of persons eligible to 
 34.16  conduct housing inspections under this section. 
 34.17     (c) The agency may provide housing inspection services 
 34.18  under this section and may set and charge appropriate fees for 
 34.19  the services.  The fees are deposited in the general fund. 
 34.20     Sec. 18.  [APPROPRIATION.] 
 34.21     $500,000 is appropriated for the 1998-1999 biennium from 
 34.22  the general fund to the housing finance agency for purposes of 
 34.23  administering the certification of qualifying low-income 
 34.24  residential properties for property taxation under subclass 4x. 
 34.25     Sec. 19.  [REPEALER.] 
 34.26     Minnesota Statutes 1996, sections 273.13, subdivisions 21a, 
 34.27  31, and 32; 273.1315; 273.1317; 273.1318; 275.02; 275.08, 
 34.28  subdivisions 1c and 1d; and 275.61, are repealed. 
 34.29     Sec. 20.  [EFFECTIVE DATE.] 
 34.30     This article is effective for taxes levied in 1998, payable 
 34.31  in 1999, and subsequent years, except for section 16, which is 
 34.32  effective for tax years beginning after 1998. 
 34.33                             ARTICLE 2
 34.34            CONVERSION OF SCHOOL DISTRICT LEVY AUTHORITY 
 34.35     Section 1.  Minnesota Statutes 1996, section 122.247, 
 34.36  subdivision 3, is amended to read: 
 35.1      Subd. 3.  [TRANSITIONAL LEVY REVENUE.] The board of the 
 35.2   combined district, or the boards of combining districts that 
 35.3   have received voter approval for the combination under section 
 35.4   122.243, subdivision 2, may levy are eligible for state aid to 
 35.5   pay for the expenses of negotiation, administrative expenses 
 35.6   directly related to the transition from cooperation to 
 35.7   combination, and the cost of necessary new athletic and music 
 35.8   uniforms.  The board or boards may levy this amount over three 
 35.9   or fewer years.  All expenses must be approved by the 
 35.10  commissioner of children, families, and learning.  The 
 35.11  commissioner may pay this state aid to a district over three or 
 35.12  fewer years.  
 35.13     Sec. 2.  Minnesota Statutes 1996, section 122.45, 
 35.14  subdivision 3a, is amended to read: 
 35.15     Subd. 3a.  (a) Liabilities of a dissolved district existing 
 35.16  at the time of the attachment other than bonded debt within the 
 35.17  purview of subdivision 2 shall be obligations of the 
 35.18  consolidated district after attachment (in the amount and kind 
 35.19  determined by the commissioner according to subdivision 1, where 
 35.20  a dissolved district is divided), for the payment of which the 
 35.21  consolidated district has a right to reimbursement by special 
 35.22  levy or levies state aid.  The amount of reimbursement will be 
 35.23  equal to the liabilities of the dissolved district for which the 
 35.24  consolidated district is obligated less the aggregate of the 
 35.25  following which has been or will be received by the consolidated 
 35.26  district at or after the time of attachment from or as a result 
 35.27  of the dissolution and attachment of the dissolved district: 
 35.28     (1) all taxes inuring to the consolidating district upon 
 35.29  levies made by the dissolved district; 
 35.30     (2) all cash, bank accounts, investments, and other current 
 35.31  assets; 
 35.32     (3) earned state aids of the dissolved districts; 
 35.33     (4) returns from the sale of property of the dissolved 
 35.34  district. 
 35.35     (b) The amount of such special levy so computed shall be 
 35.36  certified to the county auditor with the other tax requirements 
 36.1   of the consolidated district but separately stated and 
 36.2   identified.  The auditor shall add the amount of special levy so 
 36.3   certified to the school rate for the territory in the 
 36.4   consolidated district which came from the dissolved district and 
 36.5   include it in the levy on the taxable property in that 
 36.6   territory; provided, the county auditor shall not spread more of 
 36.7   the amount certified for special levy in any year than will 
 36.8   amount to 20 percent of the school levy without the special 
 36.9   levy, leaving the remaining part of the certified amount for 
 36.10  levy in successive years without further certification.  Any 
 36.11  amount of reimbursement to which it is entitled omitted by the 
 36.12  consolidated district from its initial certification for special 
 36.13  levy may be certified in a subsequent year for levy in the same 
 36.14  manner as the levy upon initial certification. 
 36.15     The levy authorized by this subdivision shall be in 
 36.16  addition to those otherwise authorized for a school district. 
 36.17  state aid shall be calculated by the commissioner and may be 
 36.18  reduced at the commissioner's discretion for any liabilities 
 36.19  that the commissioner determines are inappropriate for 
 36.20  reimbursement. 
 36.21     Sec. 3.  Minnesota Statutes 1996, section 122.531, 
 36.22  subdivision 4a, is amended to read: 
 36.23     Subd. 4a.  [REORGANIZATION OPERATING DEBT LEVIES REVENUE.] 
 36.24  (a) A district that receives revenue under section 124.2725 for 
 36.25  cooperation or has combined according to sections 122.241 to 
 36.26  122.248 may levy is eligible for state aid to eliminate 
 36.27  reorganization operating debt as defined in section 121.915, 
 36.28  clause (1).  The amount of the debt must be certified over a 
 36.29  period of five years.  After the effective date of combination 
 36.30  according to sections 122.241 to 122.248, the levy may be 
 36.31  certified and spread either 
 36.32     (1) only on the property in the combined district that 
 36.33  would have been taxable in the preexisting district that 
 36.34  incurred the debt, or 
 36.35     (2) on all of the taxable property in the combined district.
 36.36     (b) A district that has reorganized according to section 
 37.1   122.22 or 122.23 may levy is eligible for state aid to eliminate 
 37.2   reorganization operating debt as defined in section 121.915, 
 37.3   clause (2).  The amount of debt must be certified over a period 
 37.4   not to exceed five years and may be spread either 
 37.5      (1) only on the property in the newly created or enlarged 
 37.6   district which was taxable in the preexisting district that 
 37.7   incurred the debt, or 
 37.8      (2) on all of the taxable property in the newly created or 
 37.9   enlarged district. 
 37.10     (c) The commissioner shall calculate the amount of 
 37.11  reorganization operating debt for each qualifying school 
 37.12  district.  At the commissioner's discretion, the amount of the 
 37.13  state aid may be reduced for any school district.  The 
 37.14  commissioner shall establish a schedule for the payment of state 
 37.15  aid.  The schedule may extend for up to five years. 
 37.16     Sec. 4.  Minnesota Statutes 1996, section 122.531, 
 37.17  subdivision 9, is amended to read: 
 37.18     Subd. 9.  [LEVY REVENUE FOR SEVERANCE PAY OR EARLY 
 37.19  RETIREMENT INCENTIVES.] The school board of a newly created or 
 37.20  enlarged district to which part or all of a dissolved district 
 37.21  was attached according to section 122.22 may levy for is 
 37.22  eligible for state aid payments for the cost of severance pay or 
 37.23  early retirement incentives for licensed and nonlicensed 
 37.24  employees who resign or retire early as a result of the 
 37.25  dissolution or consolidation, if the commissioner of children, 
 37.26  families, and learning approves the incentives and the amount to 
 37.27  be levied.  The amount may be levied over a period of up to five 
 37.28  years and shall be spread in whole or in part on the property of 
 37.29  a preexisting district or the newly created or enlarged 
 37.30  district, as determined by the school board of the newly created 
 37.31  or enlarged district of the incentives.  The commissioner shall 
 37.32  establish a schedule for the payment of state aid.  The schedule 
 37.33  may extend for up to five years. 
 37.34     Sec. 5.  Minnesota Statutes 1996, section 122.533, is 
 37.35  amended to read: 
 37.36     122.533 [EXPENSES OF TRANSITION.] 
 38.1      The board of a district to which a dissolved district is 
 38.2   attached pursuant to section 122.22, may, is eligible for state 
 38.3   aid for the purpose of paying the expenses of negotiations and 
 38.4   other administrative expenses relating to the transition,.  The 
 38.5   board of the district may enter into agreements with banks or 
 38.6   any person to take its orders at any rate of interest not to 
 38.7   exceed seven percent per annum.  These orders shall be paid by 
 38.8   the treasurer of the district from district funds after the 
 38.9   effective date of the dissolution and attachment.  
 38.10  Notwithstanding the provisions of sections 124.226, 124.2716, 
 38.11  124.91, 124.912, 124.914, 124.916, and 124.918, the district may 
 38.12  is, in the year the dissolution and attachment becomes 
 38.13  effective, levy eligible for state aid in an amount equal to the 
 38.14  amount of the orders issued pursuant to this subdivision and the 
 38.15  interest on these orders.  No district shall issue orders for 
 38.16  funds or make a levy pursuant according to this subdivision 
 38.17  without the commissioner's approval of the expenses to be paid 
 38.18  with the funds from the orders and levy state aid. 
 38.19     Sec. 6.  Minnesota Statutes 1996, section 122.535, 
 38.20  subdivision 6, is amended to read: 
 38.21     Subd. 6.  [SEVERANCE PAY.] A district shall pay severance 
 38.22  pay to a teacher who is placed on unrequested leave of absence 
 38.23  by the district as a result of the agreement.  A teacher is 
 38.24  eligible under this subdivision if the teacher: 
 38.25     (1) is a teacher, as defined in section 125.12, subdivision 
 38.26  1, but not a superintendent; 
 38.27     (2) has a continuing contract with the district according 
 38.28  to section 125.12, subdivision 4. 
 38.29     The amount of severance pay shall be equal to the teacher's 
 38.30  salary for the school year during which the teacher was placed 
 38.31  on unrequested leave of absence minus the gross amount the 
 38.32  teacher was paid during the 12 months following the teacher's 
 38.33  termination of salary, by an entity whose teachers by statute or 
 38.34  rule must possess a valid Minnesota teaching license, and minus 
 38.35  the amount a teacher receives as severance or other similar pay 
 38.36  according to a contract with the district or district policy.  
 39.1   These entities include, but are not limited to, the school 
 39.2   district that placed the teacher on unrequested leave of 
 39.3   absence, another school district in Minnesota, an education 
 39.4   district, an intermediate school district, a SC, a board formed 
 39.5   under section 471.59, a state residential academy, the Lola and 
 39.6   Rudy Perpich Minnesota center for arts education, a vocational 
 39.7   center, or a special education cooperative.  These entities do 
 39.8   not include a school district in another state, a Minnesota 
 39.9   public post-secondary institution, or a state agency.  Only 
 39.10  amounts earned by the teacher as a substitute teacher or in a 
 39.11  position requiring a valid Minnesota teaching license shall be 
 39.12  subtracted.  A teacher may decline any offer of employment as a 
 39.13  teacher without loss of rights to severance pay. 
 39.14     To determine the amount of severance pay that is due for 
 39.15  the first six months following termination of the teacher's 
 39.16  salary, the district may require the teacher to provide 
 39.17  documented evidence of the teacher's employers and gross 
 39.18  earnings during that period.  The district shall pay the teacher 
 39.19  the amount of severance pay it determines to be due from the 
 39.20  proceeds of the levy state aid for this purpose.  To determine 
 39.21  the amount of severance pay that is due for the second six 
 39.22  months of the 12 months following the termination of the 
 39.23  teacher's salary, the district may require the teacher to 
 39.24  provide documented evidence of the teacher's employers and gross 
 39.25  earnings during that period.  The district shall pay the teacher 
 39.26  the amount of severance pay it determines to be due from 
 39.27  the proceeds of the levy state aid for this purpose.  
 39.28     A teacher who receives severance pay under this subdivision 
 39.29  waives all further reinstatement rights under section 125.12, 
 39.30  subdivision 6a or 6b.  If the teacher receives severance pay, 
 39.31  the teacher shall not receive credit for any years of service in 
 39.32  the district paying severance pay prior to the year in which the 
 39.33  teacher becomes eligible to receive severance pay. 
 39.34     The severance pay is subject to section 465.72.  The 
 39.35  district may levy annually is eligible for state aid according 
 39.36  to section 124.912, subdivision 1, for the severance pay.  
 40.1      Sec. 7.  Minnesota Statutes 1996, section 124.239, 
 40.2   subdivision 5, is amended to read: 
 40.3      Subd. 5.  [LEVY AUTHORIZED.] A district, after local board 
 40.4   approval, may levy for costs related to an approved facility 
 40.5   plan as follows:  
 40.6      (a) if the district has indicated to the commissioner that 
 40.7   bonds will be issued, the district may levy for the principal 
 40.8   and interest payments on outstanding bonds issued according to 
 40.9   subdivision 3; or 
 40.10     (b) if the district has indicated to the commissioner that 
 40.11  the plan will be funded through levy, the district may levy 
 40.12  according to the schedule approved in the plan. 
 40.13     The authority to levy for costs related to an approved 
 40.14  facility plan under this section is limited to facilities plans 
 40.15  approved prior to July 1, 1997. 
 40.16     Sec. 8.  Minnesota Statutes 1996, section 124.2601, 
 40.17  subdivision 2, is amended to read: 
 40.18     Subd. 2.  [PROGRAMS FUNDED.] Adult basic education programs 
 40.19  established under section 124.26 and approved by the 
 40.20  commissioner are eligible for revenue aid under this section. 
 40.21     Sec. 9.  Minnesota Statutes 1996, section 124.2601, 
 40.22  subdivision 3, is amended to read: 
 40.23     Subd. 3.  [AID.] Adult basic education aid for each 
 40.24  approved program equals the sum of 65 percent of the general 
 40.25  education formula allowance times the number of full-time 
 40.26  equivalent students in its adult basic education program and an 
 40.27  amount equal to .12 percent times the district's adjusted net 
 40.28  tax capacity for assessment year 1996. 
 40.29     Sec. 10.  Minnesota Statutes 1996, section 124.2711, 
 40.30  subdivision 1, is amended to read: 
 40.31     Subdivision 1.  [REVENUE AID.] The revenue State aid for 
 40.32  early childhood family education programs for a school district 
 40.33  equals $101.25 for 1993 and later fiscal years times the greater 
 40.34  of: 
 40.35     (1) 150; or 
 40.36     (2) the number of people under five years of age residing 
 41.1   in the school district on October 1 of the previous school year. 
 41.2      Sec. 11.  Minnesota Statutes 1996, section 124.2711, 
 41.3   subdivision 5, is amended to read: 
 41.4      Subd. 5.  [HOME VISITING LEVY AID.] A school district that 
 41.5   enters into a collaborative agreement to provide education 
 41.6   services and social services to families with young children may 
 41.7   levy an amount is eligible for state aid equal to $1.60 times 
 41.8   the number of people under five years of age residing in the 
 41.9   district on September 1 of the last school year.  Levy revenue 
 41.10  under this subdivision shall not be included as revenue under 
 41.11  subdivision 1.  The revenue shall be used for home visiting 
 41.12  programs under section 121.882, subdivision 2b. 
 41.13     Sec. 12.  Minnesota Statutes 1996, section 124.2713, 
 41.14  subdivision 1, is amended to read: 
 41.15     Subdivision 1.  [TOTAL COMMUNITY EDUCATION REVENUE.] 
 41.16  Community education revenue equals the sum of a district's 
 41.17  general community education revenue and youth service program 
 41.18  revenue.  Community education revenue is provided entirely 
 41.19  through state aid. 
 41.20     Sec. 13.  Minnesota Statutes 1996, section 124.2714, is 
 41.21  amended to read: 
 41.22     124.2714 [ADDITIONAL COMMUNITY EDUCATION REVENUE.] 
 41.23     (a) A district that is eligible under section 124.2713, 
 41.24  subdivision 2, may levy an amount up is eligible for aid equal 
 41.25  to the amount of revenue authorized by Minnesota Statutes 1986, 
 41.26  section 275.125, subdivision 8, clause (2).  
 41.27     (b) Beginning with levies revenue for fiscal year 1995, 
 41.28  this levy revenue must be reduced each year by the amount of any 
 41.29  increase in the levying district's general community education 
 41.30  revenue under section 124.2713, subdivision 3, for that fiscal 
 41.31  year over the amount received by the district under section 
 41.32  124.2713, subdivision 3, for fiscal year 1994. 
 41.33     (c) The proceeds of the levy revenue may be used for the 
 41.34  purposes set forth in section 124.2713, subdivision 8. 
 41.35     Sec. 14.  Minnesota Statutes 1996, section 124.2715, 
 41.36  subdivision 1, is amended to read: 
 42.1      Subdivision 1.  [REVENUE AMOUNT.] A district that is 
 42.2   eligible according to section 124.2713, subdivision 2, may 
 42.3   receive revenue for a program for adults with disabilities.  
 42.4   Revenue for the program for adults with disabilities for a 
 42.5   district or a group of districts equals the lesser of:  
 42.6      (1) the actual expenditures for approved programs and 
 42.7   budgets; or 
 42.8      (2) $60,000.  
 42.9      Revenue is provided through state aid. 
 42.10     Sec. 15.  Minnesota Statutes 1996, section 124.2716, 
 42.11  subdivision 2, is amended to read: 
 42.12     Subd. 2.  [EXTENDED DAY REVENUE.] The extended day revenue 
 42.13  for an eligible school district equals the approved additional 
 42.14  cost of providing services to children with disabilities or 
 42.15  children experiencing family or related problems of a temporary 
 42.16  nature who participate in the extended day program.  Extended 
 42.17  day revenue is provided through state aid. 
 42.18     Sec. 16.  Minnesota Statutes 1996, section 124.2725, 
 42.19  subdivision 2, is amended to read: 
 42.20     Subd. 2.  [COOPERATION AND COMBINATION REVENUE.] 
 42.21  Cooperation and combination revenue equals $100 times the pupil 
 42.22  units served in the district.  For purposes of this section, 
 42.23  pupil units served means the number of resident and nonresident 
 42.24  pupil units in average daily membership receiving instruction in 
 42.25  the cooperating or combined district.  A district may not 
 42.26  receive revenue under this section if it levies receives revenue 
 42.27  under section 124.912, subdivision 4.  Cooperation and 
 42.28  combination revenue is provided through state aid. 
 42.29     Sec. 17.  Minnesota Statutes 1996, section 124.2725, 
 42.30  subdivision 6, is amended to read: 
 42.31     Subd. 6.  [ADDITIONAL AID.] In addition to the aid in 
 42.32  subdivision 5 2, districts shall receive aid according to the 
 42.33  following: 
 42.34     (1) for districts that did not enter into an agreement 
 42.35  under section 122.541 at least three years before the date of a 
 42.36  successful referendum held under section 122.243, subdivision 2, 
 43.1   and combine without cooperating, $100 times the pupil units 
 43.2   served in the district in the first year of combination; or 
 43.3      (2) for districts that combine after one or two years of 
 43.4   cooperation, $100 times the actual pupil units served in each 
 43.5   district for the first year of cooperation and $100 times the 
 43.6   actual pupil units served in the combined district for the first 
 43.7   year of combination; or 
 43.8      (3) for districts that entered into an agreement under 
 43.9   section 122.541 at least three years before the date of a 
 43.10  successful referendum held under section 122.243, subdivision 2, 
 43.11  and combine without cooperating, $100 times the pupil units 
 43.12  served in the combined district for the first two years of 
 43.13  combination. 
 43.14     Sec. 18.  Minnesota Statutes 1996, section 124.2725, 
 43.15  subdivision 13, is amended to read: 
 43.16     Subd. 13.  [FAILURE TO COMBINE.] A district has failed to 
 43.17  combine if the commissioner disapproves of the plan according to 
 43.18  section 122.243, subdivision 1, or if a third referendum fails 
 43.19  under section 122.243, subdivision 2, or if the commissioner of 
 43.20  children, families, and learning determines that the districts 
 43.21  involved are not making sufficient progress toward combination. 
 43.22     (a) If a district has failed to combine, cooperation and 
 43.23  combination aid under subdivisions 5 and 6 shall not be paid and 
 43.24  the authority to levy under subdivision 4 ceases.  The 
 43.25  commissioner shall reduce other aids due the district to recover 
 43.26  an amount equal to the aid paid under subdivision 6 plus the 
 43.27  difference between the aid paid under subdivision 5 and the aid 
 43.28  that would have been paid if the revenue had been $50 times the 
 43.29  pupil units served.  
 43.30     (b) If a district has failed to combine, the authority to 
 43.31  levy eligibility for revenue for reorganization operating debt 
 43.32  under section 122.531, subdivision 4a, and for severance pay or 
 43.33  early retirement incentives under subdivision 15 ceases. 
 43.34     Sec. 19.  Minnesota Statutes 1996, section 124.2725, 
 43.35  subdivision 14, is amended to read: 
 43.36     Subd. 14.  [CESSATION OF REVENUE.] At any time the 
 44.1   districts cease cooperating, aid shall not be paid and the 
 44.2   authority to levy ceases.  If a district ceases to cooperate for 
 44.3   all or a portion of a fiscal year for which a levy has been 
 44.4   certified under subdivision 3, the department of children, 
 44.5   families, and learning shall adjust the next levy certified by 
 44.6   the district by an amount in proportion to the part of the 
 44.7   fiscal year that the district did not cooperate. 
 44.8      Sec. 20.  Minnesota Statutes 1996, section 124.2726, 
 44.9   subdivision 1, is amended to read: 
 44.10     Subdivision 1.  [ELIGIBILITY AND USE.] A school district 
 44.11  that has been reorganized after June 30, 1994, under section 
 44.12  122.23 is eligible for consolidation transition revenue.  
 44.13  Revenue is equal to the sum of aid under subdivision 
 44.14  subdivisions 2 and levy under subdivision 3.  Consolidation 
 44.15  transition revenue may only be used according to this section.  
 44.16  Revenue must be used for the following purposes and may be 
 44.17  distributed among these purposes at the discretion of the 
 44.18  district: 
 44.19     (1) to offer early retirement incentives as provided by 
 44.20  section 122.23, subdivision 20; 
 44.21     (2) to reduce operating debt as defined in section 121.915; 
 44.22     (3) to enhance learning opportunities for students in the 
 44.23  reorganized district; and 
 44.24     (4) for other costs incurred in the reorganization. 
 44.25     Revenue received and utilized under clause (3) or (4) may 
 44.26  be expended for operating, facilities, and/or equipment.  
 44.27  Revenue received under this section shall not be included in the 
 44.28  determination of the reduction under section 124A.26, 
 44.29  subdivision 1.  
 44.30     Sec. 21.  Minnesota Statutes 1996, section 124.2726, 
 44.31  subdivision 3, is amended to read: 
 44.32     Subd. 3.  [LEVY ADDITIONAL AID.] If the aid available in 
 44.33  subdivision 2 is insufficient to cover the costs of the district 
 44.34  under section 122.23, subdivision 20, the district may levy 
 44.35  apply to the commissioner for state aid to cover the difference 
 44.36  over a period of time not to exceed.  The commissioner shall 
 45.1   evaluate the aid request and may award additional aid for a 
 45.2   period not to exceed three years.  
 45.3      Sec. 22.  Minnesota Statutes 1996, section 124.2727, 
 45.4   subdivision 6a, is amended to read: 
 45.5      Subd. 6a.  [DISTRICT COOPERATION REVENUE.] A district's 
 45.6   cooperation revenue is equal to the greater of $67 times the 
 45.7   actual pupil units or $25,000.  District cooperation revenue is 
 45.8   provided through state aid. 
 45.9      Sec. 23.  Minnesota Statutes 1996, section 124.312, 
 45.10  subdivision 5, is amended to read: 
 45.11     Subd. 5.  [INTEGRATION AID.] For fiscal year 1996 and later 
 45.12  fiscal years Integration revenue is provided through state aid 
 45.13  and equals the following amounts: 
 45.14     (1) for independent school district No. 709, Duluth, 
 45.15  $1,385,000 plus the sum of $660,000 and an amount equal to 2.0 
 45.16  percent times the district's adjusted net tax capacity for 
 45.17  assessment year 1994; 
 45.18     (2) for independent school district No. 625, St. Paul, 
 45.19  $8,090,700 plus the product of $197 and the district's actual 
 45.20  pupil units for that year; and 
 45.21     (3) for special school district No. 1, Minneapolis, 
 45.22  $9,368,300 plus the product of $197 and the district's actual 
 45.23  pupil units for that year. 
 45.24     Sec. 24.  Minnesota Statutes 1996, section 124.313, is 
 45.25  amended to read: 
 45.26     124.313 [TARGETED NEEDS REVENUE.] 
 45.27     For fiscal year 1996 and thereafter, a school district's 
 45.28  targeted needs revenue equals the sum of: 
 45.29     (1) assurance of mastery revenue according to section 
 45.30  124.311; plus 
 45.31     (2) the district's limited English proficiency revenue 
 45.32  computed according to section 124.273, subdivision 1d; plus 
 45.33     (3) integration revenue computed according to section 
 45.34  124.312, subdivision 4. 
 45.35     Sec. 25.  Minnesota Statutes 1996, section 124.3201, 
 45.36  subdivision 1, is amended to read: 
 46.1      Subdivision 1.  [DEFINITIONS.] For the purposes of this 
 46.2   section and sections 124.3202 and 124.321, the definitions in 
 46.3   this subdivision apply. 
 46.4      (a) "Base year" for fiscal year 1996 and fiscal year 1997 
 46.5   means the 1994 summer program and the 1994-1995 school year.  
 46.6   Base year for later fiscal years means the second fiscal year 
 46.7   preceding the fiscal year for which aid will be paid. 
 46.8      (b) "Basic revenue" has the meaning given it in section 
 46.9   124A.22, subdivision 2.  For the purposes of computing basic 
 46.10  revenue pursuant to this section, each child with a disability 
 46.11  shall be counted as prescribed in section 124.17, subdivision 1. 
 46.12     (c) "Essential personnel" means teachers, related services, 
 46.13  and support services staff providing direct services to students.
 46.14     (d) "Average daily membership" has the meaning given it in 
 46.15  section 124.17. 
 46.16     (e) "Program growth factor" means 1.00 for fiscal year 1998 
 46.17  and later. 
 46.18     (f) "Aid percentage factor" means 60 percent for fiscal 
 46.19  year 1996, 70 percent for fiscal year 1997, 80 percent for 
 46.20  fiscal year 1998, 90 percent for fiscal year 1999, and 100 
 46.21  percent for fiscal years 2000 1999 and later. 
 46.22     (g) "Levy percentage factor" means 100 minus the aid 
 46.23  percentage factor for that year. 
 46.24     Sec. 26.  Minnesota Statutes 1996, section 124.4945, is 
 46.25  amended to read: 
 46.26     124.4945 [LEVY STATE AID FOR SEVERANCE PAY.] 
 46.27     A joint powers board established under section 124.494 may 
 46.28  make a levy is eligible to receive state aid to provide 
 46.29  severance pay and early retirement incentives under section 
 46.30  125.611, for any teacher as defined under section 125.12, 
 46.31  subdivision 1, who is placed on unrequested leave as a result of 
 46.32  the cooperative secondary facility agreement.  A joint powers 
 46.33  board making a levy shall certify to each participating district 
 46.34  tax levies sufficient to raise the amount necessary to provide 
 46.35  the district's portion of severance pay and early retirement 
 46.36  incentives.  The tax levy certified to each district must be 
 47.1   expressed as a local tax rate, that, when applied to the 
 47.2   adjusted net tax capacity of all of the participating districts 
 47.3   raises the amount necessary to provide severance pay and early 
 47.4   retirement incentives.  Each participating school district shall 
 47.5   include the levy in the next tax roll which it shall certify to 
 47.6   the county auditor, and shall remit the collections of the levy 
 47.7   to the joint powers board.  The commissioner shall approve any 
 47.8   severance pay agreements or early retirement incentives and 
 47.9   determine the amount of state aid for the districts. 
 47.10     Sec. 27.  Minnesota Statutes 1996, section 124.574, 
 47.11  subdivision 2c, is amended to read: 
 47.12     Subd. 2c.  [DEFINITIONS.] For the purposes of this section 
 47.13  and section 124.321, the definitions in this subdivision apply. 
 47.14     (a) "Base year" for fiscal year 1996 means fiscal year 1995.
 47.15  Base year for later fiscal years means the second fiscal year 
 47.16  preceding the fiscal year for which aid will be paid. 
 47.17     (b) "Basic revenue" has the meaning given it in section 
 47.18  124A.22, subdivision 2.  For the purposes of computing basic 
 47.19  revenue pursuant to this section, each child with a disability 
 47.20  shall be counted as prescribed in section 124.17, subdivision 1. 
 47.21     (c) "Average daily membership" has the meaning given it in 
 47.22  section 124.17. 
 47.23     (d) "Program growth factor" means 1.00 for fiscal year 1998 
 47.24  and later. 
 47.25     (e) "Aid percentage factor" means 60 percent for fiscal 
 47.26  year 1996, 70 percent for fiscal year 1997, 80 percent for 
 47.27  fiscal year 1998, 90 percent for fiscal year 1999, and 100 
 47.28  percent for fiscal year 2000 years 1999 and later. 
 47.29     Sec. 28.  Minnesota Statutes 1996, section 124.83, 
 47.30  subdivision 3, is amended to read: 
 47.31     Subd. 3.  [HEALTH AND SAFETY REVENUE.] A district's health 
 47.32  and safety revenue for a fiscal year equals: 
 47.33     (1) the sum of (a) the total approved cost of the 
 47.34  district's hazardous substance plan for fiscal years 1985 
 47.35  through 1989, plus (b) the total approved cost of the district's 
 47.36  health and safety program for fiscal year 1990 through the 
 48.1   fiscal year to which the levy is attributable, minus 
 48.2      (2) the sum of (a) the district's total hazardous substance 
 48.3   aid and levy for fiscal years 1985 through 1989 under sections 
 48.4   124.245 and 275.125, subdivision 11c, plus (b) the district's 
 48.5   health and safety revenue under this subdivision, for years 
 48.6   before the fiscal year to which the levy is attributable, plus 
 48.7   (c) the amount of other federal, state, or local receipts for 
 48.8   the district's hazardous substance or health and safety programs 
 48.9   for fiscal year 1985 through the fiscal year to which the levy 
 48.10  is attributable.  
 48.11     The commissioner shall not approve any new health and 
 48.12  safety revenue plans after July 1, 1997. 
 48.13     Sec. 29.  Minnesota Statutes 1996, section 124.91, 
 48.14  subdivision 1, is amended to read: 
 48.15     Subdivision 1.  [TO LEASE BUILDING OR LAND.] When a 
 48.16  district finds it economically advantageous to rent or lease a 
 48.17  building or land for any instructional purposes or for school 
 48.18  storage or furniture repair, and it determines that the capital 
 48.19  expenditure facilities revenues authorized under sections 
 48.20  124.243 and 124A.22, subdivision 10, are insufficient for this 
 48.21  purpose, it may apply to the commissioner for permission to make 
 48.22  an additional capital expenditure levy for this purpose.  The 
 48.23  commissioner shall not approve any levies under this section 
 48.24  after July 1, 1997.  A school district that has approved levy 
 48.25  authority under this section may continue to levy for the 
 48.26  remainder of the lease amounts.  An application for permission 
 48.27  to levy under this subdivision must contain financial 
 48.28  justification for the proposed levy, the terms and conditions of 
 48.29  the proposed lease, and a description of the space to be leased 
 48.30  and its proposed use.  The criteria for approval of applications 
 48.31  to levy under this subdivision must include:  the reasonableness 
 48.32  of the price, the appropriateness of the space to the proposed 
 48.33  activity, the feasibility of transporting pupils to the leased 
 48.34  building or land, conformity of the lease to the laws and rules 
 48.35  of the state of Minnesota, and the appropriateness of the 
 48.36  proposed lease to the space needs and the financial condition of 
 49.1   the district.  The commissioner must not authorize a levy under 
 49.2   this subdivision in an amount greater than the cost to the 
 49.3   district of renting or leasing a building or land for approved 
 49.4   purposes.  The proceeds of this levy must not be used for 
 49.5   custodial or other maintenance services.  A district may not 
 49.6   levy under this subdivision for the purpose of leasing or 
 49.7   renting a district-owned building to itself. 
 49.8      Sec. 30.  Minnesota Statutes 1996, section 124.91, 
 49.9   subdivision 2, is amended to read: 
 49.10     Subd. 2.  [PRE-JULY 1990 LEASE PURCHASE, INSTALLMENT BUYS.] 
 49.11  For taxes payable prior to 1998, a district may annually levy 
 49.12  the amount needed to make payments required by a lease purchase 
 49.13  agreement, installment purchase agreement, or other deferred 
 49.14  payment agreement authorized by Minnesota Statutes 1989 
 49.15  Supplement, section 465.71, if:  
 49.16     (1) the agreement was approved by the commissioner before 
 49.17  July 1, 1990, according to Minnesota Statutes 1989 Supplement, 
 49.18  section 275.125, subdivision 11d; or 
 49.19     (2) the district levied in 1989 for the payments. 
 49.20     For fiscal years 1999 and later, the commissioner shall pay 
 49.21  state aid to each district in the amount needed to make the 
 49.22  payments authorized by this section. 
 49.23     Sec. 31.  Minnesota Statutes 1996, section 124.91, 
 49.24  subdivision 5, is amended to read: 
 49.25     Subd. 5.  [INTERACTIVE TELEVISION.] (a) A school district 
 49.26  with its central administrative office located within economic 
 49.27  development region one, two, three, four, five, six, seven, 
 49.28  eight, nine, and ten may apply to the commissioner of children, 
 49.29  families, and learning for ITV revenue up to the greater of .5 
 49.30  percent of the adjusted net tax capacity of the district or 
 49.31  $25,000 for the construction, maintenance, and lease costs of an 
 49.32  interactive television system for instructional purposes.  The 
 49.33  approval by the commissioner of children, families, and learning 
 49.34  and the application procedures set forth in subdivision 1 shall 
 49.35  apply to the revenue in this subdivision.  In granting the 
 49.36  approval, the commissioner must consider whether the district is 
 50.1   maximizing efficiency through peak use and off-peak use pricing 
 50.2   structures.  The commissioner may not approve any new projects 
 50.3   after July 1, 1997. 
 50.4      (b) To obtain ITV revenue, a district may levy an amount 
 50.5   not to exceed the district's ITV revenue times the lesser of one 
 50.6   or the ratio of: 
 50.7      (1) the quotient derived by dividing the adjusted net tax 
 50.8   capacity of the district for the year before the year the levy 
 50.9   is certified by the actual pupil units in the district for the 
 50.10  year to which the levy is attributable; to 
 50.11     (2) 100 percent of the equalizing factor as defined in 
 50.12  section 124A.02, subdivision 8, for the year to which the levy 
 50.13  is attributable. 
 50.14     (c) A district's ITV aid is the difference between its ITV 
 50.15  revenue and the ITV levy. 
 50.16     (d) The revenue in the first year after reorganization for 
 50.17  a district that has reorganized under section 122.22, 122.23, or 
 50.18  122.241 to 122.247 shall be the greater of: 
 50.19     (1) the revenue computed for the reorganized district under 
 50.20  paragraph (a), or 
 50.21     (2)(i) for two districts that reorganized, 75 percent of 
 50.22  the revenue computed as if the districts involved in the 
 50.23  reorganization were separate, or 
 50.24     (ii) for three or more districts that reorganized, 50 
 50.25  percent of the revenue computed as if the districts involved in 
 50.26  the reorganization were separate. 
 50.27     (e) The revenue in paragraph (d) is increased by the 
 50.28  difference between the initial revenue and ITV lease costs for 
 50.29  leases that had been entered into by the preexisting districts 
 50.30  on the effective date of the consolidation or combination and 
 50.31  with a term not exceeding ten years.  This increased revenue is 
 50.32  only available for the remaining term of the lease.  However, in 
 50.33  no case shall the revenue exceed the amount available had the 
 50.34  preexisting districts received revenue separately. 
 50.35     Sec. 32.  Minnesota Statutes 1996, section 124.91, 
 50.36  subdivision 7, is amended to read: 
 51.1      Subd. 7.  [LEASE PURCHASE, INSTALLMENT BUYS.] (a) Upon 
 51.2   application to, and approval by, the commissioner in accordance 
 51.3   with the procedures and limits in subdivision 1, a district, as 
 51.4   defined in this subdivision, may: 
 51.5      (1) purchase real or personal property under an installment 
 51.6   contract or may lease real or personal property with an option 
 51.7   to purchase under a lease purchase agreement, by which 
 51.8   installment contract or lease purchase agreement title is kept 
 51.9   by the seller or vendor or assigned to a third party as security 
 51.10  for the purchase price, including interest, if any; and 
 51.11     (2) annually levy receive state aid in the amounts 
 51.12  necessary to pay the district's obligations under the 
 51.13  installment contract or lease purchase agreement. 
 51.14     (b) The obligation created by the installment contract or 
 51.15  the lease purchase agreement must not be included in the 
 51.16  calculation of net debt for purposes of section 475.53, and does 
 51.17  not constitute debt under other law.  An election is not 
 51.18  required in connection with the execution of the installment 
 51.19  contract or the lease purchase agreement. 
 51.20     (c) The proceeds of the levy authorized by commissioner 
 51.21  shall not authorize state aid under this subdivision must not to 
 51.22  be used to acquire a facility to be primarily used for athletic 
 51.23  or school administration purposes. 
 51.24     (d) For the purposes of this subdivision, "district" means: 
 51.25     (1) a school district required to have a comprehensive plan 
 51.26  for the elimination of segregation whose plan has been 
 51.27  determined by the commissioner to be in compliance with the 
 51.28  state board of education rules relating to equality of 
 51.29  educational opportunity and school desegregation; or 
 51.30     (2) a school district that participates in a joint program 
 51.31  for interdistrict desegregation with a district defined in 
 51.32  clause (1) if the facility acquired under this subdivision is to 
 51.33  be primarily used for the joint program. 
 51.34     (e) Notwithstanding subdivision 1, the prohibition against 
 51.35  a levy by a district to lease or rent a district-owned building 
 51.36  to itself does not apply to levies otherwise authorized by this 
 52.1   subdivision. 
 52.2      (f) For the purposes of this subdivision, any references in 
 52.3   subdivision 1 to building or land shall include personal 
 52.4   property. 
 52.5      Sec. 33.  Minnesota Statutes 1996, section 124.912, 
 52.6   subdivision 1, is amended to read: 
 52.7      Subdivision 1.  [STATUTORY OBLIGATIONS.] (a) A school 
 52.8   district may levy the amount authorized for liabilities of 
 52.9   dissolved districts pursuant to section 122.45; the amounts 
 52.10  necessary to pay the district's obligations under section 
 52.11  268.06, subdivision 25; the amounts necessary to pay for job 
 52.12  placement services offered to employees who may become eligible 
 52.13  for benefits pursuant to section 268.08; the amounts necessary 
 52.14  to pay the district's obligations under section 127.05; the 
 52.15  amounts authorized by section 122.531; the amounts necessary to 
 52.16  pay the district's obligations under section 122.533; and for 
 52.17  severance pay required by sections 120.08, subdivision 3, and 
 52.18  122.535, subdivision 6. 
 52.19     (b) Each year, a member district of an education district 
 52.20  that levies under this subdivision must transfer the amount of 
 52.21  revenue certified under paragraph (b) to the education district 
 52.22  board according to this subdivision.  By June 20 and November 30 
 52.23  of each year, an amount must be transferred equal to: 
 52.24     (1) 50 percent times 
 52.25     (2) the amount certified in paragraph (b) minus homestead 
 52.26  and agricultural credit aid allocated for that levy according to 
 52.27  section 273.1398, subdivision 6.  A school district is eligible 
 52.28  for state aid for the following purposes: 
 52.29     (1) liabilities for dissolved districts under section 
 52.30  122.45; 
 52.31     (2) the amounts necessary to pay the district's obligations 
 52.32  under section 268.06, subdivision 25; 
 52.33     (3) the amounts necessary to pay for job placement services 
 52.34  offered to employees who may become eligible for benefits 
 52.35  pursuant to section 268.08; 
 52.36     (4) the amounts authorized by section 122.531; 
 53.1      (5) the amounts necessary to pay the district's obligations 
 53.2   under section 122.533; and 
 53.3      (6) for severance pay required by sections 120.08, 
 53.4   subdivision 3, and 122.535, subdivision 6.  
 53.5      The commissioner shall consider all requests for state aid 
 53.6   under this subdivision and shall, at the commissioner's 
 53.7   discretion, approve, modify, or disapprove aid amounts. 
 53.8      Sec. 34.  Minnesota Statutes 1996, section 124.912, 
 53.9   subdivision 3, is amended to read: 
 53.10     Subd. 3.  [RULE COMPLIANCE.] Each year a district that is 
 53.11  required to implement a plan according to the requirements of 
 53.12  Minnesota Rules, parts 3535.0200 to 3535.2200, may levy is 
 53.13  eligible for state aid in an amount not to exceed a net tax rate 
 53.14  of equal to 2.0 percent times the adjusted net tax capacity of 
 53.15  the district for taxes payable in 1991 and thereafter the 
 53.16  preceding year.  A district that levies receives integration 
 53.17  revenue according to subdivision 2 may not levy according 
 53.18  to section 124.312 is not eligible for state aid under this 
 53.19  subdivision.  Notwithstanding section 121.904, the entire amount 
 53.20  of this levy shall be recognized as revenue for the fiscal year 
 53.21  in which the levy is certified.  This levy shall not be 
 53.22  considered in computing the aid reduction under section 124.155. 
 53.23     Sec. 35.  Minnesota Statutes 1996, section 124.912, 
 53.24  subdivision 6, is amended to read: 
 53.25     Subd. 6.  [CRIME RELATED COSTS.] For taxes levied in 1991 
 53.26  and subsequent years, payable in 1992 and subsequent years, each 
 53.27  school district may make a levy on all taxable property located 
 53.28  within the school district for the purposes specified in this 
 53.29  subdivision.  The maximum amount which may be levied for all 
 53.30  costs under this subdivision shall be equal to State aid for 
 53.31  crime related costs equals $1 multiplied by the population of 
 53.32  the school district.  For purposes of this subdivision, 
 53.33  "population" of the school district means the same as contained 
 53.34  in section 275.14.  The proceeds of the levy state aid must be 
 53.35  used for reimbursing the cities and counties who contract with 
 53.36  the school district for the following purposes:  (1) to pay the 
 54.1   costs incurred for the salaries, benefits, and transportation 
 54.2   costs of peace officers and sheriffs for liaison services in the 
 54.3   district's middle and secondary schools; (2) to pay the costs 
 54.4   for a drug abuse prevention program as defined in Minnesota 
 54.5   Statutes 1991 Supplement, section 609.101, subdivision 3, 
 54.6   paragraph (f), in the elementary schools; or (3) to pay the 
 54.7   costs for a gang resistance education training curriculum in the 
 54.8   middle schools.  The school district must initially attempt to 
 54.9   contract for these services with the police department of each 
 54.10  city or the sheriff's department of the county within the school 
 54.11  district containing the school receiving the services.  If a 
 54.12  local police department or a county sheriff's department does 
 54.13  not wish to provide the necessary services, the district may 
 54.14  contract for these services with any other police or sheriff's 
 54.15  department located entirely or partially within the school 
 54.16  district's boundaries.  The levy authorized under this 
 54.17  subdivision is not included in determining the school district's 
 54.18  levy limitations. 
 54.19     Sec. 36.  Minnesota Statutes 1996, section 124.912, 
 54.20  subdivision 7, is amended to read: 
 54.21     Subd. 7.  [ICE ARENA LEVY AID.] (a) Each year, an 
 54.22  independent school district operating and maintaining an ice 
 54.23  arena, may levy is eligible for state aid for the net 
 54.24  operational costs of the ice arena.  The levy amount of state 
 54.25  aid may not exceed the net actual costs of operation of the 
 54.26  arena for the previous year.  Net actual costs are defined as 
 54.27  operating costs less any operating revenues. 
 54.28     (b) Any school district operating and maintaining an ice 
 54.29  arena must demonstrate to the satisfaction of the office of 
 54.30  monitoring in the department of children, families, and learning 
 54.31  that the district will offer equal sports opportunities for male 
 54.32  and female students to use its ice arena, particularly in areas 
 54.33  of access to prime practice time, team support, and providing 
 54.34  junior varsity and younger level teams for girls' ice sports and 
 54.35  ice sports offerings.  The commissioner shall consider all 
 54.36  requests for state aid under this subdivision and shall, at the 
 55.1   commissioner's discretion, approve, modify, or disapprove aid 
 55.2   amounts. 
 55.3      Sec. 37.  Minnesota Statutes 1996, section 124.914, 
 55.4   subdivision 1, is amended to read: 
 55.5      Subdivision 1.  [1977 STATUTORY OPERATING DEBT.] (1) In 
 55.6   each year in which so required by this subdivision, a district 
 55.7   shall make an additional levy is eligible for state aid to 
 55.8   eliminate its statutory operating debt, determined as of June 
 55.9   30, 1977, and certified and adjusted by the commissioner.  This 
 55.10  State aid payments for fiscal years 1999 and later and the 
 55.11  previous local levy shall not be made in more than 30 successive 
 55.12  years and each year before it is made, it must be approved by 
 55.13  the commissioner and the approval shall specify its 
 55.14  amount.  This levy shall be an amount which is equal to the 
 55.15  amount raised by a levy of a net tax rate of 1.66 percent times 
 55.16  the adjusted net tax capacity of the district for the preceding 
 55.17  year for taxes payable in 1991 and thereafter; provided that in 
 55.18  the last year in which the district is required to make this 
 55.19  levy, it shall levy an amount not to exceed the amount raised by 
 55.20  a levy of a net tax rate of 1.66 percent times the adjusted net 
 55.21  tax capacity of the district for the preceding year for taxes 
 55.22  payable in 1991 and thereafter The state aid for each district 
 55.23  equals the amount raised by the levy for this purpose for taxes 
 55.24  payable in 1997.  When the sum of the cumulative levies made 
 55.25  pursuant revenue received according to this subdivision and 
 55.26  transfers made according to section 121.912, subdivision 4, 
 55.27  equals an amount equal to the statutory operating debt of the 
 55.28  district, the levy state aid shall be discontinued. 
 55.29     (2) The district shall establish a special account in the 
 55.30  general fund which shall be designated "appropriated fund 
 55.31  balance reserve account for purposes of reducing statutory 
 55.32  operating debt" on its books and records.  This account shall 
 55.33  reflect the levy revenue authorized pursuant to this subdivision.
 55.34  The proceeds of this levy revenue shall be used only for cash 
 55.35  flow requirements and shall not be used to supplement district 
 55.36  revenues or income for the purposes of increasing the district's 
 56.1   expenditures or budgets. 
 56.2      (3) Any district which is required to levy pursuant to this 
 56.3   subdivision shall certify the maximum levy allowable under 
 56.4   section 124A.23, subdivision 2, in that same year. 
 56.5      (4) Each district shall make permanent fund balance 
 56.6   transfers so that the total statutory operating debt of the 
 56.7   district is reflected in the general fund as of June 30, 1977. 
 56.8      Sec. 38.  Minnesota Statutes 1996, section 124.914, 
 56.9   subdivision 2, is amended to read: 
 56.10     Subd. 2.  [1983 OPERATING DEBT.] (1) Each year, a 
 56.11  district may make an additional levy is eligible for state aid 
 56.12  to eliminate a deficit in the net unappropriated operating funds 
 56.13  of the district, determined as of June 30, 1983, and certified 
 56.14  and adjusted by the commissioner.  This levy may in each year be 
 56.15  an amount not to exceed the amount raised by a levy of a net tax 
 56.16  rate of 1.85 percent times the adjusted net tax capacity for 
 56.17  taxes payable in 1991 and thereafter of the district for the 
 56.18  preceding year as determined by the commissioner state aid for 
 56.19  each district equals the amount raised by the district's levy 
 56.20  for this purpose for taxes payable in 1997.  However, the total 
 56.21  amount of this levy revenue for all years it is made received 
 56.22  shall not exceed the lesser of (a) the amount of the deficit in 
 56.23  the net unappropriated operating funds of the district as of 
 56.24  June 30, 1983, or (b) the amount of the aid reduction, according 
 56.25  to Laws 1981, Third Special Session chapter 2, article 2, 
 56.26  section 2, but excluding clauses (l), (m), (n), (o), and (p), 
 56.27  and Laws 1982, Third Special Session chapter 1, article 3, 
 56.28  section 6, to the district in fiscal year 1983.  When the 
 56.29  cumulative levies made pursuant revenue received according to 
 56.30  this subdivision equal equals the total amount permitted by this 
 56.31  subdivision, the levy state aid shall be discontinued.  
 56.32     (2) The proceeds of this levy state aid shall be used only 
 56.33  for cash flow requirements and shall not be used to supplement 
 56.34  district revenues or income for the purposes of increasing the 
 56.35  district's expenditures or budgets.  
 56.36     (3) Any district that levies pursuant to this subdivision 
 57.1   shall certify the maximum levy allowable under section 124A.23, 
 57.2   subdivisions 2 and 2a, in that same year. 
 57.3      Sec. 39.  Minnesota Statutes 1996, section 124.914, 
 57.4   subdivision 3, is amended to read: 
 57.5      Subd. 3.  [1985 OPERATING DEBT.] (1) Each year, a 
 57.6   district may levy is eligible for state aid to eliminate a 
 57.7   deficit in the net unappropriated balance in the general fund of 
 57.8   the district, determined as of June 30, 1985, and certified and 
 57.9   adjusted by the commissioner.  Each year this levy may be an 
 57.10  amount not to exceed the amount raised by a levy of a net tax 
 57.11  rate of 1.85 percent times the adjusted net tax capacity for 
 57.12  taxes payable in 1991 and thereafter of the district for the 
 57.13  preceding year the state aid for each district equals the amount 
 57.14  raised by the district's levy for this purpose for taxes payable 
 57.15  in 1997.  However, the total amount of this levy revenue for all 
 57.16  years it is made received shall not exceed the amount of the 
 57.17  deficit in the net unappropriated balance in the general fund of 
 57.18  the district as of June 30, 1985.  When the cumulative levies 
 57.19  made pursuant to revenue received under this subdivision equal 
 57.20  equals the total amount permitted by this subdivision, the levy 
 57.21  state aid shall be discontinued.  
 57.22     (2) A district, if eligible, may levy receive revenue under 
 57.23  this subdivision or subdivision 2 but not both. 
 57.24     (3) The proceeds of this levy revenue shall be used only 
 57.25  for cash flow requirements and shall not be used to supplement 
 57.26  district revenues or income for the purposes of increasing the 
 57.27  district's expenditures or budgets.  
 57.28     (4) Any district that levies pursuant to this subdivision 
 57.29  shall certify the maximum levy allowable under section 124A.23, 
 57.30  subdivision 2, in that same year. 
 57.31     Sec. 40.  Minnesota Statutes 1996, section 124.914, 
 57.32  subdivision 4, is amended to read: 
 57.33     Subd. 4.  [1992 OPERATING DEBT.] (a) For taxes payable for 
 57.34  calendar year 2003 fiscal year 2004 and earlier, a district that 
 57.35  has filed a plan pursuant to section 121.917, subdivision 4, may 
 57.36  levy is eligible for state aid, with the approval of the 
 58.1   commissioner, to eliminate a deficit in the net unappropriated 
 58.2   balance in the operating funds of the district, determined as of 
 58.3   June 30, 1992, and certified and adjusted by the commissioner.  
 58.4   Each year this levy may be an amount not to state aid shall not 
 58.5   exceed the lesser of: 
 58.6      (1) an amount raised by a levy of a net tax rate of one 
 58.7   percent times the adjusted net tax capacity the district's levy 
 58.8   for this purpose for taxes payable in 1997; or 
 58.9      (2) $100,000. 
 58.10  This amount shall be reduced by referendum revenue authorized 
 58.11  under section 124A.03 pursuant to the plan filed under section 
 58.12  121.917.  However, the total amount of this levy revenue for all 
 58.13  years it is made received shall not exceed the amount of the 
 58.14  deficit in the net unappropriated balance in the operating funds 
 58.15  of the district as of June 30, 1992.  When the cumulative levies 
 58.16  made pursuant to revenue received under this subdivision equal 
 58.17  equals the total amount permitted by this subdivision, the levy 
 58.18  state aid shall be discontinued.  
 58.19     (b) A district, if eligible, may levy receive revenue under 
 58.20  this subdivision or subdivision 2 or 3, or under section 
 58.21  122.531, subdivision 4a, or Laws 1992, chapter 499, article 7, 
 58.22  sections 16 or 17, but not under more than one. 
 58.23     (c) The proceeds of this levy revenue shall be used only 
 58.24  for cash flow requirements and shall not be used to supplement 
 58.25  district revenues or income for the purposes of increasing the 
 58.26  district's expenditures or budgets.  
 58.27     (d) Any district that levies pursuant to this subdivision 
 58.28  shall certify the maximum levy allowable under section 124A.23, 
 58.29  subdivision 2, in that same year. 
 58.30     Sec. 41.  Minnesota Statutes 1996, section 124.916, 
 58.31  subdivision 1, is amended to read: 
 58.32     Subdivision 1.  [HEALTH INSURANCE.] (a) A school 
 58.33  district may levy is eligible for state aid in the amount 
 58.34  necessary to make employer contributions for insurance for 
 58.35  retired employees under this subdivision.  Notwithstanding 
 58.36  section 121.904, 50 percent of the amount levied shall be 
 59.1   recognized as revenue for the fiscal year in which the levy is 
 59.2   certified.  This levy shall not be considered in computing the 
 59.3   aid reduction under section 124.155. 
 59.4      (b) The school board of a joint vocational technical 
 59.5   district formed under sections 136C.60 to 136C.69 and the school 
 59.6   board of a school district may provide employer-paid hospital, 
 59.7   medical, and dental benefits to a person who: 
 59.8      (1) is eligible for employer-paid insurance under 
 59.9   collective bargaining agreements or personnel plans in effect on 
 59.10  June 30, 1992; 
 59.11     (2) has at least 25 years of service credit in the public 
 59.12  pension plan of which the person is a member on the day before 
 59.13  retirement or, in the case of a teacher, has a total of at least 
 59.14  25 years of service credit in the teachers retirement 
 59.15  association, a first-class city teacher retirement fund, or any 
 59.16  combination of these; 
 59.17     (3) upon retirement is immediately eligible for a 
 59.18  retirement annuity; 
 59.19     (4) is at least 55 and not yet 65 years of age; and 
 59.20     (5) retires on or after May 15, 1992, and before July 21, 
 59.21  1992. 
 59.22     A school board paying insurance under this subdivision may 
 59.23  not exclude any eligible employees. 
 59.24     (c) An employee who is eligible both for the health 
 59.25  insurance benefit under this subdivision and for an early 
 59.26  retirement incentive under a collective bargaining agreement or 
 59.27  personnel plan established by the employer must select either 
 59.28  the early retirement incentive provided under the collective 
 59.29  bargaining agreement personnel plan or the incentive provided 
 59.30  under this subdivision, but may not receive both.  For purposes 
 59.31  of this subdivision, a person retires when the person terminates 
 59.32  active employment and applies for retirement benefits.  The 
 59.33  retired employee is eligible for single and dependent coverages 
 59.34  and employer payments to which the person was entitled 
 59.35  immediately before retirement, subject to any changes in 
 59.36  coverage and employer and employee payments through collective 
 60.1   bargaining or personnel plans, for employees in positions 
 60.2   equivalent to the position from which the employee retired.  The 
 60.3   retired employee is not eligible for employer-paid life 
 60.4   insurance.  Eligibility ceases when the retired employee attains 
 60.5   the age of 65, or when the employee chooses not to receive the 
 60.6   retirement benefits for which the employee has applied, or when 
 60.7   the employee is eligible for employer-paid health insurance from 
 60.8   a new employer.  Coverages must be coordinated with relevant 
 60.9   health insurance benefits provided through the federally 
 60.10  sponsored Medicare program.  
 60.11     (d) Unilateral implementation of this section by a public 
 60.12  employer is not an unfair labor practice for purposes of chapter 
 60.13  179A.  The authority provided in this subdivision for an 
 60.14  employer to pay health insurance costs for certain retired 
 60.15  employees is not subject to the limits in section 179A.20, 
 60.16  subdivision 2a. 
 60.17     (e) If a school district levies receives revenue according 
 60.18  to this subdivision, it may not also levy receive revenue 
 60.19  according to section 122.531, subdivision 9, for eligible 
 60.20  employees. 
 60.21     Sec. 42.  Minnesota Statutes 1996, section 124.916, 
 60.22  subdivision 2, is amended to read: 
 60.23     Subd. 2.  [RETIRED EMPLOYEE HEALTH BENEFITS.] For taxes 
 60.24  payable in 1996, 1997, 1998, and fiscal years 1999 and 2000 
 60.25  only, a school district may levy is eligible for state aid in an 
 60.26  amount up to the amount the district is required by the 
 60.27  collective bargaining agreement in effect on March 30, 1992, to 
 60.28  pay for health insurance or unreimbursed medical expenses for 
 60.29  licensed and nonlicensed employees who have terminated services 
 60.30  in the employing district and withdrawn from active teaching 
 60.31  service or other active service, as applicable, before July 1, 
 60.32  1992.  The total amount of the levy state aid for a district 
 60.33  each year may not exceed $300,000.  
 60.34     Notwithstanding section 121.904, 50 percent of the proceeds 
 60.35  of this levy shall be recognized in the fiscal year in which it 
 60.36  is certified. 
 61.1      Sec. 43.  Minnesota Statutes 1996, section 124.916, 
 61.2   subdivision 3, is amended to read: 
 61.3      Subd. 3.  [RETIREMENT LEVIES AID.] (1) In addition to the 
 61.4   excess levy authorized in 1976 any district within a city of the 
 61.5   first class which was authorized in 1975 to make a retirement 
 61.6   levy under Minnesota Statutes 1974, section 275.127 and chapter 
 61.7   422A may levy an amount per pupil unit which is equal to the 
 61.8   amount levied in 1975 payable 1976, under Minnesota Statutes 
 61.9   1974, section 275.127 and chapter 422A, divided by the number of 
 61.10  pupil units in the district in 1976-1977. 
 61.11     (2) In 1979 and each year thereafter, any district which 
 61.12  qualified in 1976 for an extra levy under paragraph (1) shall be 
 61.13  allowed to levy the same amount as levied for retirement in 1978 
 61.14  under this clause reduced each year by ten percent of the 
 61.15  difference between the amount levied for retirement in 1971 
 61.16  under Minnesota Statutes 1971, sections 275.127 and 422.01 to 
 61.17  422.54 and the amount levied for retirement in 1975 under 
 61.18  Minnesota Statutes 1974, section 275.127 and chapter 422A. 
 61.19     (3) In 1991 and each year thereafter, a district to which 
 61.20  this subdivision applies may levy an additional amount required 
 61.21  for contributions to the Minneapolis employees retirement fund 
 61.22  as a result of the maximum dollar amount limitation on state 
 61.23  contributions to the fund imposed under section 422A.101, 
 61.24  subdivision 3.  The additional levy shall not exceed the most 
 61.25  recent amount certified by the board of the Minneapolis 
 61.26  employees retirement fund as the district's share of the 
 61.27  contribution requirement in excess of the maximum state 
 61.28  contribution under section 422A.101, subdivision 3.  
 61.29     (4) For taxes payable in 1994 and thereafter, special 
 61.30  school district No. 1, Minneapolis, and independent school 
 61.31  district No. 625, St. Paul, may levy for the increase in the 
 61.32  employer retirement fund contributions, under Laws 1992, chapter 
 61.33  598, article 5, section 1.  Notwithstanding section 121.904, the 
 61.34  entire amount of this levy may be recognized as revenue for the 
 61.35  fiscal year in which the levy is certified.  This levy shall not 
 61.36  be considered in computing the aid reduction under section 
 62.1   124.155. 
 62.2      (1) For fiscal years 1999 and later, a district is eligible 
 62.3   for state aid equal to the amount of its retirement levies 
 62.4   certified under this subdivision for taxes payable in 1997. 
 62.5      (5) (2) If the employer retirement fund contributions under 
 62.6   section 354A.12, subdivision 2a, are increased for fiscal year 
 62.7   1994 or later fiscal years, special school district No. 1, 
 62.8   Minneapolis, and independent school district No. 625, St. Paul, 
 62.9   may levy in payable 1994 or later an amount are eligible for 
 62.10  state aid equal to the amount derived by applying the net 
 62.11  increase in the employer retirement fund contribution rate of 
 62.12  the respective teacher retirement fund association between 
 62.13  fiscal year 1993 and the fiscal year beginning in the year after 
 62.14  the levy is certified to the total covered payroll of the 
 62.15  applicable teacher retirement fund association.  Notwithstanding 
 62.16  section 121.904, the entire amount of this levy may be 
 62.17  recognized as revenue for the fiscal year in which the levy is 
 62.18  certified.  This levy shall not be considered in computing the 
 62.19  aid reduction under section 124.155.  If an applicable school 
 62.20  district levies under this paragraph, they may not levy under 
 62.21  paragraph (4). 
 62.22     (6) (3) In addition to the levy state aid authorized under 
 62.23  paragraph (5) (2), special school district No. 1, 
 62.24  Minneapolis, may also levy payable in 1997 or later is also 
 62.25  eligible for additional state aid in an amount equal to the 
 62.26  contributions under section sections 423A.02, subdivision 3, and 
 62.27  may also levy in payable 1994 or later an amount equal to the 
 62.28  state aid contribution under section 354A.12, subdivision 3b.  
 62.29  Independent school district No. 625, St. Paul, may levy payable 
 62.30  in 1997 or is eligible for additional state aid in fiscal years 
 62.31  1999 and later in an amount equal to the supplemental 
 62.32  contributions under section 423A.02, subdivision 
 62.33  3.  Notwithstanding section 121.904, the entire amount of these 
 62.34  levies may be recognized as revenue for the fiscal year in which 
 62.35  the levy is certified.  These levies shall not be considered in 
 62.36  computing the aid reduction under section 124.155. 
 63.1      Sec. 44.  Minnesota Statutes 1996, section 124.916, 
 63.2   subdivision 4, is amended to read: 
 63.3      Subd. 4.  [MINNEAPOLIS HEALTH INSURANCE SUBSIDY.] Each year 
 63.4   special school district No. 1, Minneapolis, may make an 
 63.5   additional levy not to exceed is eligible for state aid equal to 
 63.6   the amount raised by a net tax rate of .10 percent times the 
 63.7   adjusted net tax capacity for taxes payable in 1991 and 
 63.8   thereafter of the property in the district for the preceding 
 63.9   assessment year 1996.  The proceeds may be used only to 
 63.10  subsidize health insurance costs for eligible teachers as 
 63.11  provided in this section.  
 63.12     "Eligible teacher" means a retired teacher who was a basic 
 63.13  member of the Minneapolis teachers retirement fund association, 
 63.14  who retired before May 1, 1974, or who had 20 or more years of 
 63.15  basic member service in the Minneapolis teacher retirement fund 
 63.16  association and retired before June 30, 1983, and who is not 
 63.17  eligible to receive the hospital insurance benefits of the 
 63.18  federal Medicare program of the Social Security Act without 
 63.19  payment of a monthly premium.  The district shall notify 
 63.20  eligible teachers that a subsidy is available.  To obtain a 
 63.21  subsidy, an eligible teacher must submit to the school district 
 63.22  a copy of receipts for health insurance premiums paid.  The 
 63.23  school district shall disburse the health insurance premium 
 63.24  subsidy to each eligible teacher according to a schedule 
 63.25  determined by the district, but at least annually.  An eligible 
 63.26  teacher may receive a subsidy up to an amount equal to the 
 63.27  lesser of 90 percent of the cost of the eligible teacher's 
 63.28  health insurance or up to 90 percent of the cost of the number 
 63.29  two qualified plan of health coverage for individual policies 
 63.30  made available by the Minnesota comprehensive health association 
 63.31  under chapter 62E.  
 63.32     If funds remaining from the previous year's health 
 63.33  insurance subsidy levy revenue, minus the previous year's 
 63.34  required subsidy amount, are sufficient to pay the estimated 
 63.35  current year subsidy, the levy state aid must be discontinued 
 63.36  until the remaining funds are estimated by the school board to 
 64.1   be insufficient to pay the subsidy. 
 64.2      This subdivision does not extend benefits to teachers who 
 64.3   retire after June 30, 1983, and does not create a contractual 
 64.4   right or claim for altering the benefits in this subdivision.  
 64.5   This subdivision does not restrict the school district's right 
 64.6   to modify or terminate coverage under this subdivision. 
 64.7      Sec. 45.  Minnesota Statutes 1996, section 124.918, 
 64.8   subdivision 8, is amended to read: 
 64.9      Subd. 8.  [TACONITE PAYMENT AND OTHER REDUCTIONS.] (1) 
 64.10  Reductions in levies pursuant to section 124.918, subdivision 1, 
 64.11  and section 273.138, shall be made prior to the reductions in 
 64.12  clause (2). 
 64.13     (2) Notwithstanding any other law to the contrary, 
 64.14  districts which received payments pursuant to sections 298.018; 
 64.15  298.23 to 298.28, except an amount distributed under section 
 64.16  298.28, subdivision 4, paragraph (c), clause (ii); 298.34 to 
 64.17  298.39; 298.391 to 298.396; 298.405; and any law imposing a tax 
 64.18  upon severed mineral values, or recognized revenue pursuant to 
 64.19  section 477A.15; shall not include a portion of these aids in 
 64.20  their permissible levies pursuant to those sections, but instead 
 64.21  shall reduce the permissible levies authorized by this chapter 
 64.22  and chapter 124A by the greater of the following: 
 64.23     (a) an amount equal to 50 percent of the total dollar 
 64.24  amount of the payments received pursuant to those sections or 
 64.25  revenue recognized pursuant to section 477A.15 in the previous 
 64.26  fiscal year; or 
 64.27     (b) an amount equal to the total dollar amount of the 
 64.28  payments received pursuant to those sections or revenue 
 64.29  recognized pursuant to section 477A.15 in the previous fiscal 
 64.30  year less the product of the same dollar amount of payments or 
 64.31  revenue times the ratio of the maximum levy allowed the district 
 64.32  under Minnesota Statutes 1986, sections 124A.03, subdivision 2, 
 64.33  124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 
 64.34  subdivision 3a, 124A.12, subdivision 3a, and 124A.14, 
 64.35  subdivision 5a, to the total levy allowed the district under 
 64.36  this section and Minnesota Statutes 1986, sections 124A.03, 
 65.1   124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 
 65.2   subdivision 3a, 124A.12, subdivision 3a, 124A.14, subdivision 
 65.3   5a, and 124A.20, subdivision 2, for levies certified in 1986. 
 65.4      (3) No reduction pursuant to this subdivision shall reduce 
 65.5   the levy made by the district pursuant to section 124A.23, to an 
 65.6   amount less than the amount raised by a levy of a net tax rate 
 65.7   of 6.82 percent times the adjusted net tax capacity for taxes 
 65.8   payable in 1990 and thereafter of that district for the 
 65.9   preceding year as determined by the commissioner.  The amount of 
 65.10  any increased levy authorized by referendum pursuant to section 
 65.11  124A.03, subdivision 2, shall not be reduced pursuant to this 
 65.12  subdivision.  The amount of any levy authorized by 
 65.13  section 124.912, subdivision 1, 124.97 to make payments for 
 65.14  bonds issued and for interest thereon, shall not be reduced 
 65.15  pursuant to this subdivision.  
 65.16     (4) Before computing the reduction pursuant to this 
 65.17  subdivision of the capital expenditure facilities levy 
 65.18  authorized by section 124.243, the capital expenditure equipment 
 65.19  levy authorized by section 124.244, the health and safety levy 
 65.20  authorized by sections 124.83 and 124.91, subdivision 6, the 
 65.21  commissioner shall ascertain from each affected school district 
 65.22  the amount it proposes to levy under each section or 
 65.23  subdivision.  The reduction shall be computed on the basis of 
 65.24  the amount so ascertained. 
 65.25     (5) Notwithstanding any law to the contrary, any amounts 
 65.26  received by districts in any fiscal year pursuant to sections 
 65.27  298.018; 298.23 to 298.28; 298.34 to 298.39; 298.391 to 298.396; 
 65.28  298.405; or any law imposing a tax on severed mineral values; 
 65.29  and not deducted from general education aid pursuant to section 
 65.30  124A.035, subdivision 5, clause (2), and not applied to reduce 
 65.31  levies pursuant to this subdivision shall be paid by the 
 65.32  district to the St. Louis county auditor in the following amount 
 65.33  by March 15 of each year, the amount required to be subtracted 
 65.34  from the previous fiscal year's general education aid pursuant 
 65.35  to section 124A.035, subdivision 5, which is in excess of the 
 65.36  general education aid earned for that fiscal year.  The county 
 66.1   auditor shall deposit any amounts received pursuant to this 
 66.2   clause in the St. Louis county treasury for purposes of paying 
 66.3   the taconite homestead credit as provided in section 273.135. 
 66.4      Sec. 46.  Minnesota Statutes 1996, section 124A.22, 
 66.5   subdivision 1, is amended to read: 
 66.6      Subdivision 1.  [GENERAL EDUCATION REVENUE.] (a) For fiscal 
 66.7   year 1996, the general education revenue for each district 
 66.8   equals the sum of the district's basic revenue, compensatory 
 66.9   education revenue, training and experience revenue, secondary 
 66.10  sparsity revenue, elementary sparsity revenue, and supplemental 
 66.11  revenue. 
 66.12     (b) For fiscal year 1997 and thereafter, the general 
 66.13  education revenue for each district equals the sum of the 
 66.14  district's basic revenue, compensatory education revenue, 
 66.15  secondary sparsity revenue, elementary sparsity revenue, 
 66.16  transportation sparsity, total operating capital revenue, 
 66.17  transition revenue, and supplemental revenue.  For fiscal years 
 66.18  1999 and later, general education revenue is provided through 
 66.19  state aid. 
 66.20     Sec. 47.  Minnesota Statutes 1996, section 124A.292, 
 66.21  subdivision 2, is amended to read: 
 66.22     Subd. 2.  [REVENUE.] Staff development incentive revenue is 
 66.23  equal to the number of teachers at the site times $25.  Staff 
 66.24  development incentive revenue is provided through state aid. 
 66.25     Sec. 48.  Minnesota Statutes 1996, section 298.28, 
 66.26  subdivision 4, is amended to read: 
 66.27     Subd. 4.  [SCHOOL DISTRICTS; REFERENDUM AID.] (a) 27.5 
 66.28  cents per taxable ton plus the increase provided in paragraph 
 66.29  (d) must be allocated to qualifying school districts to be 
 66.30  distributed, based upon the certification of the commissioner of 
 66.31  revenue, under paragraphs (b) and (c). 
 66.32     (b) 5.5 cents per taxable ton must be distributed to the 
 66.33  school districts in which the lands from which taconite was 
 66.34  mined or quarried were located or within which the concentrate 
 66.35  was produced.  The distribution must be based on the 
 66.36  apportionment formula prescribed in subdivision 2. 
 67.1      (c)(i) 22 cents per taxable ton, less any amount 
 67.2   distributed under paragraph (e), shall be distributed to a group 
 67.3   of school districts comprised of those school districts in which 
 67.4   the taconite was mined or quarried or the concentrate produced 
 67.5   or in which there is a qualifying municipality as defined by 
 67.6   section 273.134 in direct proportion to school district indexes 
 67.7   as follows:  for each school district, its pupil units 
 67.8   determined under section 124.17 for the prior school year shall 
 67.9   be multiplied by the ratio of the average adjusted net tax 
 67.10  capacity per pupil unit for school districts receiving aid under 
 67.11  this clause as calculated pursuant to chapter 124A for the 
 67.12  school year ending prior to distribution to the adjusted net tax 
 67.13  capacity per pupil unit of the district.  Each district shall 
 67.14  receive that portion of the distribution which its index bears 
 67.15  to the sum of the indices for all school districts that receive 
 67.16  the distributions.  
 67.17     (ii) Notwithstanding clause (i), each school district that 
 67.18  receives a distribution under sections 298.018; 298.23 to 
 67.19  298.28, exclusive of any amount received under this clause; 
 67.20  298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 
 67.21  imposing a tax on severed mineral values that is less than the 
 67.22  amount of its levy reduction under section 124.918, subdivision 
 67.23  8, for the second year prior to the year of the distribution 
 67.24  shall receive a distribution equal to the difference; the amount 
 67.25  necessary to make this payment shall be derived from 
 67.26  proportionate reductions in the initial distribution to other 
 67.27  school districts under clause (i).  
 67.28     (d) Any school district described in paragraph (c) where a 
 67.29  levy increase pursuant to section 124A.03, subdivision 2, is 
 67.30  authorized by referendum, shall receive a distribution according 
 67.31  to the following formula.  In 1994, the amount distributed per 
 67.32  ton shall be equal to the amount per ton distributed in 1991 
 67.33  under this paragraph increased in the same proportion as the 
 67.34  increase between the fourth quarter of 1989 and the fourth 
 67.35  quarter of 1992 in the implicit price deflator as defined in 
 67.36  section 298.24, subdivision 1.  On July 15, 1995, and subsequent 
 68.1   years, the increase over the amount established for the prior 
 68.2   year shall be determined according to the increase in the 
 68.3   implicit price deflator as provided in section 298.24, 
 68.4   subdivision 1.  Each district shall receive the product of: 
 68.5      (i) $175 times the pupil units identified in section 
 68.6   124.17, subdivision 1, enrolled in the second previous year or 
 68.7   the 1983-1984 school year, whichever is greater, less the 
 68.8   product of 1.8 percent times the district's taxable net tax 
 68.9   capacity in the second previous year; times 
 68.10     (ii) the lesser of: 
 68.11     (A) one, or 
 68.12     (B) the ratio of the sum of the amount certified pursuant 
 68.13  to section 124A.03, subdivision 1g, in the previous year, plus 
 68.14  the amount certified pursuant to section 124A.03, subdivision 
 68.15  1i, in the previous year, plus the referendum aid according to 
 68.16  section 124A.03, subdivision 1h, for the current year, plus an 
 68.17  amount equal to the reduction under section 124A.03, subdivision 
 68.18  3b, to the product of 1.8 percent times the district's taxable 
 68.19  net tax capacity in the second previous year. 
 68.20     If the total amount provided by paragraph (d) is 
 68.21  insufficient to make the payments herein required then the 
 68.22  entitlement of $175 per pupil unit shall be reduced uniformly so 
 68.23  as not to exceed the funds available.  Any amounts received by a 
 68.24  qualifying school district in any fiscal year pursuant to 
 68.25  paragraph (d) shall not be applied to reduce general education 
 68.26  aid which the district receives pursuant to section 124A.23 or 
 68.27  the permissible levies of the district.  Any amount remaining 
 68.28  after the payments provided in this paragraph shall be paid to 
 68.29  the commissioner of iron range resources and rehabilitation who 
 68.30  shall deposit the same in the taconite environmental protection 
 68.31  fund and the northeast Minnesota economic protection trust fund 
 68.32  as provided in subdivision 11. 
 68.33     A school district that received aid in fiscal year 1999 
 68.34  under this section is eligible for a reduction of one percentage 
 68.35  point in its income tax surtax rate under section 124A.038.  
 68.36  Each year, the school district shall receive an aid amount equal 
 69.1   to one percentage point of its income tax surtax for that year 
 69.2   and its surtax rate must be lowered by that amount. 
 69.3      Each district receiving money according to this paragraph 
 69.4   shall reserve $25 times the number of pupil units in the 
 69.5   district.  It may use the money for early childhood programs or 
 69.6   for outcome-based learning programs that enhance the academic 
 69.7   quality of the district's curriculum.  The outcome-based 
 69.8   learning programs must be approved by the commissioner of 
 69.9   children, families, and learning. 
 69.10     (e) There shall be distributed to any school district the 
 69.11  amount which the school district was entitled to receive under 
 69.12  section 298.32 in 1975.  
 69.13     Sec. 49.  Minnesota Statutes 1996, section 298.28, is 
 69.14  amended by adding a subdivision to read: 
 69.15     Subd. 4a.  [SCHOOL DISTRICT LEVY REDUCTION.] For taxes 
 69.16  payable in 1999 and later, a school district's levy reduction 
 69.17  under section 124.918, subdivision 8, is equal to the reduction 
 69.18  for taxes payable in 1998 times the ratio of the taxable tons in 
 69.19  the current year to the taxable tons in payable year 1998. 
 69.20     Sec. 50.  Minnesota Statutes 1996, section 298.28, is 
 69.21  amended by adding a subdivision to read: 
 69.22     Subd. 4b.  [SCHOOL DISTRICT AID REDUCTION.] A school 
 69.23  district's taconite aid reduction to general education aid is 
 69.24  equal to its aid reduction for fiscal year 1999 times the ratio 
 69.25  of the taxable tons in the current payable year to the taxable 
 69.26  tons in the payable year 1998. 
 69.27     Sec. 51.  [REPEALER.] 
 69.28     Subdivision 1.  [FISCAL YEAR 2000.] Minnesota Statutes 
 69.29  1996, sections 124.2134; 124.225, subdivisions 1, 3a, 7a, 7b, 
 69.30  7d, 7e, 7f, 8a, 8k, 8l, 8m, 9, 10, 13, 14, 15, 16, and 17; 
 69.31  124.226; 124.2442; 124.2601, subdivisions 4, 5, and 6; 124.2711, 
 69.32  subdivisions 2a and 3; 124.2713, subdivisions 6, 6a, 6b, and 7; 
 69.33  124.2715, subdivisions 2 and 3; 124.2716, subdivisions 3 and 4; 
 69.34  124.2725, subdivisions 3, 4, 5, and 7; 124.2727, subdivisions 
 69.35  6b, 6c, and 9; 124.314, subdivision 2; 124.321; 124.91, 
 69.36  subdivision 4; 124.912, subdivision 2; 124A.029; 124A.03, 
 70.1   subdivisions 1b, 1c, 1d, 1e, 1f, 1g, 1h, 1i, 2, 2a, 2b, 3b, and 
 70.2   3c; 124A.0311; 124A.22, subdivisions 4a, 4b, 8a, 8b, 13d, and 
 70.3   13e; 124A.23, subdivisions 1, 2, 3, and 4; 124A.26, subdivisions 
 70.4   2 and 3; 124A.292, subdivisions 3 and 4; 124A.697; 124A.698; 
 70.5   124A.70, subdivisions 1, 2, 3a, and 5; 124A.71; 124A.711; 
 70.6   124A.72; and 124A.73, are repealed for revenue for fiscal year 
 70.7   2000.  
 70.8      Subd. 2.  [JULY 1, 1997.] Laws 1992, chapter 499, article 
 70.9   7, section 31, is repealed July 1, 1997. 
 70.10     Sec. 52.  [EFFECTIVE DATE.] 
 70.11     Sections 1 to 51 are effective July 1, 1997. 
 70.12                             ARTICLE 3
 70.13                 SCHOOL DISTRICT INCOME TAX SURTAX 
 70.14     Section 1.  Minnesota Statutes 1996, section 124.918, is 
 70.15  amended by adding a subdivision to read: 
 70.16     Subd. 9.  [INCOME TAX LIABILITY.] No later than October 1 
 70.17  of each year, the commissioner of children, families, and 
 70.18  learning shall report to each school district the preliminary 
 70.19  aggregate individual income tax liability for that district for 
 70.20  the previous year, as reported by the commissioner of revenue. 
 70.21     Sec. 2.  [124A.038] [DISCRETIONARY REVENUE.] 
 70.22     Subdivision 1.  [INCOME TAX SURTAX.] A school district may 
 70.23  hold a referendum under subdivision 2 to approve an income tax 
 70.24  surtax.  Each one percent rate up to five, approved by the 
 70.25  taxpayers under subdivision 2, results in revenues of $100 per 
 70.26  pupil unit for each year the surtax is in place.  The rate 
 70.27  approved in excess of five percent results in revenues 
 70.28  determined by the yield of the surtax on the district's 
 70.29  taxpayers.  The surtax rate must be expressed as a whole number. 
 70.30     Subd. 2.  [REFERENDUM.] (a) A referendum to impose an 
 70.31  income tax surtax may be called by the school board or shall be 
 70.32  called by the school board upon written petition of qualified 
 70.33  voters of the district.  The referendum shall be conducted on 
 70.34  the first Tuesday after the first Monday in November in the 
 70.35  calendar year before the tax year in which the surtax, if 
 70.36  approved, will first be applied.  The ballot shall state the 
 71.1   proposed surtax rate as a percentage of Minnesota individual 
 71.2   income tax liability under chapter 290.  The ballot may state 
 71.3   that an existing surtax is expiring or, in the case of 
 71.4   referendum authority converted to discretionary revenue under 
 71.5   subdivision 6, that a surtax must be approved by the voters to 
 71.6   continue at its current rate.  The ballot shall designate the 
 71.7   specific number of years, not to exceed ten, for which the 
 71.8   surtax applies.  The ballot may contain a textual portion with 
 71.9   the information required in this subdivision and a question 
 71.10  stating substantially the following: 
 71.11     "Shall an income tax surtax proposed by (petition to) the 
 71.12  board of .........., independent school district No. ...., be 
 71.13  approved?" 
 71.14     If approved, the surtax rate is authorized for the number 
 71.15  of years stated on the ballot, not to exceed ten, beginning in 
 71.16  the year after the referendum, or until revoked or reduced by 
 71.17  the voters of the district at a subsequent referendum. 
 71.18     (b) The school board shall prepare and deliver by first 
 71.19  class mail a notice of the referendum and the proposed income 
 71.20  tax surtax to each residential address in the school district at 
 71.21  least 15 days, but no more than 30 days, prior to the day of the 
 71.22  referendum.  The notice must project the anticipated amount of 
 71.23  income tax increase in annual dollars and annual percentages for 
 71.24  typical family incomes within the school district.  The school 
 71.25  board shall make these projections by applying the proposed 
 71.26  surtax rate to the preliminary aggregate individual income tax 
 71.27  liability in the school district in the previous year, as 
 71.28  reported by the commissioner of revenue. 
 71.29     The notice for a referendum may state that an existing 
 71.30  income tax surtax is expiring and project the anticipated amount 
 71.31  of increase over the existing discretionary income tax or 
 71.32  referendum property tax, if any, in annual dollars and annual 
 71.33  percentages for typical family incomes within the school 
 71.34  district. 
 71.35     The notice must include the following statement:  "Passage 
 71.36  of this referendum will result in an increase in your individual 
 72.1   income taxes." 
 72.2      (c) A referendum on the question of revoking or reducing 
 72.3   the surtax rate authorized under paragraph (a) may be called by 
 72.4   the school board and shall be called by the school board upon 
 72.5   the written petition of qualified voters of the district.  A 
 72.6   referendum to revoke or reduce the surtax rate must be based 
 72.7   upon the surtax rate that was stated in the initial 
 72.8   authorization.  Revenue resulting from a surtax approved by the 
 72.9   voters of the district according to paragraph (a) must be 
 72.10  received at least once before it is subject to a referendum on 
 72.11  its revocation or reduction for subsequent years.  Only one 
 72.12  revocation or reduction referendum may be held to revoke or 
 72.13  reduce referendum revenue for any specific year and for years 
 72.14  thereafter. 
 72.15     (d) A petition authorized by paragraph (a) or (c) is 
 72.16  effective if signed by a number of qualified voters in excess of 
 72.17  ten percent of the number of voters of the school district who 
 72.18  voted in the most recent November election held during an 
 72.19  even-numbered year.  A referendum invoked by petition must be 
 72.20  held on the date specified in paragraph (a). 
 72.21     (e) The approval of 50 percent plus one of those voting on 
 72.22  the question is required to pass a referendum authorized by this 
 72.23  subdivision. 
 72.24     (f) At least 15 days prior to the day of the referendum, 
 72.25  the district shall submit a copy of the notice required under 
 72.26  paragraph (b) to the commissioner of children, families, and 
 72.27  learning.  Within 15 days after the results of the referendum 
 72.28  have been certified by the school board, or in the case of a 
 72.29  recount, the certification of the results of the recount by the 
 72.30  canvassing board, the district shall notify the commissioner of 
 72.31  the results of the referendum. 
 72.32     Subd. 3.  [REVENUE.] A school district shall receive 
 72.33  discretionary revenue aid equal to the product of its income tax 
 72.34  surtax rate approved under subdivision 2 and its income tax 
 72.35  liability for that year. 
 72.36     Subd. 4.  [REVENUE USE.] Discretionary revenue aid must be 
 73.1   deposited either in the district's general fund or capital 
 73.2   expenditure fund. 
 73.3      Subd. 5.  [ANNUAL AID APPROPRIATION.] There is annually 
 73.4   appropriated from the general fund to the commissioner of 
 73.5   children, families, and learning the amount necessary for 
 73.6   discretionary revenue aid.  The amount shall be reduced by the 
 73.7   amount of any money specifically appropriated for the same 
 73.8   purpose in any year from any state fund. 
 73.9      Subd. 6.  [CONVERSION OF REFERENDUM AUTHORITY TO 
 73.10  DISCRETIONARY REVENUE.] (a) For fiscal year 2000, a school 
 73.11  district is authorized to convert its entire referendum revenue 
 73.12  amount to an income tax surtax.  For discretionary revenue 
 73.13  amounts up to $500 per pupil unit, the discretionary revenue 
 73.14  amount shall be rounded to the nearest $100 per pupil unit 
 73.15  amount.  Each $100 increment of surtax, up to $500 per pupil 
 73.16  unit, shall result in a surtax rate of one percent.  If the 
 73.17  district has discretionary revenue authority in excess of $500 
 73.18  per pupil unit and if the district intends to exercise that 
 73.19  authority, then the district's surtax rate shall be increased 
 73.20  until the district reaches its maximum authority or its surtax 
 73.21  rate reaches nine percent, whichever is less.  Any amount in 
 73.22  excess of nine percent shall be paid in state aid. 
 73.23     (b) For fiscal year 2001, if the district's surtax rate 
 73.24  would exceed nine percent, the district must conduct an election 
 73.25  by November 2000 in order to approve any surtax amounts in 
 73.26  excess of nine percent.  If the district does not have an 
 73.27  election, or if the ballot question is not approved, the 
 73.28  district's maximum surtax rate for fiscal year 2001 is limited 
 73.29  to nine percent. 
 73.30     (c) For fiscal year 2002, if the district's surtax rate 
 73.31  would exceed seven percent and the district has not yet held a 
 73.32  discretionary revenue referendum under subdivision 2, the 
 73.33  district must conduct an election by November 2001, in order to 
 73.34  approve any surtax amounts in excess of seven percent.  If the 
 73.35  district does not have an election, or if the ballot question is 
 73.36  not approved, the district's maximum surtax rate for fiscal year 
 74.1   2002 is limited to seven percent. 
 74.2      (d) For fiscal year 2003, if the district's surtax rate 
 74.3   would exceed five percent and the district has not yet held a 
 74.4   discretionary revenue referendum under subdivision 2, the 
 74.5   district must conduct an election by November 2002 in order to 
 74.6   approve any surtax amounts in excess of five percent.  If the 
 74.7   district does not have an election, or if the ballot question is 
 74.8   not approved, the district's maximum surtax rate for fiscal year 
 74.9   2003 and following years is limited to five percent. 
 74.10     Sec. 3.  [290.0621] [SCHOOL REFERENDUM TAX.] 
 74.11     Subdivision 1.  [IMPOSITION.] In addition to all other 
 74.12  taxes imposed by this chapter, a tax is imposed on individuals 
 74.13  who reside within the territory of a school district in which 
 74.14  the voters approved an income tax surtax at a referendum 
 74.15  conducted under section 124A.038 for that purpose in 1996 or a 
 74.16  subsequent year.  This tax does not apply to referenda on bond 
 74.17  issues.  Individuals residing in the district on the last day of 
 74.18  the tax year are subject to the surtax.  An individual's school 
 74.19  district of residence is the district where the individual's 
 74.20  abode is located.  If an individual is a homeowner and the 
 74.21  property is a homestead for property tax purposes, there is a 
 74.22  conclusive presumption that the individual's school district of 
 74.23  residence for purposes of the income tax surtax is the school 
 74.24  district where the homestead that is claimed for property tax 
 74.25  purposes is located.  
 74.26     Subd. 2.  [TAX IMPOSED.] The commissioner of revenue shall 
 74.27  annually assess the surtax as part of the individual income tax. 
 74.28     Sec. 4.  [290.0622] [DEPARTMENT OF REVENUE.] 
 74.29     The commissioner of revenue shall require taxpayers to 
 74.30  report on their individual income tax returns the identifying 
 74.31  number of the school district they lived in on the final day of 
 74.32  the tax year.  The commissioner shall provide taxpayers with a 
 74.33  listing of school district names and numbers to facilitate 
 74.34  compliance with this provision. 
 74.35     No later than September 15 of each year, the commissioner 
 74.36  of revenue shall report to the commissioner of children, 
 75.1   families, and learning the preliminary aggregate individual 
 75.2   income tax liability for each school district in the state. 
 75.3      In years in which surtaxes are authorized, the commissioner 
 75.4   of revenue shall collect the surtax along with the individual 
 75.5   income tax.  The instructions for completing the individual 
 75.6   income tax return shall include a listing of school districts 
 75.7   that have authorized surtaxes and the surtax rates. 
 75.8      Sec. 5.  [290.0623] [WITHHOLDING.] 
 75.9      Notwithstanding chapter 289A, a taxpayer is not subject to 
 75.10  penalty in the first year of an income tax surtax if the 
 75.11  taxpayer's withholding is not adjusted to reflect the amount of 
 75.12  the income tax surtax. 
 75.13     Sec. 6.  [NOVEMBER 1997 REFERENDUM.] 
 75.14     A school district may not hold a referendum under Minnesota 
 75.15  Statutes, section 124A.03, in November 1997.  A district may 
 75.16  conduct an election under section 2.  For 1997 taxes payable in 
 75.17  1998 only, the commissioner of children, families, and learning 
 75.18  shall convert the income tax surtax rate approved in November 
 75.19  1997 into a dollar amount by multiplying the surtax rate by the 
 75.20  estimated income tax liability of the school district for that 
 75.21  year.  The school district may increase its referendum revenue 
 75.22  authority under section 124A.03 for taxes payable in 1998 by the 
 75.23  amount calculated by the commissioner.  For following years, the 
 75.24  approved amount must be spread as an income tax surtax. 
 75.25                             ARTICLE 4
 75.26                             STATE AIDS
 75.27     Section 1.  Minnesota Statutes 1996, section 273.1398, 
 75.28  subdivision 6, is amended to read: 
 75.29     Subd. 6.  [PAYMENT.] The commissioner shall certify the 
 75.30  aids provided in subdivisions 2, 2b, 3, and 5 before September 1 
 75.31  of the year preceding the distribution year to the county 
 75.32  auditor of the affected local government.  The aids provided in 
 75.33  subdivisions 2, 2b, 3, and 5 must be paid to local governments 
 75.34  other than school districts at the times provided in section 
 75.35  477A.015 for payment of local government aid to taxing 
 75.36  jurisdictions, except that the first one-half payment of 
 76.1   disparity reduction aid provided in subdivision 3 must be paid 
 76.2   on or before August 31.  The disparity reduction credit provided 
 76.3   in subdivision 4 must be paid to taxing jurisdictions other than 
 76.4   school districts at the time provided in section 473H.10, 
 76.5   subdivision 3.  Aids and Credit reimbursements to school 
 76.6   districts must be certified to the commissioner of children, 
 76.7   families, and learning and paid under section 273.1392.  Except 
 76.8   for education districts and secondary cooperatives that receive 
 76.9   revenue according to section 124.575, payment shall not be made 
 76.10  to any taxing jurisdiction that has ceased to levy a property 
 76.11  tax.  
 76.12     Sec. 2.  Minnesota Statutes 1996, section 298.28, 
 76.13  subdivision 2, is amended to read: 
 76.14     Subd. 2.  [CITY OR TOWN WHERE QUARRIED OR PRODUCED.] 
 76.15  4.5 6.75 cents per gross ton of merchantable iron ore 
 76.16  concentrate, hereinafter referred to as "taxable ton," must be 
 76.17  allocated to the city or town in the county in which the lands 
 76.18  from which taconite was mined or quarried were located or within 
 76.19  which the concentrate was produced.  If the mining, quarrying, 
 76.20  and concentration, or different steps in either thereof are 
 76.21  carried on in more than one taxing district, the commissioner 
 76.22  shall apportion equitably the proceeds of the part of the tax 
 76.23  going to cities and towns among such subdivisions upon the basis 
 76.24  of attributing 40 percent of the proceeds of the tax to the 
 76.25  operation of mining or quarrying the taconite, and the remainder 
 76.26  to the concentrating plant and to the processes of 
 76.27  concentration, and with respect to each thereof giving due 
 76.28  consideration to the relative extent of such operations 
 76.29  performed in each such taxing district.  The commissioner's 
 76.30  order making such apportionment shall be subject to review by 
 76.31  the tax court at the instance of any of the interested taxing 
 76.32  districts, in the same manner as other orders of the 
 76.33  commissioner. 
 76.34     Sec. 3.  Minnesota Statutes 1996, section 298.28, 
 76.35  subdivision 3, is amended to read: 
 76.36     Subd. 3.  [CITIES; TOWNS.] (a) 12.5 18.75 cents per taxable 
 77.1   ton, less any amount distributed under subdivision 8, and 
 77.2   paragraph (b), must be allocated to the taconite municipal aid 
 77.3   account to be distributed as provided in section 298.282. 
 77.4      (b) An amount must be allocated to towns or cities that is 
 77.5   annually certified by the county auditor of a county containing 
 77.6   a taconite tax relief area within which there is (1) an 
 77.7   organized township if, as of January 2, 1982, more than 75 
 77.8   percent of the assessed valuation of the township consists of 
 77.9   iron ore or (2) a city if, as of January 2, 1980, more than 75 
 77.10  percent of the assessed valuation of the city consists of iron 
 77.11  ore.  
 77.12     (c) The amount allocated under paragraph (b) will be the 
 77.13  portion of a township's or city's certified levy equal to the 
 77.14  proportion of (1) the difference between 50 percent of January 
 77.15  2, 1982, assessed value in the case of a township and 50 percent 
 77.16  of the January 2, 1980, assessed value in the case of a city and 
 77.17  its current assessed value to (2) the sum of its current 
 77.18  assessed value plus the difference determined in (1), provided 
 77.19  that the amount distributed shall not exceed $55 per capita in 
 77.20  the case of a township or $75 per capita in the case of a city.  
 77.21  For purposes of this limitation, population will be determined 
 77.22  according to the 1980 decennial census conducted by the United 
 77.23  States Bureau of the Census.  If the current assessed value of 
 77.24  the township exceeds 50 percent of the township's January 2, 
 77.25  1982, assessed value, or if the current assessed value of the 
 77.26  city exceeds 50 percent of the city's January 2, 1980, assessed 
 77.27  value, this paragraph shall not apply.  For purposes of this 
 77.28  paragraph, "assessed value," when used in reference to years 
 77.29  other than 1980 or 1982, means, for distributions for production 
 77.30  year 1989, production taxes payable in 1990, the appropriate net 
 77.31  tax capacities multiplied by 8.2 and for distributions for 
 77.32  production year 1990 and thereafter, production taxes payable in 
 77.33  1991 and thereafter, the appropriate net tax capacities 
 77.34  multiplied by 10.2. 
 77.35     Sec. 4.  Minnesota Statutes 1996, section 298.28, 
 77.36  subdivision 5, is amended to read: 
 78.1      Subd. 5.  [COUNTIES.] (a) 16.5 26.25 cents per taxable ton 
 78.2   is allocated to counties to be distributed, based upon 
 78.3   certification by the commissioner of revenue, under paragraphs 
 78.4   (b) to (d). 
 78.5      (b) 13 19.5 cents per taxable ton shall be distributed to 
 78.6   the county in which the taconite is mined or quarried or in 
 78.7   which the concentrate is produced, less any amount which is to 
 78.8   be distributed pursuant to paragraph (c).  The apportionment 
 78.9   formula prescribed in subdivision 2 is the basis for the 
 78.10  distribution. 
 78.11     (c) If an electric power plant owned by and providing the 
 78.12  primary source of power for a taxpayer mining and concentrating 
 78.13  taconite is located in a county other than the county in which 
 78.14  the mining and the concentrating processes are conducted, one 
 78.15  cent 1.5 cents per taxable ton of the tax distributed to the 
 78.16  counties pursuant to paragraph (b) and imposed on and collected 
 78.17  from such taxpayer shall be paid to the county in which the 
 78.18  power plant is located. 
 78.19     (d) 3.5 5.25 cents per taxable ton shall be paid to the 
 78.20  county from which the taconite was mined, quarried or 
 78.21  concentrated to be deposited in the county road and bridge 
 78.22  fund.  If the mining, quarrying and concentrating, or separate 
 78.23  steps in any of those processes are carried on in more than one 
 78.24  county, the commissioner shall follow the apportionment formula 
 78.25  prescribed in subdivision 2. 
 78.26     Sec. 5.  Minnesota Statutes 1996, section 477A.011, is 
 78.27  amended by adding a subdivision to read: 
 78.28     Subd. 3b.  [SPRAWL POPULATION.] For a city with a 
 78.29  population of 5,000 or more which is located outside of the 
 78.30  metropolitan area, the "sprawl population" is equal to the total 
 78.31  population of all municipalities and unorganized townships that 
 78.32  have a geographic center closer to the geographic center of that 
 78.33  city than to the geographic center of any other city with a 
 78.34  population of 5,000 or more.  For a city with a population that 
 78.35  is less than 5,000 or a city located in the metropolitan area, 
 78.36  the sprawl population is zero. 
 79.1      Sec. 6.  Minnesota Statutes 1996, section 477A.011, is 
 79.2   amended by adding a subdivision to read: 
 79.3      Subd. 3c.  [ADJUSTED POPULATION.] "Adjusted population" is 
 79.4   the sum of a city's population plus five percent of the city's 
 79.5   sprawl population. 
 79.6      Sec. 7.  Minnesota Statutes 1996, section 477A.011, is 
 79.7   amended by adding a subdivision to read: 
 79.8      Subd. 3d.  [POVERTY ADJUSTED POPULATION.] "Poverty adjusted 
 79.9   population" means the sum of (1) the county's population, and 
 79.10  (2) three times the average unduplicated number of persons who 
 79.11  receive benefits per month under general assistance, medical 
 79.12  assistance, or AFDC, or its successor program, as determined 
 79.13  under section 256E.06. 
 79.14     Sec. 8.  Minnesota Statutes 1996, section 477A.011, 
 79.15  subdivision 20, is amended to read: 
 79.16     Subd. 20.  [CITY NET TAX CAPACITY.] "City Net tax capacity" 
 79.17  for a local taxing jurisdiction means (1) the net tax capacity 
 79.18  computed using the net tax capacity rates in section 273.13, and 
 79.19  the market values for taxes payable in the year prior to the aid 
 79.20  distribution plus (2) a city's jurisdiction's fiscal disparities 
 79.21  distribution tax capacity under section 276A.06, subdivision 2, 
 79.22  paragraph (b), or 473F.08, subdivision 2, paragraph (b), for 
 79.23  taxes payable in the year prior to that for which aids are being 
 79.24  calculated.  The market value utilized in computing city a 
 79.25  jurisdiction's net tax capacity shall be reduced by the sum of 
 79.26  (1) a city's the jurisdiction's market value of commercial 
 79.27  industrial property as defined in section 276A.01, subdivision 
 79.28  3, or 473F.02, subdivision 3, multiplied by the ratio determined 
 79.29  pursuant to section 276A.06, subdivision 2, paragraph (a), or 
 79.30  473F.08, subdivision 2, paragraph (a), (2) the market value of 
 79.31  the captured value of tax increment financing districts as 
 79.32  defined in section 469.177, subdivision 2, and (3) the market 
 79.33  value of transmission lines deducted from a city's the 
 79.34  jurisdiction's total net tax capacity under section 273.425.  
 79.35  The county or city net tax capacity will be computed using 
 79.36  equalized market values.  
 80.1      Sec. 9.  Minnesota Statutes 1996, section 477A.011, 
 80.2   subdivision 35, is amended to read: 
 80.3      Subd. 35.  [TAX EFFORT RATE.] "Tax effort rate" for a type 
 80.4   of taxing jurisdiction means the sum of the net levy for 
 80.5   all cities jurisdictions of that type divided by the sum of the 
 80.6   city net tax capacity for all cities jurisdictions of that type. 
 80.7   For aids payable in 1999 only, the "tax effort rate" for cities 
 80.8   means (1) the sum of the net levy for all cities plus the 1998 
 80.9   homestead and agricultural credit aid for all cities, divided by 
 80.10  (2) the sum of the net tax capacity for all cities.  For 
 80.11  purposes of this section, "net levy" means the city levy, after 
 80.12  all adjustments, used for calculating the local tax rate under 
 80.13  section 275.08 for taxes payable in the year prior to the aid 
 80.14  distribution.  The fiscal disparity distribution levy under 
 80.15  chapter 276A or 473F is included in net levy. 
 80.16     Sec. 10.  Minnesota Statutes 1996, section 477A.011, 
 80.17  subdivision 37, is amended to read: 
 80.18     Subd. 37.  [BASE REDUCTION PERCENTAGE.] "Base reduction 
 80.19  percentage" is the sum of 50 percent plus a percentage equal 
 80.20  to (1) the difference between the amount available for city aid 
 80.21  under section 477A.03 for the year for which aid is being 
 80.22  calculated and the amount available for city aid under section 
 80.23  477A.03 for calendar year 1994 1999, (2) divided by the sum of 
 80.24  the city aid base for all cities and (3) multiplied by 100.  The 
 80.25  reduction percentage for any year may not be less than the 
 80.26  reduction percentage from the previous year.  For aid paid in 
 80.27  calendar year 1994, the reduction percentage is zero.  The 
 80.28  reduction percentage may not be more than 100 percent. 
 80.29     Sec. 11.  Minnesota Statutes 1996, section 477A.011, is 
 80.30  amended by adding a subdivision to read: 
 80.31     Subd. 38.  [ACRES.] The number of acres in a township or a 
 80.32  county are the number of acres of land in the jurisdiction, 
 80.33  according to the most recent federal census, adjusted for any 
 80.34  annexations and detachments as provided under section 477A.014, 
 80.35  subdivision 1. 
 80.36     Sec. 12.  Minnesota Statutes 1996, section 477A.011, is 
 81.1   amended by adding a subdivision to read: 
 81.2      Subd. 39.  [AGRICULTURAL NET TAX CAPACITY.] The 
 81.3   "agricultural net tax capacity" for a township is equal to the 
 81.4   net tax capacity for all property in the township that is 
 81.5   classified as class 2 under section 273.13, subdivision 23, 
 81.6   excluding any airport property, plus any class 1 property under 
 81.7   section 273.13, subdivision 22, that is part of an agricultural 
 81.8   homestead. 
 81.9      Sec. 13.  [477A.0125] [COUNTY AID DISTRIBUTIONS.] 
 81.10     Subdivision 1.  [FORMULA AMOUNT.] In calendar year 1999 and 
 81.11  subsequent years, each county shall receive an aid amount equal 
 81.12  to the product of (1) an aid percentage, and (2) the sum of (i) 
 81.13  its poverty weighted population multiplied by 145; and (ii) its 
 81.14  acres of land multiplied by .40; minus its net tax capacity 
 81.15  multiplied by 50 percent of the county tax effort rate.  The aid 
 81.16  percentage shall be calculated by the department of revenue so 
 81.17  that the total aid paid to counties under this section equals 
 81.18  the amount available for distribution under section 477A.03. 
 81.19     Subd. 2.  [AID LIMITATION.] (a) For aids payable in 1999, 
 81.20  the amount of aid a county receives under this section shall not 
 81.21  exceed an amount equal to (1) its 1998 homestead and 
 81.22  agricultural credit aid, plus (2) ten percent of its net levy 
 81.23  for taxes payable in 1998. 
 81.24     (b) For aids payable in 2000 and subsequent years, the 
 81.25  amount of aid a county receives under this section shall not 
 81.26  exceed an amount equal to (1) its 1998 homestead and 
 81.27  agricultural credit aid increased by the percentage increase in 
 81.28  total aid under this section for the current aid payable year 
 81.29  compared to the total aid under this section for 1999, plus (2) 
 81.30  a percentage of its net levy for taxes payable in 1998 equal to 
 81.31  ten percent plus one percent for each aid payable year since 
 81.32  1999. 
 81.33     Sec. 14.  Minnesota Statutes 1996, section 477A.013, 
 81.34  subdivision 1, is amended to read: 
 81.35     Subdivision 1.  [TOWNS.] In 1994 each town that had levied 
 81.36  for taxes payable in the prior year a local tax rate of at least 
 82.1   .008 shall receive a distribution equal to the amount it 
 82.2   received in 1993 under this section before any nonpermanent 
 82.3   reductions made under section 477A.0132.  In 1995 each town that 
 82.4   had levied for taxes payable in 1993 a local tax rate of at 
 82.5   least .008 shall receive a distribution equal to 102 percent of 
 82.6   the amount it received in 1994 under this section before any 
 82.7   increases or reductions under sections 16A.711, subdivision 5, 
 82.8   and 477A.0132.  In 1996 and subsequent years each town that had 
 82.9   levied for taxes payable in 1993 a local tax rate of at least 
 82.10  .008 shall receive a distribution equal to the amount it 
 82.11  received in the previous year under this section, adjusted for 
 82.12  inflation as provided under section 477A.03, subdivision 3. In 
 82.13  calendar year 1999 and subsequent years, the amount of aid that 
 82.14  a town receives is equal to (1) the aid factor multiplied by the 
 82.15  number of acres in the town, less (2) 0.10 multiplied by the 
 82.16  difference between the town's total net tax capacity and its 
 82.17  agricultural net tax capacity.  In 1999, the aid factor is $1.  
 82.18  In 2000 and subsequent years, the aid factor is the aid factor 
 82.19  from the previous year adjusted for inflation as provided under 
 82.20  section 477A.03, subdivision 3.  If the town's agricultural net 
 82.21  tax capacity is less than 40 percent of its total net tax 
 82.22  capacity, the amount of aid it receives is zero.  No town may 
 82.23  have an aid amount less than zero. 
 82.24     Sec. 15.  Minnesota Statutes 1996, section 477A.013, 
 82.25  subdivision 8, is amended to read: 
 82.26     Subd. 8.  [CITY FORMULA AID.] In calendar year 1994 and 
 82.27  subsequent years, the formula aid for a city is equal to the 
 82.28  need increase percentage multiplied by the difference between 
 82.29  (1) the city's revenue need multiplied by its adjusted 
 82.30  population, and (2) the city's net tax capacity multiplied by 
 82.31  the tax effort rate.  No city may have a formula aid amount less 
 82.32  than zero.  The need increase percentage must be the same for 
 82.33  all cities.  
 82.34     Notwithstanding the prior sentence, in 1995 only, the need 
 82.35  increase percentage for a city shall be twice the need increase 
 82.36  percentage applicable to other cities if:  
 83.1      (1) the city, in 1992 or 1993, transferred an amount from 
 83.2   governmental funds to their sewer and water fund, and 
 83.3      (2) the amount transferred exceeded their net levy for 
 83.4   taxes payable in the year in which the transfer occurred. 
 83.5      The applicable need increase percentage or percentages must 
 83.6   be calculated by the department of revenue so that the total of 
 83.7   the aid under subdivision 9 equals the total amount available 
 83.8   for aid under section 477A.03.  
 83.9      Sec. 16.  Minnesota Statutes 1996, section 477A.013, 
 83.10  subdivision 9, is amended to read: 
 83.11     Subd. 9.  [CITY AID DISTRIBUTION.] (a) In calendar year 
 83.12  1994 1999 and thereafter, each city shall receive an aid 
 83.13  distribution equal to the sum of (1) the city formula aid under 
 83.14  subdivision 8, and (2) its city aid base multiplied by a 
 83.15  percentage equal to 100 minus the base reduction percentage. 
 83.16     (b) The percentage increase for a first class city in 
 83.17  calendar year 1995 and thereafter shall not exceed the 
 83.18  percentage increase in the sum of the aid to all cities under 
 83.19  this section in the current calendar year compared to the sum of 
 83.20  the aid to all cities in the previous year. 
 83.21     (c) The total aid for any city, except a first class city, 
 83.22  shall not exceed the sum of (1) ten percent of the city's net 
 83.23  levy for the year prior to the aid distribution plus (2) its 
 83.24  total aid in the previous year before any increases or decreases 
 83.25  under sections 16A.711, subdivision 5, and 477A.0132. 
 83.26     (d) Notwithstanding paragraph (c), in 1995 only, for cities 
 83.27  which in 1992 or 1993 transferred an amount from governmental 
 83.28  funds to their sewer and water fund in an amount greater than 
 83.29  their net levy for taxes payable in the year in which the 
 83.30  transfer occurred, the total aid shall not exceed the sum of (1) 
 83.31  20 percent of the city's net levy for the year prior to the aid 
 83.32  distribution plus (2) its total aid in the previous year before 
 83.33  any increases or decreases under sections 16A.711, subdivision 
 83.34  5, and 477A.0132. 
 83.35     Sec. 17.  Minnesota Statutes 1996, section 477A.03, 
 83.36  subdivision 2, is amended to read: 
 84.1      Subd. 2.  [ANNUAL APPROPRIATION.] A sum sufficient to 
 84.2   discharge the duties imposed by sections 477A.011 to 477A.014 is 
 84.3   annually appropriated from the general fund to the commissioner 
 84.4   of revenue.  For aids payable in 1996 1999 and thereafter, the 
 84.5   total aids paid under sections 477A.013, subdivision 9, 
 84.6   477A.0121 and 477A.0122 are the amounts certified to be paid in 
 84.7   the previous year, adjusted for inflation as provided under 
 84.8   subdivision 3.  Aid payments to counties under section 477A.0121 
 84.9   are limited to $20,265,000 in 1996 477A.0125 are limited to 
 84.10  $200,000,000 in 1999.  Aid payments to counties under section 
 84.11  477A.0121 are limited to $27,571,625 in 1997 cities under 
 84.12  section 477A.013, subdivision 9, are limited to $375,000,000 in 
 84.13  1999.  For aid payable in 1998 2000 and thereafter, the total 
 84.14  aids paid under section 477A.0121 sections 477A.0125 and 
 84.15  477A.013, subdivision 9, are the amounts certified to be paid in 
 84.16  the previous year, adjusted for inflation as provided under 
 84.17  subdivision 3. 
 84.18     Sec. 19.  [477A.20] [STATE-OWNED BUILDINGS; PAYMENTS IN 
 84.19  LIEU.] 
 84.20     Subdivision 1.  [STATE-OWNED BUILDINGS.] For purposes of 
 84.21  this section, "state-owned buildings" means all buildings owned 
 84.22  or leased by the state of Minnesota, the University of 
 84.23  Minnesota, state universities, community colleges, and technical 
 84.24  colleges which are currently exempt from local property taxes, 
 84.25  with the following exceptions: 
 84.26     (1) buildings that have less than 2,000 square feet of 
 84.27  finished floor space, and 
 84.28     (2) buildings owned or leased and used by the department of 
 84.29  natural resources for purposes other than as a state or district 
 84.30  headquarters. 
 84.31     Subd. 2.  [EDUCATIONAL AND CORRECTIONAL BUILDINGS.] For 
 84.32  purposes of this section, "educational and correctional 
 84.33  buildings" means correctional facilities and buildings used for 
 84.34  higher education purposes. 
 84.35     Subd. 3.  [IN LIEU PAYMENT.] (a) A city shall receive a 
 84.36  payment in lieu of property taxes for state owned buildings in 
 85.1   the following amount, subject to the limits imposed in 
 85.2   paragraphs (b) and (c).  The in lieu payment shall be equal to 
 85.3   $.25 for each square foot of finished floor space in state-owned 
 85.4   educational and correctional buildings plus $.75 for each square 
 85.5   foot of finished floor space for all other state owned buildings 
 85.6   located within the city.  The department of administration will 
 85.7   provide the square footage for all qualifying buildings to the 
 85.8   commissioner of revenue to allow calculation of this payment. 
 85.9      (b) No city may receive an in lieu payment greater than $15 
 85.10  per capita, based on the most recent city population estimate, 
 85.11  as defined in section 477A.011, subdivision 3. 
 85.12     (c) If the total amount of finished floor space in 
 85.13  qualifying state owned buildings in a city is less than 8,000 
 85.14  square feet, the in lieu payment shall be zero. 
 85.15     Subd. 4.  [APPROPRIATION.] A sum sufficient to discharge 
 85.16  the duties imposed under this section is annually appropriated 
 85.17  from the general fund to the commissioner of revenue.  The 
 85.18  payments shall be made in the manner in prescribed in section 
 85.19  477A.014, subdivision 1.  The payments shall be made on the 
 85.20  dates prescribed in section 477A.015. 
 85.21     Sec. 20.  [REPEALER.] 
 85.22     Minnesota Statutes 1996, sections 273.1398, subdivisions 2, 
 85.23  2c, 2d, 3, and 3a; and 273.166, are repealed. 
 85.24     Sec. 21.  [EFFECTIVE DATE.] 
 85.25     This article is effective for aids payable in 1999 and 
 85.26  subsequent years. 
 85.27                             ARTICLE 5
 85.28                         TRUTH IN BUDGETING
 85.29     Section 1.  Minnesota Statutes 1996, section 275.065, 
 85.30  subdivision 3, is amended to read: 
 85.31     Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
 85.32  county auditor shall prepare and the county treasurer shall 
 85.33  deliver after November 10 and on or before November 24 each 
 85.34  year, by first class mail to each taxpayer at the address listed 
 85.35  on the county's current year's assessment roll, a notice of 
 85.36  proposed property taxes and, in the case of a town, final 
 86.1   property taxes.  
 86.2      (b) The commissioner of revenue shall prescribe the form of 
 86.3   the notice. 
 86.4      (c) The notice must inform taxpayers that it contains the 
 86.5   amount of property taxes each taxing authority other than a town 
 86.6   proposes to collect for taxes payable the following year and, 
 86.7   for a town, the amount of its final levy.  It must clearly state 
 86.8   that each taxing authority, including regional library districts 
 86.9   established under section 134.201, and including the 
 86.10  metropolitan taxing districts as defined in paragraph (i), but 
 86.11  excluding all other special taxing districts, school districts, 
 86.12  and towns, will hold a public meeting to receive public 
 86.13  testimony on the proposed budget and proposed or final property 
 86.14  tax levy, or, in case of a school district, on the current 
 86.15  budget and proposed property tax levy.  It must clearly state 
 86.16  the time and place of each taxing authority's meeting and an 
 86.17  address where comments will be received by mail.  
 86.18     (d) The notice must state for each parcel the following 
 86.19  items listed in this sequential order: 
 86.20     (1) the market value of the property as determined under 
 86.21  section 273.11, and used for computing property taxes payable in 
 86.22  the following year and for taxes payable in the current year; 
 86.23  and, in the case of residential property, whether the property 
 86.24  is classified as homestead or nonhomestead.  The notice must 
 86.25  clearly inform taxpayers of the years to which the market values 
 86.26  apply and that the values are final values; 
 86.27     (2) the property tax amount for the following year based on 
 86.28  each taxing authority's constant spending levy amount.  This 
 86.29  amount must be listed by county, city or town, school district, 
 86.30  the state education tax, the total of the special taxing 
 86.31  districts, the tax increment tax, if any, the fiscal disparities 
 86.32  tax, if any, and a total of all taxing authorities; 
 86.33     (3) the proposed property tax amount for the following year 
 86.34  by for the county, the city or town, the school district 
 86.35  excess referenda levy, remaining school district levy, regional 
 86.36  library district, if in existence, the total of the metropolitan 
 87.1   special taxing districts as defined in paragraph (i) and, the 
 87.2   state education tax, the sum of the remaining special taxing 
 87.3   districts, and as a total of all the taxing authorities, 
 87.4   including all special taxing districts, the proposed or, for.  
 87.5   For a town, the proposed amount is its final net tax on the 
 87.6   property for taxes payable the following year and the actual tax 
 87.7   for taxes payable the current year.  If a school district has 
 87.8   certified under section 124A.03, subdivision 2, that a 
 87.9   referendum will be held in the school district at the November 
 87.10  general election, the county auditor must note next to the 
 87.11  school district's proposed amount that a referendum is pending 
 87.12  and that, if approved by the voters, the tax amount may be 
 87.13  higher than shown on the notice.  For the purposes of this 
 87.14  subdivision, "school district excess referenda levy" means 
 87.15  school district taxes for operating purposes approved at 
 87.16  referendums, including those taxes based on net tax capacity as 
 87.17  well as those based on market value.  "School district excess 
 87.18  referenda levy" does not include school district taxes for 
 87.19  capital expenditures approved at referendums or school district 
 87.20  taxes to pay for the debt service on bonds approved at 
 87.21  referenda.  In the case of the city of Minneapolis, the levy for 
 87.22  the Minneapolis library board and the levy for Minneapolis park 
 87.23  and recreation shall be listed separately from the remaining 
 87.24  amount of the city's levy.  In the case of a parcel where tax 
 87.25  increment or the fiscal disparities areawide tax under chapter 
 87.26  276A or 473F applies, the proposed tax levy on the captured 
 87.27  value or the proposed tax levy on the tax capacity subject to 
 87.28  the areawide tax must each be stated separately and not included 
 87.29  in the sum of the special taxing districts; and 
 87.30     (3) (4) the increase or decrease in between the amounts in 
 87.31  clause clauses (2) from taxes payable in the current year to 
 87.32  proposed or, for a town, final taxes payable the following year, 
 87.33  and (3) expressed as a dollar amount and as a percentage; and 
 87.34     (5) the total actual taxes for the current year for all 
 87.35  taxing authorities for the parcel. 
 87.36     (e) The notice must clearly state that the proposed or 
 88.1   final taxes do not include the following: 
 88.2      (1) special assessments; 
 88.3      (2) levies approved by the voters after the date the 
 88.4   proposed taxes are certified, including bond referenda, school 
 88.5   district levy referenda, and levy limit increase referenda; 
 88.6      (3) amounts necessary to pay cleanup or other costs due to 
 88.7   a natural disaster occurring after the date the proposed taxes 
 88.8   are certified; 
 88.9      (4) amounts necessary to pay tort judgments against the 
 88.10  taxing authority that become final after the date the proposed 
 88.11  taxes are certified; and 
 88.12     (5) the contamination tax imposed on properties which 
 88.13  received market value reductions for contamination. 
 88.14     (f) Except as provided in subdivision 7, failure of the 
 88.15  county auditor to prepare or the county treasurer to deliver the 
 88.16  notice as required in this section does not invalidate the 
 88.17  proposed or final tax levy or the taxes payable pursuant to the 
 88.18  tax levy. 
 88.19     (g) If the notice the taxpayer receives under this section 
 88.20  lists the property as nonhomestead and the homeowner provides 
 88.21  satisfactory documentation to the county assessor that the 
 88.22  property is owned and used as the owner's homestead, the 
 88.23  assessor shall reclassify the property to homestead for taxes 
 88.24  payable in the following year. 
 88.25     (h) In the case of class 4 residential property used as a 
 88.26  residence for lease or rental periods of 30 days or more, the 
 88.27  taxpayer must either: 
 88.28     (1) mail or deliver a copy of the notice of proposed 
 88.29  property taxes to each tenant, renter, or lessee; or 
 88.30     (2) post a copy of the notice in a conspicuous place on the 
 88.31  premises of the property.  
 88.32     The notice must be mailed or posted by the taxpayer by 
 88.33  November 27 or within three days of receipt of the notice, 
 88.34  whichever is later.  A taxpayer may notify the county treasurer 
 88.35  of the address of the taxpayer, agent, caretaker, or manager of 
 88.36  the premises to which the notice must be mailed in order to 
 89.1   fulfill the requirements of this paragraph. 
 89.2      (i) For purposes of this subdivision, subdivisions 5a and 
 89.3   6, "metropolitan special taxing districts" means the following 
 89.4   taxing districts in the seven-county metropolitan area that levy 
 89.5   a property tax for any of the specified purposes listed below: 
 89.6      (1) metropolitan council under section 473.132, 473.167, 
 89.7   473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
 89.8      (2) metropolitan airports commission under section 473.667, 
 89.9   473.671, or 473.672; and 
 89.10     (3) metropolitan mosquito control commission under section 
 89.11  473.711. 
 89.12     For purposes of this section, any levies made by the 
 89.13  regional rail authorities in the county of Anoka, Carver, 
 89.14  Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
 89.15  398A shall be included with the appropriate county's levy and 
 89.16  shall be discussed at that county's public hearing. 
 89.17     (j) For taxes levied in 1996, payable in 1997 only, in the 
 89.18  case of a statutory or home rule charter city or town that 
 89.19  exercises the local levy option provided in section 473.388, 
 89.20  subdivision 7, the notice of its proposed taxes may include a 
 89.21  statement of the amount by which its proposed tax increase for 
 89.22  taxes payable in 1997 is attributable to its exercise of that 
 89.23  option, together with a statement that the levy of the 
 89.24  metropolitan council was decreased by a similar amount because 
 89.25  of the exercise of that option. 
 89.26     Sec. 2.  Minnesota Statutes 1996, section 275.065, is 
 89.27  amended by adding a subdivision to read: 
 89.28     Subd. 3a.  [CONSTANT SPENDING LEVY AMOUNT.] (a) For 
 89.29  purposes of this section, "constant spending levy amount" for a 
 89.30  county, school district, city, town, or special taxing district 
 89.31  means the property tax levy that the taxing authority would need 
 89.32  to levy so that the sum of its levy, including its fiscal 
 89.33  disparities distribution levy under section 276A.06, subdivision 
 89.34  3, clause (a), or 473F.08, subdivision 3, clause (a), plus its 
 89.35  property tax aid amounts would remain constant from the current 
 89.36  year to the proposed year, taking into account the fiscal 
 90.1   disparities distribution levy amounts and the property tax aid 
 90.2   amounts that have been certified for the proposed year.  For the 
 90.3   purposes of this paragraph, property tax aids include local 
 90.4   government aid under sections 477A.012 and 477A.013; local 
 90.5   performance aid under section 477A.05; county criminal justice 
 90.6   aid under section 477A.0121; family preservation aid under 
 90.7   section 477A.0122; and payments in lieu for state-owned 
 90.8   buildings under section 477A.20. 
 90.9      (b) For purposes of the state education tax, "constant 
 90.10  spending levy amount" means the state education tax that would 
 90.11  be computed for the property using the current year's state 
 90.12  education tax rate applicable to the property and the proposed 
 90.13  year's taxable market value. 
 90.14     Sec. 3.  Minnesota Statutes 1996, section 275.065, 
 90.15  subdivision 5a, is amended to read: 
 90.16     Subd. 5a.  [PUBLIC ADVERTISEMENT.] (a) A city that has a 
 90.17  population of more than 2,500, county, a metropolitan special 
 90.18  taxing district as defined in subdivision 3, paragraph (i), or a 
 90.19  regional library district established under section 134.201, or 
 90.20  school district shall advertise in a newspaper a notice of its 
 90.21  intent to adopt a budget and property tax levy or, in the case 
 90.22  of a school district, to review its current budget and 
 90.23  proposed for property taxes payable in the following year, at a 
 90.24  public hearing.  The notice must be published not less than two 
 90.25  business days nor more than six business days before the hearing.
 90.26     The advertisement must be at least one-eighth page in size 
 90.27  of a standard-size or a tabloid-size newspaper.  The 
 90.28  advertisement must not be placed in the part of the newspaper 
 90.29  where legal notices and classified advertisements appear.  The 
 90.30  advertisement must be published in an official newspaper of 
 90.31  general circulation in the taxing authority.  The newspaper 
 90.32  selected must be one of general interest and readership in the 
 90.33  community, and not one of limited subject matter.  The 
 90.34  advertisement must appear in a newspaper that is published at 
 90.35  least once per week.  
 90.36     For purposes of this section, the metropolitan special 
 91.1   taxing district's advertisement must only be published in the 
 91.2   Minneapolis Star and Tribune and the Saint Paul Pioneer Press. 
 91.3      (b) The advertisement for metropolitan special taxing 
 91.4   districts and regional library districts must be in the 
 91.5   following form, except that the notice for a school district may 
 91.6   include references to the current budget in regard to proposed 
 91.7   property taxes. 
 91.8                              "NOTICE OF
 91.9                       PROPOSED PROPERTY TAXES
 91.10            (City/County/School District/Metropolitan
 91.11                  Special Taxing District/Regional
 91.12                   Library District) of .........
 91.13  The governing body of ........ will soon hold budget hearings 
 91.14  and vote on the property taxes for (city/county/metropolitan 
 91.15  special taxing district/regional library district services that 
 91.16  will be provided in 199_/school district services that will be 
 91.17  provided in 199_ and 199_ (year)). 
 91.18                     NOTICE OF PUBLIC HEARING:
 91.19  All concerned citizens are invited to attend a public hearing 
 91.20  and express their opinions on the proposed (city/county/school 
 91.21  district/metropolitan special taxing district/regional library 
 91.22  district) budget and property taxes, or in the case of a school 
 91.23  district, its current budget and proposed property taxes, 
 91.24  payable in the following year.  The hearing will be held on 
 91.25  (Month/Day/Year) at (Time) at (Location, Address)." 
 91.26     (c) The advertisement for cities and counties must be in 
 91.27  the following form. 
 91.28                       "NOTICE OF PROPOSED
 91.29                 TOTAL BUDGET AND PROPERTY TAXES
 91.30  The (city/county) governing body or board of commissioners will 
 91.31  hold a public hearing to discuss the budget and to vote on the 
 91.32  amount of property taxes to collect for services the 
 91.33  (city/county) will provide in (year). 
 91.34     
 91.35  SPENDING:  The total budget amounts below compare 
 91.36  (city's/county's) (year) total actual budget with the amount the 
 92.1   (city/county) proposes to spend in (year). 
 92.2      
 92.3   (Year) Total          Proposed (Year)          Change from
 92.4   Actual Budget             Budget               (Year)-(Year)
 92.5      
 92.6     $.......              $.......                ...%
 92.7      
 92.8   TAXES:  The property tax amounts below compare that portion of 
 92.9   the current budget levied in property taxes in (city/county) for 
 92.10  (year) with the property taxes the (city/county) proposes to 
 92.11  collect in (year). 
 92.12     
 92.13  (Year) Property       Proposed (Year)          Change from
 92.14      Taxes              Property Taxes         (Year)-(Year)
 92.15     
 92.16    $.......              $.......                ...% 
 92.17     
 92.18                    ATTEND THE PUBLIC HEARING
 92.19  All (city/county) residents are invited to attend the public 
 92.20  hearing of the (city/county) to express your opinions on the 
 92.21  budget and the proposed amount of (year) property taxes.  The 
 92.22  hearing will be held on: 
 92.23                      (Month/Day/Year/Time)
 92.24                        (Location/Address)
 92.25  If the discussion of the budget cannot be completed, a time and 
 92.26  place for continuing the discussion will be announced at the 
 92.27  hearing.  You are also invited to send your written comments to: 
 92.28                          (City/County)
 92.29                       (Location/Address)"
 92.30     (d) For purposes of this subdivision, the budget amounts 
 92.31  listed on the advertisement mean: 
 92.32     (1) for cities, the total government fund expenditures, as 
 92.33  defined by the state auditor under section 471.6965, less any 
 92.34  expenditures for improvements or services that are specially 
 92.35  assessed or charged under chapter 429, 430, 435, or the 
 92.36  provisions of any other law or charter; and 
 93.1      (2) for counties, the total government fund expenditures, 
 93.2   as defined by the state auditor under section 375.169, less any 
 93.3   expenditures for direct payments to recipients or providers for 
 93.4   the human service aids listed in section 273.1398, subdivision 
 93.5   1, paragraph (i). 
 93.6      (c) (e) A city with a population of over 500 but not more 
 93.7   than 2,500 must advertise by posted notice as defined in section 
 93.8   645.12, subdivision 1.  The advertisement must be posted at the 
 93.9   time provided in paragraph (a).  It must be in the form required 
 93.10  in paragraph (b). 
 93.11     (d) (f) For purposes of this subdivision, the population of 
 93.12  a city is the most recent population as determined by the state 
 93.13  demographer under section 4A.02. 
 93.14     (e) (g) The commissioner of revenue, subject to the 
 93.15  approval of the chairs of the house and senate tax committees, 
 93.16  shall prescribe the form and format of the advertisement. 
 93.17     (f) For calendar year 1993, each taxing authority required 
 93.18  to publish an advertisement must include on the advertisement a 
 93.19  statement that information on the increases or decreases of the 
 93.20  total budget, including employee and independent contractor 
 93.21  compensation in the prior year, current year, and proposed 
 93.22  budget year will be discussed at the hearing. 
 93.23     (g) Notwithstanding paragraph (f), for 1993, the 
 93.24  commissioner of revenue shall prescribe the form, format, and 
 93.25  content of an advertisement comparing current and proposed 
 93.26  expense budgets for the metropolitan council, the metropolitan 
 93.27  airports commission, and the metropolitan mosquito control 
 93.28  commission.  The expense budget must include occupancy, 
 93.29  personnel, contractual and capital improvement expenses.  The 
 93.30  form, format, and content of the advertisement must be approved 
 93.31  by the chairs of the house and senate tax committees prior to 
 93.32  publication. 
 93.33     Sec. 4.  Minnesota Statutes 1996, section 275.065, 
 93.34  subdivision 6, is amended to read: 
 93.35     Subd. 6.  [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 
 93.36  Between November 29 and December 20, the governing bodies of a 
 94.1   city that has a population over 500, county, metropolitan 
 94.2   special taxing districts as defined in subdivision 3, paragraph 
 94.3   (i), and regional library districts shall each hold a public 
 94.4   hearing to discuss and seek public comment on its final budget 
 94.5   and property tax levy for taxes payable in the following year, 
 94.6   and the governing body of the school district shall hold a 
 94.7   public hearing to review its current budget and proposed 
 94.8   property tax levy for taxes payable in the following year.  The 
 94.9   metropolitan special taxing districts shall be required to hold 
 94.10  only a single joint public hearing, the location of which will 
 94.11  be determined by the affected metropolitan agencies. 
 94.12     At a subsequent hearing, each county, school district, 
 94.13  city, and metropolitan special taxing district may amend its 
 94.14  proposed property tax levy and must adopt a final property tax 
 94.15  levy.  Each county, city, and metropolitan special taxing 
 94.16  district may also amend its proposed budget and must adopt a 
 94.17  final budget at the subsequent hearing.  A school district is 
 94.18  not required to adopt its final budget at the subsequent 
 94.19  hearing.  The subsequent hearing of a taxing authority must be 
 94.20  held on a date subsequent to the date of the taxing authority's 
 94.21  initial public hearing, or subsequent to the date of its 
 94.22  continuation hearing if a continuation hearing is held.  The 
 94.23  subsequent hearing may be held at a regularly scheduled board or 
 94.24  council meeting or at a special meeting scheduled for the 
 94.25  purposes of the subsequent hearing.  The subsequent hearing of a 
 94.26  taxing authority does not have to be coordinated by the county 
 94.27  auditor to prevent a conflict with an initial hearing, a 
 94.28  continuation hearing, or a subsequent hearing of any other 
 94.29  taxing authority.  All subsequent hearings must be held prior to 
 94.30  five working days after December 20 of the levy year. 
 94.31     The time and place of the subsequent hearing must be 
 94.32  announced at the initial public hearing or at the continuation 
 94.33  hearing. 
 94.34     The property tax levy certified under section 275.07 by a 
 94.35  city, county, metropolitan special taxing district, regional 
 94.36  library district, or school district must not exceed the 
 95.1   proposed levy determined under subdivision 1, except by an 
 95.2   amount up to the sum of the following amounts: 
 95.3      (1) the amount of a school district levy whose voters 
 95.4   approved a referendum to increase taxes under section 124.82, 
 95.5   subdivision 3, 124A.03, subdivision 2, or 124B.03, subdivision 
 95.6   2, after the proposed levy was certified; 
 95.7      (2) the amount of a city or county levy approved by the 
 95.8   voters after the proposed levy was certified; 
 95.9      (3) the amount of a levy to pay principal and interest on 
 95.10  bonds approved by the voters under section 475.58 after the 
 95.11  proposed levy was certified; 
 95.12     (4) the amount of a levy to pay costs due to a natural 
 95.13  disaster occurring after the proposed levy was certified, if 
 95.14  that amount is approved by the commissioner of revenue under 
 95.15  subdivision 6a; 
 95.16     (5) the amount of a levy to pay tort judgments against a 
 95.17  taxing authority that become final after the proposed levy was 
 95.18  certified, if the amount is approved by the commissioner of 
 95.19  revenue under subdivision 6a; 
 95.20     (6) the amount of an increase in levy limits certified to 
 95.21  the taxing authority by the commissioner of children, families, 
 95.22  and learning or the commissioner of revenue after the proposed 
 95.23  levy was certified; and 
 95.24     (7) the amount required under section 124.755. 
 95.25     At the hearing under this subdivision, the percentage 
 95.26  increase in property taxes proposed by the taxing authority, if 
 95.27  any, and the specific purposes for which property tax revenues 
 95.28  are being increased must be discussed.  
 95.29     During the discussion, the governing body shall hear 
 95.30  comments regarding a proposed increase and explain the reasons 
 95.31  for the proposed increase.  The public shall be allowed to speak 
 95.32  and to ask questions.  At the subsequent hearing held as 
 95.33  provided in this subdivision, the governing body, other than the 
 95.34  governing body of a school district, shall adopt its final 
 95.35  property tax levy prior to adopting its final budget. 
 95.36     If the hearing is not completed on its scheduled date, the 
 96.1   taxing authority must announce, prior to adjournment of the 
 96.2   hearing, the date, time, and place for the continuation of the 
 96.3   hearing.  The continued hearing must be held at least five 
 96.4   business days but no more than 14 business days after the 
 96.5   original hearing. 
 96.6      The hearing must be held after 5:00 p.m. if scheduled on a 
 96.7   day other than Saturday.  No hearing may be held on a Sunday.  
 96.8   The governing body of a county shall hold a hearing on the 
 96.9   second Tuesday in December each year, and may hold additional 
 96.10  hearings on other dates before December 20 if necessary for the 
 96.11  convenience of county residents.  If the county needs a 
 96.12  continuation of its hearing, the continued hearing shall be held 
 96.13  on the third Tuesday in December.  If the third Tuesday in 
 96.14  December falls on December 21, the county's continuation hearing 
 96.15  shall be held on Monday, December 20.  The county auditor shall 
 96.16  provide for the coordination of hearing dates for all cities and 
 96.17  school districts within the county. 
 96.18     The metropolitan special taxing districts shall hold a 
 96.19  joint public hearing on the first Monday of December.  A 
 96.20  continuation hearing, if necessary, shall be held on the second 
 96.21  Monday of December. 
 96.22     By August 10, each school board and the board of the 
 96.23  regional library district shall certify to the county auditors 
 96.24  of the counties in which the school district or regional library 
 96.25  district is located the dates on which it elects to hold its 
 96.26  hearings and any continuations.  If a school board or regional 
 96.27  library district does not certify the dates by August 10, the 
 96.28  auditor will assign the hearing date.  The dates elected or 
 96.29  assigned must not conflict with the hearing dates of the county 
 96.30  or the metropolitan special taxing districts.  By August 20, the 
 96.31  county auditor shall notify the clerks of the cities within the 
 96.32  county of the dates on which school districts and regional 
 96.33  library districts have elected to hold their hearings.  At the 
 96.34  time a city certifies its proposed levy under subdivision 1 it 
 96.35  shall certify the dates on which it elects to hold its hearings 
 96.36  and any continuations.  For its initial hearing and for the 
 97.1   subsequent hearing at which the final property tax levy will be 
 97.2   adopted, the city must not select dates that conflict with the 
 97.3   county hearing dates, metropolitan special taxing district 
 97.4   dates, or with those elected by or assigned to the school 
 97.5   districts or regional library district in which the city is 
 97.6   located.  For continuation hearings, the city may select dates 
 97.7   that conflict with other taxing authorities' dates if the city 
 97.8   deems it necessary. 
 97.9      The county hearing dates and the city, metropolitan special 
 97.10  taxing district, and regional library district, and school 
 97.11  district hearing dates must be designated on the notices 
 97.12  required under subdivision 3.  The continuation dates need not 
 97.13  be stated on the notices.  
 97.14     This subdivision does not apply to towns, school districts, 
 97.15  and special taxing districts other than regional library 
 97.16  districts and metropolitan special taxing districts. 
 97.17     Notwithstanding the requirements of this section, the 
 97.18  employer is required to meet and negotiate over employee 
 97.19  compensation as provided for in chapter 179A.  
 97.20     Sec. 5.  Minnesota Statutes 1996, section 276.04, 
 97.21  subdivision 2, is amended to read: 
 97.22     Subd. 2.  [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 
 97.23  shall provide for the printing of the tax statements.  The 
 97.24  commissioner of revenue shall prescribe the form of the property 
 97.25  tax statement and its contents.  The statement must contain a 
 97.26  tabulated statement of the dollar amount due to each taxing 
 97.27  authority and the state from the parcel of real property for 
 97.28  which a particular tax statement is prepared.  The dollar 
 97.29  amounts due the county, state general education tax, the school 
 97.30  district, township or municipality, the total of the 
 97.31  metropolitan special taxing districts as defined in section 
 97.32  275.065, subdivision 3, paragraph (i), school district excess 
 97.33  referenda levy, remaining school district levy, and the total of 
 97.34  other voter approved referenda levies based on market value 
 97.35  under section 275.61 must be separately stated.  The amounts due 
 97.36  all other special taxing districts, if any, may be 
 98.1   aggregated.  For the purposes of this subdivision, "school 
 98.2   district excess referenda levy" means school district taxes for 
 98.3   operating purposes approved at referenda, including those taxes 
 98.4   based on net tax capacity as well as those based on market 
 98.5   value. "School district excess referenda levy" does not include 
 98.6   school district taxes for capital expenditures approved at 
 98.7   referendums or school district taxes to pay for the debt service 
 98.8   on bonds approved at referenda.  The amount of the tax on 
 98.9   contamination value imposed under sections 270.91 to 270.98, if 
 98.10  any, must also be separately stated.  The dollar amounts, 
 98.11  including the dollar amount of any special assessments, may be 
 98.12  rounded to the nearest even whole dollar.  For purposes of this 
 98.13  section whole odd-numbered dollars may be adjusted to the next 
 98.14  higher even-numbered dollar.  The amount of market value 
 98.15  excluded under section 273.11, subdivision 16, if any, must also 
 98.16  be listed on the tax statement.  The statement shall include the 
 98.17  following sentence, printed in upper case letters in boldface 
 98.18  print:  "THE STATE OF MINNESOTA DOES NOT RECEIVE ANY PROPERTY 
 98.19  TAX REVENUES.  THE STATE OF MINNESOTA REDUCES YOUR PROPERTY TAX 
 98.20  BY PAYING CREDITS AND REIMBURSEMENTS TO LOCAL UNITS OF 
 98.21  GOVERNMENT."  
 98.22     (b) The property tax statements for manufactured homes and 
 98.23  sectional structures taxed as personal property shall contain 
 98.24  the same information that is required on the tax statements for 
 98.25  real property.  
 98.26     (c) Real and personal property tax statements must contain 
 98.27  the following information in the order given in this paragraph.  
 98.28  The information must contain the current year tax information in 
 98.29  the right column with the corresponding information for the 
 98.30  previous year in a column on the left: 
 98.31     (1) the property's estimated market value under section 
 98.32  273.11, subdivision 1; 
 98.33     (2) the property's taxable market value after reductions 
 98.34  under section 273.11, subdivisions 1a and 16; 
 98.35     (3) the property's equalized market value after dividing by 
 98.36  the assessment/sales ratio under section 273.13, subdivision 
 99.1   21b; 
 99.2      (4) the property's gross tax, calculated by multiplying the 
 99.3   property's gross tax capacity times the total local tax rate and 
 99.4   adding the property's total property tax to the result the sum 
 99.5   of the aids enumerated in clause (4) (5); 
 99.6      (4) (5) a total of the following aids: 
 99.7      (i) education aids payable under chapters 124 and 124A; and 
 99.8      (ii) local government aids for cities, towns, and counties 
 99.9   under chapter 477A; and 
 99.10     (iii) disparity reduction aid under section 273.1398; 
 99.11     (5) for homestead residential and agricultural properties, 
 99.12  the homestead and agricultural credit aid apportioned to the 
 99.13  property.  This amount is obtained by multiplying the total 
 99.14  local tax rate by the difference between the property's gross 
 99.15  and net tax capacities under section 273.13.  This amount must 
 99.16  be separately stated and identified as "homestead and 
 99.17  agricultural credit."  For purposes of comparison with the 
 99.18  previous year's amount for the statement for taxes payable in 
 99.19  1990, the statement must show the homestead credit for taxes 
 99.20  payable in 1989 under section 273.13, and the agricultural 
 99.21  credit under section 273.132 for taxes payable in 1989; 
 99.22     (6) any credits received under sections 273.119; 273.123; 
 99.23  273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 
 99.24  473H.10, except that the amount of credit received under section 
 99.25  273.135 must be separately stated and identified as "taconite 
 99.26  tax relief"; and 
 99.27     (7) the net tax payable in the manner required in paragraph 
 99.28  (a). 
 99.29     (d) If the county uses envelopes for mailing property tax 
 99.30  statements and if the county agrees, a taxing district may 
 99.31  include a notice with the property tax statement notifying 
 99.32  taxpayers when the taxing district will begin its budget 
 99.33  deliberations for the current year, and encouraging taxpayers to 
 99.34  attend the hearings.  If the county allows notices to be 
 99.35  included in the envelope containing the property tax statement, 
 99.36  and if more than one taxing district relative to a given 
100.1   property decides to include a notice with the tax statement, the 
100.2   county treasurer or auditor must coordinate the process and may 
100.3   combine the information on a single announcement.  
100.4      The commissioner of revenue shall certify to the county 
100.5   auditor the actual or estimated aids enumerated in clauses (3) 
100.6   and (4) paragraph (c), clause (5), that local governments will 
100.7   receive in the following year.  In the case of a county 
100.8   containing a city of the first class, for taxes levied in 1991, 
100.9   and for all counties for taxes levied in 1992 and thereafter, 
100.10  The commissioner must certify this amount by September 1 of each 
100.11  year.  
100.12     Sec. 6.  [EFFECTIVE DATE.] 
100.13     Sections 1 and 2 are effective for notices prepared 
100.14  beginning in 1997 for taxes payable in 1998, and thereafter. 
100.15     Section 3 is effective for newspaper advertisements 
100.16  prepared beginning in 1997 for taxes payable in 1998 and 
100.17  thereafter.  
100.18     Section 4 is effective for public hearings beginning in 
100.19  1998 and thereafter. 
100.20     Section 5 is effective for property tax statements prepared 
100.21  in 1998 and thereafter. 
100.22                             ARTICLE 6 
100.23                        PROPERTY TAX REFUND 
100.24     Section 1.  [290.0672] [CREDIT FOR PROPERTY TAXES.] 
100.25     An individual is allowed a credit against the tax imposed 
100.26  by this chapter equal to 50 percent of the property tax refund 
100.27  as determined under section 290A.04.  The amount of any claim 
100.28  otherwise payable under this section may be applied by the 
100.29  commissioner against any delinquent tax liability of the 
100.30  claimant or spouse of the claimant payable to the department of 
100.31  revenue.  If the amount of credit which the claimant is eligible 
100.32  to receive under this section exceeds the claimant's tax 
100.33  liability under this chapter, the commissioner shall refund the 
100.34  excess to the claimant.  An amount necessary to make the refund 
100.35  payments is appropriated to the commissioner. 
100.36     Sec. 2.  Minnesota Statutes 1996, section 290A.03, 
101.1   subdivision 6, is amended to read: 
101.2      Subd. 6.  [HOMESTEAD.] "Homestead" means the dwelling 
101.3   occupied as the claimant's principal residence and so much of 
101.4   the land surrounding it, not exceeding ten acres, as is 
101.5   reasonably necessary for use of the dwelling as a home and any 
101.6   other property used for purposes of a homestead as defined in 
101.7   section 273.13, subdivision 22, except for agricultural land 
101.8   assessed as part of a homestead pursuant to section 273.13, 
101.9   subdivision 23, "homestead" is limited to 320 acres or, where 
101.10  the farm homestead is rented, one acre 273.124.  The homestead 
101.11  may be owned or rented and may be a part of a multidwelling or 
101.12  multipurpose building and the land on which it is built.  A 
101.13  manufactured home, as defined in section 273.125, subdivision 8, 
101.14  or a park trailer taxed as a manufactured home under section 
101.15  168.012, subdivision 9, assessed as personal property may be a 
101.16  dwelling for purposes of this subdivision. 
101.17     Sec. 3.  Minnesota Statutes 1996, section 290A.03, 
101.18  subdivision 11, is amended to read: 
101.19     Subd. 11.  [RENT CONSTITUTING PROPERTY TAXES.] "Rent 
101.20  constituting property taxes" means the amount of gross rent 
101.21  actually paid in cash, or its equivalent, which is attributable 
101.22  (a) to the property tax paid on the unit or (b) to the amount 20 
101.23  percent of the gross rent actually paid in cash, or its 
101.24  equivalent, or the portion of rent paid in lieu of property 
101.25  taxes, in any calendar year by a claimant for the right of 
101.26  occupancy of the claimant's Minnesota homestead in the calendar 
101.27  year, and which rent constitutes the basis, in the succeeding 
101.28  calendar year of a claim for relief under this chapter by the 
101.29  claimant.  The amount of rent attributable to property taxes 
101.30  paid or payments in lieu made on the unit shall be determined by 
101.31  multiplying the gross rent paid by the claimant for the calendar 
101.32  year for the unit by a fraction, the numerator of which is the 
101.33  net tax on the property where the unit is located and the 
101.34  denominator of which is the total scheduled rent.  In no case 
101.35  may the rent constituting property taxes exceed 50 percent of 
101.36  the gross rent paid by the claimant during that calendar year.  
102.1   In the case of a claimant who resides in a unit for which (1) a 
102.2   rent subsidy is paid to, or for, the claimant based on the 
102.3   income of the claimant or the claimant's family, or (2) a 
102.4   subsidy is paid to a public housing authority that owns or 
102.5   operates the claimant's rental unit, pursuant to United States 
102.6   Code, title 42, section 1437c, 20 percent of gross rent actually 
102.7   paid in cash or its equivalent shall be the claimant's "rent 
102.8   constituting property taxes paid."  For purposes of this 
102.9   subdivision, "rent subsidy" does not include any housing 
102.10  assistance received under aid to families with dependent 
102.11  children, general assistance, Minnesota supplemental assistance, 
102.12  supplemental security income, or similar income maintenance 
102.13  programs. 
102.14     Sec. 4.  Minnesota Statutes 1996, section 290A.03, 
102.15  subdivision 13, is amended to read: 
102.16     Subd. 13.  [PROPERTY TAXES PAYABLE.] "Property taxes 
102.17  payable" means the property tax exclusive of special 
102.18  assessments, penalties, and interest payable on a claimant's 
102.19  homestead before reductions made under section 273.13 but after 
102.20  deductions made under sections 273.135, 273.1391, 273.42, 
102.21  subdivision 2, and any other state paid property tax credits in 
102.22  any calendar year and after subtracting the amount of any credit 
102.23  under section 290.06, subdivision 25.  In the case of a claimant 
102.24  who makes ground lease payments, "property taxes payable" 
102.25  includes the amount of the payments directly attributable to the 
102.26  property taxes assessed against the parcel on which the house is 
102.27  located.  No apportionment or reduction of the "property taxes 
102.28  payable" shall be required for the use of a portion of the 
102.29  claimant's homestead for a business purpose if the claimant does 
102.30  not deduct any business depreciation expenses for the use of a 
102.31  portion of the homestead in the determination of federal 
102.32  adjusted gross income.  For homesteads which are manufactured 
102.33  homes as defined in section 273.125, subdivision 8, and for 
102.34  homesteads which are park trailers taxed as manufactured homes 
102.35  under section 168.012, subdivision 9, "property taxes payable" 
102.36  shall also include the amount 20 percent of the gross rent paid 
103.1   in the preceding year for the site on which the homestead is 
103.2   located, which is attributable to the net tax paid on the site.  
103.3   The amount attributable to property taxes shall be determined by 
103.4   multiplying the net tax on the parcel by a fraction, the 
103.5   numerator of which is the gross rent paid for the calendar year 
103.6   for the site and the denominator of which is the gross rent paid 
103.7   for the calendar year for the parcel.  When a homestead is owned 
103.8   by two or more persons as joint tenants or tenants in common, 
103.9   such tenants shall determine between them which tenant may claim 
103.10  the property taxes payable on the homestead.  If they are unable 
103.11  to agree, the matter shall be referred to the commissioner of 
103.12  revenue whose decision shall be final.  Property taxes are 
103.13  considered payable in the year prescribed by law for payment of 
103.14  the taxes. 
103.15     In the case of a claim relating to "property taxes 
103.16  payable," the claimant must have owned and occupied the 
103.17  homestead on January 2 of the year in which the tax is payable 
103.18  and (i) the property must have been classified as homestead 
103.19  property pursuant to section 273.13, subdivision 22 or 23 
103.20  273.124, on or before December 15 of the assessment year to 
103.21  which the "property taxes payable" relate; or (ii) the claimant 
103.22  must provide documentation from the local assessor that 
103.23  application for homestead classification has been made on or 
103.24  before December 15 of the year in which the "property taxes 
103.25  payable" were payable and that the assessor has approved the 
103.26  application. 
103.27     Sec. 5.  Minnesota Statutes 1996, section 290A.04, 
103.28  subdivision 1, is amended to read: 
103.29     Subdivision 1.  A refund shall be is allowed each claimant 
103.30  in the amount that property taxes payable or rent constituting 
103.31  property taxes exceed the percentage of the household income of 
103.32  the claimant specified in subdivision 2 or 2a in the year for 
103.33  which the taxes were levied or in the year in which the rent was 
103.34  paid as specified in under subdivision 2 or 2a.  If the amount 
103.35  of property taxes payable or rent constituting property taxes is 
103.36  equal to or less than the percentage of the claimant's household 
104.1   income of the claimant is greater than the maximum amount 
104.2   specified in subdivision 2 or 2a in the year for which the taxes 
104.3   were levied or in the year in which the rent was paid, the 
104.4   claimant shall is not be eligible for a state refund pursuant to 
104.5   this section. 
104.6      Sec. 6.  Minnesota Statutes 1996, section 290A.04, 
104.7   subdivision 2, is amended to read: 
104.8      Subd. 2.  [HOMEOWNERS.] Each homeowner is allowed a 
104.9   standard refund equal to the lesser of 
104.10     (1) 0.25 percent of the taxable market value of the 
104.11  homestead; or 
104.12     (2) $180. 
104.13     In addition to the standard refund, a claimant whose 
104.14  property taxes payable after subtraction of (1) the standard 
104.15  refund, and (2) the state education tax are in excess of the 
104.16  percentage 2.5 percent of the household income stated below 
104.17  shall pay an amount equal to the percent of income shown for the 
104.18  appropriate 2.5 percent of household income level along 
104.19  with plus the percent to be paid by the claimant of the 
104.20  remaining amount of property taxes payable as stated below.  The 
104.21  total state refund equals the amount of property taxes payable 
104.22  that remain plus the standard refund amount, up to the maximum 
104.23  state refund amount shown below.  
104.24                        Percent           Percent    Maximum
104.25  Household Income     of Income          Paid by     State
104.26                                          Claimant    Refund
104.27      $0 to 1,029     1.2 percent        18 percent   $440
104.28   1,030 to 2,059     1.3 percent        18 percent   $440
104.29   2,060 to 3,099     1.4 percent        20 percent   $440
104.30   3,100 to 4,129     1.6 percent        20 percent   $440
104.31   4,130 to 5,159     1.7 percent        20 percent   $440
104.32   5,160 to 7,229     1.9 percent        25 percent   $440
104.33   7,230 to 8,259     2.1 percent        25 percent   $440
104.34   8,260 to 9,289     2.2 percent        25 percent   $440
104.35   9,290 to 10,319    2.3 percent        30 percent   $440
104.36  10,320 to 11,349    2.4 percent        30 percent   $440
104.37  11,350 to 12,389    2.5 percent        30 percent   $440
104.38  12,390 to 14,449    2.6 percent        30 percent   $440
104.39  14,450 to 15,479    2.8 percent        35 percent   $440
104.40  15,480 to 16,509    3.0 percent        35 percent   $440
104.41  16,510 to 17,549    3.2 percent        40 percent   $440
104.42  17,550 to 21,669    3.3 percent        40 percent   $440
104.43  21,670 to 24,769    3.4 percent        45 percent   $440
104.44  24,770 to 30,959    3.5 percent        45 percent   $440
104.45  30,960 to 36,119    3.5 percent        45 percent   $440
104.46  36,120 to 41,279    3.7 percent        50 percent   $440
104.47  41,280 to 58,829    4.0 percent        50 percent   $440
104.48  58,830 to 59,859    4.0 percent        50 percent   $310
105.1   59,860 to 60,889    4.0 percent        50 percent   $210
105.2   60,890 to 61,929    4.0 percent        50 percent   $100 
105.3      
105.4                                Percent Paid      Maximum State
105.5        Household Income        by Claimant       Refund
105.7            $0 to  4,999        20 percent        $750
105.8         5,000 to  9,999        20 percent        $750
105.9        10,000 to 14,999        30 percent        $750
105.10       15,000 to 19,999        35 percent        $750
105.11       20,000 to 24,999        40 percent        $750
105.12       25,000 to 29,999        45 percent        $750
105.13       30,000 to 34,999        50 percent        $750
105.14       35,000 to 39,999        55 percent        $750
105.15       40,000 to 44,999        60 percent        $700
105.16       45,000 to 49,999        60 percent        $650
105.17       50,000 to 54,999        60 percent        $600
105.18       55,000 to 59,999        60 percent        $550
105.19       60,000 to 64,999        60 percent        $500
105.20       65,000 to 69,499        60 percent        $450
105.21       69,500 to 73,999        60 percent        $400
105.22       74,000 to 77,499        60 percent        $350
105.23       77,500 to 81,999        60 percent        $300
105.24       82,000 to 85,499        60 percent        $250
105.25       85,500 to 89,999        60 percent        $200
105.26       90,000 to 94,499        60 percent        $150
105.27       94,500 to 97,499        60 percent        $100
105.28       97,500 to 99,999        60 percent        $ 50
105.29     The payment made to a claimant shall be the amount of the 
105.30  state refund calculated under this subdivision.  No payment is 
105.31  allowed if the claimant's household income is $61,930 $100,000 
105.32  or more. 
105.33     Sec. 7.  Minnesota Statutes 1996, section 290A.04, 
105.34  subdivision 2h, is amended to read: 
105.35     Subd. 2h.  (a) If the gross property taxes payable on a 
105.36  homestead increase more than 12 percent over the net property 
105.37  taxes payable in the prior year on the same property that is 
105.38  owned and occupied by the same owner on January 2 of both years, 
105.39  and the amount of that increase is $100 or more for taxes 
105.40  payable in 1996 and 1997 1998, 1999, 2000, and 2001, a claimant 
105.41  who is a homeowner shall be allowed an additional refund equal 
105.42  to (1) 60 percent of the amount of the increase over the greater 
105.43  of 12 percent of the prior year's net property taxes payable or 
105.44  $100 for taxes payable in 1996 and 1997, 1998, and 1999; (2) 40 
105.45  percent of the amount of the increase over the greater of 12 
105.46  percent of the prior year's net property taxes payable or $100 
105.47  for taxes payable in 2000; and (3) 20 percent of the amount of 
105.48  the increase over the greater of 12 percent of the prior year's 
106.1   net property taxes payable or $100 for taxes payable in 2001.  
106.2   This subdivision shall not apply to any increase in the gross 
106.3   property taxes payable attributable to improvements made to the 
106.4   homestead after the assessment date for the prior year's taxes.  
106.5   This subdivision shall not apply to any increase in the gross 
106.6   property taxes payable attributable to the termination of 
106.7   valuation exclusions under section 273.11, subdivision 16. 
106.8      The maximum refund allowed under this subdivision is $1,000 
106.9   for taxes payable in 1997 and 1998, and $2,000 for taxes payable 
106.10  in 1999, 2000, and 2001. 
106.11     (b) For purposes of this subdivision, the following terms 
106.12  have the meanings given: 
106.13     (1) "Net property taxes payable" means property taxes 
106.14  payable minus refund amounts for which the claimant qualifies 
106.15  pursuant to subdivision 2 and this subdivision.  
106.16     (2) "Gross property taxes" means net property taxes payable 
106.17  determined without regard to the refund allowed under this 
106.18  subdivision. 
106.19     (c) In addition to the other proofs required by this 
106.20  chapter, each claimant under this subdivision shall file with 
106.21  the property tax refund return a copy of the property tax 
106.22  statement for taxes payable in the preceding year or other 
106.23  documents required by the commissioner. 
106.24     (d) On or before December 1, 1995, the commissioner shall 
106.25  estimate the cost of making the payments provided by this 
106.26  subdivision for taxes payable in 1996.  Notwithstanding the open 
106.27  appropriation provision of section 290A.23, if the estimated 
106.28  total refund claims for taxes payable in 1996 exceed $5,500,000, 
106.29  the commissioner shall first reduce the 60 percent refund rate 
106.30  enough, but to no lower a rate than 50 percent, so that the 
106.31  estimated total refund claims do not exceed $5,500,000.  If the 
106.32  commissioner estimates that total claims will exceed $5,500,000 
106.33  at a 50 percent refund rate, the commissioner shall also reduce 
106.34  the $1,000 maximum refund amount by enough so that total 
106.35  estimated refund claims do not exceed $5,500,000. 
106.36     The determinations of the revised thresholds by the 
107.1   commissioner are not rules subject to chapter 14.  
107.2      (e) (d) Upon request, the appropriate county official shall 
107.3   make available the names and addresses of the property taxpayers 
107.4   who may be eligible for the additional property tax refund under 
107.5   this section.  The information shall be provided on a magnetic 
107.6   computer disk.  The county may recover its costs by charging the 
107.7   person requesting the information the reasonable cost for 
107.8   preparing the data.  The information may not be used for any 
107.9   purpose other than for notifying the homeowner of potential 
107.10  eligibility and assisting the homeowner, without charge, in 
107.11  preparing a refund claim. 
107.12     Sec. 8.  Minnesota Statutes 1996, section 290A.04, 
107.13  subdivision 6, is amended to read: 
107.14     Subd. 6.  [INFLATION ADJUSTMENT.] Beginning for property 
107.15  tax refunds payable in calendar year 1996 1998, the commissioner 
107.16  shall annually adjust the dollar amounts of the income 
107.17  thresholds and the maximum refunds under subdivisions 2 and 2a 
107.18  for inflation.  The commissioner shall make the inflation 
107.19  adjustments in accordance with section 290.06, subdivision 2d, 
107.20  except that for purposes of this subdivision the percentage 
107.21  increase shall be determined from the year ending on August 31, 
107.22  1994 1996, to the year ending on August 31 of the year preceding 
107.23  that in which the refund is payable.  The commissioner shall use 
107.24  the appropriate percentage increase to annually adjust the 
107.25  income thresholds and maximum refunds under subdivisions 2 and 
107.26  2a for inflation without regard to whether or not the income tax 
107.27  brackets are adjusted for inflation in that year.  The 
107.28  commissioner shall round the thresholds and the maximum amounts, 
107.29  as adjusted to the nearest $10 amount.  If the amount ends in 
107.30  $5, the commissioner shall round it up to the next $10 amount.  
107.31     The commissioner shall annually announce the adjusted 
107.32  refund schedule at the same time provided under section 290.06.  
107.33  The determination of the commissioner under this subdivision is 
107.34  not a rule under the administrative procedure act. 
107.35     Sec. 9.  Minnesota Statutes 1996, section 290A.07, 
107.36  subdivision 1, is amended to read: 
108.1      Subdivision 1.  Allowable claims filed pursuant to the 
108.2   provisions of this chapter shall be paid by the commissioner 
108.3   from the general fund.  One-half of the refund allowed under 
108.4   section 290A.04, subdivisions 2, 2a, and 2h, is a credit against 
108.5   the individual income tax as specified in section 290.0672.  The 
108.6   commissioner shall pay the rest of the refund allowed under 
108.7   section 290A.04, subdivisions 2, 2a, and 2h, to the claimant 
108.8   after September 15 and before September 30. 
108.9      Sec. 10.  Minnesota Statutes 1996, section 290A.19, is 
108.10  amended to read: 
108.11     290A.19 [OWNER OR MANAGING AGENT TO FURNISH RENT 
108.12  CERTIFICATE.] 
108.13     (a) The owner or managing agent of any property for which 
108.14  rent is paid for occupancy as a homestead must furnish a 
108.15  certificate of rent constituting property tax paid to a person 
108.16  who is a renter on December 31, in the form prescribed by the 
108.17  commissioner.  If the renter moves before December 31, the owner 
108.18  or managing agent may give the certificate to the renter at the 
108.19  time of moving, or mail the certificate to the forwarding 
108.20  address if an address has been provided by the renter.  The 
108.21  certificate must be made available to the renter before February 
108.22  1 of the year following the year in which the rent was paid.  
108.23  The owner or managing agent must retain a duplicate of each 
108.24  certificate or an equivalent record showing the same information 
108.25  for a period of three years.  The duplicate or other record must 
108.26  be made available to the commissioner upon request.  For the 
108.27  purposes of this section, "owner" includes a park owner as 
108.28  defined under section 327C.01, subdivision 6, and "property" 
108.29  includes a lot as defined under section 327C.01, subdivision 3. 
108.30     (b) The certificate of rent constituting property taxes 
108.31  must include the address of the property, including the county, 
108.32  and the property tax parcel identification number and any 
108.33  additional information that the commissioner determines is 
108.34  appropriate. 
108.35     (c) If the owner or managing agent fails to provide the 
108.36  renter with a certificate of rent constituting property taxes, 
109.1   the commissioner shall allocate the net tax on the building to 
109.2   the unit on a square footage basis or other appropriate basis as 
109.3   the commissioner determines.  The renter shall supply the 
109.4   commissioner with a statement from the county treasurer that 
109.5   gives the amount of property tax on the parcel, the address and 
109.6   property tax parcel identification number of the property, and 
109.7   the number of units in the building. 
109.8      (d) By January 31 of the year following the year in which 
109.9   the rent was collected, each owner or managing agent shall 
109.10  report to the commissioner on a form prescribed by the 
109.11  commissioner the net tax pertaining to the rental residential 
109.12  part of the property, the total scheduled rent, and the fraction 
109.13  computed under section 290A.03, subdivision 11.  A copy of the 
109.14  property tax statement for taxes payable in that year must be 
109.15  attached. 
109.16     Sec. 11.  [REPEALER.] 
109.17     (a) Minnesota Statutes 1996, sections 270B.12, subdivision 
109.18  11; 276.012; 290A.055; and 290A.26; and Laws 1995, chapter 264, 
109.19  article 4, as amended by Laws 1996, chapter 471, article 3, are 
109.20  repealed.  Notwithstanding Minnesota Statutes, section 645.34, 
109.21  the sections of statutes amended by the repealed Laws 1995, 
109.22  chapter 264, article 4, as amended by Laws 1996, chapter 471, 
109.23  article 3, remain in effect.  
109.24     (b) Minnesota Statutes 1996, sections 290A.03, subdivisions 
109.25  12a and 14; and 290A.07, subdivisions 2a and 3, are repealed. 
109.26     (c) Minnesota Statutes 1996, section 290A.04, subdivision 
109.27  2h, is repealed. 
109.28     Sec. 12.  [EFFECTIVE DATE.] 
109.29     Section 1 is effective beginning with tax year 1998.  
109.30  Sections 2 to 10 and 11, paragraph (b), are effective for 
109.31  refunds payable in 1999 and following years.  Section 11, 
109.32  paragraph (a), is effective the day following final enactment.  
109.33  Section 11, paragraph (c), is effective for taxes payable in 
109.34  2002. 
109.35                             ARTICLE 7
109.36                         FISCAL DISPARITIES
110.1      Section 1.  Minnesota Statutes 1996, section 276A.01, 
110.2   subdivision 4, is amended to read: 
110.3      Subd. 4.  [RESIDENTIAL PROPERTY.] "Residential property" 
110.4   means the following categories of property any property 
110.5   classified as class 1 or class 4, as defined in section 273.13, 
110.6   excluding that portion of the property that is exempt from 
110.7   taxation pursuant to section 272.02: 
110.8      (1) class 1a, 1b, and 2a property, limited to the homestead 
110.9   dwelling, a garage, and the one acre of land on which the 
110.10  dwelling is located; 
110.11     (2) that portion of class 3 property that is used 
110.12  exclusively for residential occupancy; and 
110.13     (3) property valued and assessed under section 273.13, 
110.14  subdivision 25, except for hospitals and property valued and 
110.15  assessed under section 273.13, subdivision 25, paragraph (c), 
110.16  clauses (5) and (6), excluding property devoted to temporary and 
110.17  seasonal residential occupancy for recreation purposes.  
110.18     Sec. 2.  Minnesota Statutes 1996, section 276A.01, 
110.19  subdivision 5, is amended to read: 
110.20     Subd. 5.  [GOVERNMENTAL UNIT.] "Governmental unit" means a 
110.21  county, city, town, school district, or other taxing unit or 
110.22  body, excluding the state of Minnesota, which levies ad valorem 
110.23  taxes in whole or in part within the area. 
110.24     Sec. 3.  Minnesota Statutes 1996, section 276A.01, 
110.25  subdivision 16, is amended to read: 
110.26     Subd. 16.  [LOCAL TAX RATE.] "Local tax rate" means a 
110.27  governmental unit's levy, including any portion levied against 
110.28  market value under section 124A.03, subdivision 2a, divided by 
110.29  its net tax capacity. 
110.30     Sec. 4.  Minnesota Statutes 1996, section 276A.04, is 
110.31  amended to read: 
110.32     276A.04 [INCREASE IN NET TAX CAPACITY.] 
110.33     By July August 15 of 1997 and each subsequent year, the 
110.34  auditor of each county in the area shall determine the amount, 
110.35  if any, by which the net tax capacity determined in the 
110.36  preceding year pursuant to section 276A.03, of 
111.1   commercial-industrial property subject to taxation within each 
111.2   municipality in the county exceeds the net tax capacity in 1995 
111.3   of commercial-industrial property subject to taxation within 
111.4   that municipality.  If a municipality is located in two or more 
111.5   counties within the area, the auditors of those counties shall 
111.6   certify the data required by section 276A.03 to the county 
111.7   auditor responsible for allocating the levies of that 
111.8   municipality between or among the affected counties.  That 
111.9   county auditor shall determine the amount of the net excess, if 
111.10  any, for the municipality under this section, and certify that 
111.11  amount under section 276A.05.  The increase in total net tax 
111.12  capacity determined by this section must be reduced by the 
111.13  amount of any decreases in the net tax capacity of 
111.14  commercial-industrial property resulting from any court 
111.15  decisions, court-related stipulation agreements, or abatements 
111.16  for a prior year, and only in the amount of such decreases made 
111.17  during the 12-month period ending on May 1 of the current 
111.18  assessment year, where the decreases, if originally reflected in 
111.19  the determination of a prior year's net tax capacity under 
111.20  section 276A.03, would have resulted in a smaller contribution 
111.21  from the municipality in that year.  An adjustment for the 
111.22  decreases shall be made only if the municipality made a 
111.23  contribution in a prior year based on the higher net tax 
111.24  capacity of the commercial-industrial property. 
111.25     Sec. 5.  Minnesota Statutes 1996, section 276A.05, 
111.26  subdivision 1, is amended to read: 
111.27     Subdivision 1.  [AREAWIDE NET TAX CAPACITY.] Each county 
111.28  auditor shall certify the determinations under sections 276A.03 
111.29  and 276A.04 to the administrative auditor on or before August 1 
111.30  15 of each year.  The administrative auditor shall determine an 
111.31  amount equal to 40 20 percent of the sum of the amounts 
111.32  certified pursuant to section 276A.04.  The resulting amount 
111.33  shall be known as the "areawide net tax capacity for 
111.34  ........(year)."  
111.35     Sec. 6.  Minnesota Statutes 1996, section 276A.05, 
111.36  subdivision 5, is amended to read: 
112.1      Subd. 5.  [CERTIFICATION.] The product of the procedure 
112.2   prescribed by subdivision 4 shall be known as the "areawide net 
112.3   tax capacity for ......(year) attributable to 
112.4   ..........(municipality)."  The administrative auditor shall 
112.5   certify the product to the auditor of the county in which the 
112.6   municipality is located on or before August September 15. 
112.7      Sec. 7.  Minnesota Statutes 1996, section 276A.06, 
112.8   subdivision 2, is amended to read: 
112.9      Subd. 2.  [DEFINITION.] The net tax capacity of a 
112.10  governmental unit is its net tax capacity as determined in 
112.11  accordance with other provisions of law including section 
112.12  469.177, subdivision 3, subject to the following adjustments:  
112.13     (a) There must be subtracted from its net tax capacity, in 
112.14  each municipality in which the governmental unit exercises ad 
112.15  valorem taxing jurisdiction, an amount that bears the same 
112.16  proportion to 40 20 percent of the amount certified in that year 
112.17  pursuant to sections 276A.04 and 276A.05 for the municipality as 
112.18  the total preceding year's net tax capacity of 
112.19  commercial-industrial property which is subject to the taxing 
112.20  jurisdiction of the governmental unit within the municipality, 
112.21  determined without regard to section 469.177, subdivision 3, 
112.22  bears to the total preceding year's net tax capacity of 
112.23  commercial-industrial property within the municipality, 
112.24  determined without regard to section 469.177, subdivision 3.  
112.25     (b) There must be added to its net tax capacity, in each 
112.26  municipality in which the governmental unit exercises ad valorem 
112.27  taxing jurisdiction, an amount which bears the same proportion 
112.28  to the areawide net tax capacity for the year attributable to 
112.29  that municipality as the total preceding year's net tax capacity 
112.30  of residential property which is subject to the taxing 
112.31  jurisdiction of the governmental unit within the municipality 
112.32  bears to the total preceding year's net tax capacity of 
112.33  residential property of the municipality.  
112.34     Sec. 8.  Minnesota Statutes 1996, section 276A.06, 
112.35  subdivision 3, is amended to read: 
112.36     Subd. 3.  [APPORTIONMENT OF LEVY.] The county auditor shall 
113.1   apportion the levy of each governmental unit in the county in 
113.2   the manner prescribed by this subdivision.  The auditor shall: 
113.3      (a) by August 20 of 1997 and each subsequent year, 
113.4   determine the areawide portion of the levy for each governmental 
113.5   unit by multiplying the local tax rate of the governmental unit 
113.6   for the preceding current levy year times the distribution value 
113.7   set forth in subdivision 2, clause (b); and 
113.8      (b) by September 5 of 1997 and each subsequent year, 
113.9   determine the local portion of the current year's levy by 
113.10  subtracting the resulting amount from clause (a) from the 
113.11  governmental unit's current year's levy. 
113.12     Sec. 9.  Minnesota Statutes 1996, section 276A.06, 
113.13  subdivision 5, is amended to read: 
113.14     Subd. 5.  [AREAWIDE TAX RATE.] (a) On or before August 25 
113.15  February 5 of 1997 and each subsequent year, the county auditor 
113.16  shall certify to the administrative auditor that portion of the 
113.17  levy of each governmental unit determined pursuant to 
113.18  subdivision 3, clause (a).  The administrative auditor shall 
113.19  then determine the areawide tax rate sufficient to yield an 
113.20  amount equal to the sum of the levies from the areawide net tax 
113.21  capacity.  
113.22     (b) On or before September 1 February 10 of each year, the 
113.23  administrative auditor shall certify the areawide tax rate to 
113.24  each of the county auditors. 
113.25     For the purposes of the notice required under section 
113.26  275.065, the deadline for the certification under paragraph (a) 
113.27  is October 10, and the deadline for certification under 
113.28  paragraph (b) is October 15. 
113.29     For any governmental unit for which the county auditor has 
113.30  not yet determined the local tax rate by January 31, the county 
113.31  auditor shall determine the areawide portion of the levy based 
113.32  on an estimated tax rate.  In the following year, the 
113.33  distribution levy of the unit must be adjusted to correct for 
113.34  the difference between the distribution levy actually received 
113.35  and the distribution levy that would have been received if the 
113.36  actual tax rate had been used. 
114.1      Sec. 10.  Minnesota Statutes 1996, section 276A.06, 
114.2   subdivision 7, is amended to read: 
114.3      Subd. 7.  [APPLICATION TO COMMERCIAL-INDUSTRIAL PROPERTY.] 
114.4   The areawide tax rate determined in accordance with subdivision 
114.5   5 applies to each commercial-industrial property subject to 
114.6   taxation within a municipality, including property located 
114.7   within any tax increment financing district, as defined in 
114.8   section 469.174, subdivision 9, to that portion of the net tax 
114.9   capacity of the item property which bears the same proportion to 
114.10  its total net tax capacity as 40 20 percent of the amount 
114.11  determined pursuant to sections 276A.04 and 276A.05 is to the 
114.12  amount determined pursuant to section 276A.03.  The rate of 
114.13  taxation determined in accordance with subdivision 4 applies in 
114.14  the taxation of the remainder of the net tax capacity of the 
114.15  item property. 
114.16     Sec. 11.  Minnesota Statutes 1996, section 473F.02, 
114.17  subdivision 4, is amended to read: 
114.18     Subd. 4.  [RESIDENTIAL PROPERTY.] "Residential property" 
114.19  means the following categories of property any property 
114.20  classified as class 1 or class 4, as defined in section 
114.21  273.13, excluding that portion of such property exempt from 
114.22  taxation pursuant to section 272.02: 
114.23     (a) Class 1, 1b, 2a, 4a, 4b, 4c, and 4d property except 
114.24  resorts and property classified under section 273.13, 
114.25  subdivision 25, paragraph (c), clause (6); 
114.26     (b) and that portion of class 3a, 3b, and 5 property that 
114.27  is used exclusively for residential occupancy, excluding 
114.28  property devoted to temporary and seasonal residential occupancy 
114.29  for recreation purposes. 
114.30     Sec. 12.  Minnesota Statutes 1996, section 473F.02, 
114.31  subdivision 5, is amended to read: 
114.32     Subd. 5.  [GOVERNMENTAL UNIT.] "Governmental unit" means a 
114.33  county, city, town, school district, or other taxing unit or 
114.34  body, excluding the state of Minnesota, which levies ad valorem 
114.35  taxes in whole or in part within the area. 
114.36     Sec. 13.  Minnesota Statutes 1996, section 473F.02, 
115.1   subdivision 24, is amended to read: 
115.2      Subd. 24.  [LOCAL TAX RATE.] "Local tax rate" means a 
115.3   governmental unit's levy, including any portion levied against 
115.4   market value under section 124A.03, subdivision 2a, divided by 
115.5   its net tax capacity. 
115.6      Sec. 14.  Minnesota Statutes 1996, section 473F.06, is 
115.7   amended to read: 
115.8      473F.06 [INCREASE IN NET TAX CAPACITY.] 
115.9      On or before July August 15 of each year, the auditor of 
115.10  each county in the area shall determine the amount, if any, by 
115.11  which the net tax capacity determined in the preceding year 
115.12  under section 473F.05, of commercial-industrial property subject 
115.13  to taxation within each municipality in the auditor's county 
115.14  exceeds the net tax capacity in 1971 of commercial-industrial 
115.15  property subject to taxation within that municipality.  If a 
115.16  municipality is located in two or more counties within the area, 
115.17  the auditors of those counties shall certify the data required 
115.18  by section 473F.05 to the county auditor who is responsible 
115.19  under other provisions of law for allocating the levies of that 
115.20  municipality between or among the affected counties.  That 
115.21  county auditor shall determine the amount of the net excess, if 
115.22  any, for the municipality under this section, and certify that 
115.23  amount under section 473F.07.  Notwithstanding any other 
115.24  provision of sections 473F.01 to 473F.13 to the contrary, in the 
115.25  case of a municipality which is designated on July 24, 1971, as 
115.26  a redevelopment area under section 401(a)(4) of the Public Works 
115.27  and Economic Development Act of 1965, Public Law Number 89-136, 
115.28  the increase in its net tax capacity of commercial-industrial 
115.29  property for purposes of this section shall be determined in 
115.30  each year by using as a base the net tax capacity of 
115.31  commercial-industrial property in that municipality in the 1989 
115.32  assessment year, rather than the net tax capacity of such 
115.33  property in 1971.  The increase in total net tax capacity 
115.34  determined by this section shall be reduced by the amount of any 
115.35  decreases in net tax capacity of commercial-industrial property 
115.36  resulting from any court decisions, court related stipulation 
116.1   agreements, or abatements for a prior year, and only in the 
116.2   amount of such decreases made during the 12-month period ending 
116.3   on May 1 of the current assessment year, where such decreases, 
116.4   if originally reflected in the determination of a prior year's 
116.5   net tax capacity under section 473F.05, would have resulted in a 
116.6   smaller contribution from the municipality in that year.  An 
116.7   adjustment for such decreases shall be made only if the 
116.8   municipality made a contribution in a prior year based on the 
116.9   higher net tax capacity of the commercial-industrial property. 
116.10     Sec. 15.  Minnesota Statutes 1996, section 473F.07, 
116.11  subdivision 1, is amended to read: 
116.12     Subdivision 1.  [AREAWIDE NET TAX CAPACITY.] Each county 
116.13  auditor shall certify the determinations under sections 473F.05 
116.14  and 473F.06 to the administrative auditor on or before August 1 
116.15  15 of each year.  
116.16     The administrative auditor shall determine an amount equal 
116.17  to 40 20 percent of the sum of the amounts certified under 
116.18  section 473F.06.  The resulting amount shall be known as the 
116.19  "areawide net tax capacity for ........(year)." 
116.20     Sec. 16.  Minnesota Statutes 1996, section 473F.07, 
116.21  subdivision 5, is amended to read: 
116.22     Subd. 5.  [CERTIFICATION TO COUNTY AUDITOR.] The result of 
116.23  the procedure prescribed by subdivision 4 shall be known as the 
116.24  "areawide net tax capacity for ........(year) attributable to 
116.25  ..................(municipality)."  The administrative auditor 
116.26  shall certify such product to the auditor of the county in which 
116.27  the municipality is located on or before August September 15. 
116.28     Sec. 17.  Minnesota Statutes 1996, section 473F.08, 
116.29  subdivision 2, is amended to read: 
116.30     Subd. 2.  [COMPUTATION OF NET TAX CAPACITY.] The net tax 
116.31  capacity of a governmental unit is its net tax capacity, as 
116.32  determined in accordance with other provisions of law including 
116.33  section 469.177, subdivision 3, subject to the following 
116.34  adjustments:  
116.35     (a) There shall be subtracted from its net tax capacity, in 
116.36  each municipality in which the governmental unit exercises ad 
117.1   valorem taxing jurisdiction, an amount which bears the same 
117.2   proportion to 40 20 percent of the amount certified in that year 
117.3   under sections 473F.06 and 473F.07 for the municipality as the 
117.4   total preceding year's net tax capacity of commercial-industrial 
117.5   property which is subject to the taxing jurisdiction of the 
117.6   governmental unit within the municipality, determined without 
117.7   regard to section 469.177, subdivision 3, bears to the total 
117.8   preceding year's net tax capacity of commercial-industrial 
117.9   property within the municipality, determined without regard to 
117.10  section 469.177, subdivision 3; 
117.11     (b) There shall be added to its net tax capacity, in each 
117.12  municipality in which the governmental unit exercises ad valorem 
117.13  taxing jurisdiction, an amount which bears the same proportion 
117.14  to the areawide net tax capacity for the year attributable to 
117.15  that municipality as the total preceding year's net tax capacity 
117.16  of residential property which is subject to the taxing 
117.17  jurisdiction of the governmental unit within the municipality 
117.18  bears to the total preceding year's net tax capacity of 
117.19  residential property of the municipality.  
117.20     Sec. 18.  Minnesota Statutes 1996, section 473F.08, 
117.21  subdivision 3, is amended to read: 
117.22     Subd. 3.  [APPORTIONMENT OF LEVY.] The county auditor shall 
117.23  apportion the levy of each governmental unit in the auditor's 
117.24  county in the manner prescribed by this subdivision.  The 
117.25  auditor shall: 
117.26     (a) by August 20, determine the areawide portion of the 
117.27  levy for each governmental unit by multiplying the local tax 
117.28  rate of the governmental unit for the preceding current levy 
117.29  year times the distribution value set forth in subdivision 2, 
117.30  clause (b); and 
117.31     (b) by September 5, determine the local portion of the 
117.32  current year's levy by subtracting the resulting amount from 
117.33  clause (a) from the governmental unit's current year's levy. 
117.34     Sec. 19.  Minnesota Statutes 1996, section 473F.08, 
117.35  subdivision 5, is amended to read: 
117.36     Subd. 5.  [AREAWIDE TAX RATE.] (a) On or before August 25 
118.1   February 5 of each year, the county auditor shall certify to the 
118.2   administrative auditor that portion of the levy of each 
118.3   governmental unit determined under subdivisions 3, clause (a), 
118.4   3a, and 3b.  The administrative auditor shall then determine the 
118.5   areawide tax rate sufficient to yield an amount equal to the sum 
118.6   of such levies from the areawide net tax capacity. 
118.7      (b) On or before September 1 February 10 of each year, the 
118.8   administrative auditor shall certify the areawide tax rate to 
118.9   each of the county auditors. 
118.10     For the purposes of the notice required under section 
118.11  275.065, the deadline for the certification under paragraph (a) 
118.12  is October 10, and the deadline for certification under 
118.13  paragraph (b) is October 15. 
118.14     For any governmental unit for which the county auditor has 
118.15  not yet determined the local tax rate by January 31, the county 
118.16  auditor shall determine the areawide portion of the levy based 
118.17  on an estimated tax rate.  In the following year, the 
118.18  distribution levy of the unit must be adjusted to correct for 
118.19  the difference between the distribution levy actually received 
118.20  and the distribution levy that would have been received if the 
118.21  actual tax rate had been used. 
118.22     Sec. 20.  Minnesota Statutes 1996, section 473F.08, 
118.23  subdivision 6, is amended to read: 
118.24     Subd. 6.  [APPLICATION TO COMMERCIAL-INDUSTRIAL PROPERTY.] 
118.25  The areawide tax rate determined in accordance with subdivision 
118.26  5 shall apply to each commercial-industrial property subject to 
118.27  taxation within a municipality, including property located 
118.28  within any tax increment financing district, as defined in 
118.29  section 469.174, subdivision 9, to that portion of the net tax 
118.30  capacity of the item property which bears the same proportion to 
118.31  its total net tax capacity as 40 20 percent of the amount 
118.32  determined under sections 473F.06 and 473F.07 is to the amount 
118.33  determined under section 473F.05.  The tax rate determined in 
118.34  accordance with subdivision 4 shall apply in the taxation of the 
118.35  remainder of the net tax capacity of the item property.  
118.36     Sec. 21.  [REPEALER.] 
119.1      Minnesota Statutes 1996, sections 276A.06, subdivision 9; 
119.2   and 473F.08, subdivision 8a, are repealed. 
119.3      Sec. 22.  [EFFECTIVE DATE.] 
119.4      This article is effective for taxes payable in 1999 and 
119.5   subsequent years. 
119.6                              ARTICLE 8
119.7                            MISCELLANEOUS
119.8      Section 1.  Minnesota Statutes 1996, section 271.01, 
119.9   subdivision 5, is amended to read: 
119.10     Subd. 5.  [JURISDICTION.] The tax court shall have 
119.11  statewide jurisdiction.  Except for an appeal to the supreme 
119.12  court or any other appeal allowed under this subdivision, the 
119.13  tax court shall be the sole, exclusive, and final authority for 
119.14  the hearing and determination of all questions of law and fact 
119.15  arising under the tax laws of the state, as defined in this 
119.16  subdivision, in those cases that have been appealed to the tax 
119.17  court and in any case that has been transferred by the district 
119.18  court to the tax court.  The tax court shall have no 
119.19  jurisdiction in any case that does not arise under the tax laws 
119.20  of the state or in any criminal case or in any case determining 
119.21  or granting title to real property or in any case that is under 
119.22  the probate jurisdiction of the district court.  The small 
119.23  claims division of the tax court shall have no jurisdiction in 
119.24  any case dealing with property valuation or assessment for 
119.25  property tax purposes until the taxpayer has appealed the 
119.26  valuation or assessment to the county board of equalization, and 
119.27  in those towns and cities which have not transferred their 
119.28  duties to the county, the town or city board of equalization and 
119.29  to the county board of equalization, except for those taxpayers 
119.30  whose original assessments are determined by the commissioner of 
119.31  revenue.  The tax court shall have no jurisdiction in any case 
119.32  involving an order of the state board of equalization unless a 
119.33  taxpayer contests the valuation of property.  Laws governing 
119.34  taxes, aids, and related matters administered by the 
119.35  commissioner of revenue, laws dealing with property valuation, 
119.36  assessment or taxation of property for property tax purposes, 
120.1   and any other laws that contain provisions authorizing review of 
120.2   taxes, aids, and related matters by the tax court shall be 
120.3   considered tax laws of this state subject to the jurisdiction of 
120.4   the tax court.  This subdivision shall not be construed to 
120.5   prevent an appeal, as provided by law, to an administrative 
120.6   agency, board of equalization, review under section 274.13, 
120.7   subdivision 1c, or to the commissioner of revenue.  Wherever 
120.8   used in this chapter, the term commissioner shall mean the 
120.9   commissioner of revenue, unless otherwise specified. 
120.10     Sec. 2.  Minnesota Statutes 1996, section 273.11, 
120.11  subdivision 1a, is amended to read: 
120.12     Subd. 1a.  [LIMITED MARKET VALUE.] In the case of all 
120.13  property classified as agricultural homestead or nonhomestead, 
120.14  residential homestead or nonhomestead, or noncommercial seasonal 
120.15  recreational residential, the assessor shall compare the value 
120.16  with that determined in the preceding assessment.  The amount of 
120.17  the increase entered in the current assessment shall not exceed 
120.18  the greater of (1) ten percent of the value in the preceding 
120.19  assessment, or (2) one-third one-fourth of the difference 
120.20  between the current assessment and the preceding assessment.  
120.21  This limitation shall not apply to increases in value due to 
120.22  improvements.  For purposes of this subdivision, the term 
120.23  "assessment" means the value prior to any exclusion under 
120.24  subdivision 16. 
120.25     The provisions of this subdivision shall be in effect only 
120.26  for assessment years 1993 through 1997 2001. 
120.27     For purposes of the assessment/sales ratio study conducted 
120.28  under section 124.2131, and the computation of state aids paid 
120.29  under chapters 124, 124A, and 477A, market values and net tax 
120.30  capacities determined under this subdivision and subdivision 16, 
120.31  shall be used. 
120.32     Sec. 3.  Minnesota Statutes 1996, section 273.121, is 
120.33  amended to read: 
120.34     273.121 [VALUATION OF REAL PROPERTY, NOTICE.] 
120.35     Any county assessor or city assessor having the powers of a 
120.36  county assessor, valuing or classifying taxable real property 
121.1   shall in each year notify those persons whose property is to be 
121.2   assessed or reclassified that year if the person's address is 
121.3   known to the assessor, otherwise the occupant of the property.  
121.4   The notice shall be in writing and shall be sent by ordinary 
121.5   mail at least ten days before the meeting of the local board of 
121.6   review or equalization under section 274.01 or the review 
121.7   process established under section 274.13, subdivision 1c.  It 
121.8   shall contain:  (1) the market value, (2) the limited market 
121.9   value under section 273.11, subdivision 1a, (3) the qualifying 
121.10  amount of any improvements under section 273.11, subdivision 16, 
121.11  (4) the market value subject to taxation after subtracting the 
121.12  amount of any qualifying improvements, (5) the new 
121.13  classification, (6) a note that if the property is homestead and 
121.14  at least 35 years old, improvements made to the property may be 
121.15  eligible for a valuation exclusion under section 273.11, 
121.16  subdivision 16, (7) the assessor's office address, and (8) the 
121.17  dates, places, and times set for the meetings of the local board 
121.18  of review or equalization, the review process established under 
121.19  section 274.13, subdivision 1c, and the county board of 
121.20  equalization.  If the assessment roll is not complete, the 
121.21  notice shall be sent by ordinary mail at least ten days prior to 
121.22  the date on which the board of review has adjourned.  The 
121.23  assessor shall attach to the assessment roll a statement that 
121.24  the notices required by this section have been mailed.  Any 
121.25  assessor who is not provided sufficient funds from the 
121.26  assessor's governing body to provide such notices, may make 
121.27  application to the commissioner of revenue to finance such 
121.28  notices.  The commissioner of revenue shall conduct an 
121.29  investigation and, if satisfied that the assessor does not have 
121.30  the necessary funds, issue a certification to the commissioner 
121.31  of finance of the amount necessary to provide such notices.  The 
121.32  commissioner of finance shall issue a warrant for such amount 
121.33  and shall deduct such amount from any state payment to such 
121.34  county or municipality.  The necessary funds to make such 
121.35  payments are hereby appropriated.  Failure to receive the notice 
121.36  shall in no way affect the validity of the assessment, the 
122.1   resulting tax, the procedures of any board of review or 
122.2   equalization, or the enforcement of delinquent taxes by 
122.3   statutory means. 
122.4      Sec. 4.  Minnesota Statutes 1996, section 273.124, 
122.5   subdivision 13, is amended to read: 
122.6      Subd. 13.  [HOMESTEAD APPLICATION.] (a) A person who meets 
122.7   the homestead requirements under subdivision 1 must file a 
122.8   homestead application with the county assessor to initially 
122.9   obtain homestead classification. 
122.10     (b) On or before In January 2, 1993, each county assessor 
122.11  1998, and every four years thereafter, the commissioner of 
122.12  revenue shall mail a homestead application to the owner of each 
122.13  parcel of property within the county state which was classified 
122.14  as homestead for the 1992 immediately preceding assessment year. 
122.15  Each county assessor shall furnish the commissioner of revenue 
122.16  with a list of the owners and addresses of all homestead parcels 
122.17  within the county.  The format and contents of a uniform 
122.18  homestead application shall be prescribed by the commissioner of 
122.19  revenue.  The commissioner shall consult with the chairs of the 
122.20  house and senate tax committees on the contents of the homestead 
122.21  application form.  The application must clearly inform the 
122.22  taxpayer that this application must be signed by all owners who 
122.23  occupy the property or by the qualifying relative and returned 
122.24  to the county assessor in order for the property to continue 
122.25  receiving homestead treatment.  The envelope containing the 
122.26  homestead application shall clearly identify its contents and 
122.27  alert the taxpayer of its necessary immediate response.  An 
122.28  envelope addressed to the county assessor for the appropriate 
122.29  county shall be sent to the taxpayer with the application. 
122.30     (c) Every property owner applying for homestead 
122.31  classification must furnish to the county assessor the social 
122.32  security number of each occupant who is listed as an owner of 
122.33  the property on the deed of record, the name and address of each 
122.34  owner who does not occupy the property, and the name and social 
122.35  security number of each owner's spouse who occupies the 
122.36  property.  The application must be signed by each owner who 
123.1   occupies the property and by each owner's spouse who occupies 
123.2   the property, or, in the case of property that qualifies as a 
123.3   homestead under subdivision 1, paragraph (c), by the qualifying 
123.4   relative. 
123.5      If a property owner occupies a homestead, the property 
123.6   owner's spouse may not claim another property as a homestead 
123.7   unless the property owner and the property owner's spouse file 
123.8   with the assessor an affidavit or other proof required by the 
123.9   assessor stating that the property qualifies as a homestead 
123.10  under subdivision 1, paragraph (e). 
123.11     Owners or spouses occupying residences owned by their 
123.12  spouses and previously occupied with the other spouse, either of 
123.13  whom fail to include the other spouse's name and social security 
123.14  number on the homestead application or provide the affidavits or 
123.15  other proof requested, will be deemed to have elected to receive 
123.16  only partial homestead treatment of their residence.  The 
123.17  remainder of the residence will be classified as nonhomestead 
123.18  residential.  When an owner or spouse's name and social security 
123.19  number appear on homestead applications for two separate 
123.20  residences and only one application is signed, the owner or 
123.21  spouse will be deemed to have elected to homestead the residence 
123.22  for which the application was signed. 
123.23     The social security numbers or affidavits or other proofs 
123.24  of the property owners and spouses are private data on 
123.25  individuals as defined by section 13.02, subdivision 12, but, 
123.26  notwithstanding that section, the private data may be disclosed 
123.27  to the commissioner of revenue, or, for purposes of proceeding 
123.28  under the revenue recapture act to recover personal property 
123.29  taxes owing, to the county treasurer. 
123.30     (d) If residential real estate is occupied and used for 
123.31  purposes of a homestead by a relative of the owner and qualifies 
123.32  for a homestead under subdivision 1, paragraph (c), in order for 
123.33  the property to receive homestead status, a homestead 
123.34  application must be filed with the assessor.  The social 
123.35  security number of each relative occupying the property and the 
123.36  social security number of each owner who is related to an 
124.1   occupant of the property shall be required on the homestead 
124.2   application filed under this subdivision.  If a different 
124.3   relative of the owner subsequently occupies the property, the 
124.4   owner of the property must notify the assessor within 30 days of 
124.5   the change in occupancy.  The social security number of a 
124.6   relative occupying the property is private data on individuals 
124.7   as defined by section 13.02, subdivision 12, but may be 
124.8   disclosed to the commissioner of revenue.  
124.9      (e) The homestead application shall also notify the 
124.10  property owners that the application filed under this section 
124.11  will not be mailed annually and that if the property is granted 
124.12  homestead status for the 1993 assessment, or any assessment year 
124.13  thereafter, that same property shall remain classified as 
124.14  homestead until the property is sold or transferred to another 
124.15  person, or the owners, the spouse of the owner, or the relatives 
124.16  no longer use the property as their homestead every four years 
124.17  by the commissioner of revenue.  Upon the sale or transfer of 
124.18  the homestead property, a certificate of value must be timely 
124.19  filed with the county auditor as provided under section 272.115. 
124.20  Failure to notify the assessor within 30 days that the property 
124.21  has been sold, transferred, or that the owner, the spouse of the 
124.22  owner, or the relative is no longer occupying the property as a 
124.23  homestead, shall result in the penalty provided under this 
124.24  subdivision and the property will lose its current homestead 
124.25  status. 
124.26     (f) If the homestead application is not returned within 30 
124.27  days, the county will notify the commissioner of revenue and the 
124.28  commissioner will send a second application to the present 
124.29  owners of record.  The notice of proposed property taxes 
124.30  prepared under section 275.065, subdivision 3, shall reflect the 
124.31  property's classification.  Beginning with assessment year 1993 
124.32  for all properties, If a homestead application has not been 
124.33  filed with the county by December 15, the assessor shall 
124.34  classify the property as nonhomestead for the current assessment 
124.35  year for taxes payable in the following year, provided that the 
124.36  owner may be entitled to receive the homestead classification by 
125.1   proper application under section 375.192. 
125.2      (g) At the request of the commissioner, each county must 
125.3   give the commissioner a list that includes the name and social 
125.4   security number of each property owner and the property owner's 
125.5   spouse occupying the property, or relative of a property owner, 
125.6   applying for homestead classification under this subdivision.  
125.7   The commissioner shall use the information provided on the lists 
125.8   as appropriate under the law, including for the detection of 
125.9   improper claims by owners, or relatives of owners, under chapter 
125.10  290A.  
125.11     (h) If the commissioner finds that a property owner may be 
125.12  claiming a fraudulent homestead, the commissioner shall notify 
125.13  the appropriate counties.  Within 90 days of the notification, 
125.14  the county assessor shall investigate to determine if the 
125.15  homestead classification was properly claimed.  If the property 
125.16  owner does not qualify, the county assessor shall notify the 
125.17  county auditor who will determine the amount of homestead 
125.18  benefits that had been improperly allowed.  For the purpose of 
125.19  this section, "homestead benefits" means the tax reduction 
125.20  resulting from the classification as a homestead under section 
125.21  273.13, the taconite homestead credit under section 273.135, and 
125.22  the supplemental homestead credit under section 273.1391. 
125.23     The county auditor shall send a notice to the person who 
125.24  owned the affected property at the time the homestead 
125.25  application related to the improper homestead was filed, 
125.26  demanding reimbursement of the homestead benefits plus a penalty 
125.27  equal to 100 percent of the homestead benefits.  The person 
125.28  notified may appeal the county's determination by serving copies 
125.29  of a petition for review with county officials as provided in 
125.30  section 278.01 and filing proof of service as provided in 
125.31  section 278.01 with the Minnesota tax court within 60 days of 
125.32  the date of the notice from the county.  Procedurally, the 
125.33  appeal is governed by the provisions in chapter 271 which apply 
125.34  to the appeal of a property tax assessment or levy, but without 
125.35  requiring any prepayment of the amount in controversy.  If the 
125.36  amount of homestead benefits and penalty is not paid within 60 
126.1   days, and if no appeal has been filed, the county auditor shall 
126.2   certify the amount of taxes and penalty to the county 
126.3   treasurer.  The county treasurer will add interest to the unpaid 
126.4   homestead benefits and penalty amounts at the rate provided for 
126.5   delinquent personal property taxes for the period beginning 60 
126.6   days after demand for payment was made until payment.  If the 
126.7   person notified is the current owner of the property, the 
126.8   treasurer may add the total amount of benefits, penalty, 
126.9   interest, and costs to the real estate taxes otherwise payable 
126.10  on the property in the following year.  If the person notified 
126.11  is not the current owner of the property, the treasurer may 
126.12  collect the amounts due under the revenue recapture act in 
126.13  chapter 270A, or use any of the powers granted in sections 
126.14  277.20 and 277.21 without exclusion, to enforce payment of the 
126.15  benefits, penalty, interest, and costs, as if those amounts were 
126.16  delinquent tax obligations of the person who owned the property 
126.17  at the time the application related to the improperly allowed 
126.18  homestead was filed.  The treasurer may relieve a prior owner of 
126.19  personal liability for the benefits, penalty, interest, and 
126.20  costs, and instead extend those amounts on the tax lists against 
126.21  the property for taxes payable in the following year to the 
126.22  extent that the current owner agrees in writing. 
126.23     (i) Any amount of homestead benefits recovered by the 
126.24  county from the property owner shall be distributed to the 
126.25  county, city or town, and school district where the property is 
126.26  located in the same proportion that each taxing district's levy 
126.27  was to the total of the three taxing districts' levy for the 
126.28  current year.  Any amount recovered attributable to taconite 
126.29  homestead credit shall be transmitted to the St. Louis county 
126.30  auditor to be deposited in the taconite property tax relief 
126.31  account.  Any amount recovered that is attributable to 
126.32  supplemental homestead credit is to be transmitted to the 
126.33  commissioner of revenue for deposit in the general fund of the 
126.34  state treasury.  The total amount of penalty collected must be 
126.35  deposited in the county general fund. 
126.36     (j) If a property owner has applied for more than one 
127.1   homestead and the county assessors cannot determine which 
127.2   property should be classified as homestead, the county assessors 
127.3   will refer the information to the commissioner.  The 
127.4   commissioner shall make the determination and notify the 
127.5   counties within 60 days. 
127.6      (k) In addition to lists of homestead properties, the 
127.7   commissioner may ask the counties to furnish lists of all 
127.8   properties and the record owners. 
127.9      Sec. 5.  Minnesota Statutes 1996, section 273.135, 
127.10  subdivision 2, is amended to read: 
127.11     Subd. 2.  The amount of the reduction authorized by 
127.12  subdivision 1 shall be: 
127.13     (a) In the case of property located within the boundaries 
127.14  of a municipality which meets the qualifications prescribed in 
127.15  section 273.134, 66 percent of the tax, provided that the 
127.16  reduction shall not exceed the maximum amounts specified in 
127.17  clause (c), and shall not exceed an amount sufficient to reduce 
127.18  the effective tax rate on each parcel of property to 95 percent 
127.19  of the base year effective tax rate.  In no case will the 
127.20  reduction for each homestead resulting from this credit be less 
127.21  than $10.  
127.22     (b) In the case of property located within the boundaries 
127.23  of a school district which qualifies as a tax relief area but 
127.24  which is outside the boundaries of a municipality which meets 
127.25  the qualifications prescribed in section 273.134, 57 percent of 
127.26  the tax, provided that the reduction shall not exceed the 
127.27  maximum amounts specified in clause (c), and shall not exceed an 
127.28  amount sufficient to reduce the effective tax rate on each 
127.29  parcel of property to 95 percent of the base year effective tax 
127.30  rate.  In no case will the reduction for each homestead 
127.31  resulting from this credit be less than $10.  
127.32     (c) The maximum reduction of the tax is $225.40 on property 
127.33  described in clause (a) and $200.10 on property described in 
127.34  clause (b), for taxes payable in 1985.  These maximum amounts 
127.35  shall increase by $15 times the quantity one minus the homestead 
127.36  credit equivalency percentage per year for taxes payable in 1986 
128.1   and subsequent years through taxes payable in 1998.  Beginning 
128.2   with taxes payable in 1999 and thereafter, the maximum reduction 
128.3   of the tax under this subdivision will be $315.10. 
128.4      For the purposes of this subdivision, "homestead credit 
128.5   equivalency percentage" means one minus the ratio of the net 
128.6   class rate to the gross class rate applicable to the first 
128.7   $72,000 of the market value of residential homesteads, 
128.8   "effective tax rate" means tax divided by the market value of a 
128.9   property, and the "base year effective tax rate" means the 
128.10  payable 1988 tax on a property with an identical market value to 
128.11  that of the property receiving the credit in the current year 
128.12  after the application of the credits payable under Minnesota 
128.13  Statutes 1988, section 273.13, subdivisions 22 and 23, and this 
128.14  section, divided by the market value of the property.  
128.15     Sec. 6.  Minnesota Statutes 1996, section 273.1391, 
128.16  subdivision 2, is amended to read: 
128.17     Subd. 2.  The amount of the reduction authorized by 
128.18  subdivision 1 shall be: 
128.19     (a) In the case of property located within a school 
128.20  district which does not meet the qualifications of section 
128.21  273.134 as a tax relief area, but which is located in a county 
128.22  with a population of less than 100,000 in which taconite is 
128.23  mined or quarried and wherein a school district is located which 
128.24  does meet the qualifications of a tax relief area, and provided 
128.25  that at least 90 percent of the area of the school district 
128.26  which does not meet the qualifications of section 273.134 lies 
128.27  within such county, 57 percent of the tax on qualified property 
128.28  located in the school district that does not meet the 
128.29  qualifications of section 273.134, provided that the amount of 
128.30  said reduction shall not exceed the maximum amounts specified in 
128.31  clause (c), and shall not exceed an amount sufficient to reduce 
128.32  the effective tax rate on each parcel of property to the product 
128.33  of 95 percent of the base year effective tax rate multiplied by 
128.34  the ratio of the current year's tax rate to the payable 1989 tax 
128.35  rate.  In no case will the reduction for each homestead 
128.36  resulting from this credit be less than $10.  The reduction 
129.1   provided by this clause shall only be applicable to property 
129.2   located within the boundaries of the county described therein.  
129.3      (b) In the case of property located within a school 
129.4   district which does not meet the qualifications of section 
129.5   273.134 as a tax relief area, but which is located in a school 
129.6   district in a county containing a city of the first class and a 
129.7   qualifying municipality, but not in a school district containing 
129.8   a city of the first class or adjacent to a school district 
129.9   containing a city of the first class unless the school district 
129.10  so adjacent contains a qualifying municipality, 57 percent of 
129.11  the tax, but not to exceed the maximums specified in clause (c), 
129.12  and shall not exceed an amount sufficient to reduce the 
129.13  effective tax rate on each parcel of property to the product of 
129.14  95 percent of the base year effective tax rate multiplied by the 
129.15  ratio of the current year's tax rate to the payable 1989 tax 
129.16  rate.  In no case will the reduction for each homestead 
129.17  resulting from this credit be less than $10. 
129.18     (c) The maximum reduction of the tax is $200.10 for taxes 
129.19  payable in 1985.  This maximum amount shall increase by $15 
129.20  multiplied by the quantity one minus the homestead credit 
129.21  equivalency percentage per year for taxes payable in 1986 and 
129.22  subsequent years through taxes payable in 1998.  Beginning with 
129.23  taxes payable in 1999 and thereafter, the maximum reduction of 
129.24  the tax under this subdivision will be $289.80.  
129.25     For the purposes of this subdivision, "homestead credit 
129.26  equivalency percentage" means one minus the ratio of the net 
129.27  class rate to the gross class rate applicable to the first 
129.28  $72,000 of the market value of residential homesteads, and 
129.29  "effective tax rate" means tax divided by the market value of a 
129.30  property, and the "base year effective tax rate" means the 
129.31  payable 1988 tax on a property with an identical market value to 
129.32  that of the property receiving the credit in the current year 
129.33  after application of the credits payable under Minnesota 
129.34  Statutes 1988, section 273.13, subdivisions 22 and 23, and this 
129.35  section, divided by the market value of the property. 
129.36     Sec. 7.  Minnesota Statutes 1996, section 274.01, is 
130.1   amended to read: 
130.2      274.01 [BOARD OF REVIEW.] 
130.3      Subdivision 1.  [ORDINARY BOARD; MEETINGS, DEADLINES, 
130.4   GRIEVANCES.] (a) The town board of a town, or the council or 
130.5   other governing body of a city, is the board of review 
130.6   except (1) in cities whose charters provide for a board of 
130.7   equalization, or (2) in any city or town that has transferred 
130.8   its local board of review power and duties to the county board 
130.9   as provided in subdivision 3.  The county assessor shall fix a 
130.10  day and time when the board or the board of equalization shall 
130.11  meet in the assessment districts of the county.  On or before 
130.12  February 15 of each year the assessor shall give written notice 
130.13  of the time to the city or town clerk.  Notwithstanding the 
130.14  provisions of any charter to the contrary, the meetings must be 
130.15  held between April 1 and May 31 each year.  The clerk shall give 
130.16  published and posted notice of the meeting at least ten days 
130.17  before the date of the meeting.  
130.18     If in any county, at least 25 percent of the total net tax 
130.19  capacity of a city or town is noncommercial seasonal residential 
130.20  recreational property classified under section 273.13, 
130.21  subdivision 25, the county must hold two countywide 
130.22  informational meetings on Saturdays.  The meetings will allow 
130.23  noncommercial seasonal residential recreational taxpayers to 
130.24  discuss their property valuation with the appropriate assessment 
130.25  staff.  These Saturday informational meetings must be scheduled 
130.26  to allow the owner of the noncommercial seasonal residential 
130.27  recreational property the opportunity to attend one of the 
130.28  meetings prior to the scheduled board of review for their city 
130.29  or town.  The Saturday meeting dates must be contained on the 
130.30  notice of valuation of real property under section 273.121.  
130.31     The board shall meet at the office of the clerk to review 
130.32  the assessment and classification of property in the town or 
130.33  city.  No changes in valuation or classification which are 
130.34  intended to correct errors in judgment by the county assessor 
130.35  may be made by the county assessor after the board of review or 
130.36  the county board of equalization has adjourned in those cities 
131.1   or towns that hold a local board of review; however, corrections 
131.2   of errors that are merely clerical in nature or changes that 
131.3   extend homestead treatment to property are permitted after 
131.4   adjournment until the tax extension date for that assessment 
131.5   year.  The changes must be fully documented and maintained in 
131.6   the assessor's office and must be available for review by any 
131.7   person.  A copy of the changes made during this period in those 
131.8   cities or towns that hold a local board of review must be sent 
131.9   to the county board no later than December 31 of the assessment 
131.10  year.  
131.11     (b) The board shall determine whether the taxable property 
131.12  in the town or city has been properly placed on the list and 
131.13  properly valued by the assessor.  If real or personal property 
131.14  has been omitted, the board shall place it on the list with its 
131.15  market value, and correct the assessment so that each tract or 
131.16  lot of real property, and each article, parcel, or class of 
131.17  personal property, is entered on the assessment list at its 
131.18  market value.  No assessment of the property of any person may 
131.19  be raised unless the person has been duly notified of the intent 
131.20  of the board to do so.  On application of any person feeling 
131.21  aggrieved, the board shall review the assessment or 
131.22  classification, or both, and correct it as appears just.  
131.23     (c) A local board of review may reduce assessments upon 
131.24  petition of the taxpayer but the total reductions must not 
131.25  reduce the aggregate assessment made by the county assessor by 
131.26  more than one percent.  If the total reductions would lower the 
131.27  aggregate assessments made by the county assessor by more than 
131.28  one percent, none of the adjustments may be made.  The assessor 
131.29  shall correct any clerical errors or double assessments 
131.30  discovered by the board of review without regard to the one 
131.31  percent limitation.  
131.32     (d) A majority of the members may act at the meeting, and 
131.33  adjourn from day to day until they finish hearing the cases 
131.34  presented.  The assessor shall attend, with the assessment books 
131.35  and papers, and take part in the proceedings, but must not 
131.36  vote.  The county assessor, or an assistant delegated by the 
132.1   county assessor shall attend the meetings.  The board shall list 
132.2   separately, on a form appended to the assessment book, all 
132.3   omitted property added to the list by the board and all items of 
132.4   property increased or decreased, with the market value of each 
132.5   item of property, added or changed by the board, placed opposite 
132.6   the item.  The county assessor shall enter all changes made by 
132.7   the board in the assessment book.  
132.8      (e) Except as provided in subdivision 3, if a person fails 
132.9   to appear in person, by counsel, or by written communication 
132.10  before the board after being duly notified of the board's intent 
132.11  to raise the assessment of the property, or if a person feeling 
132.12  aggrieved by an assessment or classification fails to apply for 
132.13  a review of the assessment or classification, the person may not 
132.14  appear before the county board of equalization for a review of 
132.15  the assessment or classification.  This paragraph does not apply 
132.16  if an assessment was made after the board meeting, as provided 
132.17  in section 273.01, or if the person can establish not having 
132.18  received notice of market value at least five days before the 
132.19  local board of review meeting.  
132.20     (f) The board of review or the board of equalization must 
132.21  complete its work and adjourn within 20 days from the time of 
132.22  convening stated in the notice of the clerk, unless a longer 
132.23  period is approved by the commissioner of revenue.  No action 
132.24  taken after that date is valid.  All complaints about an 
132.25  assessment or classification made after the meeting of the board 
132.26  must be heard and determined by the county board of 
132.27  equalization.  A nonresident may, at any time, before the 
132.28  meeting of the board of review file written objections to an 
132.29  assessment or classification with the county assessor.  The 
132.30  objections must be presented to the board of review at its 
132.31  meeting by the county assessor for its consideration. 
132.32     Subd. 2.  [SPECIAL BOARD; DUTIES DELEGATED.] The governing 
132.33  body of a city, including a city whose charter provides for a 
132.34  board of equalization, may appoint a special board of review.  
132.35  The city may delegate to the special board of review all of the 
132.36  powers and duties in subdivision 1.  The special board of review 
133.1   shall serve at the direction and discretion of the appointing 
133.2   body, subject to the restrictions imposed by law.  The 
133.3   appointing body shall determine the number of members of the 
133.4   board, the compensation and expenses to be paid, and the term of 
133.5   office of each member.  At least one member of the special board 
133.6   of review must be an appraiser, realtor, or other person 
133.7   familiar with property valuations in the assessment district. 
133.8      Subd. 3.  [LOCAL BOARD DUTIES TRANSFERRED TO COUNTY.] The 
133.9   town board of any town or the governing body of any home rule 
133.10  charter or statutory city may transfer its powers and duties 
133.11  under subdivision 1 to the county board and no longer perform 
133.12  the function of a local board.  A transfer of duties as 
133.13  permitted under this subdivision must be communicated to the 
133.14  county assessor, in writing, before December 1 of any year to be 
133.15  effective for the following year's assessment.  This transfer of 
133.16  duties to the county may either be permanent or for a specified 
133.17  number of years, provided that the transfer cannot be for less 
133.18  than three years.  Its length must be stated in writing.  A town 
133.19  or city may renew its option to transfer.  The option to 
133.20  transfer duties under this subdivision is only available to a 
133.21  town or city whose assessment is done by the county. 
133.22     Sec. 8.  Minnesota Statutes 1996, section 274.13, is 
133.23  amended by adding a subdivision to read: 
133.24     Subd. 1b.  [ASSESSMENT CHANGES.] No changes in valuation or 
133.25  classification that are intended to correct errors in judgment 
133.26  by the county assessor may be made by the county assessor after 
133.27  the county board of equalization has adjourned; however, 
133.28  corrections of errors that are merely clerical in nature or 
133.29  changes that extend homestead treatment to property are 
133.30  permitted after adjournment until the tax extension date for 
133.31  that assessment year.  The changes must be fully documented and 
133.32  maintained in the assessor's office and must be available for 
133.33  review by any person. 
133.34     Sec. 9.  Minnesota Statutes 1996, section 274.13, is 
133.35  amended by adding a subdivision to read: 
133.36     Subd. 1c.  [ALTERNATIVE REVIEW OPTION.] The county shall 
134.1   notify taxpayers whose town or city elected to transfer its 
134.2   powers and duties under section 274.01 to the county.  Prior to 
134.3   the time of the county board of equalization, the county shall 
134.4   make available to those taxpayers a procedure for a review of 
134.5   its assessments, including, but not limited to, open book 
134.6   meetings.  This alternative review process shall take place in 
134.7   April and May.  
134.8      Sec. 10.  Minnesota Statutes 1996, section 298.24, 
134.9   subdivision 1, is amended to read: 
134.10     Subdivision 1.  (a) For concentrate produced in 1992, 1993, 
134.11  1994, and 1995 there is imposed upon taconite and iron 
134.12  sulphides, and upon the mining and quarrying thereof, and upon 
134.13  the production of iron ore concentrate therefrom, and upon the 
134.14  concentrate so produced, a tax of $2.054 per gross ton of 
134.15  merchantable iron ore concentrate produced therefrom.  
134.16     (b) For concentrates produced in 1996 and subsequent years 
134.17  1997 and 1998, the tax rate shall be equal to the preceding 
134.18  year's tax rate plus an amount equal to the preceding year's tax 
134.19  rate multiplied by the percentage increase in the implicit price 
134.20  deflator from the fourth quarter of the second preceding year to 
134.21  the fourth quarter of the preceding year, provided that, for 
134.22  concentrates produced in 1996 only, the increase in the rate of 
134.23  tax imposed under this section over the rate imposed for the 
134.24  previous year may not exceed four cents per ton.  "Implicit 
134.25  price deflator" for the gross national product means the 
134.26  implicit price deflator prepared by the bureau of economic 
134.27  analysis of the United States Department of Commerce.  For 
134.28  concentrates produced in 1999 and subsequent years, the tax rate 
134.29  shall be equal to the tax rate determined under this subdivision 
134.30  for 1998. 
134.31     (c) The tax shall be imposed on the average of the 
134.32  production for the current year and the previous two years.  The 
134.33  rate of the tax imposed will be the current year's tax rate.  
134.34  This clause shall not apply in the case of the closing of a 
134.35  taconite facility if the property taxes on the facility would be 
134.36  higher if this clause and section 298.25 were not applicable.  
135.1      (d) If the tax or any part of the tax imposed by this 
135.2   subdivision is held to be unconstitutional, a tax of $2.054 per 
135.3   gross ton of merchantable iron ore concentrate produced shall be 
135.4   imposed.  
135.5      (e) Consistent with the intent of this subdivision to 
135.6   impose a tax based upon the weight of merchantable iron ore 
135.7   concentrate, the commissioner of revenue may indirectly 
135.8   determine the weight of merchantable iron ore concentrate 
135.9   included in fluxed pellets by subtracting the weight of the 
135.10  limestone, dolomite, or olivine derivatives or other basic flux 
135.11  additives included in the pellets from the weight of the 
135.12  pellets.  For purposes of this paragraph, "fluxed pellets" are 
135.13  pellets produced in a process in which limestone, dolomite, 
135.14  olivine, or other basic flux additives are combined with 
135.15  merchantable iron ore concentrate.  No subtraction from the 
135.16  weight of the pellets shall be allowed for binders, mineral and 
135.17  chemical additives other than basic flux additives, or moisture. 
135.18     (f)(1) Notwithstanding any other provision of this 
135.19  subdivision, for the first five years of a plant's production of 
135.20  direct reduced ore, the rate of the tax on direct reduced ore is 
135.21  determined under this paragraph.  As used in this paragraph, 
135.22  "direct reduced ore" is ore that results in a product that has 
135.23  an iron content of at least 75 percent.  The rate to be applied 
135.24  to direct reduced ore is 25 percent of the rate otherwise 
135.25  determined under this subdivision for the first 500,000 of 
135.26  taxable tons for the production year, and 50 percent of the rate 
135.27  otherwise determined for any remainder.  If the taxpayer had no 
135.28  production in the two years prior to the current production 
135.29  year, the tonnage eligible to be taxed at 25 percent of the rate 
135.30  otherwise determined under this subdivision is the first 166,667 
135.31  tons.  If the taxpayer had some production in the year prior to 
135.32  the current production year but no production in the second 
135.33  prior year, the tonnage eligible to be taxed at 25 percent of 
135.34  the rate otherwise determined under this subdivision is the 
135.35  first 333,333 tons. 
135.36     (2) Production of direct reduced ore in this state is 
136.1   subject to the tax imposed by this section, but if that 
136.2   production is not produced by a producer of taconite or iron 
136.3   sulfides, the production of taconite or iron sulfides consumed 
136.4   in the production of direct reduced iron in this state is not 
136.5   subject to the tax imposed by this section on taconite or iron 
136.6   sulfides. 
136.7      Sec. 11.  [TIF GRANTS; APPROPRIATIONS.] 
136.8      (a) The commissioner of revenue shall pay grants to 
136.9   municipalities for deficits in tax increment financing districts 
136.10  caused by the changes in class rates, the reduction of school 
136.11  district taxes, and the imposition of a state tax that is not 
136.12  used in determining tax increment under this act.  
136.13  Municipalities must submit applications for the grants in a form 
136.14  prescribed by the commissioner by no later than March 1 for 
136.15  taxes payable during the calendar year.  The maximum grant 
136.16  equals the lesser of: 
136.17     (1) the reduction in the tax increment financing district's 
136.18  revenues derived from increment resulting from the provisions of 
136.19  this act; and 
136.20     (2) the municipality's total available tax increments, 
136.21  including those from previous years, less the amount due during 
136.22  the calendar year to pay bonds issued and sold before and 
136.23  binding contracts entered into before the day following final 
136.24  enactment of this act. 
136.25     (b) The amount necessary to make the grants is appropriated 
136.26  to the commissioner of revenue from the general fund for 
136.27  purposes of this section. 
136.28     Sec. 12.  [STATE PROPERTY TAX; PRE-1979 TIF DISTRICTS.] 
136.29     Notwithstanding any law to the contrary, the state tax 
136.30  imposed under Minnesota Statutes, section 273.13, subdivision 
136.31  1b, may not be used to compute the increment for a tax increment 
136.32  financing district for which certification was requested prior 
136.33  to August 1, 1979. 
136.34     Sec. 13.  [REPEALER.] 
136.35     Minnesota Statutes 1996, section 273.1399, is repealed. 
136.36     Sec. 14.  [EFFECTIVE DATE.] 
137.1      Sections 1, 3, and 7 to 9 are effective the day following 
137.2   final enactment. 
137.3      Section 2 is effective beginning with assessment year 1997. 
137.4      Section 4 is effective for the 1998 assessment and 
137.5   thereafter. 
137.6      Section 11 is effective for grants made in calendar year 
137.7   1999 and thereafter. 
137.8      Section 13 is effective for aids payable in 1999 and 
137.9   thereafter.