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Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1984 

                        CHAPTER 502-H.F.No. 2016 
           An act relating to financing and operation of 
          government in this state; increasing the budget 
          reserve account; repealing the income tax surtax; 
          providing a tax amnesty; increasing the school 
          agricultural credit; providing for distribution of 
          proceeds from Minnesota breeders fund; changing notice 
          provisions and qualifying debts under the revenue 
          recapture capture act; clarifying the application of 
          the mortgage registry tax to revolving lines of 
          credit; changing refund procedure of motor fuels tax; 
          abolishing the excise tax on boxing; changing the 
          maximum property tax levy of Duluth port authority; 
          exempting hot water heating from St. Paul franchise 
          tax; giving certain powers to the Ramsey-Washington 
          metro watershed district; creating the Croft 
          Historical Park board; giving the city of Cloquet 
          power to contract and levy for public transportation; 
          providing for the conveyance of certain lands in St. 
          Louis County and Morrison County; authorizing levy 
          limit increases for the cities of Breezy Point and 
          Oakdale; abolishing rent capitalization and providing 
          for study by the department of revenue; imposing 
          requirements for disaster relief property tax credits; 
          changing certain assessment ratios; changing 
          eligibility for certain assessment ratios; changing 
          homestead classification treatment; changing property 
          tax statement requirements; delaying imposition of a 
          property tax penalty; providing for notice of sale of 
          certain tax forfeited lands; changing computation of 
          payments in lieu; requiring tax clearance prior to 
          issuance of certain licenses; restoring local 
          government aid payments for 1984; modifying the 
          computation formula for local government aids; 
          providing for a local government aids study 
          commission; changing designation and funding for 
          enterprise zones; changing procedures and eligibility 
          for certain business income tax credits; allowing or 
          increasing income tax deductions for certain dividends 
          and royalties; restricting tax exemptions for 
          redevelopment companies; providing grants for plant 
          expansions; adjusting the computation of taxes on 
          taconite and iron ore and authorizing certain refunds 
          and credits; modifying distributions from the proceeds 
          of the taconite tax; changing computation of 
          agricultural, homestead, and taconite homestead 
          credits; allowing taxing districts to levy for certain 
          purposes; changing the definition of political party 
          for purposes of the political contribution credit; 
          changing the income tax pension exclusion; altering 
          certain gross income modifications; increasing the 
          tuition deduction; providing for the adjustment of 
          income under the farm loss modification; providing for 
          the determination of sales within the state for income 
          tax purposes; changing or eliminating witholding on 
          parimutuel winnings and purses; reenacting rental 
          registration provisions; establishing an agricultural 
          resource loan guaranty program; regulating charitable 
          gambling; requiring prompt payment by state agencies; 
          providing that certain admission taxes are 
          discretionary with the metropolitan sports facilities 
          commission; changing certain transfers to the 
          education aids increase account; exempting sales of 
          candy by nonprofit youth organizations from the sales 
          tax; changing certain provisions relating to sales 
          ratios and property tax appeals; including logging 
          equipment in the definition of farm machinery; 
          providing a reduced sales tax rate on capital 
          equipment and special tooling; exempting hot water and 
          certain manufactured homes from the sales tax; 
          exempting certain vehicles used in interstate commerce;
          providing that sales of certain leased vehicles are 
          not exempt; simplifying hydropower lease procedures; 
          clarifying certain exempt land; modifying the 
          definition of wetlands; extending availability of 
          confession of judgment procedures to certain 
          nonhomestead property; modifying and extending the 
          targeting credit for certain years; providing property 
          tax reimbursement for certain transit levies; changing 
          certain procedures for valuing railroad property; 
          providing certain refunds for railroad abatements; 
          appropriating money; amending Minnesota Statutes 1982, 
          sections 10A.31, subdivisions 3a and 5; 105.482, 
          subdivisions 8 and 9; 124.2131, subdivision 1; 270.04, 
          subdivision 2; 270.80, subdivision 4; 270.84, 
          subdivision 1; 270.86; 270.87; 270A.03, subdivision 5; 
          270A.08, subdivisions 1 and 2; 271.01, subdivision 5; 
          271.06, subdivision 6; 272.02, by adding a subdivision;
          273.123, by adding subdivisions; 273.13, subdivision 
          19; 273.135, subdivisions 2 and 5; 273.1391, 
          subdivisions 2 and 4; 273.19, by adding a subdivision; 
          279.37, subdivisions 1 and 3; 287.05, by adding 
          subdivisions; 290.06, by adding a subdivision; 290.08, 
          by adding a subdivision; 290.19, subdivision 1a; 
          290.21, by adding a subdivision; 290.61; 290A.04, by 
          adding a subdivision; 295.44, subdivision 1; 296.18, 
          subdivisions 3 and 8; 297A.01, subdivision 15, and by 
          adding subdivisions; 297A.15, by adding a subdivision; 
          297A.44, subdivision 1; 297B.035, subdivision 3; 
          298.01; 298.02, subdivision 1; 298.031, subdivision 2; 
          298.225; 298.24, subdivision 1, and by adding a 
          subdivision; 298.40, by adding a subdivision; 299.012, 
          subdivision1; 341.05; 349.11; 349.12; 349.13; 349.14; 
          349.15; 349.16; 349.17; 349.18; 349.19; 349.20; 
          349.21; 349.22; 349.31, subdivision 1; 362A.01, 
          subdivision 1; 362A.05; 458.14; 462.651, subdivision 
          1, and by adding a subdivision; 473.595, subdivision 
          1; 477A.13; Minnesota Statutes 1983 Supplement, 
          sections 16A.15, subdivision 6; 124.2137, subdivision 
          1; 240.18; 272.02, subdivision 1; 273.11, subdivision 
          1; 273.13, subdivisions 6, 7, 9, 17, 17b, 17c, and 21; 
          273.1312, subdivision 4; 273.1314, subdivisions 6, 8, 
          and 15; 275.125, subdivisions 11a, 11b, and 12a; 
          276.04; 278.01, subdivision 1; 278.05, subdivision 4; 
          279.01, subdivision 1; 290.01, subdivisions 20a and 
          20b; 290.06, subdivision 11; 290.069, subdivisions 1, 
          2, 4, 5, and by adding subdivisions; 290.089, 
          subdivision 2; 290.09, subdivision 29; 290.18, 
          subdivision 2; 290.21, subdivision 4; 290.92, 
          subdivisions 27 and 28; 290A.04, subdivisions 2e and 
          2f; 296.14, subdivision 4; 296.18, subdivision 1; 
          297A.02, subdivision 2, and by adding a subdivision; 
          297A.14; 297A.25, subdivision 1; 297B.03; 298.28, 
          subdivision 1; 340.14, subdivision 2; 473.446, 
          subdivision 1; 477A.013, subdivisions 1 and 2; 
          477A.0131, subdivision 1; 609.75, subdivision 3; 
          609.761; amending Laws 1979, chapter 189, section 2; 
          Laws 1982, Second Special Session, chapter 2, sections 
          12, as amended, and 14, as amended; Laws 1983, chapter 
          342,article 1, section 44; 1984 Regular Session, H.F. 
          No. 1393, article 9, section 9; proposing new law 
          coded as Minnesota Statutes, chapter 41A; proposing 
          new law coded in Minnesota Statutes, chapters 16A; 270;
          282; 349; 362A; 507; 508; repealing Minnesota Statutes 
          1982, sections 270.051; 290.06, subdivision 13; 
          295.44, subdivisions 2, 3, and 4; 349.26; 462.651, 
          subdivision 2; Minnesota Statutes 1983 Supplement, 
          sections 273.11, subdivision 7; 290.06, subdivision 2e;
          462.651, subdivision 3; 477A.0131, subdivision 2; and 
          477A.03, subdivision 2; Laws 1983, chapter 342, 
          article 1, section 8. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                ARTICLE 1
BUDGET RESERVE
    Section 1.  Minnesota Statutes 1983 Supplement, section 
16A.15, subdivision 6, is amended to read:  
    Subd. 6.  [BUDGET RESERVE ACCOUNT.] A budget reserve 
account is created in the general fund in the state treasury.  
The commissioner of finance on July 1, 1983, shall transfer 
$250,000,000 to a the budget reserve account in the general fund 
in the state treasury.  The commissioner of finance on July 1, 
1984, shall transfer an additional $125,000,000 to the budget 
reserve account in the general fund.  The amounts transferred 
shall remain in the budget reserve account until expended under 
subdivision 1. 

                                ARTICLE 2

                               INCOME TAX
    Section 1.  Minnesota Statutes 1982, section 10A.31, 
subdivision 3a, is amended to read: 
    Subd. 3a.  A minor political party as defined in section 
10A.01, subdivision 13 qualifies for inclusion on the income tax 
form and property tax refund return as provided in subdivision 
3, provided that 
    (1) (a) if a petition is filed, it is filed by June 1 of 
the taxable year; or 
    (b) if the party ran a candidate for statewide office, that 
office must have been the office of governor and lieutenant 
governor, secretary of state, state auditor, state treasurer, or 
attorney general; and 
    (2) the secretary of state certifies to the commissioner of 
revenue by July 1, 1984, and by July 1 of every odd-numbered 
year thereafter the parties which qualify as minor political 
parties under this subdivision.  
    A minor party shall be certified only if the secretary of 
state determines that the party satisfies the following 
conditions:  
    (a) the party meets the requirements of section 10A.01, 
subdivision 13, and in the last applicable election ran a 
candidate for the statewide offices listed in clause (1)(b) of 
this subdivision;  
    (b) it is a political party, not a principal campaign 
committee;  
    (c) it has held a state convention in the last two years, 
adopted a state constitution, and elected state officers; and 
    (d) an officer of the party has filed with the secretary of 
state a certification that the party held a state convention in 
the last two years, adopted a state constitution, and elected 
state officers. 
    Sec. 2.  Minnesota Statutes 1982, section 10A.31, 
subdivision 5, is amended to read: 
    Subd. 5.  In each calendar year the moneys in each party 
account and the general account shall be allocated to candidates 
as follows: 
     (1) 21 percent for the offices of governor and lieutenant 
governor together; 
     (2) 3.6 percent for the office of attorney general; 
     (3) 1.8 percent each for the offices of secretary of state, 
state auditor and state treasurer; 
     (4) In each calendar year during the period in which state 
senators serve a four year term, 23-1/3 percent for the office 
of state senator and 46-2/3 percent for the office of state 
representative; 
     (5) In each calendar year during the period in which state 
senators serve a two year term, 35 percent each for the offices 
of state senator and state representative; 
     (6) To assure that moneys will be returned to the counties 
from which they were collected, and to assure that the 
distribution of those moneys rationally relates to the support 
for particular parties or for particular candidates within 
legislative districts, moneys from the party accounts for 
legislative candidates shall be distributed as follows: 
     Each candidate for the state senate and state house of 
representatives whose name is to appear on the ballot in the 
general election shall receive moneys from his party account set 
aside for candidates of the state senate or state house of 
representatives, whichever applies, according to the following 
formula; 
     For each county within his district the candidate's share 
of the dollars allocated in that county to his party account and 
set aside for that office shall be: 
     (a) The sum of the votes cast in the last general election 
in that part of the county in his district for all candidates of 
his party (i) whose names appeared on the ballot in each voting 
precinct of the state and (ii) for the state senate and state 
house of representatives, divided by 
     (b) The sum of the votes cast in that county in the last 
general election for all candidates of his party (i) whose names 
appeared on the ballot in each voting precinct in the state and 
(ii) for the state senate and state house of representatives, 
multiplied by 
     (c) The amount in his party account allocated in that 
county and set aside for the candidates for the office for which 
he is a candidate. 
     The sum of all the county shares calculated in the formula 
above is the candidate's share of his party account. 
     In a year in which an election for the state senate occurs, 
with respect to votes for candidates for the state senate only, 
"last general election" means the last general election in which 
an election for the state senate occurred. 
     For any party under whose name no candidate's name appeared 
on the ballot in each voting precinct in the state in the last 
general election, "last general election" means the last general 
election in which the name of a candidate of that party appeared 
on the ballot in each voting precinct in the state amounts in 
the party's account shall be allocated based on (a) the number 
of people voting in the last general election in that part of 
the county in his district, divided by (b) the number of the 
people voting in that county in the last general election, 
multiplied by (c) the amount in his party account allocated in 
that county and set aside for the candidates for the office for 
which he is a candidate. 
     Sec. 3.  Minnesota Statutes 1983 Supplement, section 
290.01, subdivision 20a, is amended to read: 
    Subd. 20a.  [MODIFICATIONS INCREASING FEDERAL ADJUSTED 
GROSS INCOME.] There shall be added to federal adjusted gross 
income: 
     (1) Interest income on obligations of any state other than 
Minnesota or a political subdivision of any other state exempt 
from federal income taxes under the Internal Revenue Code of 
1954; 
     (2) Income taxes imposed by this state or any other taxing 
jurisdiction, to the extent deductible in determining federal 
adjusted gross income and not credited against federal income 
tax; 
     (3) Interest on indebtedness incurred or continued to 
purchase or carry securities the income from which is exempt 
from tax under this chapter, to the extent deductible in 
determining federal adjusted gross income; 
     (4) In the case of a change of residence from Minnesota to 
another state or nation, the amount of moving expenses which 
exceed total reimbursements and which were therefore deducted in 
arriving at federal adjusted gross income; 
     (5) The amount of any increase in the taxpayer's federal 
tax liability under section 47 of the Internal Revenue Code of 
1954 to the extent of the credit under section 38 of the 
Internal Revenue Code of 1954 that was previously allowed as a 
deduction under Minnesota Statutes 1982, section 290.01, 
subdivision 20b, clause (7); 
         (6) Expenses and losses arising from a farm which are not 
allowable under section 290.09, subdivision 29; 
          (7) Expenses and depreciation attributable to substandard 
buildings disallowed by section 290.101; 
          (8) The amount by which the gain determined pursuant to 
section 41.59, subdivision 2 exceeds the amount of such gain 
included in federal adjusted gross income; 
          (9) To the extent deducted in computing the taxpayer's 
federal adjusted gross income for the taxable year, losses 
recognized upon a transfer of property to the spouse or former 
spouse of the taxpayer in exchange for the release of the 
spouse's marital rights;  
          (10) Interest income from qualified scholarship funding 
bonds as defined in section 103(e) of the Internal Revenue Code 
of 1954, if the nonprofit corporation is domiciled outside of 
Minnesota; 
          (11) Exempt-interest dividends, as defined in section 
852(b)(5)(A) of the Internal Revenue Code of 1954, not included 
in federal adjusted gross income pursuant to section 
852(b)(5)(B) of the Internal Revenue Code of 1954, except for 
that portion of exempt-interest dividends derived from interest 
income on obligations of the state of Minnesota, any of its 
political or governmental subdivisions, any of its 
municipalities, or any of its governmental agencies or 
instrumentalities; 
          (12) The amount of any excluded gain recognized by a trust 
on the sale or exchange of property as defined in section 
641(c)(1) of the Internal Revenue Code of 1954; 
          (13) To the extent not included in the taxpayer's federal 
adjusted gross income, the amount of any gain, from the sale or 
other disposition of property having a lower adjusted basis for 
Minnesota income tax purposes than for federal income tax 
purposes.  This modification shall not exceed the difference in 
basis.  If the gain is considered a long term capital gain for 
federal income tax purposes, the modification shall be limited 
to 40 percent of the portion of the gain.  This modification is 
limited to property that qualified for the equity investment 
credit contained in section 290.069, subdivision 4, and to 
property acquired in exchange for the release of the taxpayer's 
marital rights contained in section 290.14, clause (7);  
          (14) The amount of any loss from a source outside of 
Minnesota which is not allowed under section 290.17 including 
any capital loss or net operating loss carryforwards or 
carrybacks resulting from the loss; 
     (15) To the extent deducted in computing the taxpayer's 
federal adjusted gross income, interest, taxes and other 
expenses which are not allowed under section 290.10, clause (9) 
or (10); 
     (16) The deduction for two-earner married couples provided 
in section 221 of the Internal Revenue Code of 1954;  
    (17) Losses from the business of mining as defined in 
section 290.05, subdivision 1, clause (a) which is not subject 
to the Minnesota income tax;  
    (18) Expenses and depreciation attributable to property 
subject to Laws 1982, chapter 523, article 7, section 3 which 
has not been registered;  
    (19) The amount of contributions to an individual 
retirement account, including a qualified voluntary employee 
contribution, simplified employee pension plan, or self-employed 
retirement plan which is allowed under sections 311 and 312 of 
Public Law Number 97-34, section 238 of Public Law Number 
97-248, and section 103(d)(1)(B) of Public Law Number 97-448 to 
the extent those contributions were not an allowable deduction 
prior to the enactment of that law; provided that an individual 
on whose behalf stock worth less than $300 is contributed during 
the taxable year to a tax credit employee stock ownership plan 
that satisfies the requirements of sections 44G and 409A of the 
Internal Revenue Code of 1954 shall not be required, as a 
consequence of that contribution, to include contributions to 
another plan or account in gross income under this clause to the 
extent the contributions do not exceed the difference between 
the value of the stock contributed during the taxable year and 
$1,500; and 
    (20) To the extent not included in the taxpayer's federal 
adjusted gross income, the amount of any contributions to a 
qualified pension plan, designated as employee contributions but 
which the employing unit picks up and which are treated as 
employer contributions pursuant to section 414(h)(2) of the 
Internal Revenue Code of 1954, provided that employee 
contributions to police and fire relief associations that 
previously were not included within gross income as 
contributions to organizations qualified under section 501(c)(4) 
of the Internal Revenue Code of 1954 shall not be included in 
gross income under this clause.  
    Sec. 4.  Minnesota Statutes 1983 Supplement, section 
290.01, subdivision 20b, is amended to read: 
    Subd. 20b.  [MODIFICATIONS REDUCING FEDERAL ADJUSTED GROSS 
INCOME.] There shall be subtracted from federal adjusted gross 
income: 
    (1) Interest income on obligations of any authority, 
commission or instrumentality of the United States to the extent 
includible in gross income for federal income tax purposes but 
exempt from state income tax under the laws of the United States;
    (2) The portion of any gain, from the sale or other 
disposition of property having a higher adjusted basis for 
Minnesota income tax purposes than for federal income tax 
purposes, that does not exceed such difference in basis; but if 
such gain is considered a long-term capital gain for federal 
income tax purposes, the modification shall be limited to 40 per 
centum of the portion of the gain.  This modification shall not 
be applicable if the difference in basis is due to disallowance 
of depreciation pursuant to section 290.101. 
    (3) Income from the performance of personal or professional 
services which is subject to the reciprocity exclusion contained 
in section 290.081, clause (a); 
    (4) Losses, not otherwise reducing federal adjusted gross 
income assignable to Minnesota, arising from events or 
transactions which are assignable to Minnesota under the 
provisions of sections 290.17 to 290.20, including any capital 
loss or net operating loss carryforwards or carrybacks or out of 
state loss carryforwards resulting from the losses, and 
including any farm loss carryforwards or carrybacks; 
    (5) If included in federal adjusted gross income, the 
amount of any credit received, whether received as a refund or 
credit to another taxable year's income tax liability, pursuant 
to chapter 290A, and the amount of any overpayment of income tax 
to Minnesota, or any other state, for any previous taxable year, 
whether the amount is received as a refund or credited to 
another taxable year's income tax liability; 
    (6) To the extent included in federal adjusted gross 
income, or the amount reflected as the ordinary income portion 
of a lump sum distribution under section 402(e) of the Internal 
Revenue Code of 1954, notwithstanding any other law to the 
contrary, the amount received by any person (i) from the United 
States, its agencies or instrumentalities, the Federal Reserve 
Bank or from the state of Minnesota or any of its political or 
governmental subdivisions or from any other state or its 
political or governmental subdivisions, or a Minnesota volunteer 
firefighter's relief association, by way of payment as a 
pension, public employee retirement benefit, or any combination 
thereof, (ii) as a retirement or survivor's benefit made from a 
plan qualifying under section 401, 403, 404, 405, 408, 409 or 
409A of the Internal Revenue Code of 1954, or (iii) severance 
pay distributed to an individual upon discontinuance of the 
individual's employment due to termination of business 
operations by the individual's employer, provided that the 
termination is reasonably likely to be permanent, involves the 
discharge of at least 75 percent of the employees at that site 
within a one-year period, and the business is not acquired by 
another person who continues operations at that site.  The 
maximum amount of this subtraction shall be $11,000 less the 
amount by which the individual's federal adjusted gross income, 
plus the ordinary income portion of a lump sum distribution as 
defined in section 402(e) of the Internal Revenue Code of 1954, 
exceeds $17,000.  For purposes of this clause, "severance pay" 
means an amount received for cancellation of an employment 
contract or a collectively bargained termination payment made as 
a substitute for income which would have been earned for 
personal services to be rendered in the future.  In the case of 
a volunteer firefighter who receives an involuntary lump sum 
distribution of his pension or retirement benefits, the maximum 
amount of this subtraction shall be $11,000; this subtraction 
shall not be reduced by the amount of the individual's federal 
adjusted gross income in excess of $17,000 Pension income as 
provided by section 7; 
    (7) To the extent included in the taxpayer's federal 
adjusted gross income for the taxable year, gain recognized upon 
a transfer of property to the spouse or former spouse of the 
taxpayer in exchange for the release of the spouse's marital 
rights;  
    (8) The amount of any distribution from a qualified pension 
or profit sharing plan included in federal adjusted gross income 
in the year of receipt to the extent of any contribution not 
previously allowed as a deduction by reason of a change in 
federal law which was not adopted by Minnesota law for a taxable 
year beginning in 1974 or later; 
          (9) Interest, including payment adjustment to the extent 
that it is applied to interest, earned by the seller of the 
property on a family farm security loan executed before January 
1, 1986 that is guaranteed by the commissioner of agriculture as 
provided in sections 41.51 to 41.60; 
          (10) The first $3,000 of compensation for personal services 
in the armed forces of the United States or the United Nations, 
and the next $2,000 of compensation for personal services in the 
armed forces of the United States or the United Nations wholly 
performed outside the state of Minnesota.  This modification 
does not apply to compensation defined in subdivision 20b, 
clause (6); 
          (11) The amount of any income earned for personal services 
rendered outside of Minnesota prior to the date when the 
taxpayer became a resident of Minnesota.  This modification does 
not apply to compensation defined in subdivision 20b, clause (6);
          (12) In the case of wages or salaries paid or incurred on 
or after January 1, 1977, the amount of any credit for 
employment of certain new employees under sections 44B and 51 to 
53 of the Internal Revenue Code of 1954 which is claimed as a 
credit against the taxpayer's federal tax liability, but only to 
the extent that the credit is connected with or allocable 
against the production or receipt of income included in the 
measure of the tax imposed by this chapter; 
          (13) In the case of work incentive program expenses paid or 
incurred on or after January 1, 1979, the amount of any credit 
for expenses of work incentive programs under sections 40, 50A 
and 50B of the Internal Revenue Code of 1954 which is claimed as 
a credit against the taxpayer's federal tax liability, but only 
to the extent that the credit is connected with or allocable 
against the production or receipt of income included in the 
measure of the tax imposed by this chapter; 
          (14) Unemployment compensation to the extent includible in 
gross income for federal income tax purposes under section 85 of 
the Internal Revenue Code of 1954; 
     (15) The amount of any income or gain which is not 
assignable to Minnesota under the provisions of section 290.17; 
     (16) Interest earned on a contract for deed entered into 
for the sale of property for agricultural use if the rate of 
interest set in the contract is no more than nine percent per 
year for the duration of the term of the contract.  This 
exclusion shall be available only if (1) the purchaser is an 
individual who, together with his spouse and dependents, has a 
total net worth valued at less than $150,000 and (2) the 
property sold under the contract is farm land as defined in 
section 41.52, subdivision 6 of no more than 1,000 acres that 
the purchaser intends to use for agricultural purposes.  
Compliance with these requirements shall be stated in an 
affidavit to be filed with the first income tax return on which 
the taxpayer claims the exclusion provided in this clause.  Upon 
request accompanied by the information necessary to make the 
determination, the commissioner shall determine whether interest 
to be paid on a proposed transaction will qualify for this 
exclusion; the determination shall be provided within 30 days of 
receipt of the request, unless the commissioner finds it 
necessary to obtain additional information, or verification of 
the information provided, in which case the determination shall 
be provided within 30 days of receipt of the final item of 
information or verification.  The exclusion provided in this 
clause shall apply to interest earned on contracts for deed 
entered into after December 31, 1981 and before July 1, 1983; 
     (17) Income from the business of mining as defined in 
section 290.05, subdivision 1, clause (a) which is not subject 
to the Minnesota income tax;  
          (18) To the extent included in federal adjusted gross 
income, distributions from a qualified governmental pension plan 
which represent a return of designated employee contributions to 
the plan and which contributions were included in gross income 
pursuant to subdivision 20a, clause (20); and 
     (19) To the extent included in federal adjusted gross 
income, distributions from an individual retirement account 
which represent a return of designated employee contributions if 
the contributions were included in gross income pursuant to 
subdivision 20a, clause (19).  The distribution shall be 
allocated first to return of contributions included in gross 
income until the amount of the contributions has been exhausted. 
    Sec. 5.  Minnesota Statutes 1983 Supplement, section 
290.06, subdivision 11, is amended to read: 
    Subd. 11.  [CONTRIBUTIONS TO POLITICAL PARTIES AND 
CANDIDATES.] A taxpayer may take a credit against the tax due 
under this chapter of 50 percent of his contributions to 
candidates for elective state or federal public office and to 
any political party.  The maximum credit for an individual shall 
not exceed $50 and, for a married couple filing jointly or 
filing a combined return, shall not exceed $100.  No credit 
shall be allowed under this subdivision for a contribution to 
any candidate, other than a candidate for elective judicial 
office or federal office, who has not signed an agreement to 
limit his campaign expenditures as provided in section 10A.32, 
subdivision 3b.  For purposes of this subdivision, a political 
party means a major political party as defined in section 
200.02, subdivision 7, or a minor political party qualifying for 
inclusion on the income tax or property tax refund form under 
section 10A.31, subdivision 3a.  A major or minor party includes 
the aggregate of the party organization within each house of the 
legislature, the state party organization, and the party 
organization within congressional districts, counties, 
legislative districts, municipalities, and precincts.  A 
"federal office" means the office of the president or vice 
president of the United States or the office of United States 
senator or congressman from Minnesota. 
    This credit shall be allowed only if the contribution is 
verified in the manner the commissioner of revenue shall 
prescribe. 
    Sec. 6.  Minnesota Statutes 1982, section 290.06, is 
amended by adding a subdivision to read: 
    Subd. 19.  [CONSERVATION TILLAGE FARM EQUIPMENT; CREDIT.] 
(a) A credit is allowed against the tax imposed by this chapter 
in an amount equal to ten percent of the net cost of 
conservation tillage planters.  
    (b) The credit for a taxable year may not exceed the 
liability for tax.  "Liability for tax" means the tax imposed 
under this chapter for the taxable year reduced by the sum of 

any nonrefundable credits allowed under this chapter except the 
credit provided in section 290.068.  The amount of any unused 
credit for a taxable year shall be a carryback to each of the 
preceding three taxable years and a carryover to each of the 
succeeding five taxable years.  The entire amount of the credit 
shall be carried to the earliest of the taxable years to which 
it may be carried.  
    (c) For the purposes of sections 290.46 and 290.50, if the 
claim for refund relates to an overpayment attributable to a 
carryback under this subdivision, in lieu of the period of 
limitation prescribed in sections 290.46 and 290.50, the period 
of limitation shall be that period which ends with the 
expiration of the 15th day of the 46th month, or the 45th month, 
in the case of a corporation, following the end of the taxable 
year in which the credit arises which results in the carryback. 
With respect to any portion of a credit carryback from a taxable 
year attributable to a loss carryback from a subsequent taxable 
year, the period of limitations shall be that period which ends 
with the expiration of the 15th day of the 46th month, or, in 
the case of a corporation, the 45th month following the end of 
the subsequent taxable year.  In any case in which a taxpayer is 
entitled to a refund in a carryback year due to the carryback, 
interest shall be computed only from the end of the taxable year 
in which the credit arises.  With respect to any portion of a 
credit carryback from a taxable year attributable to a loss 
carryback from a subsequent taxable year, interest shall be 
computed from the end of the subsequent taxable year.  
    (d) For purposes of this subdivision, the following terms 
have the meanings given:  
    (1) "Conservation tillage planters" means planters or 
planting attachments designed and configured in a manner to 
plant row or small grain crops under a no-till, ridge-till, or 
strip-till method of conservation tillage.  
    (2) "No-till" means a conservation tillage system in which 
the soil is left undisturbed prior to planting and planting is 
completed in a narrow seedbed approximately one to three inches 
wide.  
    (3) "Ridge-till" means a conservation tillage system in 
which the soil is left undisturbed prior to planting and 
approximately one-third of the soil surface is tilled at 
planting with sweeps or row cleaners.  Planting is completed on 
ridges several inches higher than the row middles.  
    (4) "Strip-till" means a conservation tillage system in 
which the soil is left undisturbed prior to planting and 
approximately one-third of the soil surface is tilled at 
planting using a rototiller, inrow chisel, row cleaner, or other 
similar conservation tillage equipment.  
    Sec. 7.  Minnesota Statutes 1982, section 290.08, is 
amended by adding a subdivision to read: 
    Subd. 26.  [PENSION INCOME.] (a) [EXCLUSION.] Gross income 
shall not include the taxpayer's pension income.  The maximum 
amount of this exclusion is the greater of the following two 
amounts:  
    (1) $11,000 reduced by the amount of the taxpayer's federal 
adjusted gross income in excess of $17,000; or 
    (2) $11,000 reduced by the sum of 
    (A) social security benefits, 
    (B) railroad retirement benefits, and 
    (C) the excess over $23,000 of federal adjusted gross 
income, but excluding social security benefits and railroad 
retirement benefits to the extent included in federal adjusted 
gross income.  
    (3) Notwithstanding clauses (1) and (2), in the case of an 
involuntary lump sum distribution of pension or retirement 
benefits to volunteer firefighters, the maximum amount of the 
exclusion is $11,000.  This amount is not subject to reduction 
for other income of the taxpayer.  
    (4) Pension income consisting of severance pay qualifies 
only for the exclusion computed according to paragraph (a), 
clause (1).  
    (b) [DEFINITIONS.] For purposes of this subdivision the 
following terms have the meanings given:  
    (1) "Internal Revenue Code" means the Internal Revenue Code 
of 1954, as amended through December 31, 1983.  
    (2) "Federal adjusted gross income" is the federal adjusted 
gross income referred to in section 290.01, subdivision 20, for 
the current taxable year, and includes the ordinary income 
portion of a lump sum distribution as defined in section 402(e) 
of the Internal Revenue Code.  
    (3) "Pension income" means to the extent included in the 
taxpayer's federal adjusted gross income the amount received by 
the taxpayer 
    (A) from the United States, its agencies or 
instrumentalities, the Federal Reserve Bank or from the state of 
Minnesota or any of its political or governmental subdivisions 
or from any other state or its political or governmental 
subdivisions, or a Minnesota volunteer firefighter's relief 
association, by way of payment as a pension, public employee 
retirement benefit, or any combination thereof, 
    (B) as a retirement or survivor's benefit made from a plan 
qualifying under section 401, 403, 404, 405, 408, 409, or 409A 
of the Internal Revenue Code, or 
    (C) severance pay distributed to an individual upon 
discontinuance of the individual's employment due to termination 
of business operations by the individual's employer, if the 
termination is reasonably likely to be permanent, involves the 
discharge of at least 75 percent of the employees at that site 
within a one-year period, and the business is not acquired by 
another person who continues operations at that site. 
     (4) "Severance pay" means an amount received for 
cancellation of an employment contract or a collectively 
bargained termination payment made as a substitute for income 
which would have been earned for personal services to be 
rendered in the future.  
    Sec. 8.  Minnesota Statutes 1983 Supplement, section 
290.089, subdivision 2, is amended to read: 
    Subd. 2.  [ITEMIZED DEDUCTIONS.] Subject to the provisions 
of section 290.18, subdivision 1, an amount equal to the amount 
determined pursuant to section 63(f) of the Internal Revenue 
Code is allowed with the following adjustments:  
    (a) Add the amount paid to others not to exceed $500 $650 
for each dependent in grades K to 6 and $700 $1,000 for each 
dependent in grades 7 to 12, for tuition, textbooks, and 
transportation of each dependent in attending an elementary or 
secondary school situated in Minnesota, North Dakota, South 
Dakota, Iowa, or Wisconsin, wherein a resident of this state may 
legally fulfill the state's compulsory attendance laws, which is 
not operated for profit, and which adheres to the provisions of 
the Civil Rights Act of 1964 and chapter 363.  As used in this 
clause, "textbooks" includes books and other instructional 
materials and equipment used in elementary and secondary schools 
in teaching only those subjects legally and commonly taught in 
public elementary and secondary schools in this state.  
"Textbooks" does not include instructional books and materials 
used in the teaching of religious tenets, doctrines, or worship, 
the purpose of which is to instill such tenets, doctrines, or 
worship, nor does it include books or materials for, or 
transportation to, extracurricular activities including sporting 
events, musical or dramatic events, speech activities, driver's 
education, or similar programs;  
    (b) Add the amount of Minnesota and other states' estate or 
inheritance taxes which were allowed as a deduction under 
section 290.077, subdivision 4, on income in respect of a 
decedent;  
     (c) Add the amount by which the deduction for the taxable 
year allowed pursuant to subdivision 4 exceeds the amount 
determined pursuant to section 222 of the Internal Revenue Code; 
     (d) Subtract income taxes paid or accrued within the 
taxable year under this chapter;  
     (e) Subtract income taxes paid to any other state or to any 
province or territory of Canada if a credit is allowed for the 
taxes under section 290.081;  
    (f) If the deduction computed under section 164 of the 
Internal Revenue Code is not reduced by the amount of the credit 
or refund allowed under chapter 290A, subtract that amount;  
    (g) Subtract the amount of interest on investment 
indebtedness paid or accrued in a taxable year beginning before 
January 1, 1981, which has been carried forward and is allowed 
as a deduction in the taxable year under section 163(d) of the 
Internal Revenue Code;  
    (h) Subtract the amount of charitable contributions 
deducted under section 170 of the Internal Revenue Code that (i) 
exceeds the following limitations:  (A) an overall limit of 30 
percent of the taxpayer's Minnesota gross income which, for 
purposes of this paragraph, shall include the ordinary income 
portion of a lump sum distribution as defined in section 402(e) 
of the Internal Revenue Code; and (B) the aggregate of 
contributions to organizations described in section 290.21, 
subdivision 3, clause (c) shall not exceed 20 percent of the 
taxpayer's Minnesota gross income; or (ii) was deducted as a 
carryover under section 170(d) of the Internal Revenue Code.  
    Sec. 9.  Minnesota Statutes 1983 Supplement, section 
290.09, subdivision 29, is amended to read: 
    Subd. 29.  [DEDUCTIONS ATTRIBUTABLE TO FARMING.] (a) [ 
DEFINITIONS.] For purposes of this subdivision, income and gains 
and expenses and losses shall be considered as "arising from a 
farm" if such items are received or incurred in connection with 
cultivating the soil, or in connection with raising or 
harvesting any agricultural or horticultural commodity, 
including the raising, shearing, feeding, caring for, training, 
and management of livestock, including horses for horse racing, 
bees, poultry, and fur-bearing animals and wildlife, and all 
operations incident thereto, including but not limited to the 
common use of "hedging." 
    (b) [DEDUCTIONS LIMITED.] Except as provided in this 
subdivision, expenses and losses, except for interest and taxes, 
arising from a farm shall not be allowed as deductions in excess 
of income and gains arising from a farm. 
    (c) [DEDUCTIONS ALLOWED; CARRYOVER DEDUCTIONS.] Expenses 
and losses arising from a farm or farms shall be allowed as 
deductions up to the amount of the income and gains arising from 
a farm or farms in any taxable year, plus the first $30,000 of 
nonfarm gross income, or nonfarm taxable net income in the case 
of a corporation, provided however that in any case where 
nonfarm income exceeds $30,000, the maximum allowable amount of 
$30,000 shall be reduced by an amount equal to the nonfarm 
income in excess of $30,000 multiplied by three.  For this 
purpose and for the purpose of applying the limitation in the 
following paragraph regarding the application of any carryback 
or carryforward, the term gross income shall include the 
ordinary income portion of a lump sum distribution as defined in 
section 402(e) of the Internal Revenue Code of 1954, as amended 
through December 31, 1981, and no deduction shall be allowed for 
two-earner married couples as provided in section 221 of the 
Internal Revenue Code of 1954, as amended through December 31, 
1981.  Any remaining balance of the deductions shall be carried 
back three years and carried forward five years, in 
chronological order, provided, however, that in any case in 
which any individual, estate or trust which elects a net 
operating loss carryforward under section 172(b)(3)(C) of the 
Internal Revenue Code of 1954, as amended through December 31, 
1981, such losses shall not be carried back but shall only be 
carried forward. 
     Current expenses and losses shall be utilized as deductions 
in any taxable year, to the extent herein allowable, prior to 
the application of any carryback or carryover deductions.  In 
any event, the combined amounts of such current expenses and 
losses and carryback or carryover deductions shall be allowed as 
deductions up to the amount of the income and gains arising from 
a farm or farms in any taxable year, plus the first $30,000 of 
nonfarm gross income, or nonfarm taxable net income in the case 
of a corporation, provided however that in any case where 
nonfarm income exceeds $30,000, the maximum allowable amount of 
$30,000 shall be reduced by an amount equal to the nonfarm 
income in excess of $30,000 multiplied by three.  For taxable 
years beginning after December 31, 1984, the $30,000 amount in 
this subdivision shall be adjusted for inflation in the manner 
provided in section 290.06, subdivision 2d.  The commissioner 
shall round that amount to the nearest hundred dollar amount. 
When adjusting the amount for inflation, the commissioner shall 
use the actual dollar amount of the maximum allowable amount of 
nonfarm income prior to rounding.  Carryback or carryover 
deductions will be subject to the maximum amount in effect for 
the year to which the deduction is carried.  
    (d) [SHAREHOLDERS SEPARATE ENTITIES.] For purposes of this 
subdivision, individual shareholders of an S corporation shall 
be considered separate entities. 
    (e) [SPECIAL PERIOD OF LIMITATION WITH RESPECT TO FARM LOSS 
LIMITATION CARRYBACKS.] For the purposes of sections 290.46 and 
290.50, if the claim for refund relates to an overpayment 
attributable to a farm loss limitation carryback under this 
subdivision, in lieu of the period of limitation prescribed in 
sections 290.46 and 290.50, the period of limitation shall be 
that period which ends with the expiration of the 15th day of 
the 46th month (or the 45th month, in the case of a corporation) 
following the end of the taxable year of the farm loss which 
results in the carryback.  During this extended period, married 
individuals who elected to file separate returns or a combined 
return may change their election and file a joint return. 
    (f) [INTEREST ON CLAIMS.] In any case in which a taxpayer 
is entitled to a refund in a carryback year due to the carryback 
of a farm loss, interest shall be computed only from the end of 
the taxable year in which the loss occurs. 
    (g) [ORDER OF APPLICATION.] The application of this 
subdivision shall be made after applying any limitation to out 
of state losses contained in section 290.17. 
    Sec. 10.  Minnesota Statutes 1983 Supplement, section 
290.18, subdivision 2, is amended to read: 
    Subd. 2.  [FEDERAL INCOME TAX PAYMENTS AND REFUNDS.] The 
adjusted gross income shall be computed by deducting from the 
gross income assignable to this state under section 290.17, the 
deduction for allowable federal income taxes determined under 
the provisions of sections 290.09, subdivision 4, 290.10 (8), 
(9) or (10), and 290.18.  For purposes of the preceding 
sentence, federal income tax shall include the foreign tax 
credit allowed under section 33 of the Internal Revenue Code of 
1954, as amended through December 31, 1983.  
    This deduction shall be allowed to individuals, estates, or 
trusts (i) for taxable years beginning after December 31, 1980 
in the taxable year to which the liability applies.  Such 
liability includes the portion of self-employment tax allowed 
under section 290.10, clause (8).  The self-employment tax must 
be deducted by the person who is deriving the income.  When the 
federal tax liability is joint and several under the computation 
of a joint federal return of husband and wife, the federal tax 
liability must be split between the spouses in the same ratio 
that the federal adjusted gross income of that spouse bears to 
the total federal adjusted gross income.  For purposes of the 
preceding sentence, "federal adjusted gross income" includes the 
ordinary income portion of a lump sum distribution as defined in 
section 402(e) of the Internal Revenue Code of 1954, as amended 
through December 31, 1981.  
    (ii) Taxes paid for a taxable year beginning before January 
1, 1981 shall be allowed as follows:  
    (1) Those taxes paid in a taxable year beginning before 
January 1, 1981, shall be claimed in the year in which the 
payment was made.  
     (2) Those paid in a taxable year beginning after December 
31, 1980 but before January 1, 1983 shall be divided and 
deducted in equal installments reflected by the yearly periods 
beginning with the first day of the taxable year in which the 
payment was made and ending December 31, 1986.  For an amount 
which remains to be deducted in a taxable year beginning after 
December 31, 1982, where the federal tax liability for the year 
in which the payment was made is joint and several under the 
computation of a joint federal return of husband and wife, the 
remaining amounts to be deducted shall be claimed by the same 
spouse and in the same dollar amount as the deduction was 
claimed in the first taxable year beginning after December 31, 
1981.  
      (3) Those paid in a taxable year beginning after December 
31, 1982 shall be claimed in the year in which the payment was 
made.  This amount shall be apportioned between spouses as 
provided in clause (i) and shall be allocated for exempt income 
under the provisions of section 290.10, clause (9) or (10) as 
though the payment was part of the federal tax liability for the 
year in which the payment was made.  
           (4) In the case of a person who was self employed during 
all or a portion of the taxable year, the federal income tax 
liability for purposes of this clause shall be increased by the 
self-employment tax allowed under section 290.10, clause (8).  
The self-employment tax shall be deducted in the year paid as 
provided in paragraph (1), (2), or (3).  The self-employment tax 
must be deducted by the person who earned the income.  
Self-employment tax paid in a taxable year beginning after 
December 31, 1982 shall be allocated for exempt income as 
provided in paragraph (3).  
          (iii) If a taxpayer's federal tax liability is eventually 
not paid by reason of compromise, discharge, or court order, the 
deduction allowed pursuant to this subdivision shall be 
disallowed for the taxable year in which the liability was 
accrued.  
         (iv) In the event a federal tax liability for a taxable 
year commencing after December 31, 1980 is increased, decreased 
or modified, and such increase, decrease or modification has 
resulted in a change in the amount of Minnesota income tax in 
the year to which such increase, decrease or modification is 
attributable, the taxpayer's deduction under this subdivision 
shall be modified for such year.  
          (v) If the readjustments required in (iii) or (iv) are for 
taxes reflected in the transition rule described in (ii)(2), the 
readjustment shall be made equally to the remaining installments 
and if a reduction to such installments is required under this 
readjustment which exceeds the total of all remaining 
installments, the remaining installments will be reduced to zero 
and the excess included in income as a federal income tax refund.
           (vi) Refunds which are not involved with any readjustments 
under the transition rule shall be included in income under 
Minnesota Statutes 1982, section 290.01, subdivision 20a, clause 
(6) if it is from a year beginning before January 1, 1981.  
            (vii) Refunds of taxes for years beginning after December 
31, 1980, shall be used to adjust the deduction in the taxable 
year of the liability unless that year is closed by statute and 
no other adjustments are to be required or allowable in which 
case such refund shall be reportable in the year received. 
    Sec. 11.  Minnesota Statutes 1982, section 290.19, 
subdivision 1a, is amended to read: 
    Subd. 1a.  [DETERMINATION OF SALES MADE WITHIN THIS STATE.] 
For purposes of this section the following rules shall apply in 
determining whether or not sales are made within this state. 
    Sales of tangible personal property are made within this 
state if the property is delivered or shipped to received by a 
purchaser at a point within this state, and the taxpayer is 
taxable in this state, regardless of the f.o.b. point or, other 
conditions of the sale, or the ultimate destination of the 
property.  However, when intoxicating liquor, wine, fermented 
malt beverages, cigarettes, or tobacco products are sold to a 
purchaser who is licensed by a state or political subdivision to 
resell this property only within the state of ultimate 
destination, the sale is made in that state.  Tangible personal 
property delivered to a common or contract carrier or foreign 
vessel for delivery to a purchaser in another state or nation is 
a sale in that state or nation, regardless of f.o.b. point or 
other conditions of the sale.  
    Sales made by or through a corporation which is qualified 
as a domestic international sales corporation under section 992 
of the Internal Revenue Code of 1954, as amended through 
December 31, 1981, shall not be considered to have been made 
within this state. 
    Sec. 12.  Minnesota Statutes 1982, section 290.61, is 
amended to read: 
    290.61 [PUBLICITY OF RETURNS, INFORMATION.] 
    It shall be unlawful for the commissioner or any other 
public official or employee to divulge or otherwise make known 
in any manner any particulars set forth or disclosed in any 
report or return required by this chapter, or any information 
concerning, the taxpayer's affairs acquired from his or its 
records, officers, or employees while examining or auditing any 
taxpayer's liability for taxes imposed hereunder, except in 
connection with a proceeding involving taxes due under this 
chapter from the taxpayer making such return or to comply with 
the provisions of sections 290.612 and 302A.821.  The 
commissioner may furnish a copy of any taxpayer's return to any 
official of the United States or of any state having duties to 
perform in respect to the assessment or collection of any tax 
imposed upon or measured by income, if such taxpayer is required 
by the laws of the United States or of such state to make a 
return therein.  The commissioner may disclose information from 
withholding tax returns received from the taxpayer to the 
Minnesota department of economic security for purposes of 
auditing unemployment tax.  Prior to the release of any 
information to any official of the United States or any other 
state or the department of economic security under the 
provisions of this section, the person to whom the information 
is to be released shall sign an agreement which provides that he 
will protect the confidentiality of the returns and information 
revealed thereby to the extent that it is protected under the 
laws of the state of Minnesota.  The commissioner and all other 
public officials and employees shall keep and maintain the same 
secrecy in respect to any information furnished by any 
department, commission, or official of the United States or of 
any other state in respect to the income of any person as is 
required by this section in respect to information concerning 
the affairs of taxpayers under this chapter.  Nothing herein 
contained shall be construed to prohibit the commissioner from 
publishing statistics so classified as not to disclose the 
identity of particular returns or reports and the items 
thereof.  Upon request of a majority of the members of the 
senate tax committee or of the house tax committee or the tax 
study commission, the commissioner shall furnish abstracted 
financial information to those committees for research purposes 
from returns or reports filed pursuant to this chapter, provided 
that he shall not disclose the name, address, social security 
number, business identification number or any other item of 
information associated with any return or report which the 
commissioner believes is likely to identify the taxpayer.  The 
commissioner shall not furnish the actual return, or a portion 
thereof, or a reproduction or copy of any return or portion 
thereof.  "Abstracted financial information" means only the 
dollar amounts set forth on each line on the form including the 
filing status. 
     Any person violating the provisions of this section shall 
be guilty of a gross misdemeanor. 
     In order to locate the named payee on state warrants issued 
pursuant to this chapter or chapter 290A and undeliverable by 
the United States postal service, the commissioner may publish 
in any English language newspaper of general circulation in this 
state a list of the name and last known address of the payee as 
shown on the reports or returns filed with the commissioner.  
The commissioner may exclude the names of payees whose refunds 
are in an amount which is less than a minimal amount to be 
determined by the commissioner.  The published list shall not 
contain any particulars set forth on any report or return.  The 
publication shall include instructions on claiming the warrants. 
     An employee of the department of revenue may, in connection 
with his official duties relating to any audit, collection 
activity, or civil or criminal tax investigation or any other 
offense under this chapter, disclose return information to the 
extent that such disclosure is necessary in obtaining 
information, which is not otherwise reasonably available, with 
respect to the correct determination of tax, liability for tax, 
or the amount to be collected or with respect to the enforcement 
of any other provision of this chapter.  
    In order to facilitate processing of returns and payments 
of taxes required by this chapter, the commissioner may contract 
with outside vendors and may disclose private and nonpublic data 
to the vendor.  The data disclosed will be administered by the 
vendor consistent with this section.  
    Information from a tax return required under this chapter 
on a holder of a license issued by the Minnesota racing 
commission or an owner of a horse may be provided by the 
commissioner to the Minnesota racing commission.  
    Sec. 13.  Minnesota Statutes 1983 Supplement, section 
290.92, subdivision 27, is amended to read: 
    Subd. 27.  Any holder of a class A, B, or D license issued 
by the Minnesota horse racing commission, who makes a payment or 
payments for winnings on a pari-mutuel betting ticket or tickets 
in an amount of $200 or more to the same individual, shall 
deduct from the payment or payments and withhold 11 ten percent 
of the amount the payment of winnings which are subject to 
withholding as Minnesota withholding tax.  For purposes of this 
subdivision, winnings from a pari-mutuel betting ticket must be 
determined by reducing the amount received by the amount paid 
for the ticket, and payments for winning on a pari-mutuel 
betting ticket which are not money must be taken into account at 
their fair market value the term "winnings which are subject to 
withholding" has the meaning given in section 3402(q)(3) of the 
Internal Revenue Code of 1954, as amended through December 31, 
1983.  For purposes of the provisions of this section, a payment 
to any person of winnings which are subject to withholding must 
be treated as if the payment was a wage paid by an employer to 
an employee.  Every individual who is to receive a payment of 
winnings which are subject to withholding shall furnish the 
license holder with a statement, made under the penalties of 
perjury, containing the name, address, and social security 
account number of the person receiving the payment and of each 
person entitled to any portion of such payment.  The license 
holder is liable for the payment of the tax required to be 
withheld under this subdivision and subdivision 28 but is not 
liable to any person for the amount of the payment.  
    Sec. 14.  Minnesota Statutes 1983 Supplement, section 
290.92, subdivision 28, is amended to read: 
    Subd. 28.  Any holder of a class A or B license issued by 
the Minnesota horse racing commission who makes a payment to a 
holder of a class C license issued by the commission, or who 
pays except an amount paid as a purse, shall deduct from the 
payment and withhold seven percent of the amount as Minnesota 
withholding tax when the amount paid to that individual during 
the calendar year exceeds $200 $600.  For purposes of the 
provisions of this section, a payment to any person which is 
subject to withholding under this subdivision must be treated as 
if the payment was a wage paid by an employer to an employee.  
Every individual who is to receive a payment which is subject to 
withholding under this subdivision shall furnish the license 
holder with a statement, made under the penalties of perjury, 
containing the name, address, and social security account number 
of the person receiving the payment.  No withholding is required 
if the individual presents a signed certificate from his 
employer which states that the individual is an employee of that 
employer.  A nonresident individual who holds a class C license 
must be treated as an athlete for purposes of applying the 
provisions of sections 290.17, subdivision 2(1)(b)(ii) and 
290.92, subdivision 4a.  
    Sec. 15.  [TRANSITION PROVISION; UNITARY NET OPERATING 
LOSSES.] 
    (a) If for a taxable year a corporation is subject to the 
provisions of Minnesota Statutes, section 290.095, subdivision 
3, clause (d), the corporation may elect to take a net operating 
loss carryback pursuant to this section.  If the taxpayer elects 
to be covered by the provisions of this section, the carryback 
shall be subject to the provisions of Minnesota Statutes, 
section 290.095, subdivision 3, but excluding clause (d).  
    (b) If the corporation elects to be covered by this 
section, all members of the unitary group must file amended 
returns for the year to which the loss is carried back.  The 
amended returns must reflect the income of the entire unitary 
business as provided in Minnesota Statutes, section 290.34, 
subdivision 2.  The unitary group of corporations must calculate 
the sum of the separate tax liabilities prior to the amended 
returns and the sum of the tax liabilities after the amended 
returns are filed.  (1) If the sum of the separate tax 
liabilities is more than the sum of the unitary tax liabilities 
per amended returns, no refund is allowed from the filing of the 
amended returns.  (2) If the sum of the separate tax liabilities 
is less than the sum of the unitary tax liabilities per amended 
returns, the difference must be paid with the filing of the 
amended returns.  
    (c) After filing the amended returns required by clause 
(b), the corporation shall be allowed a net operating loss 
carryback pursuant to section 290.095, subdivision 3.  The net 
operating loss carryback is allowable only to the extent of the 
tax liability on the amended returns.  The time limit on the 
filing of the amended return allowed under this section shall be 
the same as the time limit on the filing of the return for the 
year from which the loss is carried back.  
    (d) This section is effective for taxable years beginning 
after June 1981 and is repealed for taxable years beginning 
after December 31, 1984.  
     If the taxpayer elects to be covered by this section, the 
extension of net operating loss carryovers provided by the last 
sentence of Minnesota Statutes, section 290.095, subdivision 3, 
clause (d), does not apply to any year to which a loss is 
carried back under this section.  
    Sec. 16.  Laws 1983, chapter 342, article 1, section 44, is 
amended to read: 
    Sec. 44.  [REPEALER.] 
    Minnesota Statutes 1982, sections 290.01, subdivisions 23, 
27, and 28; 290.032, subdivision 5; 290.06, subdivisions 9 and 
9a; 290.077, subdivision 2; 290.08, subdivision 25; 290.09, 
subdivisions 10, 15, 22, and 27; 290.21, subdivision 3a;  
290.501; and 352C.07; and Laws 1982, chapter 523, article VII, 
section 3, and Third Special Session chapter 1, article 5, 
section 4, are repealed. 
    Sec. 17.  [REPEALER.] 
    Minnesota Statutes 1983 Supplement, section 290.06, 
subdivision 2e, and Laws 1983, chapter 342, article 1, section 
8, are repealed.  
    Sec. 18.  [EFFECTIVE DATE.] 
    Sections 1, 5, 10, 11, 17, and the amendment to clause (19) 
in section 3 are effective for taxable years beginning after 
December 31, 1983, and, to the extent applicable, for property 
tax refund claims based on rent paid in 1984 and thereafter and 
property taxes payable in 1985 and thereafter.  Sections 2 and 
12 to 14 are effective the day following final enactment. 
Sections 4, 6, 7, and 8 are effective for taxable years 
beginning after December 31, 1984.  In section 16, Laws 1982, 
chapter 523, article VII, section 3, is reenacted and effective 
the day following final enactment of this act for taxable years 
beginning after December 31, 1983.  The amendment to clause (20) 
in section 3 is effective for taxable years beginning after 
December 31, 1982. 

                               ARTICLE 3 

                             PROPERTY TAX 
    Section 1.  Minnesota Statutes 1982, section 105.482, 
subdivision 8, is amended to read: 
    Subd. 8.  [HYDROPOWER GENERATION POLICY; LEASING OF DAMS 
AND DAM SITES.] Consistent with laws relating to dam 
construction, reconstruction, repair, and maintenance, the 
legislature finds that the public health, safety, and welfare of 
the state is also promoted by the use of state waters to produce 
hydroelectric or hydromechanical power.  Further, the 
legislature finds that the leasing of existing dams and 
potential dam sites primarily for such power generation is a 
valid public purpose.  A local governmental unit, or the 
commissioner of natural resources with the approval of the state 
executive council, may provide pursuant to a lease or 
development agreement for the development and operation of dams, 
dam sites, and hydroelectric or hydromechanical power generation 
plants owned by the respective government by an individual, a 
corporation, an organization, or other legal entity upon such 
terms and conditions as the local governmental unit or the 
commissioner may negotiate for a period not to exceed 50 99 
years.  For installations of 15,000 kilowatts or less at a dam 
site and reservoir that is not being used on January 1, 1984 in 
connection with the production of hydroelectric or 
hydromechanical power, the lease or development agreement 
negotiated by the local governmental unit and the developer 
shall constitute full payment by the lessee and may be in lieu 
of all real or personal property taxes that might otherwise be 
due to a local governmental unit.  If the dam, dam site, or 
power generation plant is located in or contiguous to a city or 
town, other than the lessor governmental unit, the lease or 
agreement shall not be effective unless it is approved by the 
governing body of such the city or town.  For purposes of this 
subdivision, city means a statutory or home rule charter city.  
    Sec. 2.  Minnesota Statutes 1982, section 105.482, 
subdivision 9, is amended to read: 
    Subd. 9.  [CONTENTS OF DEVELOPMENT AGREEMENT.] An agreement 
for the development or redevelopment of a hydropower site may 
contain, but need not be limited to, the following provisions:  
    (a) Length of the development agreement, subject to 
negotiations between the parties but not more than 50 99 years, 
and conditions for extension, modification, or termination;  
    (b) Provisions for a performance bond on the developer, or, 
certification that the equipment and its installation have a 
design life at least as long as the lease;  
    (c) Provisions to assure adequate maintenance and safety in 
the impoundment structures, if any, and to assure access to 
recreational sites, if any.  
    Sec. 3.  Minnesota Statutes 1983 Supplement, section 
124.2137, subdivision 1, is amended to read: 
    Subdivision 1.  [TAX REDUCTIONS.] The county auditor shall 
reduce the tax for school purposes on all property receiving the 
homestead credit pursuant to section 273.13, subdivision 6, by 
an amount equal to 29 33 percent of the tax levy imposed on up 
to 320 acres of land including the buildings and structures 
thereon but excluding the homestead dwelling and surrounding one 
acre of land.  The county auditor shall reduce the tax for 
school purposes on the next 320 acres classified pursuant to 
section 273.13, subdivision 6 by an amount equal to 13 15 
percent of the tax levy imposed on the property.  The tax on all 
other agricultural lands classified pursuant to section 273.13, 
subdivision 6 shall be reduced by an amount equal to ten percent 
of the tax levy imposed on the property.  The tax on the first 
320 acres of agricultural land classified pursuant to section 
273.13, subdivision 4 including buildings and structures thereon 
but excluding all dwellings and an acre of land for each 
dwelling and all real estate devoted to temporary and seasonal 
residential occupancy for recreational purposes, but not devoted 
to commercial purposes, shall be reduced by an amount equal to 
13 15 percent of the tax imposed on the property. The tax on 
timber land classified pursuant to section 273.13, subdivision 
8a and agricultural land in excess of 320 acres classified 
pursuant to section 273.13, subdivision 4 shall be reduced by an 
amount equal to ten percent of the tax levy imposed on the 
property.  The amounts so computed by the county auditor shall 
be submitted to the commissioner of revenue as part of the 
abstracts of tax lists required to be filed with the 
commissioner under the provisions of section 275.29.  Any prior 
year adjustments shall also be certified in the abstracts of tax 
lists.  The commissioner of revenue shall review the 
certifications to determine their accuracy.  He may make changes 
in the certification as he may deem necessary or return a 
certification to the county auditor for corrections.  The amount 
of the reduction provided under this subdivision which any 
taxpayer can receive on all qualifying property which he owns 
shall not exceed $2,000 $4,000 in the case of agricultural 
property and shall not exceed $100 in the case of seasonal 
residential recreational property.  In the case of property 
owned by more than one person, the maximum amount of the 
reduction shall apply to the total of all the owners.  For 
purposes of computing the credit pursuant to this subdivision, 
the "tax levy" shall be the tax levy reduced by the credits 
provided by sections 273.115, 273.116, 273.123, 273.42, 
subdivision 2, and 473H.10.  
    Sec. 4.  Minnesota Statutes 1983 Supplement, section 
272.02, subdivision 1, is amended to read: 
    Subdivision 1.  Except as provided in other subdivisions of 
this section or in section 272.025 or section 273.13, 
subdivisions 17, 17b, 17c or 17d, all property described in this 
section to the extent herein limited shall be exempt from 
taxation: 
    (1) All public burying grounds; 
    (2) All public schoolhouses; 
    (3) All public hospitals; 
    (4) All academies, colleges, and universities, and all 
seminaries of learning; 
    (5) All churches, church property, and houses of worship; 
    (6) Institutions of purely public charity except parcels of 
property containing structures and the structures assessed 
pursuant to section 273.13, subdivisions 17, 17b, 17c or 17d; 
    (7) All public property exclusively used for any public 
purpose; 
    (8) (a) Class 2 property of every household of the value of 
$100, maintained in the principal place of residence of the 
owner thereof.  The county auditor shall deduct the exemption 
from the total valuation of the property as equalized by the 
commissioner of revenue assessed to the household, and extend 
the levy of taxes upon the remainder only.  The term "household" 
as used in this section is defined to be a domestic 
establishment maintained either (1) by two or more persons 
living together within the same house or place of abode, 
subsisting in common and constituting a domestic or family 
relationship, or (2) by one person. 
      (b) During the period of his active service and for six 
months after his discharge therefrom, no member of the armed 
forces of the United States shall lose status of a householder 
under paragraph (a) which he had immediately prior to becoming a 
member of the armed forces. 
      In case there is an assessment against more than one member 
of a household the $100 exemption shall be divided among the 
members assessed in the proportion that the assessed value of 
the Class 2 property of each bears to the total assessed value 
of the Class 2 property of all the members assessed.  The Class 
2 property of each household claimed to be exempt shall be 
limited to property in one taxing district, except in cases 
where a single domestic establishment is maintained in two or 
more adjoining districts. 
     Bonds, certificates of indebtedness, or other obligations 
issued by the state of Minnesota, or by any county or city of 
the state, or any town, or any common or independent school 
district of the state, or any governmental board of the state 
are exempt from ad valorem property taxation; provided, that 
this subdivision shall not exempt the obligations or their 
interest from any excise or other tax levied on income, gross 
earnings, estates, inheritance, bequests, gifts, transfers, 
sales, or other transactions, other than an ad valorem property 
tax. 
     (9) Farm machinery manufactured prior to 1930, which is 
used only for display purposes as a collectors item; 
     (10) The taxpayer shall be exempted with respect to all 
agricultural products, inventories, stocks of merchandise of all 
sorts, all materials, parts and supplies, furniture and 
equipment, manufacturers material, manufactured articles 
including the inventories of manufacturers, wholesalers, 
retailers and contractors; and the furnishings of a room or 
apartment in a hotel, rooming house, tourist court, motel or 
trailer camp, tools and machinery which by law are considered as 
personal property, and the property described in section 272.03, 
subdivision 1, clause (c), except personal property which is 
part of an electric generating, transmission, or distribution 
system or a pipeline system transporting or distributing water, 
gas, or petroleum products or mains and pipes used in the 
distribution of steam or hot or chilled water for heating or 
cooling buildings and structures.  Railroad docks and wharves 
which are part of the operating property of a railroad company 
as defined in section 270.80 are not exempt. 
      (11) Containers of a kind customarily in the possession of 
the consumer during the consumption of commodities, the sale of 
which are subject to tax under the provisions of the excise tax 
imposed by chapter 297A; 
     (12) All livestock, poultry, all horses, mules and other 
animals used exclusively for agricultural purposes; 
     (13) All agricultural tools, implements and machinery used 
by the owners in any agricultural pursuit. 
     (14) Real and personal property used primarily for the 
abatement and control of air, water, or land pollution to the 
extent that it is so used, other than real property used 
primarily as a solid waste disposal site. 
     Any taxpayer requesting exemption of all or a portion of 
any equipment or device, or part thereof, operated primarily for 
the control or abatement of air or water pollution shall file an 
application with the commissioner of revenue.  The equipment or 
device shall meet standards, regulations or criteria prescribed 
by the Minnesota Pollution Control Agency, and must be installed 
or operated in accordance with a permit or order issued by that 
agency.  The Minnesota Pollution Control Agency shall upon 
request of the commissioner furnish information or advice to the 
commissioner.  If the commissioner determines that property 
qualifies for exemption, he shall issue an order exempting the 
property from taxation.  The equipment or device shall continue 
to be exempt from taxation as long as the permit issued by the 
Minnesota Pollution Control Agency remains in effect. 
    (15) Wetlands.  For purposes of this subdivision, 
"wetlands" means (1) land described in section 105.37, 
subdivision 15, or (2) land which is mostly under water, 
produces little if any income, and has no use except for 
wildlife or water conservation purposes.  "Wetlands" shall be 
land, provided it is preserved in its natural condition, and 
drainage of which it would be legal, feasible, and economically 
practical for the production of livestock, dairy animals, 
poultry, fruit, vegetables, forage and grains, except wild 
rice.  "Wetlands" shall include adjacent land which is not 
suitable for agricultural purposes due to the presence of the 
wetlands.  "Wetlands" shall not include woody swamps containing 
shrubs or trees, wet meadows, meandered water, streams, rivers, 
and floodplains or river bottoms.  Exemption of wetlands from 
taxation pursuant to this section shall not grant the public any 
additional or greater right of access to the wetlands or 
diminish any right of ownership to the wetlands. 
     (16) Native prairie.  The commissioner of the department of 
natural resources shall determine lands in the state which are 
native prairie and shall notify the county assessor of each 
county in which the lands are located.  Pasture land used for 
livestock grazing purposes shall not be considered native 
prairie for the purposes of this clause and section 273.116.  
Upon receipt of an application for the exemption and credit 
provided in this clause and section 273.116 for lands for which 
the assessor has no determination from the commissioner of 
natural resources, the assessor shall refer the application to 
the commissioner of natural resources who shall determine within 
30 days whether the land is native prairie and notify the county 
assessor of his decision.  Exemption of native prairie pursuant 
to this clause shall not grant the public any additional or 
greater right of access to the native prairie or diminish any 
right of ownership to it. 
     (17) Property used in a continuous program to provide 
emergency shelter for victims of domestic abuse, provided the 
organization that owns and sponsors the shelter is exempt from 
federal income taxation pursuant to section 501(c)(3) of the 
Internal Revenue Code of 1954, as amended through December 31, 
1982, notwithstanding the fact that the sponsoring organization 
receives funding under section 8 of the United States Housing 
Act of 1937, as amended. 
      (18) If approved by the governing body of the municipality 
in which the property is located, property not exceeding one 
acre which is owned and operated by any senior citizen group or 
association of groups that in general limits membership to 
persons age 55 or older and is organized and operated 
exclusively for pleasure, recreation, and other nonprofit 
purposes, no part of the net earnings of which inures to the 
benefit of any private shareholders; provided the property is 
used primarily as a clubhouse, meeting facility or recreational 
facility by the group or association and the property is not 
used for residential purposes on either a temporary or permanent 
basis. 
     (19) To the extent provided by section 295.44, real and 
personal property used or to be used primarily for the 
production of hydroelectric or hydromechanical power on a site 
owned by the state or a local governmental unit which is 
developed and operated pursuant to the provisions of section 
105.482, subdivisions 1, 8 and 9. 
     (20) If approved by the governing body of the municipality 
in which the property is located, a direct satellite 
broadcasting facility or fixed satellite regional or national 
program service facility, construction of which is commenced 
after June 30, 1983, for a period not to exceed five years.  
When the facility no longer qualifies for exemption, it shall be 
placed on the assessment rolls as provided in subdivision 4.  As 
used in this clause, a "direct satellite broadcasting facility" 
is a facility operated by a corporation licensed by the federal 
communications commission to provide direct satellite 
broadcasting services using direct broadcast satellites 
operating in the 12-ghz. band and a "fixed satellite regional or 
national program service facility" is a facility operated by a 
corporation licensed by the federal communications commission to 
provide fixed satellite-transmitted regularly scheduled 
broadcasting services using satellites operating in the 6-ghz. 
band.  Before approving a tax exemption pursuant to this 
paragraph, the governing body of the municipality shall provide 
an opportunity to the members of the county board of 
commissioners of the county in which the facility is proposed to 
be located and the members of the school board of the school 
district in which the facility is proposed to be located to meet 
with the governing body.  The governing body shall present to 
the members of those boards its estimate of the fiscal impact of 
the proposed property tax exemption.  The tax exemption shall 
not be approved by the governing body until the county board of 
commissioners has presented its written comment on the proposal 
to the governing body, or 30 days has passed from the date of 
the transmittal by the governing body to the board of the 
information on the fiscal impact, whichever occurs first.  
      (21) If approved by the governing body of the municipality 
in which the property is located, a facility construction of 
which is commercial after June 30, 1983, at which a licensed 
Minnesota manufacturer produces distilled spirituous liquors, 
liqueurs, cordials, or liquors designated as specialties 
regardless of alcoholic content, but not including ethyl 
alcohol, distilled with a majority of the ingredients grown or 
produced in Minnesota, for a period not to exceed five years. 
When the facility no longer qualifies for exemption, it shall be 
placed on the assessment rolls as provided in subdivision 4. 
Before approving a tax exemption pursuant to this paragraph, the 
governing body of the municipality shall provide an opportunity 
to the members of the county board of commissioners of the 
county in which the facility is proposed to be located and the 
members of the school board of the school district in which the 
facility is proposed to be located to meet with the governing 
body.  The governing body shall present to the members of those 
boards its estimate of the fiscal impact of the proposed 
property tax exemption.  The tax exemption shall not be approved 
by the governing body until the county board of commissioners 
has presented its written comment on the proposal to the 
governing body, or 30 days has passed from the date of the 
transmittal by the governing body to the board of the 
information on the fiscal impact, whichever occurs first. 
    Sec. 5.  Minnesota Statutes 1982, section 272.02, is 
amended by adding a subdivision to read: 
    Subd. 6.  Notwithstanding the provisions of subdivision 5, 
real and personal property used or to be used primarily for the 
production of hydroelectric or hydromechanical power and leased 
from the state or a local governmental unit pursuant to section 
105.482, subdivisions 1, 8, and 9 may be exempt from taxation or 
payments in lieu of taxes.  
    The exemption from taxation or payments in lieu of taxes 
provided by this subdivision does not apply to hydroelectric or 
hydromechanical facilities operated at any time between January 
1, 1980 and January 1, 1984.  
    Sec. 6.  Minnesota Statutes 1983 Supplement, section 
273.11, subdivision 1, is amended to read: 
    Subdivision 1.  [GENERALLY.] Except as provided in 
subdivisions 6, 7, 8, and 9 or section 273.17, subdivision 1, 
all property shall be valued at its market value.  The market 
value as determined pursuant to this section shall be stated 
such that any amount under $100 is rounded up to $100 and any 
amount exceeding $100 shall be rounded to the nearest $100.  In 
estimating and determining such value, the assessor shall not 
adopt a lower or different standard of value because the same is 
to serve as a basis of taxation, nor shall he adopt as a 
criterion of value the price for which such property would sell 
at a forced sale, or in the aggregate with all the property in 
the town or district; but he shall value each article or 
description of property by itself, and at such sum or price as 
he believes the same to be fairly worth in money.  In assessing 
any tract or lot of real property, the value of the land, 
exclusive of structures and improvements, shall be determined, 
and also the value of all structures and improvements thereon, 
and the aggregate value of the property, including all 
structures and improvements, excluding the value of crops 
growing upon cultivated land.  In valuing real property upon 
which there is a mine or quarry, it shall be valued at such 
price as such property, including the mine or quarry, would sell 
for a fair, voluntary sale, for cash.  In valuing real property 
which is vacant, the fact that such property is platted shall 
not be taken into account.  An individual lot of such platted 
property shall not be assessed in excess of the assessment of 
the land as if it were unplatted until the lot is improved with 
a permanent improvement all or a portion of which is located 
upon the lot, or for a period of three years after final 
approval of said plat whichever is shorter.  When a lot is sold 
or construction begun, the assessed value of that lot or any 
single contiguous lot fronting on the same street shall be 
eligible for reassessment.  All property, or the use thereof, 
which is taxable under sections 272.01, subdivision 2, or 
273.19, shall be valued at the market value of such property and 
not at the value of a leasehold estate in such property, or at 
some lesser value than its market value. 
    Sec. 7.  Minnesota Statutes 1982, section 273.123, is 
amended by adding a subdivision to read: 
    Subd. 2a.  [APPLICATION REQUIREMENTS.] A request for 
property tax relief shall be considered by the executive council 
only if the following requirements are met by the local unit of 
government submitting the request:  
    (1) a completed disaster survey shall be included with the 
request;  
    (2) the average dollar amount of damage for the homes which 
are damaged and located within the geographic boundaries of the 
applicant shall be $5,000 or more; and 
    (3) either (a) at least 25 homes located within the 
geographic boundaries of the applicant must have been damaged or 
destroyed; or (b) the total dollar amount of damage to all of 
the damaged homes located within the geographic boundaries of 
the applicant shall be equal to at least one percent of the 
total market value of all homestead property located within the 
geographic boundaries of the applicant.  
    Sec. 8.  Minnesota Statutes 1982, section 273.123, is 
amended by adding a subdivision to read: 
    Subd. 7.  [LOCAL OPTION.] The owner of homestead property 
not qualifying for an adjustment in valuation pursuant to 
subdivisions 1 to 5 may receive a reduction in the amount of 
taxes payable for the year in which the destruction occurs on 
the homestead portion if:  
    (a) 50 percent or more of the homestead dwelling, as 
established by the county assessor, is unintentionally or 
accidentally destroyed and the homestead is uninhabitable;  
    (b) the owner of the property makes written application to 
the county assessor as soon as practical after the damage has 
occurred; and 
     (c) the owner of the property makes written application to 
the county board, upon completion of the restoration of the 
destroyed structure.  
    The county board may grant a reduction in the amount of 
property tax which the owner must pay on the qualifying home in 
the year of destruction.  Any reduction in the amount of tax 
payable which is authorized by county board action shall be 
calculated based upon the number of months that the home is 
uninhabitable.  The amount of net tax due from the taxpayer 
shall be multiplied by a fraction, the numerator of which is the 
number of months the dwelling was occupied by that taxpayer and 
the denominator of which is 12.  For purposes of this 
subdivision, if a structure is occupied for a fraction of a 
month, it is considered a month.  "Net tax" is defined as the 
amount of tax after the subtraction of all of the state paid 
property tax credits.  If application is made following payment 
of all property taxes due for the year of destruction, the 
amount of the reduction granted by the county board shall be 
refunded to the taxpayer by the county treasurer as soon as 
practical.  
    Any reductions or refunds approved by the county board 
shall not be subject to approval by the commissioner of revenue. 
    The county board may levy in the following year the amount 
of tax dollars lost to the county government as a result of the 
reductions granted pursuant to this subdivision.  Any amount 
levied for this purpose shall be exempt from the levy limit 
provisions of sections 275.50 to 275.56.  
    Sec. 9.  Minnesota Statutes 1983 Supplement, section 
273.13, subdivision 9, is amended to read: 
    Subd. 9.  [CLASS 4A, 4B, 4C, AND 4D.] (1) All property not 
included in the preceding classes shall constitute class 4a and 
shall be valued and assessed at 43 percent of the market value 
thereof, except as otherwise provided in this subdivision. 
    (2) Real property which is not improved with a structure 
and which is not utilized as part of a commercial or industrial 
activity shall constitute class 4b and shall be valued and 
assessed at 40 percent of market value.  
    (3) Commercial and industrial property, except as provided 
in this subdivision, shall constitute class 4c and shall be 
valued and assessed at 34 28 percent of the first $50,000 
$60,000 of market value and 43 percent of the remainder, 
provided that in the case of state-assessed commercial or 
industrial property owned by one person or entity, only one 
parcel shall qualify for the 34 28 percent assessment, and in 
the case of other commercial or industrial property owned by one 
person or entity, only one parcel in each county shall qualify 
for the 34 28 percent assessment. 
    (4) Employment property defined in section 273.1313, during 
the period provided in section 273.1313, shall constitute class 
4d and shall be valued and assessed at 20 percent of the first 
$50,000 of market value and 21.5 percent of the remainder, 
except that for employment property located in an enterprise 
zone designated pursuant to section 273.1312, subdivision 4, 
paragraph (c), clause (3), the first $50,000 of market value 
shall be valued and assessed at 31.5 percent and the remainder 
shall be assessed and valued at 38.5 percent, unless the 
governing body of the city designated as an enterprise zone 
determines that a specific parcel shall be assessed pursuant to 
the first clause of this sentence.  The governing body may 
provide for assessment under the first clause of the preceding 
sentence only for property which is located in an area which has 
been designated by the governing body for the receipt of tax 
reductions authorized by section 273.1314, subdivision 9, 
paragraph (a). 
    Sec. 10.  Minnesota Statutes 1983 Supplement, section 
273.13, subdivision 17, is amended to read: 
    Subd. 17.  [TITLE II OR STATE HOUSING FINANCE AGENCY 
PROPERTY USED FOR ELDERLY AND LOW AND MODERATE INCOME FAMILIES.] 
(a) Except as provided in clause (b), a structure situated on 
real property that is used for housing for the elderly or for 
low and moderate income families as defined by Title II of the 
National Housing Act or the Minnesota housing finance agency law 
of 1971 or regulations promulgated by the agency pursuant 
thereto and financed by a direct federal loan or federally 
insured loan or a loan made by the Minnesota housing finance 
agency pursuant to the provisions of either of those acts and 
acts amendatory thereof shall, for 15 years from the date of the 
completion of the original construction or substantial 
rehabilitation, or for the original term of the loan, be 
assessed at 20 percent of the market value thereof, provided 
that the fair market value as determined by the assessor is 
based on the normal approach to value using normal unrestricted 
rents. 
    (b) In the case of a structure described in clause (a) with 
respect to which construction or substantial rehabilitation had 
not been commenced prior to January 1, 1984, the 20 percent 
assessment ratio shall apply only to that portion of the 
structure that is occupied by elderly persons or low and 
moderate income families as defined above unless (1) 
construction or substantial rehabilitation of the structure had 
been commenced prior to January 1, 1984; or (2) the project had 
been approved by the governing body of the municipality in which 
it is located prior to June 30, 1983; or (3) financing of the 
project had been approved by a federal or state agency prior to 
June 30, 1983.  
    Sec. 11.  Minnesota Statutes 1983 Supplement, section 
273.13, subdivision 17b, is amended to read:  
    Subd. 17b.  [VALUATION OF FARMERS HOME ADMINISTRATION 
PROPERTY IN MUNICIPALITIES OF UNDER 10,000.] (a) Notwithstanding 
any other provision of law, except as provided in clause (b), 
any structure 
    (1) situated on real property that is used for housing for 
the elderly or for low and moderate income families as defined 
by the farmers home administration, 
    (2) located in a municipality of less than 10,000 
population, 
    (3) financed by a direct loan or insured loan from the 
farmers home administration, and 
    (4) which qualifies under subdivision 17a, shall, for 15 
years from the date of the completion of the original 
construction or for the original term of the loan, be assessed 
at five percent of the market value thereof, provided that the 
fair market value as determined by the assessor is based on the 
normal approach to value using normal unrestricted rents.  
    (b) A structure described in clause (a) with respect to 
which construction had not been commenced prior to January 1, 
1984, shall be assessed at 20 percent of its market value, but 
only in proportion to its occupancy by elderly persons or low 
and moderate income families as defined above unless (1) 
construction of the structure had been commenced prior to 
January 1, 1984; or (2) the project had been approved by the 
governing body of the municipality in which it is located prior 
to June 30, 1983; or (3) financing of the project had been 
approved by a federal or state agency prior to June 30, 1983.  
    Sec. 12.  Minnesota Statutes 1983 Supplement, section 
273.13, subdivision 17c, is amended to read:  
    Subd. 17c.  [VALUATION OF LOWER INCOME HOUSING.] (a) Except 
as provided in clause (b), a structure which is 
    (1) situated upon real property that is used for housing 
lower income families or elderly or handicapped persons, as 
defined in section 8 of the United States Housing Act of 1937, 
as amended, and 
    (2) owned by an entity which has entered into a housing 
assistance payments contract under section 8 which provides 
assistance for 100 percent of the dwelling units in the 
structure, other than dwelling units intended for management or 
maintenance personnel, shall, for the term of the housing 
assistance payments contract, including all renewals, or for the 
term of its permanent financing, whichever is shorter, be 
assessed at 20 percent of its market value.  The market value 
determined by the assessor shall be based on the normal approach 
to value using normal unrestricted rents.  
    (b) In the case of a structure described in clause (a) with 
respect to which construction had not been commenced prior to 
January 1, 1984, the 20 percent assessment ratio shall apply 
only to that portion of the structure that is occupied by lower 
income families or elderly or handicapped persons as defined 
above unless (1) construction of the structure had been 
commenced prior to January 1, 1984; or (2) the project had been 
approved by the governing body of the municipality in which it 
is located prior to June 30, 1983; or (3) financing of the 
project had been approved by a federal or state agency prior to 
June 30, 1983. 
    Sec. 13.  Minnesota Statutes 1982, section 273.13, 
subdivision 19, is amended to read: 
    Subd. 19.  [CLASS 3D, 3DD.] Residential real estate 
containing four or more units, other than seasonal residential, 
recreational and homesteads shall be classified as class 3d 
property and shall have a taxable value equal to 36 percent of 
market value for taxes levied in 1981 and 34 percent of market 
value for taxes levied in 1982 and thereafter.  Residential real 
estate containing three or less units, other than seasonal 
residential, recreational and homesteads, shall be classified as 
class 3dd property and shall have a taxable value equal to 28 
percent of market value. 
    Residential real estate as used in this subdivision means 
real property used or held for use by the owner thereof, or by 
his tenants or lessees as a residence for rental periods of 30 
days or more, but shall not include homesteads, or real estate 
devoted to temporary or seasonal residential occupancy for 
recreational purposes.  Where a portion of a parcel of property 
qualified for class 3d or 3dd and a portion does not qualify for 
class 3d or 3dd the valuation shall be apportioned according to 
the respective uses. 
    Residential real estate containing less than three four 
units when entitled to homestead classification for one or more 
units shall be classed as 3b, 3c or 3cc according to the 
provisions of subdivisions 6 and 7.  A single rented or leased 
dwelling unit located within or attached to a private garage or 
similar structure owned by the owner of a homestead and located 
on the premises of that homestead must be classified as 3b, 3c, 
or 3cc as part of the owner's homestead according to the 
provisions of subdivisions 6 and 7.  If more than one dwelling 
unit is attached to the structure, the units must be assessed as 
class 3d or 3dd property.  
    Sec. 14.  Minnesota Statutes 1983 Supplement, section 
273.13, subdivision 21, is amended to read: 
    Subd. 21.  [LIMITATION ON HOMESTEAD CLASSIFICATION.] If the 
assessor has classified a property as both homestead and 
nonhomestead, only the values greater of the value attributable 
to the portion of the property classified as 3b, 3c, or 3cc or 
the value of the first tier of assessment percentages provided 
under those subdivisions shall be entitled to homestead 
treatment, except as provided in subdivision 19 for buildings 
containing fewer than four residential units and for a single 
rented or leased dwelling unit located within or attached to a 
private garage or similar structure owned by the owner of a 
homestead and located on the premises of that homestead.  
    If the assessor has classified a property as both homestead 
and nonhomestead, the homestead credit provided under 
subdivisions 6 and 7 and the reductions in tax provided under 
sections 273.135 and 273.1391, shall apply to the value of both 
the homestead and the nonhomestead portions of the property.  
    Except for buildings containing fewer than three units 
classified pursuant to section 273.13, subdivision 19, if the 
portion of a building used as the owner's homestead is separate 
from other dwelling units in the building, only the owner's 
residence plus the land attributable to the residence is to 
receive either the 3b, 3c, or 3cc classification.  
    Sec. 15.  Minnesota Statutes 1982, section 273.19, is 
amended by adding a subdivision to read: 
    Subd. 5.  Notwithstanding the provisions of subdivision 4, 
real and personal property used or to be used primarily for the 
production of hydroelectric or hydromechanical power and leased 
from the state or a local governmental unit pursuant to section 
105.482, subdivisions 1, 8, and 9 may be exempt from taxation or 
payments in lieu of taxes.  
    The exemption from taxation or payments in lieu of taxes 
provided by this subdivision does not apply to hydroelectric or 
hydromechanical facilities operated at any time between January 
1, 1980 and January 1, 1984.  
    Sec. 16.  Minnesota Statutes 1983 Supplement, section 
276.04, is amended to read: 
    276.04 [NOTICE OF RATES; PROPERTY TAX STATEMENTS.] 
    On receiving the tax lists from the county auditor, the 
county treasurer shall, if directed by the county board, give 
three weeks' published notice in a newspaper specifying the 
rates of taxation for all general purposes and the amounts 
raised for each specific purpose.  He shall, whether or not 
directed by the county board, cause to be printed on all tax 
statements, or on an attachment, a tabulated statement of the 
dollar amount due to each taxing authority and the amount to be 
paid to the state of Minnesota from the parcel of real property 
for which a particular tax statement is prepared.  The dollar 
amounts due the state, county, township or municipality and 
school district shall be separately stated but the amounts due 
other taxing districts, if any, may be aggregated.  The dollar 
amounts may be rounded to the nearest even whole dollar.  For 
purposes of this section whole odd-numbered dollars may be 
adjusted to the next higher even-numbered dollar.  The statement 
shall include the following sentence, printed in upper case 
letters in bold face print:  "THE STATE OF MINNESOTA DOES NOT 
RECEIVE ANY PROPERTY TAX REVENUES.  THE STATE OF MINNESOTA 
REDUCES YOUR PROPERTY TAX BY PAYING CREDITS AND REIMBURSEMENTS 
TO LOCAL UNITS OF GOVERNMENT."  The property tax statements for 
class 2a property shall contain the same information that is 
required on the tax statements for real property.  The county 
treasurer shall mail to taxpayers statements of their personal 
property taxes due, such statements to be mailed not later than 
February 15 (except in the case of Class 2a property), 
statements of the real property taxes due shall be mailed not 
later than January 31; provided, that the validity of the tax 
shall not be affected by failure of the treasurer to mail such 
statement.  The taxpayer is defined as the owner who is 
responsible for the payment of the tax.  Such real and personal 
property tax statements shall contain the market value, as 
defined in section 272.03, subdivision 8, used in determining 
the tax.  The statement shall show the amount attributable to 
section 124.2137 as "state paid agricultural credit" and the 
amount attributable to section 273.13, subdivisions 6 and 7 as 
"state paid homestead credit."  The statement shall show the 
reduction attributable to the aid given pursuant to section 
273.139 and shall indicate that the reduction is paid by the 
state of Minnesota.  If so directed by the county board, the 
treasurer shall visit places in the county as he deems expedient 
for the purpose of receiving taxes and the county board is 
authorized to pay the expenses of such visits and of preparing 
duplicate tax lists.  Failure to mail the tax statement shall 
not be deemed a material defect to affect the validity of any 
judgment and sale for delinquent taxes.  
    Sec. 17.  Minnesota Statutes 1983 Supplement, section 
279.01, subdivision 1, is amended to read: 
    Subdivision 1.  On May 16, of each year, with respect to 
property actually occupied and used as a homestead by the owner 
of the property, a penalty of three percent shall accrue and 
thereafter be charged upon all unpaid taxes on real estate on 
the current lists in the hands of the county treasurer, and a 
penalty of seven percent on nonhomestead property, except that 
this penalty shall not accrue until June 1 of each year on 
commercial use real property used for seasonal residential 
recreational purposes and classified as class 3 or 3a, and on 
other commercial use real property classified as class 4c, 
provided that over 60 percent of the gross income earned by the 
enterprise on the class 4c property is earned during the months 
of May, June, July, and August.  Any property owner of such 
class 4c property who pays the first half of the tax due on the 
property after May 15 and before June 1 shall attach an 
affidavit to his payment attesting to compliance with the income 
provision of this subdivision.  Thereafter, for both homestead 
and nonhomestead property, on the 16th day of each month, up to 
and including October 16 following, an additional penalty of one 
percent for each month shall accrue and be charged on all such 
unpaid taxes.  When the taxes against any tract or lot exceed 
$10, one-half thereof may be paid prior to May 16; and, if so 
paid, no penalty shall attach; the remaining one-half shall be 
paid at any time prior to October 16 following, without penalty; 
but, if not so paid, then a penalty of four percent shall accrue 
thereon for homestead property and a penalty of four percent on 
nonhomestead property.  Thereafter, for homestead property, on 
the 16th day of each month up to and including December 16 
following, an additional penalty of two percent for each month 
shall accrue and be charged on all such unpaid taxes.  
Thereafter, for nonhomestead property, on the 16th day of each 
month up to and including December 16 following, an additional 
penalty of four percent for each month shall accrue and be 
charged on all such unpaid taxes.  If one-half of such taxes 
shall not be paid prior to May 16, the same may be paid at any 
time prior to October 16, with accrued penalties to the date of 
payment added, and thereupon no penalty shall attach to the 
remaining one-half until October 16 following; provided, also, 
that the same may be paid in installments as follows:  
One-fourth prior to March 16; one-fourth prior to May 16; 
one-fourth prior to August 16; and the remaining one-fourth 
prior to October 16, subject to the aforesaid penalties.  Where 
the taxes delinquent after October 16 against any tract or 
parcel exceed $40, they may be paid in installments of not less 
than 25 percent thereof, together with all accrued penalties and 
costs, up to the next tax judgment sale, and after such payment, 
penalties, interest, and costs shall accrue only on the sum 
remaining unpaid.  Any county treasurer who shall make out and 
deliver or countersign any receipt for any such taxes without 
including all of the foregoing penalties therein, shall be 
liable to the county for the amount of such penalties.  
    Sec. 18.  Minnesota Statutes 1982, section 279.37, 
subdivision 1, is amended to read: 
    Subdivision 1.  [COMPOSITION INTO ONE ITEM.] Delinquent 
taxes upon any parcel of real estate which have been bid in for 
and are held by the state and not assigned by it, may be 
composed into one item or amount by confession of judgment at 
any time prior to the forfeiture of such the parcel of land to 
the state for taxes, for the aggregate amount of all such the 
taxes, costs, penalties, and interest accrued against said the 
parcel, as hereinafter provided; provided except that only taxes 
upon property which, for the previous year's assessment, was 
classified as homestead property pursuant to section 273.13, 
subdivisions 6, 6a, 7, and 14a vacant land, mineral property, 
employment property, or commercial or industrial property shall 
not be eligible to be composed into any confession of judgment 
pursuant to this section. 
    Sec. 19.  Minnesota Statutes 1982, section 279.37, 
subdivision 3, is amended to read: 
    Subd. 3.  Upon the receipt of said the offer and payment of 
the sums herein sum required, the said auditor shall notify the 
county board of the offer.  If the county board approves the 
offer, the auditor shall note the same it upon his records and 
shall forthwith file said the offer and confession of judgment 
with the clerk of the district court of the county who is hereby 
directed to enter judgment in accordance with said the offer.  
If the county board does not approve the offer within 30 days of 
its notification by the county auditor, confession of judgment 
will not be allowed for the property, and the amount remitted 
pursuant to subdivision 2 shall be returned to the payor.  
    Sec. 20.  [282.021] [NOTIFICATION OF SALE.] 
    Thirty days before the sale of tax-forfeited land at public 
auction, the county auditor shall publish in a newspaper of 
general circulation the notice of sale and each parcel's 
appraised value or market value, whichever is higher, as 
determined by the county or local assessor who is responsible 
for valuing the property.  The county auditor shall also mail 
notice to all owners of land adjoining each parcel to be sold 
and to all owners of platted or unplatted land whose boundaries 
are within 300 feet of the boundaries of each parcel to be sold. 
    Sec. 21.  Minnesota Statutes 1983 Supplement, section 
290A.04, subdivision 2e, is amended to read: 
    Subd. 2e.  If the net property taxes payable on a homestead 
increase more than 20 percent over the net property taxes 
payable in the previous year on the same property, a claimant 
who is a homeowner shall be allowed an additional refund equal 
to 50 100 percent of the amount by which the increase exceeds 20 
percent.  This subdivision shall not apply to any increase in 
the net property taxes payable attributable to improvements made 
to the homestead.  The refund shall not exceed $200.  The 
maximum refund shall be reduced by $20 for each $1,000 of the 
claimant's household income in excess of $30,000.  No refund 
shall be allowed if the claimant's household income exceeds 
$40,000.  The refund shall be reduced by one-tenth for each 
$1,000 of claimant's household income in excess of $40,000.  
    No refund pursuant to this subdivision shall be allowed if 
the claimant's household income exceeds $50,000.  
    For purposes of this subdivision, "net property taxes 
payable" means property taxes payable after reductions made 
pursuant to sections 124.2137; 273.13, subdivisions 6, 7, and 
14a; 273.115, subdivision 1; 273.116, subdivision 1; 273.135; 
273.1391; and 273.42, subdivision 2, and any other state paid 
property tax credits and after the deduction of tax refund 
amounts for which the claimant qualifies pursuant to 
subdivisions 2, 2a and 2b.  
    In addition to the other proofs required by this chapter, 
each claimant under this subdivision shall file with the 
property tax refund return a copy of the property tax statement 
for taxes payable in the preceding year or other documents 
required by the commissioner.  
    On or before December 1, 1983, the commissioner shall 
estimate the cost of making the payments provided by this 
section.  Notwithstanding the open appropriation provision of 
section 290A.23, if the estimated total refund claims exceed 
$11,000,000, the commissioner shall adjust accordingly the 
percentage increase in net property taxes payable over the 
previous year which is required to qualify for the credit 
provided in this subdivision.  
    This subdivision is repealed effective for property taxes 
levied in 1984, payable in 1985. 
    Sec. 22.  Minnesota Statutes 1983 Supplement, section 
290A.04, subdivision 2f, is amended to read: 
    Subd. 2f.  If the net property taxes payable in 1984 on a 
homestead increases more than ten percent over the net property 
taxes payable in 1983 on the same property, and if the effective 
tax rate of property tax paid in 1983 on that homestead as 
compared to the January 2, 1982, estimated market value exceeds 
2.25 percent, an additional credit shall be paid by the 
commissioner to the claimant.  The additional credit shall be 
equal to 50 percent of the amount by which the increase exceeds 
ten percent but in no case shall the additional credit exceed 
$200.  This subdivision shall not apply to any increase in the 
net property taxes payable attributable to improvements made to 
the homestead.  
    For purposes of this subdivision, "effective tax rate" 
means the net property tax paid by the claimant in 1983, divided 
by the assessor's 1982 estimated market value times 100.  
    For purposes of this subdivision, "net property taxes" 
means the gross tax less the homestead credit and any other 
state paid credit and after the deduction of tax refund amounts 
for which the claimant qualifies.  
    The city assessor, or the county assessor if the property 
is located in a taxing district which does not have a city 
assessor, shall notify all affected property owners of the 
availability of this credit and furnish the forms which the 
commissioner shall prescribe.  
    The additional refunds shall be paid at the same time as 
the commissioner pays other property tax refund claims. 
    Sec. 23.  Minnesota Statutes 1982, section 290A.04, is 
amended by adding a subdivision to read: 
    Subd. 2g.  If the net property taxes payable on a homestead 
in 1985 increase more than 12.5 percent over the net property 
taxes payable in 1984 on the same property, a claimant who is a 
homeowner shall be allowed an additional refund equal to 50 
percent of the amount by which the increase exceeds 12.5 percent.
This subdivision shall not apply to any increase in the net 
property taxes payable attributable to improvements made to the 
homestead.  The refund shall not exceed $400.  
    For purposes of this subdivision, "net property taxes 
payable" means property taxes payable after reductions made 
pursuant to sections 124.2137; 273.13, subdivisions 6, 7, and 
14a; 273.115, subdivision 1; 273.116, subdivision 1; 273.135; 
273.1391; and 273.42, subdivision 2, and any other state paid 
property tax credits and after the deduction of tax refund 
amounts for which the claimant qualifies pursuant to 
subdivisions 2, 2a, and 2b.  
    In addition to the other proofs required by this chapter, 
each claimant under this subdivision shall file with the 
property tax refund return a copy of the property tax statement 
for taxes payable in the preceding year or other documents 
required by the commissioner.  
    This subdivision is repealed effective for property taxes 
levied in 1985, payable in 1986.  
    Sec. 24.  Minnesota Statutes 1982, section 295.44, 
subdivision 1, is amended to read: 
    Subdivision 1.  [EXEMPTION.] Notwithstanding the provisions 
of sections 272.01, subdivision 2, 272.02, subdivision 5, and 
273.19, subdivision 1, real or personal property used or to be 
used primarily for the production of hydroelectric or 
hydromechanical power on a site owned by the state or a local 
governmental unit and developed and operated pursuant to section 
105.482, subdivisions 1, 8 and 9 shall may be exempt from 
property taxation for the five calendar years succeeding the 
year in which the development agreement is executed all years 
during which the site is developed and operated under the terms 
of a lease or agreement authorized by section 105.482, 
subdivisions 1, 8, and 9.  
    Sec. 25.  Minnesota Statutes 1983 Supplement, section 
473.446, subdivision 1, is amended to read:  
    Subdivision 1.  [TAXATION WITHIN TRANSIT TAXING DISTRICT.] 
For the purposes of sections 473.401 to 473.451 and the 
metropolitan transit system, except as otherwise provided in 
this subdivision the metropolitan transit commission shall levy 
each year upon all taxable property within the metropolitan 
transit taxing district, defined in subdivision 2, a transit tax 
consisting of: 
    (a) An amount up to two mills times the assessed value of 
all such property, based upon the level of transit service 
provided for the property, the proceeds of which shall be used 
for payment of the expenses of operating transit and paratransit 
service; 
    (b) An additional amount, if any, as the commission 
determines to be necessary to provide for the full and timely 
payment of its certificates of indebtedness and other 
obligations outstanding on July 1, 1977, to which property taxes 
under this section have been pledged; and 
    (c) An additional amount necessary to provide full and 
timely payment of certificates of indebtedness, bonds, or other 
obligations issued or to be issued pursuant to section 473.436 
for purposes of acquisition and betterment of property and other 
improvements of a capital nature and to which the commission has 
specifically pledged tax levies under this clause. 
    The county auditor shall reduce the tax levied pursuant to 
this subdivision on all property within cities or towns that 
receive full peak service and limited off-peak service by an 
amount equal to the tax levy that would be produced by applying 
a rate of 0.5 mills on the property.  The county auditor shall 
reduce the tax levied pursuant to this subdivision on all 
property within cities or towns that receive limited peak 
service by an amount equal to the tax levy that would be 
produced by applying a rate of 0.75 mills on the property.  The 
amounts so computed by the county auditor shall be submitted to 
the commissioner of revenue as part of the abstracts of tax 
lists required to be filed with the commissioner under section 
275.29.  Any prior year adjustments shall also be certified in 
the abstracts of tax lists.  The commissioner shall review the 
certifications to determine their accuracy.  He may make changes 
in the certification as he may deem necessary or return a 
certification to the county auditor for corrections.  The 
commissioner shall pay to the regional transit board the amounts 
certified by the county auditors on the dates provided in 
section 273.13, subdivision 15a, clause (3).  There is annually 
appropriated from the general fund in the state treasury to the 
department of revenue the amounts necessary to make these 
payments in fiscal year 1985 and thereafter.  
    For the purposes of this subdivision, "full peak and 
limited off-peak service" means peak period service plus weekday 
midday service with a frequency of more than 60 minutes on the 
route with the greatest frequency; and "limited peak period 
service" means peak period service only.  
    Sec. 26.  Minnesota Statutes 1982, section 477A.13, is 
amended to read: 
    477A.13 [TIME OF PAYMENT, DEDUCTIONS.] 
    Payments to the counties shall be made from the general 
fund during the month of July of the year next following 
certification.  There shall be deducted from amounts paid any 
amounts paid to a county or township during the preceding year 
pursuant to sections 84A.51, 89.036, 97.49, subdivision 3, and 
272.68, subdivision 3 with respect to the lands certified 
pursuant to section 477A.12.  
    Payments under section 477A.12 must also be reduced by the 
following percentages of the amounts paid during the preceding 
year under section 84A.51:  
    (1) for the payment made July 15, 1984, 75 percent;  
    (2) for the payment made July 15, 1985, 50 percent;  
    (3) for the payment made July 15, 1986, 25 percent; and 
    (4) for the payment made thereafter, 0 percent.  
    Sec. 27.  [STATEMENT OF PURPOSE.] 
    The legislature finds that the method of valuing farm 
property on the basis of sales of comparable properties 
overstates the value of farm property.  Further, the legislature 
finds that methods of determining the production value of farm 
property are not suitable as a basis for directly determining 
the value of individual parcels of farm property.  Therefore, 
the legislature determines that market value should continue to 
be used as the basis for taxation but that that market value 
should be adjusted to reflect the production value of farm 
property.  
    Sec. 28.  [DETERMINATION OF RATIO.] 
    The commissioner of revenue shall consider alternative 
methods of determining the production value of farm property and 
shall make a recommendation to the legislature by January 15, 
1985, as to the percentage of market value to be used in 
determining the production value to be used for the 1985 
assessment, taxes payable in 1986.  
    Sec. 29.  [GUIDELINES TO COUNTY ASSESSORS.] 
    The department of revenue is directed by the legislature to 
prepare and issue guidelines to all county assessors by October 
1984, on the following two topics:  
    (a) the proper assessment methods which should be used when 
valuing land which is irrigated or capable of being irrigated, 
and 
    (b) the proper method for adjusting sales price for 
financing terms and other conditions of a sale in determining 
true market value.  
    The guidelines are not rules subject to the Administrative 
Procedure Act of chapter 14.  
    Sec. 30.  [COMPUTATION; REFUNDS.] 
    An additional credit shall be allowed to owners of all 
property subject to the $2,000 agricultural aid credit maximum 
imposed by Laws 1983, chapter 342, article 2, section 1.  The 
county auditor shall determine the amount of credit to be 
allowed by recomputing the property tax for taxes payable in 
1984 on this property, reducing the tax by the rates set by 
Minnesota Statutes 1983 Supplement, section 124.2137, 
subdivision 1.  The difference so computed, not to exceed 
$2,000, shall be allowed as an additional credit against the 
property taxes payable in 1984.  Amended statements shall be 
mailed to the affected taxpayers by May 11, 1984.  The 
statements shall contain the information required in Minnesota 
Statutes, section 276.04, except that a notice must be enclosed 
stating that the statement is amended pursuant to this section. 
The auditor shall certify the additional agricultural aid 
amounts pursuant to this section to the commissioner of revenue 
by the time and in the form determined by the commissioner.  The 
auditor shall also list the number of property tax statements 
which were revised as a result of the change in the maximum 
$4,000 agricultural aid limitation.  The commissioner shall 
reimburse the county $5 for each revised statement for the 
administrative expenses incurred as a result of the 
recomputations pursuant to this section.  The commissioner of 
revenue shall review the certifications to determine their 
accuracy.  He may make changes in the certification he deems 
necessary or return a certification to the county auditor for 
corrections.  
    If property taxes payable in 1984 have been paid in full 
without the adjustments required by this section, the taxpayer 
shall receive a refund equal to the difference between the taxes 
paid and the tax as recomputed.  The county treasurer or auditor 
shall determine the amount of the refund and mail it to the 
taxpayer as soon as practical.  
    If property taxes payable in 1984 have been partially paid 
without the adjustments required by this section, the county 
treasurer or auditor shall reduce the remaining taxes due by the 
amount of the tax reduction required by this section, and refund 
any excess.  He shall notify the affected taxpayer of the 
corrected tax.  
    Refunds paid under this section do not include interest.  
    If the county treasurer or auditor has settled and 
distributed funds under Minnesota Statutes, section 276.10 with 
respect to any amounts which have been refunded to taxpayers 
under this section, the amounts of those refunds must be 
deducted from the next settlement and distribution.  Additional 
credits payable under this section may be designated as state 
school agriculture credit on the tax statements, but for 
distribution purposes, the credit shall be distributed to all 
taxing districts in the same manner and the same proportion as 
taxes paid by the taxpayer for the property.  
    Sec. 31.  [PAYMENT; PENALTIES.] 
    Section 30 does not excuse timely payment of taxes as 
required in Minnesota Statutes, section 279.01.  Penalties shall 
accrue as provided in Minnesota Statutes, section 279.01 only on 
the amount of the taxes as recomputed under section 30.  
    Sec. 32.  [PROPERTY TAX REFUNDS.] 
    For purposes of Minnesota Statutes, section 290A.03, 
subdivision 13, "property taxes payable" means property taxes as 
recomputed under section 30.  Taxpayers who filed property tax 
refund returns utilizing the payable 1984 property taxes before 
the recomputation must file an amended return and attach an 
amended property tax statement to the amended return.  
    Sec. 33.  [APPROPRIATION.] 
    There is appropriated from the general fund to the 
commissioner of revenue the amount necessary to pay the county 
the amount by which the property taxes payable in 1984 as 
certified under section 30 are reduced and the fee for issuing 
the revised tax statements.  Payment must be made not later than 
September 15, 1984.  
    Sec. 34.  [HOMESTEAD CREDIT ADJUSTMENTS.] 
    The commissioner of revenue shall by May 1, 1984, advise 
each county auditor to recompute the homestead credit to be 
applied against each parcel of property assessed by the county 
as both homestead and nonhomestead property.  The homestead 
credit shall be applied against the entire parcel.  The county 
auditor shall file an abatement with the county board listing 
each affected parcel and the additional homestead credit.  The 
county board shall approve the abatement in the same manner as 
provided in Minnesota Statutes, section 375.192 and forward it 
to the commissioner.  For purposes of this section, "homestead 
credit" means reductions paid pursuant to Minnesota Statutes, 
sections 273.13, subdivision 14a; 273.135; and 273.1391.  
    The county treasurer shall issue corrected property tax 
statements showing the corrected taxes.  The additional 
homestead credit shall be a reduction against the second half 
taxes unless the county treasurer issues the corrected 
statements on or before May 11, 1984.  
    By July 1, 1984, each county auditor shall notify the 
commissioner in writing about the procedures used in the county 
to handle this process.  The auditor shall also list the number 
of property tax statements which were revised as a result of the 
homestead credit adjustments.  The commissioner shall reimburse 
the county $5 for each revised statement for the administrative 
expenses incurred as a result of the recomputations pursuant to 
this section.  There is appropriated from the general fund to 
the commissioner of revenue the amount necessary to make these 
payments to the county.  
    Sec. 35.  [LEVY LIMIT ADJUSTMENT.] 
    If a governmental unit subject to the levy limitation 
provisions of Minnesota Statutes, sections 275.50 to 275.56 
realizes savings in the form of reduced employer contributions 
to public pension funds resulting from the enactment of S.F. No. 
147 at the 1984 regular session, its levy limit base is 
permanently reduced, beginning with taxes payable in 1985, by 
twice the amount of savings realized during the period from July 
1, 1984, to December 31, 1984, but only to the extent that the 
doubled amount exceeds the amount levied as a special levy 
pursuant to section 275.50, subdivision 5, clause (o), for taxes 
payable in 1984.  
    Sec. 36.  [REPEALER.] 
    Minnesota Statutes 1982, section 295.44, subdivisions 2, 3, 
and 4 and Minnesota Statutes 1983 Supplement, section 273.11, 
subdivision 7, is repealed.  
    Sec. 37.  [EFFECTIVE DATE.] 
    The increase in the agricultural aid maximum to $4,000 in 
section 3 is effective for the 1983 assessment and thereafter, 
taxes payable 1984 and thereafter.  The remainder of section 3 
and sections 4, 6 to 14 and the portion of section 36 relating 
to Minnesota Statutes, section 273.11, subdivision 7, are 
effective for the 1984 assessment and thereafter, taxes payable 
in 1985 and thereafter.  Sections 1, 2, 5, 15, 17 to 24, 26 to 
34 and the portion of section 36 relating to Minnesota Statutes, 
section 295.44, subdivisions 2, 3, and 4 are effective the day 
after final enactment.  Section 25 is effective in the counties 
of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and 
Washington for taxes levied in 1985, payable in 1986, and 
thereafter, but is contingent upon the enactment of the 
reorganization of metropolitan transit governance in H.F. 2317. 

                                ARTICLE 4

                          LOCAL GOVERNMENT AIDS
    Section 1.  [LOCAL GOVERNMENT AID RESTORATION.] 
    Subdivision 1.  [ELIGIBLE AMOUNT.] For each town, statutory 
city, and home rule charter city in the state, the commissioner 
of revenue shall certify a supplemental aid amount equal to the 
difference, if any, between (a) its certified distribution for 
1984 pursuant to Minnesota Statutes, sections 477A.011 to 
477A.03, and (b) the amount that would have been certified had 
not the limitations of Minnesota Statutes, sections 477A.0131, 
subdivision 2, and 477A.03, subdivision 2, been in effect.  
    Subd. 2.  [TIME OF PAYMENTS.] Aid amounts determined 
pursuant to this section shall be distributed to affected cities 
in calendar year 1984 according to the payment schedule provided 
in Minnesota Statutes, section 477A.015.  However, if a city is 
subject to levy limitation pursuant to Minnesota Statutes, 
sections 275.50 to 275.56, and the amount distributed to it 
pursuant to this section exceeds the amount by which the city's 
levy limitation for taxes payable in 1984 exceeds its levy 
subject to limitation for taxes payable in 1984, the amount of 
that excess distribution shall be used to reduce the city's levy 
limitation for taxes payable in 1985 accordingly.  
    Subd. 3.  [SUBSEQUENT YEARS.] For the purpose of aid 
distributions pursuant to Minnesota Statutes, sections 477A.011 
to 477A.03 for 1985 and subsequent calendar years, aid amounts 
distributed according to the provisions of this section shall be 
considered as included in the definition of aids received in 
1984 pursuant to Minnesota Statutes, sections 477A.011 to 
477A.03.  
    Sec. 2.  [HIGH-GROWTH ADJUSTMENT.] 
    Subdivision 1.  [ELIGIBLE AMOUNT.] For any statutory city 
(a) which incorporated in 1974 or thereafter, and (b) whose 
current population as determined for the calendar year 1979 
local government aids distribution exceeded its 1970 census 
population by a factor of two or more, the commissioner of 
revenue shall determine the additional amount that the city 
would have been allocated in the 1984 aid distribution, had the 
full amount of its then current population been used in the 
formula calculation for 1979 aids, with aids in the intervening 
years recalculated using the 1979 adjusted figures.  
    Subd. 2.  [ADJUSTMENTS.] For every qualifying city, the 
amount determined pursuant to subdivision 1 shall be permanently 
added to its adjusted local revenue base pursuant to Minnesota 
Statutes, section 477A.011, subdivision 7a, and its maximum aid 
amount pursuant to Minnesota Statutes, section 477A.011, 
subdivision 10, for aids payable in 1984.  1984 aid 
distributions for all affected cities shall be based upon 
formula factors as amended by this section.  
    This amount shall also be a permanent adjustment to each 
city's adjusted levy limit base for taxes payable in 1984, 
pursuant to Minnesota Statutes, section 275.51, subdivision 3h.  
    Sec. 3.  Minnesota Statutes 1983 Supplement, section 
477A.013, subdivision 1, is amended to read: 
    Subdivision 1.  [TOWNS.] In each (a) In 1984, each town 
shall receive a distribution equal to 50 percent of the amount 
received in 1983 pursuant to Minnesota Statutes 1982, sections 
273.138, 273.139, and 477A.011 to 477A.03.  
    (b) In 1985 and each succeeding calendar year, each town 
which has an average equalized mill rate of at least two mills 
had levied for taxes payable in the previous year at least one 
mill on the dollar of the assessed value of the town shall 
receive a distribution equal to 50 percent of the amount 
received in 1983 pursuant to Minnesota Statutes 1982, sections 
273.138, 273.139, and 477A.011 to 477A.03.  
    Sec. 4.  Minnesota Statutes 1983 Supplement, section 
477A.013, subdivision 2, is amended to read: 
    Subd. 2.  [CITIES AND TOWNS.] In each calendar year, each 
statutory and home rule charter city shall receive a 
distribution equal to the amount obtained by subtracting ten 
mills multiplied by the municipality's equalized assessed value 
from the adjusted local revenue base.  
    An aid amount shall be computed in the same manner for all 
towns which have an average equalized mill rate of at least two 
mills had levied for taxes payable in the previous year at least 
one mill on the dollar of the assessed value of the town.  A 
town's final aid amount shall be determined by either the 
subdivision 1 or the subdivision 2 calculation, whichever is 
greater.  
    Sec. 5.  Minnesota Statutes 1983 Supplement, section 
477A.0131, subdivision 1, is amended to read: 
    Subdivision 1.  (a) No home rule charter or statutory city 
shall receive a distribution in any calendar year 1985 pursuant 
to sections 477A.011 to 477A.03 that is less than the sum of the 
amounts amount certified in the previous calendar year pursuant 
to sections 477A.011 to 477A.03, section 273.139, and section 
273.138, by more than an amount equal to three-fourths of one 
mill times the unit's equalized assessed value.  
     (b) No home rule charter or statutory city shall receive a 
distribution in calendar year 1986 or any subsequent calendar 
year pursuant to sections 477A.011 to 477A.03 that is less than 
the amount certified in the previous calendar year pursuant to 
sections 477A.011 to 477A.03 by more than an amount equal to 
three-fourths of one mill times the city's equalized assessed 
value.  
    Sec. 6.  [LOCAL GOVERNMENT AIDS STUDY COMMISSION.] 
    A local government aids study commission consisting of 18 
members is created.  Nine members of the commission shall be 
members of the senate and appointed by the committee on 
committees.  Nine members of the commission shall be members of 
the house of representatives and appointed by the speaker.  The 
study commission shall elect a chairman from among its members 
and meetings of the commission will be held at the call of the 
chairman.  
    The purpose of the commission is to study the current 
funding and distribution of state aid to local units of 
government including school districts.  The commission may do 
all things necessary and reasonable to conduct the study 
including holding meetings and soliciting testimony and 
information.  The commission shall make specific recommendations 
on changes in the present state aid formula and shall report to 
the legislature and the governor its conclusions and 
recommendations by January 15, 1985.  The commission shall 
expire on February 1, 1985.  Expenses of the commission 
including per diem and expenses of commission members will be 
provided by the appointing authority.  
    Sec. 7.  [APPROPRIATIONS.] 
    Subdivision 1.  An amount sufficient to carry out the 
provisions of sections 1 and 3 is appropriated from the general 
fund to the commissioner of revenue.  
    Subd. 2.  The sum of $120,000 is appropriated from the 
general fund to the commissioner of revenue for the purpose of 
providing increased local government aid distributions under 
section 2.  If this appropriation is not sufficient, aid amounts 
determined pursuant to section 2 shall be proportionately 
reduced.  
    Sec. 8.  [REPEALER.] 
    Minnesota Statutes 1983 Supplement, sections 477A.0131, 
subdivision 2, and 477A.03, subdivision 2, are repealed.  
    Sec. 9.  [EFFECTIVE DATE.] 
    Sections 1 to 4 and 6 to 8 are effective the day following 
final enactment.  Section 5 is effective for distributions 
beginning with calendar year 1985. 

                               ARTICLE 5 

                          ECONOMIC DEVELOPMENT
    Section 1.  Minnesota Statutes 1983 Supplement, section 
273.1312, subdivision 4, as amended by H.F. No. 1877, is amended 
to read:  
    Subd. 4.  [ELIGIBILITY REQUIREMENTS.] An area is eligible 
for designation if the following requirements are met:  
    (a) The boundary of the zone or each subdivision of the 
zone is continuous and includes vacant or underutilized lands or 
buildings.  
    (b) The area of the zone is less than 400 acres.  The total 
market value of the taxable property contained in the zone at 
the time of application is less than $100,000 per acre or 
$300,000 per acre for an area located wholly within a first 
class city.  A zone which is located in a city of the third or 
fourth class may be divided into two to four separate 
subdivisions which need not be contiguous with each other.  Each 
subdivision must contain not less than 100 acres.  The 
restrictions provided by this paragraph shall not apply to areas 
designated pursuant to paragraph (c), clause (2) or (3).  
    (c) (1) The proposed zone is located within an economic 
hardship area, as established by meeting two or more of the 
following criteria:  
    (A) the number of residential housing units within the area 
which are substandard is 15 percent or greater under criteria 
prescribed by the commissioner using data collected by the 
bureau of the census or data submitted by the municipality and 
approved by the commissioner;  
    (B) the percentage of households within the area that fall 
below the poverty level, as determined by the United States 
census bureau, is 20 percent or greater;  
    (C) (i) the total market value of commercial and industrial 
property in the area has declined over three of the preceding 
five years, or (ii) the total market value of all property in 
the area has declined or it has increased less than ten 10.5 
percent over the preceding three-year period;  
    (D) for the last full year for which data is available, the 
per capita income in the area was 90 percent or less of the per 
capita income for the state, excluding standard metropolitan 
stastistical areas, or for the standard metropolitan statistical 
area if the area is located in a standard metropolitan 
statistical area;  
    (E) (i) the current rate of unemployment in the area is 120 
percent of the statewide average unemployment for the last 
12-month period for which verifiable figures are available, or 
(ii) the total number of employment positions has declined by 
ten percent during the last 18 months; or 
    (2) The area is so designated under federal legislation 
providing for federal tax benefits to investors, employers or 
employees in enterprise zones; or 
    (3) The area consists of a statutory or home rule charter 
city with a contiguous border with a city in another state or 
with a contiguous border with a city in Minnesota which has a 
contiguous border with a city in another state and the area is 
determined by the commissioner to be economically or fiscally 
distressed.  
    For purposes of this subdivision, an economic hardship area 
must have a population under the most recent federal decennial 
census of at least (i) 4,000 if any of the area is located 
wholly or partly within a standard metropolitan statistical 
area, or (ii) 2,500 for an area located outside of a standard 
metropolitan statistical area, or (iii) no minimum in the case 
of an area located in an Indian reservation; except that, in the 
case of two or more cities seeking designation of an enterprise 
zone under a joint exercise of power pursuant to section 471.59, 
the minimum population required by this provision shall not 
exceed the sum of the populations of those cities.  
    Sec. 2.  Minnesota Statutes 1983 Supplement, section 
273.1314, subdivision 6, is amended to read: 
    Subd. 6.  [LOCAL CONTRIBUTION.] No area may be designated 
as an enterprise zone unless the municipality agrees to make a 
qualifying local contribution in the form of (a) a property tax 
reduction for employment property as provided by section 
273.1313 for any business qualifying for a state tax reduction 
pursuant to this section, or (b) an equivalent local 
contribution or investment out of other municipal funds, but 
excluding any special federal grants or loans.  In concluding 
the agreement with the municipality the commissioner may require 
that the local contribution will be made in a specified ratio to 
the amount of the state credits authorized.  If the local 
contribution is to be used to fund additional reductions in 
state taxes, the commissioner and the governing body of the 
municipality shall enter an agreement for timely payment to the 
state to reimburse the state for the amount of tax revenue 
foregone as a result.  
    Sec. 3.  Minnesota Statutes 1983 Supplement, section 
273.1314, subdivision 8, is amended to read:  
    Subd. 8.  [FUNDING LIMITATIONS.] The maximum amount of the 
tax reductions which may be authorized pursuant to designations 
of enterprise zones under section 273.1312 and this section is 
limited to $32,000,000 $35,600,000.  The maximum amount of this 
total which may be authorized by the commissioner for tax 
reductions pursuant to subdivision 9 that will reduce tax 
revenues which otherwise would have been received during fiscal 
years 1984 and 1985 is limited to $8,000,000 $9,000,000.  Of the 
total limitation and the 1984-1985 biennial limitation the 
commissioner shall allocate to enterprise zones designated under 
section 273.1312, subdivision 4, paragraph (c), clause (3), an 
amount equal to $10,000,000 $16,610,940 and $4,000,000 
$5,000,000 respectively.  These funds shall be allocated among 
such zones on a per capita basis except that the maximum 
allocation to any one city is $6,610,940 and no city's 
allocation shall exceed $210 on a per capita basis.  An amount 
sufficient to fund the state funded property tax credits 
authorized pursuant to this section is appropriated to the 
commissioner of revenue.  Upon designation of an enterprise zone 
the commissioner shall certify the total amount available for 
tax reductions in the zone for its duration.  The amount 
certified shall reduce the amount available for tax reductions 
in other enterprise zones.  If subsequent estimates indicate or 
actual experience shows that the approved tax reductions will 
result in amounts of tax reductions in excess of the amount 
certified, the commissioner shall implement a plan to reduce the 
available tax reductions in the zone to an amount within the sum 
certified.  If subsequent estimates indicate or actual 
experience shows that the approved tax reductions will result in 
amounts of tax reductions below the amount certified, the 
difference shall be available for certification in other zones 
or used in connection with an amended plan of tax reductions for 
the zone as the commissioner determines appropriate.  If the tax 
reductions authorized result in reduced revenues for a dedicated 
fund, the commissioner of finance shall transfer equivalent 
amounts to the dedicated fund from the general fund as necessary.
    Sec. 4.  Minnesota Statutes 1983 Supplement, section 
273.1314, subdivision 15, is amended to read: 
    Subd. 15.  [REPORTING.] The commissioner shall require 
municipalities receiving enterprise zone designations pursuant 
to section 273.1312, subdivision 4, to supply information or 
otherwise report to the state regarding the economic activity 
which has occurred in the zone following the designation.  This 
information shall include the number of jobs created in the 
zone, the number of economically disadvantaged individuals hired 
in the zone, the average wage level of the jobs created, and 
descriptions of any affirmative action programs undertaken by 
the municipality in connection with the zone.  The amount of the 
municipality's local contribution and the number of businesses 
qualifying for or directly benefiting from the local 
contribution must be reported annually to the commissioner.  
    Sec. 5.  Minnesota Statutes 1983 Supplement, section 
290.069, subdivision 1, is amended to read: 
    Subdivision 1.  [DEFINITIONS.] (a) "Small business 
assistance office" means a nonprofit corporation which is formed 
under chapter 317, is an exempt organization under section 
501(c)(3) of the Internal Revenue Code, and satisfies the 
following conditions:  
    (1) The primary purpose of the corporation is to aid in the 
formation of new businesses which create jobs in the state by 
training or providing other direct assistance to entrepreneurs, 
managers, inventors, and other individuals in the development, 
financing, and operation of qualified small businesses.  
    (2) The corporation provides audited financial statements 
to all contributors and the commissioner of energy, planning, 
and development within 90 days following the close of the 
corporation's fiscal year.  
    (3) The corporation employs, at least, two full-time 
professional employees or the equivalent.  This clause is 
satisfied if the corporation employs one full-time professional 
employee and shares a professional employee with another 
organization engaged in related activities, including but not 
limited to providing development financing or other services to 
businesses.  
    (4) The corporation is not engaged in providing financing 
or primarily engaged in arranging financing for businesses.  
    (5) The commissioner of energy, planning and economic 
development certifies that the corporation satisfies the 
requirements of this paragraph for the calendar year. 
     (b) "Technology" means a proprietary process, formula, 
pattern, device, or compilation of scientific or technical 
information unless it 
     (1) is in the public domain; or 
    (2) cannot be accurately valued.  
    (c) "Controlled group of corporations" means the controlled 
group of corporations as defined in section 1563 of the Internal 
Revenue Code, and if the corporation is part of a unitary 
business, includes the corporations or entities constituting the 
unitary business which are not in the controlled group of 
corporations as defined in section 1563.  
    (d) An "innovation center public corporation" is a 
nonprofit public corporation located at a state university in 
Minnesota that has the purpose of assisting, encouraging, 
developing, and advancing the high technology small business 
prosperity and economic welfare of the state.  
    (e) The "Internal Revenue Code" means the Internal Revenue 
Code of 1954, as amended through January 15, 1983.  
    (f) "Qualified small business" means a business an entity, 
whether organized as a corporation, partnership, or 
proprietorship, organized for profit if the entity: that 
satisfies the following conditions.  
    (1) Has The entity had 20 or fewer employees and has had 
less than $1,000,000 in gross annual receipts; in each of its 
three previous taxable years.  The number of employees for 
purposes of this clause and clause (2) shall be determined on an 
annualized full-time equivalent basis.  
    (2) The entity is not a subsidiary or an affiliate of a 
business an entity which employs more than 20 employees or has 
which had total gross receipts for the previous year of more 
than $1,000,000, computed by aggregating all of the employees 
and gross receipts of the business entities affiliated with the 
business;.  
    (3) The entity has its commercial domicile in this state;.  
    (4) Does The entity did not derive more than 20 percent of 
its gross receipts from royalties, rents, dividends, interest, 
annuities, and sales or exchanges of stock or securities; in one 
or more of the three previous taxable years.  Gross receipts 
from the sale of stock or securities shall be taken into account 
only to the extent of gains realized.  If the business was not 
in operation for an entire year at the time of application for 
certification, this clause is not satisfied if the entity 
engages in or intends to engage in a trade or business producing 
or is likely to derive more than 20 percent of its gross 
receipts from rents, royalties, dividends, interest, annuities, 
and sales or exchanges of stock or securities.  This clause does 
not apply to the first taxable year of the entity if the total 
amount of passive income for the year is less than $3,000 or to 
a sole proprietor.  
    (5) The entity is not engaged in a trade or business, the 
primary purpose of which is described in section 103(b)(6)(O) of 
the Internal Revenue Code of 1954, as amended through January 
15, 1983; and.  
    (6) Is certified by The commissioner of energy, planning 
and economic development certifies that it the entity satisfies 
the requirements of clauses (1) to (5).  An income tax return 
filed with the commissioner of energy and economic development 
in order to obtain a certification is nonpublic data or private 
data on individuals, whichever is applicable, as defined in 
section 13.02. 
     A qualified small business does not include an entity 
engaged primarily in providing licensed professional services.  
    Sec. 6.  Minnesota Statutes 1983 Supplement, section 
290.069, subdivision 2, is amended to read: 
    Subd. 2.  [TECHNOLOGY TRANSFER CREDIT.] A credit may be 
claimed against the taxes imposed by this chapter in an amount 
equal to 30 percent of the net value of the technology 
transferred to a qualified small business if the following 
conditions are satisfied:  
    (a) The commissioner certifies that the technology has the 
value claimed by the transferor taxpayer. 
    (b) The transferor taxpayer is the exclusive and undisputed 
owner of the technology at the time the transfer is made. 
    (c) Except as provided in paragraph (h), the transferor 
retains no proprietary or financial interest in the technology 
subsequent to its transfer to the qualified small business and 
no credit is claimed for the transfer of the technology in a 
prior or subsequent taxable year, except pursuant to the 
carryover provisions of subdivision 5.  
    (d) The credit shall apply only to the first $1,000,000 of 
the net value of the technology transferred during the taxable 
year.  The value of the technology shall not exceed the total 
qualified research expenses, as defined in section 290.068, 
subdivision 2, expended by the transferor to create or develop 
the technology.  For purposes of this clause paragraph, "net 
value" means the total value of the technology less any payments 
received from the transferee and less the value of any equity 
interest in the transferee received by the transferor in 
exchange for the technology.  For purposes of determining the 
value of the equity interest, the total value of the transferee 
shall be deemed to be not less than the value of the technology 
transferred, less any cash payment made to the transferor.  
    (e) The taxpayer has not deducted the value of the 
transferred property from income under any other provisions of 
this chapter, except that the costs of developing the technology 
may have been deducted as a business expense or depreciated or 
included in the computation of the research and experimental 
expenditure credit pursuant to section 290.068.  
    (f) The transferee business entity may not be a subsidiary 
or affiliate of the transferor taxpayer.  
    (g) The transferee makes a substantial investment in 
acquiring or developing the technology.  The requirements of 
this clause are satisfied if over a two-year period beginning 
not later than the date of the transfer (1) the transferee pays 
the transferor an amount equal to 20 percent of the value of the 
technology in return for acquisition of the rights to the 
technology, or if (2) the transferee expends an equivalent 
amount for equipment, materials, wages, or other direct costs to 
develop, produce, or otherwise use the technology.  The 
requirements of this paragraph may not be satisfied by granting 
the transferor an equity interest as provided by paragraph (h).  
    (h) The transferor may receive in exchange for the transfer 
of the technology an equity interest in the transferee, but this 
interest may not exceed 25 percent of the capital interest, if 
the transferee is a partnership, or 25 percent in value of the 
outstanding stock, if the transferee is a corporation.  The 
transferor's basis in the equity interest shall be reduced by 
the amount of the credits received pursuant to this 
subdivision.  The transferor may not deduct any loss realized on 
the sale or exchange of the equity interest.  
    (i) The maximum credit which is allowed for technology 
transferred during the taxable year is $300,000.  The maximum 
credit which is allowable for technology transferred during all 
taxable years to an entity or a related person to the transferee 
entity is $300,000.  A person is a related person to the entity 
if (i) the relationship would result in disallowance of losses 
under section 267 or 707(b) of the Internal Revenue Code or (ii) 
the person and the entity are members of the same controlled 
group or corporation.  
    The commissioner may require that the taxpayer obtain an 
appraisal of the value of the transferred technology by a 
reliable, expert third party.  The disclosure to a third party 
appraiser of information necessary to make an appraisal shall 
not be subject to the provisions of section 290.61.  The 
commissioner may promulgate administrative rules for appraising 
the value of transferred technology.  
    Sec. 7.  Minnesota Statutes 1983 Supplement, section 
290.069, is amended by adding a subdivision to read: 
     Subd. 2a.  [RECAPTURE; TECHNOLOGY TRANSFER CREDIT.] (a) A 
corporation which receives a tax reduction pursuant to 
subdivision 2 shall repay to the commissioner an amount of the 
tax reduction as specified in paragraph (b) if any of the 
following conditions occur within a three-year period after the 
date of transfer of the technology.  
    (1) The transferee ceases operations in Minnesota.  
    (2) The transferee becomes a subsidiary or affiliate of the 
transferor.  
    (3) The transferee sells, transfers, or otherwise disposes 
of the rights to technology.  
    (4) The transferee fails to make the necessary payments or 
expenditures required by subdivision 2, paragraph (g).  
    (5) The transferee grants an interest to the transferor in 
violation of subdivision 2, paragraph (h).  
    (b) The amount of the repayment is determined pursuant to 
the following schedule:  
Occurrence of event causing recapture     Repayment portion
Less than six months                          100 percent
Six months or more but less than 12 months    83-1/3 percent
12 months or more but less than 18 months     66-2/3 percent
18 months or more but less than 24 months     50 percent
24 months or more but less than 30 months     33-1/3 percent
30 months or more but less than 36 months     16-2/3 percent
    Sec. 8.  Minnesota Statutes 1983 Supplement, section 
290.069, subdivision 4, is amended to read: 
    Subd. 4.  [EQUITY INVESTMENT CREDIT.] (a) A credit shall be 
allowed against the tax imposed by this chapter for the taxable 
year in an amount equal to 30 percent of the net investment in 
excess of $25,000 in the equity stock of a qualified small 
business, which is organized as a corporation.  The maximum 
amount of the credit for a taxable year may not exceed $75,000.  
The credit for the taxable year is the least of 
    (1) $75,000, or 
    (2) 30 percent of the sum of the following, computed for 
the investment in each qualified small business:  
    (A) The net investment made by the taxpayer during the 
taxable year in the equity stock of the qualified small 
business, less 
    (B) $25,000; or 
    (3) 75 percent of the taxpayer's tax liability computed 
after subtraction of all nonrefundable credits.  
    (b) For purposes of this credit the following limitations 
apply:  
    (1) Equity stock means common or preferred stock in the 
qualified small business, and shall not include any security 
which provides for fixed or variable interest payments which 
would be treated as debt under section 385 of the Internal 
Revenue Code.  
    (2) The taxpayer and any related persons may not own more 
than 49 percent of the value of any class of stock.  For 
purposes of this paragraph clause, a person is a related person 
to another person if (i) the relationship between the persons 
would result in a disallowance of losses under section 267 or 
707(b) of the Internal Revenue Code of 1954 or (ii) the persons 
are members of the same controlled group of corporations.  The 
restrictions provided by this subdivision shall apply for a 
three-year period beginning on the date the stock is purchased. 
If the taxpayer or a related person acquires more than 49 
percent of the value of any class of stock after the allowance 
of a credit under this subdivision and prior to the end of the 
three-year period, the taxpayer's tax for the taxable year in 
which the credit was allowed shall be increased by the amount of 
the credit previously claimed.  
    (3) The credit shall not exceed 75 percent of the 
taxpayer's tax liability computed after the subtraction of all 
credits, other than the credit provided in this subdivision.  
"Net investment" is limited to cash or the fair market value of 
marketable securities which are transferred to the qualified 
small business in return for equity stock, less the value of any 
other property or other consideration received by the taxpayer. 
The amount of the net investment shall be reduced by any 
payments made by the qualified small business to redeem shares 
of its stock or to acquire the assets or stock of another 
business during a 24-month period beginning one year prior to 
the taxpayer's purchase of the stock in the qualified small 
business.  Marketable securities are limited to (A) obligations 
of the United States government, (B) securities of a corporation 
or other entity the stock or other securities of which are 
listed by the New York or American Stock Exchange or by the 
National Association of Securities Dealers Automated Quotation 
System, or (C) state or local government obligations, other than 
industrial development bonds as defined in section 103(b) of the 
Internal Revenue Code.  The transfer of the assets of an entity 
engaged in a trade or business as a corporation, partnership, 
association, or proprietorship to a corporation shall not 
qualify as a net investment for purposes of the credit, if the 
ownership of the transferee corporation is substantially the 
same as that of the entity.  For purposes of the preceding 
sentence, any property owned by or used directly in the 
business, pledged as collateral, or used as working capital 
shall constitute assets of the business.  
    (b) (c) If the principal place of business of the qualified 
small business is located in an enterprise zone designated 
pursuant to section 273.1312, $10,000 shall be substituted for 
$25,000 and $100,000 for $75,000 in paragraph (a).  
    (c) (d) The taxpayer's basis in the stock shall be reduced 
by the amount of the credit.  
    (e) In the case of an investment made by a small business 
corporation, having a valid election in effect under section 
1362 of the Internal Revenue Code, or by a partnership, the 
credit shall be allocated among the shareholders or partners on 
a pro rata basis and the limitations contained in paragraphs (a) 
and (c) shall apply to the small business corporation or 
partnership.  In no case shall a taxpayer be allowed a maximum 
credit in excess of that permitted by paragraph (a) or (c).  
    Sec. 9.  Minnesota Statutes 1983 Supplement, section 
290.069, is amended by adding a subdivision to read: 
     Subd. 4a.  [RECAPTURE; EQUITY INVESTMENT CREDIT.] (a) A 
taxpayer who receives a tax reduction pursuant to subdivision 4 
shall repay to the commissioner an amount of the tax reduction 
as specified in paragraph (b) if any of the following conditions 
occur within a four-year period after the date of the investment:
    (1) The taxpayer transfers, sells, or otherwise disposes of 
the stock other than transfer by the estate of a taxpayer who 
died after acquiring the stock.  
    (2) The taxpayer or a related person acquires an interest 
in the qualified small business in excess of that permitted by 
subdivision 4, clause (b)(2).  
     (3) The transferee ceases operations in Minnesota. 
    (b) The amount of the repayment is determined pursuant to 
the following schedule:  
Occurrence of event causing recapture         Repayment portion
Less than six months                              100 percent
Six months or more but less than 12 months        87-1/2 percent
12 months or more but less than 18 months         75 percent
18 months or more but less than 24 months         62-1/2 percent
24 months or more but less than 30 months         50 percent
30 months or more but less than 36 months         37-1/2 percent
36 months or more but less than 42 months         25 percent
42 months or more but less than 48 months         12-1/2 percent
     (c) If a credit was allowed for a qualified small business 
whose principal place of business was located in an enterprise 
zone and the business ceases operations in the zone within three 
years after the investment is made, the taxpayer shall file an 
amended return claiming the credit without regard to subdivision 
4, paragraph (c).  
    Sec. 10.  Minnesota Statutes 1983 Supplement, section 
290.069, is amended by adding a subdivision to read: 
    Subd. 4b.  [MULTISTATE BUSINESSES.] If a qualified small 
business is engaged in a business partly within and partly 
without the state, the credit allowable pursuant to subdivision 
2 or 4 for technology transferred to or a net investment made in 
the business must be apportioned.  The credit determined 
pursuant to subdivision 2 or 4 must be multiplied by the 
arithmetical average of the qualified small business' property 
and payrolls, determined as provided by section 290.19, 
subdivision 1, clauses (2)(a)(2) and (2)(a)(3), using data from 
the most recently available year.  After the technology is 
transferred or the investment made, the qualified small business 
shall certify to the transferor taxpayer its factors under 
section 290.19, subdivision 1, clauses (2)(a)(2) and (2)(a)(3) 
for each of the succeeding two tax years.  If the factors for 
either of these years would result in at least a 25 percent 
change in the allowable credit, the taxpayer shall file an 
amended return repaying or claiming the difference in the 
credit.  The preceding sentence does not apply if the qualified 
small business ceases operations in Minnesota and the recapture 
provisions of subdivision 2a or 4a apply.  
    Sec. 11.  Minnesota Statutes 1983 Supplement, section 
290.069, subdivision 5, is amended to read: 
    Subd. 5.  [LIMITATIONS CARRYOVER; OTHER CONDITIONS.] The 
provisions of section 290.068, subdivisions 3, clause (a); 4; 
and 5 shall apply to the sum of the credits which this section 
allows, except that no carryback shall be allowed.  The 
carryover provisions of section 290.068, subdivision 3, clause 
(b), shall apply to the sum of the credits allowed by this 
section except that the term "research credit" or "research and 
experimental expenditure credit" shall include the credits 
authorized by subdivisions 2 and 3 of this section.  If the 
amount of the allowable credit pursuant to subdivision 2 or 3 
for the taxable year exceeds the taxpayer's tax liability or if 
the limitation contained in subdivision 4, clause (a)(3) 
applies, the unused credit for the taxable year is a carryover 
to each of the succeeding five taxable years.  The entire amount 
of the unused credit must be carried to the earliest of the 
taxable years to which it may be carried.  "Tax liability" means 
the tax imposed by this chapter reduced by the sum of the 
nonrefundable credits allowed under this chapter except the 
credit allowed by section 290.068.  The credits allowed by 
subdivisions 2 and 3 shall only be available to corporations and 
banks whose tax is computed pursuant to section 290.06, 
subdivision 1. 
    The maximum limitations on the amount of credits pursuant 
to subdivisions 2 and, 3, and 4 shall be determined by 
aggregating together the credits of all the corporations in the 
controlled group of corporations with the taxpayer.  In order to 
facilitate compliance with and enforcement of this provision the 
commissioner may require the taxpayer to claim the credit on a 
combined report of the unitary business or to file a copy of the 
consolidated federal return with the state return or both.  
    Sec. 12.  Minnesota Statutes 1983 Supplement, section 
290.069, is amended by adding a subdivision to read: 
    Subd. 7.  [COMMISSIONER'S POWER TO DISALLOW CREDIT.] The 
commissioner may disallow a credit under subdivision 2 or 4 if 
he determines that the transaction giving rise to the credit was 
entered into by the parties primarily to reduce taxes and not 
primarily for an independent business or commercial purpose 
other than the reduction of taxes.  
    Sec. 13.  [TRANSITION PROVISION; FARMS.] 
    An investment made on or before June 30, 1985, in a 
corporation primarily engaged in the business of farming does 
not qualify for the equity investment credit under Minnesota 
Statutes, section 290.069.  The business of farming includes the 
activities enumerated in Minnesota Statutes, section 290.09, 
subdivision 29, paragraph (a).  The commissioner of energy and 
economic development may not certify an entity primarily engaged 
in farming as a qualified small business under Minnesota 
Statutes, section 290.069, subdivision 1, prior to July 1, 1985. 
    Sec. 14.  Minnesota Statutes 1983 Supplement, section 
290.21, subdivision 4, is amended to read: 
    Subd. 4.  (a) 85 percent of dividends received by a 
corporation during the taxable year from another corporation, 
when the corporate stock with respect to which dividends are 
paid does not constitute the stock in trade of the taxpayer or 
would not be included in the inventory of the taxpayer, or does 
not constitute property held by the taxpayer primarily for sale 
to customers in the ordinary course of his trade or business, or 
when the trade or business of the taxpayer does not consist 
principally of the holding of the stocks and the collection of 
the income and gains therefrom.  The remaining 15 percent shall 
be allowed if the recipient owns 80 percent or more of all the 
voting stock of such the other corporation, and the dividends 
were paid from income arising out of business done in this state 
by the corporation paying such dividends; but if the income out 
of which the dividends are declared was derived from business 
done within and without this state, then so much of the 
remainder shall be allowed as a deduction as the amount of the 
taxable net income of the corporation paying the dividends 
assignable or allocable to this state bears to the entire net 
income of the corporation, such rate being determined by the 
returns under this chapter of the corporation paying such 
dividends for the taxable year preceding the distribution 
thereof; the burden shall be on the taxpayer of showing that the 
amount of remainder claimed as a deduction has been received 
from income arising out of business done in this state.  
    (b) If the trade or business of the taxpayer consists 
principally of the holding of the stocks and the collection of 
the income and gains therefrom, dividends received by a 
corporation during the taxable year from another corporation, if 
the recipient owns 80 percent or more of all the voting stock of 
such the other corporation, from income arising out of business 
done in this state by the corporation paying such dividends; 
but, if the income out of which the dividends are declared was 
derived from business done within and without this state, then 
so much of the dividends shall be allowed as deduction as the 
amount of the taxable net income of the corporation paying the 
dividends assignable or allocable to this state bears to the 
entire net income of the corporation, such rate being determined 
by the returns under this chapter of the corporation paying such 
dividends for the taxable year preceding the distribution 
thereof.  The burden shall be on the taxpayer of showing that 
the amount of dividends claimed as a deduction has been received 
from income arising out of business done in this state.  
    (c) The dividend deduction provided in this subdivision 
shall be allowed only with respect to dividends that are 
included in a corporation's Minnesota taxable net income for the 
taxable year. 
    The dividend deduction provided in this subdivision does 
not apply to a dividend from a corporation which, for the 
taxable year of the corporation in which the distribution is 
made or for the next preceding taxable year of the corporation, 
is a corporation exempt from tax under section 501 of the 
Internal Revenue Code of 1954, as amended through December 31, 
1982.  
    The dividend deduction provided in this subdivision applies 
to the amount of regulated investment company dividends only to 
the extent determined under section 854(b) of the Internal 
Revenue Code of 1954, as amended through December 31, 1982.  
    (d) If dividends received by a corporation that does not 
have nexus with Minnesota under the provisions of Public Law 
86-272 are included as income on the return of an affiliated 
corporation permitted or required to file a combined report 
under section 290.34, subdivision 2, then for purposes of this 
subdivision the determination as to whether the trade or 
business of the corporation consists principally of the holding 
of stocks and the collection of income and gains therefrom shall 
be made with reference to the trade or business of the 
affiliated corporation having a nexus with Minnesota. 
    (e) Dividends received by a corporation from another 
corporation which is organized under the laws of a foreign 
country or a political subdivision of a foreign country, if the 
dividends are paid from income arising from sources without the 
United States, the commonwealth of Puerto Rico, and the 
possessions of the United States.  The deduction provided by 
this clause does not apply if the corporate stock with respect 
to which dividends are paid constitutes the stock in trade of 
the taxpayer, or would be included in the inventory of the 
taxpayer, or constitutes property held by the taxpayer primarily 
for sale to customers in the ordinary course of the taxpayer's 
trade or business, or if the trade or business of the taxpayer 
consists principally of the holding of stocks and the collection 
of the income or gains therefrom.  No dividend may be deducted 
under this clause if it is deducted under clause (a).  
    Sec. 15.  Minnesota Statutes 1982, section 290.21, is 
amended by adding a subdivision to read: 
    Subd. 8.  [FOREIGN SOURCE ROYALTIES.] (a) Rentals, fees, 
and royalties accrued or received from a foreign corporation for 
the use of or for the privilege of using outside of the United 
States patents, copyrights, secret processes and formulas, good 
will, know-how, trademarks, trade brands, franchises, and other 
like property.  Rentals, fees, or royalties deducted under this 
subdivision shall not be included in the taxpayer's 
apportionment factors under section 290.19, subdivision 1, 
clause (1)(a) or (2)(a)(1).  The preceding sentence shall not be 
construed to imply that nondeductible rentals, fees, and 
royalties from such properties are or were included in or 
excluded from the apportionment factors under any other 
provision of law.  
    (b) A corporation is allowed the deduction provided by this 
subdivision only if during the taxable year it received or 
accrued at least 80 percent of its gross income from sources as 
defined in clause (a) and from dividends received from foreign 
corporations.  The corporation's gross income for purposes of 
this clause shall be computed without regard to the requirement 
of section 290.34, subdivision 2, that a combined report be 
filed reflecting the entire income of the unitary business.  
    (c) For purposes of this subdivision, a foreign corporation 
is (i) a corporation organized under the laws of a foreign 
country or the political subdivision of a foreign country or 
(ii) a corporation which for the taxable year derives at least 
80 percent of its gross income from sources without the United 
States, the commonwealth of Puerto Rico, and the possessions of 
the United States.  A foreign corporation does not include a 
DISC as defined in section 992(a) of the Internal Revenue Code 
of 1954, as amended through December 31, 1983.  
    (d) The deduction provided in this subdivision is allowed 
only with respect to rentals, fees, and royalties that are 
included in a corporation's Minnesota taxable net income for the 
taxable year.  
    Sec. 16.  Minnesota Statutes 1982, section 462.651, 
subdivision 1, is amended to read: 
    Subdivision 1.  [GENERAL TAXES.] The governing body of a 
municipality in which any project of a redevelopment company is 
located may, by ordinance or resolution after the local approval 
as provided in subdivision 5, exempt from all local taxes so 
much up to 50 percent of the value of the property included in 
that project as which represents an increase over the assessed 
valuation of the property, both land and improvements, acquired 
for the project at the time of its original acquisition for 
redevelopment purposes.  Should such a If the governing body 
grant such a tax grants an exemption, the project shall, to the 
extent of the municipal exemption and during the period thereof, 
be exempt from any and all state, county, and school district ad 
valorem property taxes.  The tax exemption specified herein 
shall not operate for a period of more than 25 ten years, 
commencing in each instance from the date on which the benefits 
of such exemption first become available and effective.  There 
shall be No exemption may be granted from payment of special 
assessments or from the payment of inspection, supervision, and 
auditing fees of the commissioner of energy, planning and 
development or the authority.  
    Sec. 17.  Minnesota Statutes 1982, section 462.651, is 
amended by adding a subdivision to read: 
    Subd. 5.  [COMMENT BY COUNTY BOARD.] Before approving a tax 
exemption pursuant to this section, the governing body of the 
municipality must provide an opportunity to the members of the 
county board of commissioners of the county in which the project 
is proposed to be located and the members of the school board of 
the school district in which the project is proposed to be 
located to meet with the governing body.  The governing body 
must present to the members of those boards its estimate of the 
fiscal impact of the proposed property tax exemption.  The tax 
exemption may not be approved by the governing body until the 
county board of commissioners has presented its written comment 
on the proposal to the governing body, or 30 days have passed 
from the date of the transmittal by the governing body to the 
board of the information on the fiscal impact, whichever occurs 
first.  
     Sec. 18.  [ALLOCATION TO DULUTH.] 
     The city of Duluth is allocated $6,610,940 of the tax 
reductions permitted by section 273.1314, subdivision 8, 
pursuant to its designation under section 273.1312, subdivision 
4, paragraph (c), clause (3).  
    Sec. 19.  [PLANT CONSTRUCTION AND EXPANSION GRANTS.] 
    Subdivision 1.  [APPROPRIATION.] The sum of $3,400,000 is 
appropriated from the general fund to the commissioner of energy 
and economic development for the purpose of providing grants to 
industrial operations that are substantially renovating their 
facilities, provided that the renovation enables the operation 
to continue to provide a substantial portion of the industrial 
employment of the community in which it is located.  The grant 
is intended to help meet the cost of property tax increases due 
to plant expansion or renovation and the cost of sales tax or 
equipment purchased to replace obsolete, inadequate, or 
inefficient equipment in the plant.  
    Of the sum appropriated, up to $1,000,000 may be granted to 
a meat processing and packing facility that, at the time when 
renovation or expansion of the facility begins, provides over 20 
percent of the industrial employment in the city.  The entire 
amount of this grant may be paid on or after July 1, 1984.  
     Up to $2,400,000 may be granted to a manufacturer of 
internal combustion engines, generators, electrical generating 
sets, and switchgear that, at the time when renovation or 
expansion of the facility begins, provides over ten percent of 
the industrial employment in the city.  This grant is to be 
disbursed as follows.  The recipient must annually certify to 
the commissioner the following amounts paid during the year: (a) 
the additional property taxes paid as a result of the expansion 
and (b) one-third of the sales tax paid on replacement capital 
equipment that does not qualify for the four percent sales tax 
rate under Minnesota Statutes, section 297A.02, subdivision 2. 
The commissioner shall pay the lesser of the amount certified 
for the year or $480,000.  If in a year the amount certified is 
less than $480,000, the excess shall carryforward and may be 
paid in a succeeding year.  The commissioner may not pay an 
amount in excess of that certified. The appropriation for this 
grant does not cancel.  
    An additional sum of $100,000 is appropriated to the 
commissioner of energy and economic development to provide a 
grant to a city which is selected as the site for a foreign 
manufacturing development facility.  This grant is not subject 
to the limitations contained in the first paragraph of this 
subdivision.  A foreign manufacturing development project is a 
production and office facility financed, in whole or part, by an 
agency of a foreign government or a foreign corporation for the 
purpose of testing and developing the expertise of foreign firms 
in manufacturing products in the United States.  The city may 
use the grant moneys to provide assistance to the foreign 
manufacturing development facility in the manner it determines 
appropriate.  
    Designation of grant recipients is not subject to the 
provisions of chapter 14.  
    Subd. 2.  [RECAPTURE.] A business that receives a grant 
pursuant to subdivision 1 shall repay to the commissioner of 
energy and economic development a portion of the grant if, 
within five years of the receipt of the grant, the commissioner 
determines that (1) the recipient has failed to renovate or 
expand its facility according to the schedule submitted pursuant 
to subdivision 1 and that the recipient is unlikely to resume 
the renovation or expansion activity according to a schedule 
that is reasonably similar in result to the original schedule, 
allowing for some extension of time, not to exceed 20 percent of 
the time originally scheduled, for accomplishment of the 
renovation or expansion, or (2) the recipient has ceased 
operation of the facility.  
    The amount of the repayment is determined according to the 
following schedule:  
  Occurrence of event causing recapture      Repayment portion 
Less than one year                              100 percent
One year or more but less than two years         80 percent
Two years or more but less than three years      60 percent
Three years or more but less than four years     40 percent
Four years or more but less than five years      20 percent
    Sec. 20.  [REPEALER.] 
    Minnesota Statutes 1982, section 462.651, subdivision 2, 
and Minnesota Statutes 1983 Supplement, section 462.651, 
subdivision 3 are repealed.  
    Sec. 21.  [EFFECTIVE DATE; APPROPRIATION.] 
    Sections 1 to 4 are effective the day following final 
enactment.  Sections 5 to 13 are effective for taxable years 
beginning after December 31, 1983, except that they shall not 
apply to qualified small businesses that were certified by the 
commissioner of energy and economic development prior to April 
10, 1984.  Section 14 is effective for taxable years beginning 
after June 30, 1985.  Section 15 is effective for taxable years 
beginning after December 31, 1984.  Sections 16, 17, and 20 are 
effective for exemptions approved after July 1, 1984.  Section 
18 is effective July 1, 1984. 

                               ARTICLE 6  

                                 SALES 
    Section 1.  Minnesota Statutes 1982, section 297A.01, 
subdivision 15, is amended to read: 
    Subd. 15.  "Farm machinery" means new or used machinery, 
equipment, implements, accessories and contrivances used 
directly and principally in the production for sale, but not 
including the processing, of livestock, dairy animals, dairy 
products, poultry and poultry products, fruits, vegetables, 
forage, grains and bees and apiary products.  "Farm machinery"  
shall include machinery for the preparation, seeding or 
cultivation of soil for growing agricultural crops, harvesting 
and threshing of agricultural products, and certain machinery 
for dairy, livestock and poultry farms, together with barn 
cleaners, milking systems, grain dryers, automatic feeding 
systems and similar installations.  Irrigation equipment sold 
for exclusively agricultural use, including pumps, pipe 
fittings, valves, sprinklers and other equipment necessary to 
the operation of an irrigation system when sold as part of an 
irrigation system, except irrigation equipment which is situated 
below ground and considered to be a part of the real property, 
shall be included in the definition of farm machinery.  Logging 
equipment, except chain saws, shall be included in the 
definition of farm machinery.  Repair or replacement parts for 
farm machinery shall not be included in the definition of farm 
machinery.  
    Tools, shop equipment, grain bins, feed bunks, fencing 
material, communication equipment and other farm supplies shall 
not be considered to be farm machinery.  "Farm machinery" does 
not include motor vehicles taxed under chapter 297B, 
snowmobiles, snow blowers, lawn mowers, garden-type tractors or 
garden tillers and the repair and replacement parts for those 
vehicles and machines. 
    Sec. 2.  Minnesota Statutes 1982, section 297A.01, is 
amended by adding a subdivision to read: 
    Subd. 16.  [CAPITAL EQUIPMENT.] Capital equipment means 
machinery and equipment and the materials and supplies necessary 
to construct or install the machinery or equipment.  To qualify 
under this definition the capital equipment must be used by the 
purchaser or lessee for manufacturing, fabricating, or refining 
a product to be sold at retail and must be used for the 
establishment of a new or the physical expansion of an existing 
manufacturing, fabricating, or refining facility in the state. 
Capital equipment does not include (1) machinery or equipment 
purchased or leased to replace machinery or equipment performing 
substantially the same function in an existing facility, (2) 
repair or replacement parts, or (3) machinery or equipment used 
to extract, receive, or store raw materials.  
    Sec. 3.  Minnesota Statutes 1982, section 297A.01, is 
amended by adding a subdivision to read: 
    Subd. 17.  [SPECIAL TOOLING.] Special tooling means tools, 
dies, jigs, patterns, gauges and other special tools which have 
value and use only for the buyer and for the use for which it is 
made.  An item has use or value only to the buyer if the item is 
not standard enough to be stocked or ordered from a catalog or 
other sales literature, but must be produced in accordance with 
special requirements peculiar to the buyer and not common to 
someone else whose conditions for possible use of the material 
are reasonably similar to the buyer's.  
    Sec. 4.  Minnesota Statutes 1983 Supplement, section 
297A.02, subdivision 2, is amended to read: 
    Subd. 2.  [FARM MACHINERY AND EQUIPMENT.] Notwithstanding 
the provisions of subdivision 1, the rate of the excise tax 
imposed upon sales of farm machinery shall be, special tooling, 
and capital equipment is four percent.  
    Sec. 5.  Minnesota Statutes 1983 Supplement, section 
297A.02, is amended by adding a subdivision to read: 
    Subd. 4.  [MANUFACTURED HOUSING.] Notwithstanding the 
provisions of subdivision 1, for sales at retail of manufactured 
homes used for residential purposes the excise tax is imposed 
upon 65 percent of the sales price of the home.  
    Sec. 6.  Minnesota Statutes 1983 Supplement, section 
297A.14, is amended to read: 
    297A.14 [USING, STORING OR CONSUMING TANGIBLE PERSONAL 
PROPERTY; ADMISSIONS; UTILITIES.] 
    For the privilege of using, storing or consuming in 
Minnesota tangible personal property, tickets or admissions to 
places of amusement and athletic events, electricity, gas, and 
local exchange telephone service purchased for use, storage or 
consumption in this state, there a use tax is imposed on every 
person in this state a use tax at the rate of six percent of the 
sales price of sales at retail of any of the aforementioned 
items unless the tax imposed by section 297A.02 was paid on the 
sales price.  Notwithstanding the provisions of this paragraph 
the preceding sentence, the rate of the use tax imposed upon the 
sales price of sales of farm machinery shall be, special 
tooling, and capital equipment is four percent.  
    A motor vehicle subject to tax under this section shall be 
taxed at its fair market value at the time of transport into 
Minnesota if the motor vehicle was acquired more than three 
months prior to its transport into this state. 
    Sec. 7.  Minnesota Statutes 1982, section 297A.15, is 
amended by adding a subdivision to read: 
    Subd. 5.  [REFUND; APPROPRIATION.] Notwithstanding the 
provisions of section 297A.02, subdivision 2, the tax on sales 
of capital equipment shall be imposed and collected as if the 
rate under section 297A.02, subdivision 1, applied.  Upon 
application by the purchaser, on forms prescribed by the 
commissioner, a refund equal to the reduction in the tax due as 
a result of the application of the rates under section 297A.02, 
subdivision 2, shall be paid to the purchaser.  The application 
shall include information necessary for the commissioner 
initially to verify that the purchases qualified as capital 
equipment under section 297A.02, subdivision 2.  No more than 
two applications for refunds may be filed under this subdivision 
in a calendar year.  Unless otherwise specifically provided by 
this subdivision, the provisions of section 297A.34 apply to the 
refunds payable under this subdivision.  There is annually 
appropriated to the commissioner of revenue the amount required 
to make the refunds.  
    Sec. 8.  Minnesota Statutes 1983 Supplement, section 
297A.25, subdivision 1, is amended to read: 
    Subdivision 1.  The following are specifically exempted 
from the taxes imposed by sections 297A.01 to 297A.44: 
    (a) The gross receipts from the sale of food products 
including but not limited to cereal and cereal products, butter, 
cheese, milk and milk products, oleomargarine, meat and meat 
products, fish and fish products, eggs and egg products, 
vegetables and vegetable products, fruit and fruit products, 
spices and salt, sugar and sugar products, coffee and coffee 
substitutes, tea, cocoa and cocoa products, and food products 
which are not taxable pursuant to section 297A.01, subdivision 
3, clause (c) and which are sold by a retailer, organized as a 
nonprofit corporation or association, within a place located on 
property owned by the state or an agency or instrumentality of 
the state, the entrance to which is subject to an admission 
charge.  This exemption does not include the following:  
    (i) candy and candy products, except when sold for 
fundraising purposes by a nonprofit organization that provides 
educational and social activities for young people primarily 
aged 18 and under; 
    (ii) carbonated beverages, beverages commonly referred to 
as soft drinks containing less than 15 percent fruit juice, or 
bottled water other than noncarbonated and noneffervescent 
bottled water sold in individual containers of one-half gallon 
or more in size; 
    (b) The gross receipts from the sale of prescribed drugs 
and medicine intended for use, internal or external, in the 
cure, mitigation, treatment or prevention of illness or disease 
in human beings and products consumed by humans for the 
preservation of health, including prescription glasses, 
therapeutic and prosthetic devices, but not including cosmetics 
or toilet articles notwithstanding the presence of medicinal 
ingredients therein; 
      (c) The gross receipts from the sale of and the storage, 
use or other consumption in Minnesota of tangible personal 
property, tickets, or admissions, electricity, gas, or local 
exchange telephone service, which under the Constitution or laws 
of the United States or under the Constitution of Minnesota, the 
state of Minnesota is prohibited from taxing; 
      (d) The gross receipts from the sale of tangible personal 
property (i) which, without intermediate use, is shipped or 
transported outside Minnesota by the purchaser and thereafter 
used in a trade or business or is stored, processed, fabricated 
or manufactured into, attached to or incorporated into other 
tangible personal property transported or shipped outside 
Minnesota and thereafter used in a trade or business outside 
Minnesota, and which is not thereafter returned to a point 
within Minnesota, except in the course of interstate commerce 
(storage shall not constitute intermediate use); provided that 
the property is not subject to tax in that state or country to 
which it is transported for storage or use, or, if subject to 
tax in that other state, that state allows a similar exemption 
for property purchased therein and transported to Minnesota for 
use in this state; except that sales of tangible personal 
property that is shipped or transported for use outside 
Minnesota shall be taxed at the rate of the use tax imposed by 
the state to which the property is shipped or transported, 
unless that state has no use tax, in which case the sale shall 
be taxed at the rate generally imposed by this state; and 
provided further that sales of tangible personal property to be 
used in other states or countries as part of a maintenance 
contract shall be specifically exempt; or (ii) which the seller 
delivers to a common carrier for delivery outside Minnesota, 
places in the United States mail or parcel post directed to the 
purchaser outside Minnesota, or delivers to the purchaser 
outside Minnesota by means of the seller's own delivery 
vehicles, and which is not thereafter returned to a point within 
Minnesota, except in the course of interstate commerce; 
     (e) The gross receipts from the sale of packing materials 
used to pack and ship household goods, the ultimate destination 
of which is outside the state of Minnesota and which are not 
thereafter returned to a point within Minnesota, except in the 
course of interstate commerce; 
     (f) The gross receipts from the sale of and storage, use or 
consumption of petroleum products upon which a tax has been 
imposed under the provisions of chapter 296, whether or not any 
part of said tax may be subsequently refunded; 
     (g) The gross receipts from the sale of clothing and 
wearing apparel except the following: 
     (i) all articles commonly or commercially known as jewelry, 
whether real or imitation; pearls, precious and semi-precious 
stones, and imitations thereof; articles made of, or ornamented, 
mounted or fitted with precious metals or imitations thereof; 
watches; clocks; cases and movements for watches and clocks; 
gold, gold-plated, silver, or sterling flatware or hollow ware 
and silver-plated hollow ware; opera glasses; lorgnettes; marine 
glasses; field glasses and binoculars. 
      (ii) articles made of fur on the hide or pelt, and articles 
of which such fur is the component material or chief value, but 
only if such value is more than three times the value of the 
next most valuable component material. 
      (iii) perfume, essences, extracts, toilet waters, 
cosmetics, petroleum jellies, hair oils, pomades, hair 
dressings, hair restoratives, hair dyes, aromatic cachous and 
toilet powders.  The tax imposed by this act shall not apply to 
lotion, oil, powder, or other article intended to be used or 
applied only in the case of babies. 
      (iv) trunks, valises, traveling bags, suitcases, satchels, 
overnight bags, hat boxes for use by travelers, beach bags, 
bathing suit bags, brief cases made of leather or imitation 
leather, salesmen's sample and display cases, purses, handbags, 
pocketbooks, wallets, billfolds, card, pass, and key cases and 
toilet cases. 
      (h) The gross receipts from the sale of and the storage, 
use, or consumption of all materials, including chemicals, 
fuels, petroleum products, lubricants, packaging materials, 
including returnable containers used in packaging food and 
beverage products, feeds, seeds, fertilizers, electricity, gas 
and steam, used or consumed in agricultural or industrial 
production of personal property intended to be sold ultimately 
at retail, whether or not the item so used becomes an ingredient 
or constituent part of the property produced.  Such production 
shall include, but is not limited to, research, development, 
design or production of any tangible personal property, 
manufacturing, processing (other than by restaurants and 
consumers) of agricultural products whether vegetable or animal, 
commercial fishing, refining, smelting, reducing, brewing, 
distilling, printing, mining, quarrying, lumbering, generating 
electricity and the production of road building materials.  Such 
production shall not include painting, cleaning, repairing or 
similar processing of property except as part of the original 
manufacturing process.  Machinery, equipment, implements, tools, 
accessories, appliances, contrivances, furniture and fixtures, 
used in such production and fuel, electricity, gas or steam used 
for space heating or lighting, are not included within this 
exemption; however, accessory tools, equipment and other short 
lived items, which are separate detachable units used in 
producing a direct effect upon the product, where such items 
have an ordinary useful life of less than 12 months, are 
included within the exemption provided herein; 
    (i) The gross receipts from the sale of and storage, use or 
other consumption in Minnesota of tangible personal property 
(except as provided in section 297A.14) which is used or 
consumed in producing any publication regularly issued at 
average intervals not exceeding three months, and any such 
publication.  For purposes of this subsection, "publication" as 
used herein shall include, without limiting the foregoing, a 
legal newspaper as defined by Minnesota Statutes 1965, section 
331.02, and any supplements or enclosures with or part of said 
newspaper; and the gross receipts of any advertising contained 
therein or therewith shall be exempt.  For this purpose, 
advertising in any such publication shall be deemed to be a 
service and not tangible personal property, and persons or their 
agents who publish or sell such newspapers shall be deemed to be 
engaging in a service with respect to gross receipts realized 
from such newsgathering or publishing activities by them, 
including the sale of advertising.  The term "publication" shall 
not include magazines and periodicals sold over the counter.  
Machinery, equipment, implements, tools, accessories, 
appliances, contrivances, furniture and fixtures used in such 
publication and fuel, electricity, gas or steam used for space 
heating or lighting, are not exempt; 
     (j) The gross receipts from all sales, including sales in 
which title is retained by a seller or a vendor or is assigned 
to a third party under an installment sale or lease purchase 
agreement under section 465.71, of tangible personal property 
to, and all storage, use or consumption of such property by, the 
United States and its agencies and instrumentalities or a state 
and its agencies, instrumentalities and political subdivisions. 
Sales exempted by this clause include sales pursuant to section 
297A.01, subdivision 3, clauses (d) and (f).  This exemption 
shall not apply to building, construction or reconstruction 
materials purchased by a contractor or a subcontractor as a part 
of a lump-sum contract or similar type of contract with a 
guaranteed maximum price covering both labor and materials for 
use in the construction, alteration or repair of a building or 
facility.  This exemption does not apply to construction 
materials purchased by tax exempt entities or their contractors 
to be used in constructing buildings or facilities which will 
not be used principally by the tax exempt entities; 
     (k) The gross receipts from the isolated or occasional sale 
of tangible personal property in Minnesota not made in the 
normal course of business of selling that kind of property, and 
the storage, use, or consumption of property acquired as a 
result of such a sale.  For purposes of this clause, sales by a 
nonprofit organization shall be deemed to be "isolated or 
occasional" if they occur at sale events that have a duration of 
three or fewer consecutive days.  The granting of the privilege 
of admission to places of amusement and the privilege of use of 
amusement devices by a nonprofit organization at an isolated or 
occasional event conducted on property owned or leased for a 
continuous period of more than 30 days by the nonprofit 
organization are also exempt.  The exemption provided for 
isolated sales of tangible personal property and of the granting 
of admissions or the privilege of use of amusement devices by 
nonprofit organizations pursuant to this clause shall be 
available only if the sum of the days on which the organization 
and any subsidiary nonprofit organization sponsored by it that 
does not have a separate sales tax exemption permit conduct 
sales of tangible personal property, plus the days with respect 
to which the organization charges for the use of amusement 
devices or admission to places of amusement, does not exceed 
eight days in a calendar year.  For purposes of this clause, a 
"nonprofit organization" means any corporation, society, 
association, foundation, or institution organized and operated 
exclusively for charitable, religious, or educational purposes, 
no part of the net earnings of which inures to the benefit of a 
private individual; 
     (l) The gross receipts from sales of rolling stock and the 
storage, use or other consumption of such property by railroads, 
freight line companies, sleeping car companies and express 
companies taxed on the gross earnings basis in lieu of ad 
valorem taxes.  For purposes of this clause "rolling stock" is 
defined as the portable or moving apparatus and machinery of any 
such company which moves on the road, and includes, but is not 
limited to, engines, cars, tenders, coaches, sleeping cars and 
parts necessary for the repair and maintenance of such rolling 
stock. 
     (m) The gross receipts from sales of airflight equipment 
and the storage, use or other consumption of such property by 
airline companies taxed under the provisions of sections 270.071 
to 270.079.  For purposes of this clause, "airflight equipment" 
includes airplanes and parts necessary for the repair and 
maintenance of such airflight equipment, and flight simulators. 
     (n) The gross receipts from the sale of telephone central 
office telephone equipment used in furnishing intrastate and 
interstate telephone service to the public. 
      (o) The gross receipts from the sale of and the storage, 
use or other consumption by persons taxed under the in lieu 
provisions of chapter 298, of mill liners, grinding rods and 
grinding balls which are substantially consumed in the 
production of taconite, the material of which primarily is added 
to and becomes a part of the material being processed. 
     (p) The gross receipts from the sale of tangible personal 
property to, and the storage, use or other consumption of such 
property by, any corporation, society, association, foundation, 
or institution organized and operated exclusively for 
charitable, religious or educational purposes if the property 
purchased is to be used in the performance of charitable, 
religious or educational functions, or any senior citizen group 
or association of groups that in general limits membership to 
persons age 55 or older and is organized and operated 
exclusively for pleasure, recreation and other nonprofit 
purposes, no part of the net earnings of which inures to the 
benefit of any private shareholders.  Sales exempted by this 
clause include sales pursuant to section 297A.01, subdivision 3, 
clauses (d) and (f).  This exemption shall not apply to 
building, construction or reconstruction materials purchased by 
a contractor or a subcontractor as a part of a lump-sum contract 
or similar type of contract with a guaranteed maximum price 
covering both labor and materials for use in the construction, 
alteration or repair of a building or facility.  This exemption 
does not apply to construction materials purchased by tax exempt 
entities or their contractors to be used in constructing 
buildings or facilities which will not be used principally by 
the tax exempt entities; 
     (q) The gross receipts from the sale of caskets and burial 
vaults; 
     (r) The gross receipts from the sale of an automobile or 
other conveyance if the purchaser is assisted by a grant from 
the United States in accordance with 38 United States Code, 
section 1901, as amended. 
      (s) The gross receipts from the sale to the licensed 
aircraft dealer of an aircraft for which a commercial use permit 
has been issued pursuant to section 360.654, if the aircraft is 
resold while the permit is in effect. 
      (t) The gross receipts from the sale of building materials 
to be used in the construction or remodeling of a residence when 
the construction or remodeling is financed in whole or in part 
by the United States in accordance with 38 United States Code, 
sections 801 to 805, as amended.  This exemption shall not be 
effective at time of sale of the materials to contractors, 
subcontractors, builders or owners, but shall be applicable only 
upon a claim for refund to the commissioner of revenue filed by 
recipients of the benefits provided in title 38 United States 
Code, chapter 21, as amended.  The commissioner shall provide by 
regulation for the refund of taxes paid on sales exempt in 
accordance with this paragraph. 
      (u) The gross receipts from the sale of textbooks which are 
prescribed for use in conjunction with a course of study in a 
public or private school, college, university and business or 
trade school to students who are regularly enrolled at such 
institutions.  For purposes of this clause a "public school" is 
defined as one that furnishes course of study, enrollment and 
staff that meets standards of the state board of education and a 
private school is one which under the standards of the state 
board of education, provides an education substantially 
equivalent to that furnished at a public school.  Business and 
trade schools shall mean such schools licensed pursuant to 
section 141.25. 
    (v) The gross receipts from the sale of and the storage of 
material designed to advertise and promote the sale of 
merchandise or services, which material is purchased and stored 
for the purpose of subsequently shipping or otherwise 
transferring outside the state by the purchaser for use 
thereafter solely outside the state of Minnesota. 
    (w) The gross receipt from the sale of residential heating 
fuels in the following manner: 
    (i) all fuel oil, coal, wood, steam, hot water, propane 
gas, and L.P.  gas sold to residential customers for residential 
use; 
    (ii) natural gas sold for residential use to customers who 
are metered and billed as residential users and who use natural 
gas for their primary source of residential heat, for the 
billing months of November, December, January, February, March 
and April; 
    (iii) electricity sold for residential use to customers who 
are metered and billed as residential users and who use 
electricity for their primary source of residential heat, for 
the billing months of November, December, January, February, 
March and April. 
    (x) The gross receipts from the sale or use of tickets or 
admissions to the premises of or events sponsored by an 
association, corporation or other group of persons which 
provides an opportunity for citizens of the state to participate 
in the creation, performance or appreciation of the arts and 
which qualifies as a tax-exempt organization within the meaning 
of Minnesota Statutes 1980, section 290.05, subdivision 1, 
clause (i). 
     (y) The gross receipts from either the sales to or the 
storage, use or consumption of tangible personal property by an 
organization of military service veterans or an auxiliary unit 
of an organization of military service veterans, provided that: 
     (i) the organization or auxiliary unit is organized within 
the state of Minnesota and is exempt from federal taxation 
pursuant to section 501(c), clause (19), of the Internal Revenue 
Code as amended through December 31, 1982; and 
     (ii) the tangible personal property which is sold to or 
stored, used or consumed by the organization or auxiliary unit 
is for charitable, civic, educational, or nonprofit uses and not 
for social, recreational, pleasure or profit uses. 
     (z) The gross receipts from the sale of sanitary napkins, 
tampons, or similar items used for feminine hygiene. 
    (aa) The gross receipts from the sale of a manufactured 
home, as defined in section 327.31, subdivision 6, to be used by 
the purchaser for residential purposes, unless the sale is the 
first retail sale of the manufactured home in this state.  
    Sec. 9.  Minnesota Statutes 1983 Supplement, section 
297B.03, is amended to read: 
    297B.03 [EXEMPTIONS.] 
    There is specifically exempted from the provisions of this 
chapter and from computation of the amount of tax imposed by it 
the following: 
    (1) Purchase or use, including use under a lease purchase 
agreement or installment sales contract made pursuant to section 
465.71, of any motor vehicle by any person described in and 
subject to the conditions provided in section 297A.25, 
subdivision 1, clauses (j), (p) and (r). 
    (2) Purchase or use of any motor vehicle by any person who 
was a resident of another state at the time of the purchase and 
who subsequently becomes a resident of Minnesota, provided the 
purchase occurred more than 60 days prior to the date such 
person moved his residence to the state of Minnesota. 
    (3) Purchase or use of any motor vehicle by any person 
making a valid election to be taxed under the provisions of 
section 297A.211. 
    (4) Purchase or use of any motor vehicle previously 
registered in the state of Minnesota by any corporation or 
partnership when such transfer constitutes a transfer within the 
meaning of sections 351 or 721 of the Internal Revenue Code of 
1954, as amended through December 31, 1974. 
    (5) Purchase or use of any vehicle owned by a resident of 
another state and leased to a Minnesota based private or for 
hire carrier for regular use in the transportation of persons or 
property in interstate commerce provided the vehicle is titled 
in the state of the owner or secured party, and that state does 
not impose a sales or motor vehicle excise tax on motor vehicles 
used in interstate commerce.  
    Sec. 10.  Minnesota Statutes 1982, section 297B.035, 
subdivision 3, is amended to read: 
    Subd. 3.  Motor vehicles sold by a new motor vehicle dealer 
in contravention of section 168.27, subdivision 10, clause 
(1)(b) shall not be considered to have been acquired or 
purchased for resale in the ordinary or regular course of 
business for the purposes of this chapter, and the dealer shall 
be required to pay the excise tax due on the purchase of those 
vehicles.  The sale by a lessor of a new motor vehicle under 
lease within 120 days of the commencement of the lease is deemed 
a sale in contravention of section 168.27, subdivision 10, 
clause (1)(b) unless the lessor holds a valid contract or 
franchise with the manufacturer or distributor of the vehicle.  
    Sec. 11.  [EFFECTIVE DATE.] 
    Section 5 and the provision in section 8, clause (aa), 
exempting certain sales of manufactured homes are effective 
January 1, 1985.  Section 1, the rest of section 8, and section 
10 are effective for sales after June 30, 1984.  Sections 2 to 
4, 6, and 7 are effective for sales made after June 30, 1984, 
and also apply to purchases of capital equipment and special 
tooling made after May 1, 1984, but not placed in service until 
after June 30, 1984. 

                                ARTICLE 7
TACONITE
    Section 1.  Minnesota Statutes 1983 Supplement, section 
273.13, subdivision 6, is amended to read: 
    Subd. 6.  [CLASS 3B.] Agricultural land, except as provided 
by class 1 hereof, and which is used for the purposes of a 
homestead shall constitute class 3b and shall be valued and 
assessed as follows:  the first $60,000 of market value shall be 
valued and assessed at 14 percent; the remaining market value 
shall be valued and assessed at 19 percent.  The maximum amount 
of the market value of the homestead bracket subject to the 14 
percent rate shall be adjusted by the commissioner of revenue as 
provided in section 273.1311.  The property tax to be paid on 
class 3b property as otherwise determined by law less any 
reduction received pursuant to sections 124.2137, 273.123, 
273.135, and 473H.10 shall be reduced by 54 percent of the tax; 
provided that the amount of the reduction shall not exceed $650. 
Noncontiguous land shall constitute class 3b only if the 
homestead is classified as class 3b and the detached land is 
located in the same township or city or not farther than two 
townships or cities or combination thereof from the homestead.  
The first $12,000 market value of each tract of real estate 
which is rural in character and devoted or adaptable to rural 
but not necessarily agricultural use, used for the purpose of a 
homestead shall be exempt from taxation for state purposes; 
except as specifically provided otherwise by law. 
     Agricultural land as used herein, and in section 124.2137, 
shall mean contiguous acreage of ten acres or more, primarily 
used during the preceding year for agricultural purposes.  
Agricultural use may include pasture, timber, waste, unusable 
wild land and land included in federal farm programs. 
     Real estate of less than ten acres used principally for 
raising poultry, livestock, fruit, vegetables or other 
agricultural products, shall be considered as agricultural land, 
if it is not used primarily for residential purposes. 
     The assessor shall determine and list separately on his 
records the market value of the homestead dwelling and the one 
acre of land on which that dwelling is located.  If any farm 
buildings or structures are located on this homesteaded acre of 
land, their market value shall not be included in this separate 
determination. 
    Sec. 2.  Minnesota Statutes 1983 Supplement, section 
273.13, subdivision 7, is amended to read: 
    Subd. 7.  [CLASS 3C, 3CC.] All other real estate and class 
2a property, except as provided by classes 1 and 3cc, which is 
used for the purposes of a homestead, shall constitute class 3c, 
and shall be valued and assessed as follows:  the first $30,000 
of market value shall be valued and assessed at 17 percent; the 
next $30,000 of market value shall be valued and assessed at 19 
percent; and the remaining market value shall be valued and 
assessed at 30 percent.  The maximum amounts of the market value 
of the homestead brackets subject to the 17 percent and 19 
percent rates shall be adjusted by the commissioner of revenue 
as provided in section 273.1311.  The property tax to be paid on 
class 3c property as otherwise determined by law, less any 
reduction received pursuant to sections 273.123, 273.135, and 
473H.10 shall be reduced by 54 percent of the tax imposed on the 
first $67,000 of market value; provided that the amount of the 
reduction shall not exceed $650.  The first $12,000 market value 
of each tract of such real estate used for the purposes of a 
homestead shall be exempt from taxation for state purposes; 
except as specifically provided otherwise by law. 
    Class 3cc property shall include real estate or 
manufactured homes used for the purposes of a homestead by (a) 
any blind person, if the blind person is the owner thereof or if 
the blind person and his or her spouse are the sole owners 
thereof; or (b) any person (hereinafter referred to as veteran) 
who:  (1) served in the active military or naval service of the 
United States and (2) is entitled to compensation under the laws 
and regulations of the United States for permanent and total 
service-connected disability due to the loss, or loss of use, by 
reason of amputation, ankylosis, progressive muscular 
dystrophies, or paralysis, of both lower extremities, such as to 
preclude motion without the aid of braces, crutches, canes, or a 
wheelchair, and (3) with assistance by the administration of 
veterans affairs has acquired a special housing unit with 
special fixtures or movable facilities made necessary by the 
nature of the veteran's disability, or the surviving spouse of 
the deceased veteran for as long as the surviving spouse retains 
the special housing unit as his or her homestead; or (c) any 
person who:  (1) is permanently and totally disabled and (2) 
receives 90 percent or more of his total income from (i) aid 
from any state as a result of that disability, or (ii) 
supplemental security income for the disabled, or (iii) workers' 
compensation based on a finding of total and permanent 
disability, or (iv) social security disability, including the 
amount of a disability insurance benefit which is converted to 
an old age insurance benefit and any subsequent cost of living 
increases, or (v) aid under the Federal Railroad Retirement Act 
of 1937, 45 United States Code Annotated, Section 228b(a)5, or 
(vi) a pension from any local government retirement fund located 
in the state of Minnesota as a result of that disability.  
Property shall be classified and assessed as class 3cc only if 
the commissioner of revenue certifies to the assessor that the 
owner of the property satisfies the requirements of this 
subdivision.  Class 3cc property shall be valued and assessed as 
follows:  in the case of agricultural land, including a 
manufactured home, used for a homestead, the first $30,000 of 
market value shall be valued and assessed at five percent, the 
next $30,000 of market value shall be valued and assessed at 14 
percent, and the remaining market value shall be valued and 
assessed at 19 percent; and in the case of all other real estate 
and manufactured homes, the first $30,000 of market value shall 
be valued and assessed at five percent, the next $30,000 of 
market value shall be valued and assessed at 19 percent, and the 
remaining market value shall be valued and assessed at 30 
percent.  In the case of agricultural land including a 
manufactured home used for purposes of a homestead, the 
commissioner of revenue shall adjust, as provided in section 
273.1311, the maximum amount of the market value of the 
homestead brackets subject to the five percent and 14 percent 
rates; and for all other real estate and manufactured homes, the 
commissioner of revenue shall adjust, as provided in section 
273.1311, the maximum amount of the market value of the 
homestead brackets subject to the five percent and 19 percent 
rates.  Permanently and totally disabled for the purpose of this 
subdivision means a condition which is permanent in nature and 
totally incapacitates the person from working at an occupation 
which brings him an income.  The property tax to be paid on 
class 3cc property as otherwise determined by law, less any 
reduction received pursuant to section 273.135 shall be reduced 
by 54 percent of the tax imposed on the first $67,000 of market 
value; provided that the amount of the reduction shall not 
exceed $650. 
    For purposes of this subdivision, homestead property which 
qualifies for the classification ratios and credits provided in 
this subdivision shall include property which is used for 
purposes of the homestead but is separated from the homestead by 
a road, street, lot, waterway, or other similar intervening 
property.  The term "used for purposes of the homestead" shall 
include but not be limited to uses for gardens, garages, or 
other outbuildings commonly associated with a homestead, but 
shall not include vacant land held primarily for future 
development.  In order to receive homestead treatment for the 
noncontiguous property, the owner shall apply for it to the 
assessor by July 1 of 1983 or the year when the treatment is 
initially sought.  After initial qualification for the homestead 
treatment, additional applications for subsequent years are not 
required.  
    Sec. 3.  Minnesota Statutes 1982, section 273.135, 
subdivision 2, is amended to read:  
    Subd. 2.  The amount of the reduction authorized by 
subdivision 1 shall be 
    (a) in the case of property located within the boundaries 
of a municipality which meets the qualifications prescribed in 
section 273.134, 66 percent of the amount of such net tax up to 
the taconite breakpoint plus a percentage equal to the homestead 
credit equivalency percentage of the net tax in excess of the 
taconite breakpoint, provided that the amount of said reduction 
shall not exceed the maximum amount amounts specified in clause 
(c). 
    (b) in the case of property located within the boundaries 
of a school district which qualifies as a tax relief area but 
which is outside the boundaries of a municipality which meets 
the qualifications prescribed in section 273.134, 57 percent of 
the amount of such net tax up to the taconite breakpoint plus a 
percentage equal to the homestead credit equivalency percentage 
of the net tax in excess of the taconite breakpoint, provided 
that the amount of said reduction shall not exceed the maximum 
amount amounts specified in clause (c). 
    (c) (1) The maximum reduction for of the net tax up to the 
taconite breakpoint is $225.40 on property described in clause 
(a) shall be $385 and for $200.10 on property described in 
clause (b) $330, for taxes payable in 1978 1985.  These maximum 
amounts shall increase by $15 times the quantity one minus the 
homestead credit equivalency percentage per year for taxes 
payable in 1979 1986 and subsequent years. 
    (2) The total maximum reduction of the net tax on property 
described in clause (a) is $490 for taxes payable in 1985.  The 
total maximum reduction for the net tax on property described in 
clause (b) is $435 for taxes payable in 1985.  These maximum 
amounts shall increase by $15 per year for taxes payable in 1986 
and thereafter.  
    For the purposes of this subdivision, "net tax" means the 
tax on the property after deduction of any credit under section 
273.13, subdivision 6, 7, or 14a, "taconite breakpoint" means 
the lowest possible net tax for a homestead qualifying for the 
maximum reduction pursuant to section 273.13, subdivision 7, 
rounded to the nearest whole dollar, and "homestead credit 
equivalency percentage" means a percentage equal to the 
percentage reduction authorized in section 273.13, subdivision 7.
    Sec. 4.  Minnesota Statutes 1982, section 273.135, 
subdivision 5, is amended to read: 
    Subd. 5.  For the purposes of this section, the amount of 
property tax to be paid shall be determined before after the 
allowance of any reduction prescribed by section 273.13, and the 
reduction prescribed by this section shall be in addition to 
that prescribed by section 273.13. 
    Sec. 5.  Minnesota Statutes 1982, section 273.1391, 
subdivision 2, is amended to read:  
    Subd. 2.  The amount of the reduction authorized by 
subdivision 1 shall be:  
    (a) In the case of property located within a school 
district which does not meet the qualifications of section 
273.134 as a tax relief area, but which is located in a county 
with a population of less than 100,000 in which taconite is 
mined or quarried and wherein a school district is located which 
does meet the qualifications of a tax relief area, and provided 
that at least 90 percent of the area of the school district 
which does not meet the qualifications of section 273.134 lies 
within such county, 57 percent of the amount of the net tax up 
to the taconite breakpoint plus a percentage equal to the 
homestead credit equivalency percentage of the net tax in excess 
of the taconite breakpoint on qualified property located in the 
school district that does not meet the qualifications of section 
273.134, provided that the amount of said reduction shall not 
exceed the maximum amount amounts specified in clause (c).  The 
reduction provided by this clause shall only be applicable to 
property located within the boundaries of the county described 
therein.  
    (b) In the case of property located within a school 
district which does not meet the qualifications of section 
273.134 as a tax relief area, but which is located in a school 
district in a county containing a city of the first class and a 
qualifying municipality, but not in a school district containing 
a city of the first class or adjacent to a school district 
containing a city of the first class unless the school district 
so adjacent contains a qualifying municipality, 57 percent of 
the amount of the net tax up to the taconite breakpoint plus a 
percentage equal to the homestead credit equivalency percentage 
of the net tax in excess of the taconite breakpoint, but not to 
exceed the maximum maximums specified in clause (c). 
    (c) (1) The maximum reduction shall be $375 of the net tax 
up to the taconite breakpoint is $200.10 for taxes payable in 
1981 1985.  These This maximum amounts amount shall increase 
by $15 multiplied by the quantity one minus the homestead credit 
equivalency percentage per year for taxes payable in 1982 1986 
and subsequent years.  
    (2) The total maximum reduction of the net tax is $435 for 
taxes payable in 1985.  This total maximum amount shall increase 
by $15 per year for taxes payable in 1986 and thereafter. 
    For the purposes of this subdivision, "net tax" means the 
tax on the property after deduction of any credit under section 
273.13, subdivision 6, 7, or 14a, "taconite breakpoint" means 
the lowest possible net tax for a homestead qualifying for the 
maximum reduction pursuant to section 273.13, subdivision 7, 
rounded to the nearest whole dollar, and "homestead credit 
equivalency percentage" means a percentage equal to the 
percentage reduction authorized in section 273.13, subdivision 7.
    Sec. 6.  Minnesota Statutes 1982, section 273.1391, 
subdivision 4, is amended to read: 
    Subd. 4.  For the purposes of this section, the amount of 
property tax to be paid shall be determined before after the 
allowance of any reduction prescribed by section 273.13, and the 
reduction prescribed by this section shall be in addition to 
that prescribed by section 273.13.  
    Sec. 7.  Minnesota Statutes 1983 Supplement, section 
275.125, subdivision 11a, is amended to read: 
    Subd. 11a.  [CAPITAL EXPENDITURE LEVY.] (a) Each year a 
school district may levy an amount not to exceed the amount 
equal to $90 per pupil unit, or $95 per pupil unit in districts 
where the actual number of pupil units identified in section 
124.17, subdivision 1, clauses (1) and (2), has increased from 
the prior year.  No levy under this clause shall exceed seven 
mills times the adjusted assessed valuation of the taxable 
property in the district for the preceding year. 
     (b) The proceeds of the tax may be used to acquire land, to 
equip and re-equip buildings and permanent attached fixtures, to 
rent or lease buildings for school purposes, to pay leasing fees 
for computer systems hardware and related proprietary software, 
and to pay leasing fees for photocopy machines and 
telecommunications equipment.  The proceeds of the tax may also 
be used for capital improvement and repair of school sites, 
buildings and permanent attached fixtures, energy assessments, 
and for the payment of any special assessments levied against 
the property of the district authorized pursuant to section 
435.19 or any other law or charter provision authorizing 
assessments against publicly owned property; provided that a 
district may not levy amounts to pay assessments for service 
charges, such as those described in section 429.101, whether 
levied pursuant to that section or pursuant to any other law or 
home rule provision.  The proceeds of the tax may also be used 
for capital expenditures to reduce or eliminate barriers to or 
increase access to school facilities by handicapped 
individuals.  The proceeds of the tax may also be used to make 
capital improvements to schoolhouses to be leased pursuant to 
section 123.36, subdivision 10.  The proceeds of the tax may 
also be used to pay fees for capital outlay expenditures 
assessed and certified to each participating school district by 
the educational cooperative service unit board of directors.  
The proceeds of the tax may also be used to pay principal and 
interest on loans from the state authorized by section sections 
116J.37 and 298.292 to 298.298.  
    (c) Subject to the commissioner's approval, the tax 
proceeds may also be used to acquire or construct buildings.  
The state board shall promulgate rules establishing the criteria 
to be used by the commissioner in approving and disapproving 
district applications requesting the use of capital expenditure 
tax proceeds for the acquisition or construction of buildings.  
The approval criteria for purposes of building acquisition and 
construction shall include:  the appropriateness of the proposal 
for the district's long term needs; the availability of adequate 
existing facilities; and the economic feasibility of bonding 
because of the proposed building's size or cost. 
    (d) The board shall establish a fund in which the proceeds 
of this tax shall be accumulated until expended. 
    (e) The proceeds of the tax shall not be used for custodial 
or other maintenance services. 
    (f) Each year, subject to the seven mill limitation of 
clause (a) of this subdivision, a school district which operates 
an approved secondary vocational education program or an 
approved senior secondary industrial arts program may levy an 
additional amount equal to $5 per pupil unit for capital 
expenditures for equipment for these programs. 
    (g) For purposes of computing allowable levies under this 
subdivision and subdivisions 11b and 11c, pupil units shall 
include those units identified in section 124.17, subdivision 1, 
clauses (1) and (2), and 98.5 percent of the units identified in 
Minnesota Statutes 1980, section 124.17, subdivision 1, clauses 
(4) and (5) for 1980-1981. 
    Sec. 8.  Minnesota Statutes 1983 Supplement, section 
275.125, subdivision 11b, is amended to read: 
    Subd. 11b.  [SPECIAL PURPOSE CAPITAL EXPENDITURE LEVY.] In 
addition to the levy authorized in subdivision 11a, each year a 
school district may levy an amount not to exceed the amount 
equal to $25 per pupil unit.  No levy under this clause shall 
exceed two mills times the adjusted assessed valuation of the 
property in the district for the preceding year.  The proceeds 
of the tax shall be placed in the district's capital expenditure 
fund and may be used only for the following:  
     (a) for energy audits on district-owned buildings, and for 
funding those energy conservation and renewable energy measures 
which the energy audits indicate will reduce the use of 
nonrenewable sources of energy to the extent that the projected 
energy cost savings will amortize the cost of the conservation 
measures within a period of ten years or less;  
     (b) for capital expenditures for the purpose of reducing or 
eliminating barriers to or increasing access to school 
facilities by handicapped persons;  
     (c) for capital expenditures to bring district facilities 
into compliance with the uniform fire code adopted pursuant to 
chapter 299F;  
     (d) for expenditures for the removal of asbestos from 
school buildings or property or for asbestos encapsulation;  
     (e) for expenditures for the cleanup and disposal of 
polychlorinated biphenyls; and 
     (f) to pay principal and interest on loans from the state 
authorized by section sections 116J.37 and 298.292 to 298.298. 
    Sec. 9.  Minnesota Statutes 1983 Supplement, section 
275.125, subdivision 12a, is amended to read: 
    Subd. 12a.  [ENERGY CONSERVATION LEVY.] The school district 
may levy, without the approval of a majority of the voters in 
the district, an amount equal to the actual costs of the energy 
conservation investments for the purposes of repaying the 
principal and interest of the law made pursuant to section 
sections 116J.37 and 298.292 to 298.298.  
    Sec. 10.  Minnesota Statutes 1982, section 298.01, is 
amended to read: 
    298.01 [MINING OR PRODUCING ORES.] 
    Subdivision 1.  Every person engaged in the business of 
mining or producing iron ore or other ores in this state shall 
pay to the state of Minnesota an occupation tax equal to 15.5 
percent of the valuation of all ores except taconite, 
semi-taconite and iron sulphides mined or produced after 
December 31, 1971 and iron ores mined or produced after December 
31, 1984.  Said tax shall be in addition to all other taxes 
provided for by law and shall be due and payable from such 
person on or before June 15 of the year next succeeding the 
calendar year covered by the report thereon to be filed as 
hereinafter provided.  
    Subd. 2.  Every person engaged in the business of producing 
or mining taconite, semi-taconite and iron sulphides in this 
state shall pay to the state an occupation tax equal to 15 
percent of the valuation of all taconite, semi-taconite and iron 
sulphides mined or produced after December 31, 1970 and of iron 
ores mined or produced after December 31, 1984.  The tax shall 
be in addition to all other taxes provided for by law and shall 
be due and payable from such person on or before June 15 of the 
year next succeeding the calendar year covered by the report 
thereon to be filed as hereinafter provided.  
    Sec. 11.  Minnesota Statutes 1982, section 298.02, 
subdivision 1, is amended to read:  
    Subdivision 1.  [CREDIT.] For the purpose of increasing 
employment and the utilization of low-grade, underground, and 
high labor cost ores any taxpayer on whom a tax is imposed by 
reason of the provisions of section 298.01, subdivisions 1 and 
2, shall be allowed a credit against the occupation tax as 
computed in said subdivisions that section because of the mining 
or production of ore from any mine, in an amount calculated as 
follows: 
    (a) In the case of underground mines or that tonnage of 
merchantable ore produced in open pit mines in the year in 
question which tonnage has resulted from beneficiation at an ore 
beneficiation plant within the state by jigging, heavy media, 
spiral separation, cyclone process, roasting, drying by 
artificial heat, sintering, magnetic separation, flotation, 
agglomeration or any process requiring fine grinding or any 
other iron ores mined after December 31, 1984, ten percent of 
that part of the cost of labor employed by said the mine or in 
the beneficiation of all ore mined or produced in said the 
calendar year in excess of 70 cents and not in excess of 90 
cents per ton of the merchantable ore produced during the year 
at said that mine, and 15 percent of that part of the cost of 
such labor in excess of 90 cents per ton; in the case of any 
other tonnage produced at said mine or in the case of other 
mines, ten percent of the amount by which the average cost per 
ton of labor employed at said the mine, or in the beneficiation 
of such the ore at or near the mine, exceeds 80 cents, but does 
not exceed $1.05, plus 15 percent of the amount by which such 
the average labor cost per ton exceeds $1.05, multiplied by the 
number of tons of ore produced at said the mine, not exceeding 
100,000 tons, but this 100,000 tons or less shall be first 
reduced by any tonnage described in the first part of this 
subparagraph; provided, however, that in no event shall the 
credit allowed hereunder be in excess of three-fourths of eleven 
percent, as applied to underground and taconite or, 
semi-taconite or other iron ore operations, and six-tenths of 
eleven percent as applied to all other operations, of the 
valuation of the ore used in computing the tax under the 
provisions of section 298.01.  The expression term "merchantable 
ore produced" as used herein means ores which as mined or as 
mined and beneficiated, are ready for shipment as a merchantable 
product.  The provisions of this subparagraph (a) shall be 
applicable to all ores mined or produced subsequent to December 
31, 1956.  
    (b) The aggregate amount of all credits allowed under this 
subdivision to all mines shall not exceed six and two-tenths 
percent of the aggregate amount of occupation taxes imposed 
under section 298.01, subdivision 1, assessed against all mines 
in the state for said year prior to the deduction of such 
credits, provided, that after December 31, 1954, labor credits 
to underground mines or taconite or semi-taconite operations 
shall not be subject to such percentage limitation and that, 
after December 31, 1984, labor credits to other iron ore 
operations shall not be subject to the percentage limitation and 
both the occupation taxes of such underground mines or taconite 
or, semi-taconite or other iron ore operations and the labor 
credits allowed thereto, shall be excluded in calculating such 
percentage limitations.  At the time of his final determination 
of occupation tax pursuant to section 298.09, subdivision 3, the 
commissioner shall reduce the credit otherwise allowable to each 
mine hereunder by such equal percentage as will bring the total 
within such limitation.  If an equal percentage reduction is 
made in the labor credits of mines pursuant to this subparagraph 
at the time of certification to the commissioner of finance 
revenue as set forth in section 298.10, the same percentage will 
be used where changes are made pursuant to section 298.09, 
subdivision 4, subsequent to June 1.  Also if no reduction is 
made at the time of certification to by the commissioner of 
finance revenue on or before June 1, pursuant to this 
subdivision and section 298.10, no reduction will be made 
subsequent to June 1, due to changes made pursuant to section 
298.09, subdivision 4.  This subparagraph shall apply to 
occupation tax calculations in calendar years subsequent to 
December 31, 1952.  
    Sec. 12.  Minnesota Statutes 1982, section 298.031, 
subdivision 2, is amended to read: 
    Subd. 2.  [VALUE OF CERTAIN ORE; HOW ASCERTAINED.] (1) The 
taxpayer shall be given a credit in each taxable year upon the 
occupation tax assessed in such year under Minnesota Statutes 
1957, Chapter 298, against a given mine after credit for labor 
credits has been given, in an amount equal to the occupation tax 
under said chapter 298 upon an amount produced by multiplying 
the number of tons of ore sold at a discount by the amount of 
such discount. 
    (2) The aggregate amount of all credits allowed under this 
section to all mines shall not exceed one percent of the 
aggregate amount of all occupation taxes imposed under section 
298.01, subdivision 1, assessed against all mines in the state 
for said year prior to the deduction of the credit allowed by 
this section. 
    (3) The amount of the foregoing subtraction shall be 
ascertained and determined by the commissioner. 
    (4) If ore stockpiled from previous years operations is 
sold at a discount, the discount credit shall be allowed against 
all ore currently being produced by the same company to the 
extent that the discount credit is available.  Any unused credit 
may be carried forward and utilized with future years production 
of ore from the stockpiled property or other properties operated 
by the same company.  
    Sec. 13.  Minnesota Statutes 1982, section 298.225, is 
amended to read: 
    298.225 [APPROPRIATION.] 
    If a taconite producer ceases beneficiation operations, 
either temporarily or permanently, and if For distribution of 
taconite production tax in 1985 and thereafter with respect to 
production in 1984 and thereafter, the recipients of the 
taconite production tax as provided in section 298.28, 
subdivision 1, clauses (1) to (4) and (5)(b) to, (7), 
and (8)(a), would shall receive decreased distributions as a 
result thereof, then the distribution to these recipients in 
each of the two years immediately following the year in which 
operations ceased shall be equal to the amount they received in 
the last full year before operations ceased distributions equal 
to the amount distributed to them pursuant to sections 298.225 
and 298.28, subdivision 1, with respect to 1983 production if 
the production for the year prior to the distribution year is no 
less than 42,000,000 taxable tons.  If the production is less 
than 42,000,000 taxable tons, the amount of the distributions 
shall be reduced by two percent for each 1,000,000 tons, or part 
of 1,000,000 tons by which the production is less than 
42,000,000 tons.  There is hereby appropriated to the 
commissioner of revenue from the taconite environmental 
protection fund and the corpus of the northeast Minnesota 
economic protection trust fund in equal proportions the amount 
needed to make the above payments.  
    If a taconite producer ceases beneficiation operations 
permanently and is required by a special law to make bond 
payments for a school district, the northeast Minnesota economic 
protection trust fund shall assume the payments of the taconite 
producer if the producer ceases to make the needed payments.  
There is hereby appropriated from the corpus of the northeast 
Minnesota economic protection trust fund to the commissioner of 
revenue the amounts needed to make these school bond payments.  
    Sec. 14.  Minnesota Statutes 1982, section 298.24, 
subdivision 1, is amended to read: 
    Subdivision 1.  (a) There is hereby imposed upon taconite 
and iron sulphides, and upon the mining and quarrying thereof, 
and upon the production of iron ore concentrate therefrom, and 
upon the concentrate so produced, a tax of $1.25 cents per gross 
ton of merchantable iron ore concentrate produced therefrom.  
The tax on concentrates produced in 1978 and subsequent years 
prior to 1985 shall be equal to $1.25 multiplied by the steel 
mill products index during the production year, divided by the 
steel mill products index in 1977.  The index stated in code 
number 1013, or any subsequent equivalent, as published by the 
United States Department of Labor, Bureau of Labor Statistics 
Wholesale Prices and Price Indexes for the month of January of 
the year in which the concentrate is produced shall be the index 
used in calculating the tax imposed herein.  In no event shall 
the tax be less than $1.25 per gross ton of merchantable iron 
ore concentrate.  The tax on concentrates produced in 1985 and 
1986 shall be at the rate determined for 1984 production.  For 
concentrates produced in 1987 and subsequent years, the tax 
shall be equal to the preceding year's tax plus an amount equal 
to the preceding year's tax multiplied by the percentage 
increase in the implicit price deflator from the fourth quarter 
of the second preceding year to the fourth quarter of the 
preceding year.  "Implicit price deflator" means the implicit 
price deflator prepared by the bureau of economic analysis of 
the United States department of commerce.  
    (b) On concentrates produced in 1984, an additional tax is 
hereby imposed equal to 1.6 eight-tenths of one percent of the 
total tax imposed by clause (a) per gross ton for each one 
percent that the iron content of such product exceeds 62 
percent, when dried at 212 degrees Fahrenheit.  
    (c) The tax imposed by this subdivision on concentrates 
produced in 1984 shall be computed on the production for the 
current year or.  The tax on concentrates produced in 1985 shall 
be computed on the average of the production for the current 
year and the previous year.  The tax on concentrates produced in 
1986 and thereafter shall be the average of the production for 
the current year and the previous two years, whichever is 
higher.  This clause shall not apply in the case of the closing 
of a taconite facility if the property taxes on the facility 
would be higher if this clause and section 298.25 were not 
applicable.  
    (d) If the tax or any part of the tax imposed by this 
subdivision is held to be unconstitutional, a tax of $1.25 per 
gross ton of merchantable iron ore concentrate produced shall be 
imposed.  
    Sec. 15.  Minnesota Statutes 1982, section 298.24, is 
amended by adding a subdivision to read: 
    Subd. 4.  A credit shall be allowed against the tax imposed 
by subdivision 1, in the amount of $250,000 per year to any 
taconite producer that builds a water filtration and treatment 
plant in 1984 at a cost in excess of $1,000,000 in order to 
alleviate the contamination of water resulting from the disposal 
of taconite tailings on land.  This credit shall be available 
against taxes paid in 1985, 1986, and 1987.  The amount 
sufficient to pay these credits is appropriated from the 
taconite environmental protection fund created in section 
298.223 to the commissioner of revenue.  
    Sec. 16.  Minnesota Statutes 1983 Supplement, section 
298.28, subdivision 1, is amended to read: 
    Subdivision 1.  [DISTRIBUTION FROM GENERAL FUND.] The 
proceeds of the taxes collected under section 298.24, except the 
tax collected under section 298.24, subdivision 2, shall, upon 
certificate of the commissioner of revenue to the general fund 
of the state, be paid by the commissioner of revenue as follows: 
    (1) 2.5 cents per gross ton of merchantable iron ore 
concentrate, hereinafter referred to as "taxable ton," to the 
city or town in which the lands from which taconite was mined or 
quarried were located or within which the concentrate was 
produced.  If the mining, quarrying, and concentration, or 
different steps in either thereof are carried on in more than 
one taxing district, the commissioner shall apportion equitably 
the proceeds of the part of the tax going to cities and towns 
among such subdivisions upon the basis of attributing 40 percent 
of the proceeds of the tax to the operation of mining or 
quarrying the taconite, and the remainder to the concentrating 
plant and to the processes of concentration, and with respect to 
each thereof giving due consideration to the relative extent of 
such operations performed in each such taxing district.  His 
order making such apportionment shall be subject to review by 
the tax court at the instance of any of the interested taxing 
districts, in the same manner as other orders of the 
commissioner. 
     (2) 12.5 cents per taxable ton, less any amount distributed 
under clause (8), to the taconite municipal aid account in the 
apportionment fund of the state treasury, to be distributed as 
provided in section 298.282. 
     (3) 29 cents per taxable ton plus the increase provided in 
paragraph (c) to qualifying school districts to be distributed 
as follows: 
     (a) Six cents per taxable ton to the school districts in 
which the lands from which taconite was mined or quarried were 
located or within which the concentrate was produced.  The 
commissioner shall follow the apportionment formula prescribed 
in clause (1). 
     (b) 23 cents per taxable ton, less any amount distributed 
under part (d), shall be distributed to a group of school 
districts comprised of those school districts wherein the 
taconite was mined or quarried or the concentrate produced or in 
which there is a qualifying municipality as defined by section 
273.134 in direct proportion to school district tax levies as 
follows:  each district shall receive that portion of the total 
distribution which its certified levy for the prior year, 
computed pursuant to section 275.125, comprises of the sum of 
certified levies for the prior year for all qualifying 
districts, computed pursuant to section 275.125.  For purposes 
of distributions pursuant to this part, certified levies for the 
prior year computed pursuant to section 275.125 shall not 
include the amount of any increased levy authorized by 
referendum pursuant to section 275.125, subdivision 2d. 
    (c) On July 15, 1982 and on July 15 in subsequent years in 
years prior to 1988, an amount equal to the increase derived by 
increasing the amount determined by clause (3)(b) in the same 
proportion as the increase in the steel mill products index over 
the base year of 1977 as provided in section 298.24, subdivision 
1, clause (a), shall be distributed to any school district 
described in clause (3)(b) where a levy increase pursuant to 
section 275.125, subdivision 2d, is authorized by referendum, 
according to the following formula.  On July 15, 1988 and 
subsequent years, the increase over the amount established for 
the prior year shall be determined according to the increase in 
the implicit price deflator as provided in section 298.24, 
subdivision 1, paragraph (a).  Each district shall receive the 
product of: 
    (i) $150 times the pupil units identified in section 
124.17, subdivision 1, clauses (1) and (2), enrolled in the 
previous school year, less the product of two mills times the 
district's taxable valuation in the second previous year; times 
    (ii) the lesser of: 
    (A) one, or 
    (B) the ratio of the amount certified pursuant to section 
275.125, subdivision 2d, in the previous year, to the product of 
two mills times the district's taxable valuation in the second 
previous year. 
    If the total amount provided by clause (3)(c) is 
insufficient to make the payments herein required then the 
entitlement of $150 per pupil unit shall be reduced uniformly so 
as not to exceed the funds available.  Any amounts received by a 
qualifying school district in any fiscal year pursuant to clause 
(3)(c) shall not be applied to reduce foundation aids which the 
district is entitled to receive pursuant to sections 124.2121 to 
124.2128 or the permissible levies of the district.  Any amount 
remaining after the payments provided in this paragraph shall be 
paid to the commissioner of finance who shall deposit the same 
in the taconite environmental protection fund and the northeast 
Minnesota economic protection trust fund as provided in section 
298.28, subdivision 1, clause 10. 
     (d) There shall be distributed to any school district the 
amount which the school district was entitled to receive under 
section 298.32 in 1975. 
     (4) 19.5 cents per taxable ton to counties to be 
distributed as follows: 
     (a) 15.5 cents per taxable ton shall be distributed to the 
county in which the taconite is mined or quarried or in which 
the concentrate is produced, less any amount which is to be 
distributed pursuant to part (b).  The commissioner shall follow 
the apportionment formula prescribed in clause (1). 
     (b) If an electric power plant owned by and providing the 
primary source of power for a taxpayer mining and concentrating 
taconite is located in a county other than the county in which 
the mining and the concentrating processes are conducted, one 
cent per taxable ton of the tax distributed to the counties 
pursuant to part (a) and imposed on and collected from such 
taxpayer shall be distributed by the commissioner of revenue to 
the county in which the power plant is located. 
     (c) Four cents per taxable ton shall be paid to the county 
from which the taconite was mined, quarried or concentrated to 
be deposited in the county road and bridge fund.  If the mining, 
quarrying and concentrating, or separate steps in any of those 
processes are carried on in more than one county, the 
commissioner shall follow the apportionment formula prescribed 
in clause (1). 
    (5) (a) 25.75 17.75 cents per taxable ton, less any amount 
required to be distributed under part (b), to the taconite 
property tax relief account in the apportionment fund in the 
state treasury, to be distributed as provided in sections 
273.134 to 273.136. 
     (b) If an electric power plant owned by and providing the 
primary source of power for a taxpayer mining and concentrating 
taconite is located in a county other than the county in which 
the mining and the concentrating processes are conducted, .75 
cent per taxable ton of the tax imposed and collected from such 
taxpayer shall be distributed by the commissioner of revenue to 
the county and school district in which the power plant is 
located as follows:  25 percent to the county and 75 percent to 
the school district. 
    (6) One cent per taxable ton to the state for the cost of 
administering the tax imposed by section 298.24. 
    (7) Three cents per taxable ton shall be deposited in the 
state treasury to the credit of the iron range resources and 
rehabilitation board account in the special revenue fund for the 
purposes of section 298.22.  The amount determined in this 
clause shall be increased in 1981 and subsequent years prior to 
1988 in the same proportion as the increase in the steel mill 
products index as provided in section 298.24, subdivision 1 and 
shall be increased in 1988 and subsequent years according to the 
increase in the implicit price deflator as provided in section 
298.24, subdivision 1.  The amount distributed pursuant to this 
clause shall be expended within or for the benefit of a tax 
relief area defined in section 273.134.  No part of the fund 
provided in this clause may be used to provide loans for the 
operation of private business unless the loan is approved by the 
governor and the legislative advisory commission. 
    (8) (a) .20 cent per taxable ton shall be paid in 1979 and 
each year thereafter, to the range association of municipalities 
and schools, for the purpose of providing an area wide approach 
to problems which demand coordinated and cooperative actions and 
which are common to those areas of northeast Minnesota affected 
by operations involved in mining iron ore and taconite and 
producing concentrate therefrom, and for the purpose of 
promoting the general welfare and economic development of the 
cities, towns and school districts within the iron range area of 
northeast Minnesota. 
    (b) 1.5 cents per taxable ton shall be paid to the 
northeast Minnesota economic protection trust fund.  
    (9) the amounts determined under clauses (4)(a), (4)(c), 
and (5), and (8)(b) shall be increased in 1979 and subsequent 
years prior to 1988 in the same proportion as the increase in 
the steel mill products index as provided in section 298.24, 
subdivision 1.  Those amounts shall be increased in 1988 and 
subsequent years in the same proportion as the increase in the 
implicit price deflator as provided in section 298.24, 
subdivision 1.  
    (10) the proceeds of the tax imposed by section 298.24 
which remain after the distributions in clauses (1) to (9) and 
parts (a) and (b) of this clause have been made shall be divided 
between the taconite environmental protection fund created in 
section 298.223 and the northeast Minnesota economic protection 
trust fund created in section 298.292 as follows:  In 1981 and 
each year thereafter, Two-thirds to the taconite environmental 
protection fund and one-third to the northeast Minnesota 
economic protection trust fund.  The proceeds shall be placed in 
the respective special accounts in the general fund. 
    (a) In 1978 and each year thereafter, There shall be 
distributed to each city, town, school district, and county the 
amount that they received under section 294.26 in calendar year 
1977; provided, however, that the amount distributed in 1981 to 
the unorganized territory number 2 of Lake County and the town 
of Beaver Bay based on the between-terminal trackage of Erie 
Mining Company will be distributed in 1982 and subsequent years 
to the unorganized territory number 2 of Lake County and the 
towns of Beaver Bay and Stony River based on the miles of track 
of Erie Mining Company in each taxing district. 
    (b) In 1978 and each year thereafter, There shall be 
distributed to the iron range resources and rehabilitation board 
the amounts it received in 1977 under section 298.22. 
    On or before October 10 of each calendar year each producer 
of taconite or iron sulphides subject to taxation under section 
298.24 (hereinafter called "taxpayer") shall file with the 
commissioner of revenue and with the county auditor of each 
county in which such taxpayer operates, and with the chief 
clerical officer of each school district, city or town which is 
entitled to participate in the distribution of the tax, an 
estimate of the amount of tax which would be payable by such 
taxpayer under said law for such calendar year; provided such 
estimate shall be in an amount not less than the amount due on 
the mining and production of concentrates up to September 30 of 
said year plus the amount becoming due because of probable 
production between September 30 and December 31 of said year, 
less any credit allowable as hereinafter provided.  Such 
estimate shall list the taxing districts entitled to participate 
in the distribution of such tax, and the amount of the estimated 
tax which would be distributable to each such district in the 
next ensuing calendar year on the basis of the last percentage 
distribution certified by the commissioner of revenue.  If there 
be no such prior certification, the taxpayer shall set forth its 
estimate of the proper distribution of such tax under the law, 
which estimate may be corrected by the commissioner if he deems 
it improper, notice of such correction being given by him to the 
taxpayer and the public officers receiving such estimate.  The 
officers with whom such report is so filed shall use the amount 
so indicated as being distributable to each taxing district in 
computing the permissible tax levy of such county, city or 
school district in the year in which such estimate is made, and 
payable in the next ensuing calendar year, except that in 1978 
and 1979 two cents per taxable ton, and in 1980 and thereafter, 
one cent per taxable ton of the amount distributed under clause 
(4)(c) shall not be deducted in calculating the permissible 
levy.  Such taxpayer shall then pay, at the times payments are 
required to be made pursuant to section 298.27, as the amount of 
tax payable under section 298.24, the greater of (a) the amount 
shown by such estimate, or (b) the amount due under said section 
as finally determined by the commissioner of revenue pursuant to 
law.  If, as a result of the payment of the amount of such 
estimate, the taxpayer has paid in any calendar year an amount 
of tax in excess of the amount due in such year under section 
298.24, after application of credits for any excess payments 
made in previous years, all as determined by the commissioner of 
revenue, the taxpayer shall be given credit for such excess 
amount against any taxes which, under said section, may become 
due from the taxpayer in subsequent years.  In any calendar year 
in which a general property tax levy subject to sections 275.125 
or 275.50 to 275.59 has been made, if the taxes distributable to 
any such county, city or school district are greater than the 
amount estimated to be paid to any such county, city or school 
district in such year, the excess of such distribution shall be 
held in a special fund by the county, city or school district 
and shall not be expended until the succeeding calendar year, 
and shall be included in computing the permissible levies under 
sections 275.125 or 275.50 to 275.59, of such county, city or 
school district payable in such year.  If the amounts 
distributable to any such county, city or school district, after 
final determination by the commissioner of revenue under this 
section are less than the amounts indicated by such estimates, 
such county, city or school district may issue certificates of 
indebtedness in the amount of the shortage, and may include in 
its next tax levy, in excess of the limitations of sections 
275.125 or 275.50 to 275.59 an amount sufficient to pay such 
certificates of indebtedness and interest thereon, or, if no 
certificates were issued, an amount equal to such shortage. 
     There is hereby annually appropriated to such taxing 
districts as are stated herein, to the taconite property tax 
relief account and to the taconite municipal aid account in the 
apportionment fund in the state treasury, to the department of 
revenue, to the iron range resources and rehabilitation board, 
to the range association of municipalities and schools, to the 
taconite environmental protection fund, and to the northeast 
Minnesota economic protection trust fund, from any fund or 
account in the state treasury to which the money was credited, 
an amount sufficient to make the payment or transfer.  The 
payment of the amount appropriated to such taxing districts 
shall be made by the commissioner of revenue on or before May 15 
annually. 
    Sec. 17.  Minnesota Statutes 1982, section 298.40, is 
amended by adding a subdivision to read: 
    Subd. 4.  There is appropriated, effective July 1, 1985, to 
the commissioner of revenue from the general fund an amount 
equal to any credits due as a result of a recomputation of 
occupation taxes for production year 1977 and previous years 
based on the limitations prescribed in section 298.40, 
subdivision 1, and established by the commissioner as an account 
payable on or before March 25, 1984.  The commissioner shall 
refund to the taxpayers the amount of overpayment plus six 
percent interest per annum from the date of the overpayment.  
    Sec. 18.  Minnesota Statutes 1982, section 299.012, 
subdivision 1, is amended to read: 
    Subdivision 1.  For the purpose of increasing the 
utilization of low grade, underground, and high labor cost ores 
and taconites, the royalty tax levied by virtue of section 
299.01, subdivisions 1 and 2, on royalty received because of the 
production of ores in any calendar year from land forming part 
of any mine which was in production during said year, shall be 
reduced by a credit in an amount which will make the net 
effective tax rate thereon equal to the net effective rate of 
the occupation tax imposed pursuant to section 298.01, because 
of the production of ores during such calendar year from the 
mine of which such land forms a part, after the application of 
the credits against such occupation tax allowed under section 
298.02; provided, if such mine produced ore in such calendar 
year, but the ore produced had no valuation for occupation tax 
purposes because of the allowable deductions equaling or 
exceeding the value of the ore produced, the credit allowed 
hereunder shall be three-fourths of eleven percent, as applied 
to underground, taconite, and semi-taconite and other iron ore 
operations, and six-tenths of eleven percent as applied to all 
other operations, of the royalty received.  Any person making 
payments of royalty taxes in advance of the final determination 
of such taxes, may assume for the purposes of section 299.08, 
that the net rate of the tax for the calendar year in question 
shall be the last full year's net effective occupation tax rate 
known at the time of the first payment of royalty tax during the 
current calendar year. 
    Sec. 19.  Laws 1982, Second Special Session, chapter 2, 
section 12, as amended by Laws 1983, chapter 5, section 1, is 
amended to read: 
    Sec. 12.  [DISTRESSED AREA EMERGENCY JOBS AND RETRAINING 
PROGRAM.] 
    Subdivision 1.  [APPROPRIATION.] Notwithstanding the 
provisions of Minnesota Statutes, sections 298.293 or 298.294, 
or any other law, there is appropriated to the commissioner of 
iron range resources and rehabilitation from the net interest, 
dividends, and other earnings of the northeast Minnesota 
economic protection trust fund the sum of $2,500,000.  This 
money shall be expended by the commissioner upon recommendation 
of the iron range resources and rehabilitation board for the 
creation of emergency jobs through public works projects 
submitted to the commissioner by cities, towns, and school 
districts that are tax relief areas as defined in Minnesota 
Statutes, section 273.134, by counties in which a tax relief 
area is located, or by state or federal agencies and for payment 
of training allowances to individuals who meet the 
qualifications established pursuant to subdivision 2 while they 
are participating in an employment retraining program.  The 
money shall be expended only for projects or with respect to 
employment retraining programs located within a tax relief 
area.  The projects shall be beneficial to the city, town, 
school district, county, or the state and may include permanent 
improvements or maintenance of public property, residential 
weatherization programs, landscaping of public grounds or parks, 
planting or trimming trees, improving open space areas, 
playgrounds, and recreational facilities owned or operated by 
the sponsoring unit of government, mineland reclamation and 
reforestation.  The sponsoring unit of government shall provide 
the administration, supervision, and supplies and materials for 
its project.  All money appropriated for the projects under this 
section and section 14 shall be expended for wages and benefits 
and the cost of workers' compensation insurance for workers who 
qualify for employment pursuant to subdivision 2 and who are 
employed or who are being paid while participating in an 
employment retraining program pursuant to this act except that 
an amount not to exceed 3.5 percent of the amount expended under 
this section and section 14 shall be available to reimburse the 
department of economic security and iron range resources and 
rehabilitation board for its actual cost of administering this 
program.  The appropriation under this section shall not lapse 
but shall remain available until entirely disbursed the day 
following final enactment of this act.  Any funds which are 
unexpended on the day following final enactment of this act are 
transferred and deposited in the special revenue fund 
established at section 298.28, subdivision 1, clause (7), for 
the purposes of section 298.22.  
    Subd. 2.  [QUALIFICATIONS FOR EMPLOYMENT.] The 
appropriations made under this section and section 14 shall be 
used only to employ needy unemployed persons who meet the 
qualifications which shall be established by the commissioner of 
iron range resources and rehabilitation and the commissioner of 
economic security.  The criteria for employment may be 
established without compliance with any law or statutory 
provision relating to the promulgation of rules by departments, 
agencies or instrumentalities of the state.  
    Sec. 20.  Laws 1982, Second Special Session, chapter 2, 
section 14, as amended by Laws 1983, chapters 5, section 2, and 
46, section 7, is amended to read: 
    Sec. 14.  [SUPPLEMENTAL APPROPRIATION.] 
    Notwithstanding the provisions of Minnesota Statutes, 
sections 298.293 or 298.294, or any other law there is 
appropriated to the iron range resources and rehabilitation 
board from the net interest, dividends, and other earnings of 
the northeast Minnesota economic protection trust fund the sum 
of $5,000,000 for the purpose of continuing the emergency public 
works job and retraining program established in section 12.  
Expenditure of this money, or any portion thereof, is contingent 
upon approval by a majority of the members of the iron range 
resources and rehabilitation board.  The determination of the 
board that money may be expended from this appropriation shall 
be approved by the governor prior to the expenditure of any 
money under this section, and the legislative advisory 
commission shall make a recommendation on the expenditure.  The 
appropriation under this section shall not lapse but shall 
remain available until entirely disbursed the day following 
final enactment of this act.  Any funds which are unexpended on 
the day following final enactment of this act are transferred 
and deposited in the special revenue fund established at section 
298.28, subdivision 1, clause (7), for the purposes of section 
298.22. 
    Sec. 21.  [REFUNDS FROM PRODUCTION TAX CASE.] 
    Any refunds due to taconite producers under the decision of 
the Minnesota Supreme Court in Erie Mining Co. v. Commissioner 
of Revenue, filed January 6, 1984, shall be credited against the 
production tax liability of each company in five equal annual 
installments.  The refunds shall be credited against the 
distributions to the funds and accounts that received excessive 
distributions pursuant to Minnesota Statutes, section 298.28, 
subdivision 1, as a result of the improper computation of the 
tax that was rectified in that decision.  
    Sec. 22.  [EFFECTIVE DATE.] 
    Subdivision 1.  Sections 1 to 6 are effective for taxes 
levied in 1984, payable in 1985, and thereafter.  Sections 7 to 
9 and 12 are effective the day following final enactment. 
Sections 10, 11, and 18 are effective for ores produced after 
December 31, 1984.  Except as otherwise provided, section 14 is 
effective for concentrates produced in 1984 and thereafter. 
Section 16 is effective for distributions in 1985 and 
thereafter.  Sections 19 and 20 are effective the day after 
final enactment.  
    Subd. 2.  Section 14 shall not become effective unless the 
commissioner of revenue and all taconite producers with pending 
taconite production tax litigation execute an agreement to 
suspend the prosecution of currently pending taconite production 
tax litigation under terms and conditions satisfactory to the 
commissioner and the taconite producers before the governor 
approves this act. 

                               ARTICLE 8

                               TAX AMNESTY
    Section 1.  [TAX AMNESTY.] 
    The commissioner of revenue shall establish a tax amnesty 
program.  The amnesty program applies to taxes payable to the 
commissioner other than taxes collected by the commissioner on 
behalf of the cities of Minneapolis and Rochester and the 
metropolitan sports facilities commission and is only available 
to a taxpayer who either has an unpaid liability on the 
department of revenue's accounts receivable system as of 
February 1, 1984, or who has failed to file a return which, if 
filed on February 1, 1984, would be considered a delinquent 
return subject to penalty by law.  For a taxpayer who has an 
existing liability as of February 1, 1984, the commissioner 
shall accept as full payment of the account a certified check, 
cashier's check, or money order in the amount of 80 percent of 
the balance due on February 1, 1984, plus any interest accruing 
on that account since February 1, 1984, plus any additional 
liabilities including tax, penalty, and interest established by 
the commissioner after February 1, 1984.  All payments credited 
to a taxpayer's account after February 1, 1984, but prior to the 
taxpayer's application for amnesty, shall reduce the February 1 
balance prior to computation of the 80 percent requirement.  In 
no case may the reduction exceed $2,000.  Tax amnesty is not 
available to any taxpayer who has an account which includes a 
civil fraud penalty imposed by the commissioner.  The amount of 
a penalty imposed pursuant to section 290.92, subdivision 15, 
clause (9), shall be deducted from the balance due before 
application of the 20 percent reduction.  Payment must be 
received by the commissioner on or after August 1, 1984, but 
before November 1, 1984.  For purposes of this section, 
"received" means actual receipt by the commissioner either at 
the St. Paul office or at any field office of the department of 
revenue on or before the final date allowed for payment under 
this program.  
    In the case of a taxpayer who has failed to file returns 
which if filed on February 1, 1984, would be considered 
delinquent returns, the commissioner shall accept the delinquent 
returns along with payment of all tax and interest if payment is 
made by certified check, cashier's check, or money order and 
received by the commissioner on or after August 1, 1984, but 
before November 1, 1984.  For delinquent returns filed pursuant 
to this program, the civil and criminal penalties imposed by law 
are waived unless the commissioner later finds that the tax as 
shown on any return was understated by 25 percent or more.  In 
that case the civil and criminal penalties are reinstated, and 
the commissioner shall collect the civil penalties and may 
pursue the criminal penalties.  
    There will not be another tax amnesty before October 1, 
1994.  
    Sec. 2.  [270.72] [TAX CLEARANCE; ISSUANCE OF LICENSES.] 
    Subdivision 1.  [TAX CLEARANCE REQUIRED.] The state or a 
political subdivision of the state may not issue or renew a 
license for the conduct of a profession, trade, or business, if 
the commissioner notifies the licensing authority that the 
applicant owes the state delinquent taxes, penalties, or 
interest.  The commissioner may not notify the licensing 
authority unless the applicant taxpayer owes $1,000 or more in 
delinquent taxes.  A licensing authority that has received a 
notice from the commissioner may issue or renew the applicant's 
license only if (a) the commissioner issues a tax clearance 
certificate and (b) the commissioner or the applicant forwards a 
copy of the clearance to the authority.  The commissioner may 
issue a clearance certificate only if the applicant does not owe 
the state any uncontested delinquent taxes, penalties, or 
interest.  
    Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
following terms have the meanings given.  
    (a) "Taxes" are limited to withholding tax as provided in 
section 290.92, sales and use tax as provided in chapter 297A, 
and motor vehicle excise tax as provided in chapter 297B. 
Penalties and interest are limited to penalties and interest due 
on taxes included in this definition.  
    (b) "Delinquent taxes" do not include a tax liability if 
(i) an administrative or court action which contests the amount 
or validity of the liability has been filed or served, (ii) the 
appeal period to contest the tax liability has not expired, or 
(iii) the applicant has entered into a payment agreement and is 
current with the payments.  
    (c) "Applicant" means an individual if the license is 
issued to or in the name of an individual or the corporation or 
partnership if the license is issued to or in the name of a 
corporation or partnership.  
    Subd. 3.  [NOTICE AND HEARING.] If the commissioner 
notifies a licensing authority pursuant to subdivision 1, he 
must send a copy of the notice to the applicant.  In the case of 
the renewal of a license if the applicant requests, in writing, 
within 30 days of the receipt of the notice a hearing, a 
contested case hearing must be held.  The hearing must be held 
within 45 days of the date the commissioner refers the case to 
the office of administrative hearings.  The hearing must be held 
under the procedures provided by section 270A.09 and the 
administrative rules promulgated under chapter 270A.  
    Subd. 4.  [LICENSING AUTHORITY; DUTIES.] All licensing 
authorities must require the applicant to provide his social 
security number and Minnesota business identification number on 
all license applications.  Upon request of the commissioner, the 
licensing authority must provide the commissioner with a list of 
all applicants, including the name, address, business name and 
address, social security number, and business identification 
number of each applicant.  The commissioner may request from a 
licensing authority a list of the applicants no more than once 
each calendar year.  
    Subd. 5.  [REPEALER.] This section is repealed effective 
December 1, 1986. 

                               ARTICLE 9 

                               RAILROADS 
    Section 1.  Minnesota Statutes 1982, section 270.80, 
subdivision 4, is amended to read:  
    Subd. 4.  "Nonoperating property" means and includes all 
property other than property defined in subdivision 3.  
Nonoperating property shall include real property which is 
leased or rented or available for lease or rent to any person 
which is not a railroad company.  Vacant land shall be presumed 
to be available for lease or rent if it has not been used as 
operating property for a period of one year preceding the 
valuation date.  Nonoperating property also includes land which 
is not necessary and integral to the performance of railroad 
transportation services and which is not used on a regular and 
continual basis in the performance of these services.  
Nonoperating property also includes that portion of a general 
corporation office building and its proportionate share of land 
which is not used for railway operation or purpose.  
    Sec. 2.  Minnesota Statutes 1982, section 270.84, 
subdivision 1, is amended to read: 
    Subdivision 1.  The commissioner shall annually between 
April 30 and July 31 make a determination of the fair market 
value of the operating property of every railroad company doing 
business in this state as of January 2 of the year in which the 
valuation is made.  In determining the fair market value of the 
portion of operating property within this state, the 
commissioner shall value the operating property as a unit, 
taking into consideration the value of the operating property of 
the entire system, and shall allocate to this state that part 
thereof which is a fair and reasonable proportion of said entire 
system valuation.  If the commissioner uses original cost as a 
factor in determining the unit value of operating property, no 
depreciation or obsolescence allowance shall be permitted. 
However, if the commissioner uses replacement cost as a factor 
in determining the unit value of operating property, then a 
reasonable depreciation and obsolescence allowance may be used 
In making this determination, the commissioner shall employ 
generally accepted appraisal principles and practices which may 
include the unit method of determining value.  The commissioner 
may promulgate temporary rules adopting valuation procedures 
under sections 14.29 to 14.36.  
    The commissioner shall give a report to the legislature in 
February 1980 1985 and in February 1981 1986 on the formula 
which he has used to determine the unit value of railroad 
operating property pursuant to Laws 1979, Chapter 303 this 
article.  This report shall also contain the valuation for 
payable 1980 1985 and 1981 1986 by company and the taxes payable 
in 1980 1985 and 1981 1986 by company based upon the valuation 
of operating property.  The legislature may review the formula, 
the valuation, and the resulting taxes and may make changes in 
the formula that it deems necessary.  
    Sec. 3.  Minnesota Statutes 1982, section 270.86, is 
amended to read: 
    270.86 [APPORTIONMENT AND EQUALIZATION OF VALUATION.] 
    Subdivision 1.  [APPORTIONMENT OF VALUE.] Upon 
determination by the commissioner of the fair market value of 
the operating property of each railroad company, he shall 
apportion such value to the respective counties and to the 
taxing districts therein in conformity with fair and reasonable 
rules and standards to be established by the commissioner 
pursuant to notice and hearing, except as provided in section 
270.81.  In establishing such rules and standards the 
commissioner may consider (a) the physical situs of all station 
houses, depots, docks, wharves, and other buildings and 
structures with an original cost in excess of $10,000; (b) the 
proportion that the length and type of all the tracks used by 
the railroad in such county and taxing district bears to the 
length and type of all the track used in the state; and (c) 
other facts as will result in a fair and equitable apportionment 
of value.  
    Subd. 2.  [EQUALIZED VALUATION.] After making the 
apportionment provided in subdivision 1, the commissioner shall 
determine the equalized valuation of the operating property in 
each county by applying to the apportioned value an estimated 
current year median sales ratio for all commercial and 
industrial property in that county.  If the commissioner decides 
there are insufficient sales to determine a median 
commercial-industrial sales ratio, an estimated current year 
countywide median sales ratio for all property shall be applied 
to the apportioned value.  No equalization shall be made to the 
market value of the operating property if the median sales ratio 
determined pursuant to this subdivision is within five percent 
of the assessment ratio of the railroad operating property.  
    Sec. 4.  Minnesota Statutes 1982, section 270.87, is 
amended to read: 
    270.87 [CERTIFICATION TO COUNTY ASSESSORS.] 
    When the commissioner has made his annual determination of 
the equalized fair market value of the operating property of 
each company in each of the respective counties, and in the 
taxing districts therein, he shall certify the equalized fair 
market value to the county assessor, which shall constitute the 
equalized fair market value of the operating property of the 
railroad company in such county and the taxing districts therein 
upon which taxes shall be levied and collected in the same 
manner as on the commerical and industrial property of such 
county and the taxing districts therein.  
    Sec. 5.  [APPROPRIATION.] 
    There is appropriated from the general fund to the 
commissioner of revenue the amounts necessary to make certain 
refunds of property taxes to railroads for assessment years 1981 
and 1982 as a result of a change in the assessed valuation of 
railroad property.  For purposes of this section, the term 
"property taxes" includes any interest which is required to be 
paid to the railroads.  
    The county auditor shall certify to the commissioner of 
revenue the dollar amount of the refunds paid to the railroads 
by the county and each city, town, school district, and special 
taxing district or portion thereof which is located within the 
county.  The certification must be made on the forms and 
completed by the date prescribed by the commissioner.  The 
commissioner of revenue shall review the certification and make 
changes in the certification that he determines are necessary. 
The amounts of the abatements for a taxing district which is 
located in more than one county shall be aggregated.  The 
commissioner shall determine the amount to be paid to each 
county, city, town, and special taxing district which shall be 
equal to the amount of the abatement in excess of 20 cents per 
capita for each county, city, town, and special taxing district. 
The commissioner shall determine the amount to be paid to each 
school district which shall be equal to the amount of the 
abatement in excess of one dollar per pupil unit for the school 
district.  The 20 cents per capita and the one dollar per pupil 
unit shall relate to the combined abatement amount for all 
railroads for both 1981 and 1982 for each county, city, town, 
school district, and special taxing district.  The commissioner 
shall pay each taxing district as soon as practicable after 
certification, but not before January 1, 1985.  
    This appropriation is available the day after final 
enactment until expended.  
    A county, city, town, school district, and special taxing 
district may include an additional amount in its property tax 
levy for taxes payable in 1985 equal to the difference between 
the amount of tax and interest refunded to a railroad company 
whose valuation was ordered reduced by the tax court and the 
amount reimbursed to the taxing district by the state pursuant 
to this section.  Amounts levied for this purpose shall be 
considered outside of any levy limitations applicable to the 
taxing district.  In the case of a school district, only the 
amount of abatement not reimbursed under this section may be 
considered in the computation of abatement aid under section 
124.214, subdivision 2.  
    Sec. 6.  [EFFECTIVE DATE.] 
    Section 5 is effective the day after final enactment.  The 
remaining sections in this article are effective for the 1984 
assessment and subsequent years, for taxes payable in 1985 and 
subsequent years. 

                              ARTICLE 10 

                            AGRIPROCESSING 
    Section 1.  [41A.01] [PURPOSE.] 
    Sections 1 to 6 provide a framework for an agricultural 
resource loan guaranty program, the purposes of which are to 
further the development of the state's agricultural resources 
and improve the market for its agricultural products.  Public 
debt is authorized by the constitution to be incurred for 
developing agricultural resources by extending credit on real 
estate security.  The program contemplates the use of this power 
not to finance projects of the kind described herein, but to 
provide financial guaranties for a portion of the cost of viable 
projects to the extent necessary to enable qualified developers 
and operators to secure private financing which would not 
otherwise be available.  All credit advanced pursuant to loan 
guaranty commitments is to be secured by subrogation of the 
state to mortgage security and other security interests granted 
to the private lender, in proportion to the amount advanced by 
the state.  A loan guaranty board is established to investigate 
the feasibility of each project, its conformity to the above 
policies and to environmental standards, the qualifications of 
the owners, operators, and lenders, and the nature and extent of 
the security, prior to commitment, and to secure maximum 
financial participation by private persons, not supported by the 
guaranty, to assure that in these respects each project 
satisfies and will continue to satisfy criteria which are 
adequate in the judgment of the board.  
     Sec. 2.  [41A.02] [DEFINITIONS; ACTIONS BY THE STATE.] 
     Subdivision 1.  [SCOPE.] The definition of each term given 
in this section applies whenever the term is used in sections 1 
to 7. 
     Subd. 2.  [AGRICULTURAL RESOURCE.] "Agricultural resource" 
means any organic matter which is available on a renewable basis 
from agricultural processes, including agricultural crop, 
animal, and wood production, waste, and residues. 
     Subd. 3.  [AGRICULTURAL RESOURCE LOAN GUARANTY BOARD; 
BOARD.] "Agricultural resource loan guaranty board" or "board" 
means the commissioner of finance as chairman, the commissioner 
of agriculture, the commissioner of commerce, the commissioner 
of energy and economic development, and the director of the 
pollution control agency. 
     Subd. 4.  [AGRICULTURAL RESOURCE LOAN GUARANTY FUND; 
GUARANTY FUND.] "Agricultural resource loan guaranty fund" or 
"guaranty fund" means the fund created by section 5. 
     Subd. 5.  [AGRICULTURAL RESOURCE LOAN GUARANTY PROGRAM; 
PROGRAM.] "Agricultural resource loan guaranty program" or 
"program" includes all projects and loan guaranties approved 
pursuant to sections 3 and 4. 
    Subd. 6.  [AGRICULTURAL RESOURCE PROJECT; PROJECT.] 
"Agricultural resource project" or "project" means any facility, 
or portion of a facility, located in the state which is operated 
or to be operated primarily for the production from agricultural 
resources of marketable products.  A project includes a facility 
or portion of a facility for mixing or producing substances to 
be mixed with other substances for use as a fuel or as a 
substitute for petroleum or petrochemical feedstocks. 
     Subd. 7.  [APPLICANT.] "Applicant" means any rural 
development finance authority organized, or any county 
exercising the powers of such an authority, pursuant to chapter 
362A, which applies to the state for approval of a guaranty of a 
loan to a borrower for a project.  
     Subd. 8.  [BORROWER.] "Borrower" means any applicant or any 
private individual, company, cooperative, partnership, 
corporation, association, consortium, or other entity organized 
for a common business purpose, which is obligated or to be 
obligated to pay a guaranteed loan. 
     Subd. 9.  [CONSTRUCTION.] "Construction" means construction 
of a new agricultural resource project, or conversion of a 
facility to such a project, or expansion or improvement of a 
project to increase its capacity or efficiency.  "Construction" 
includes acquisition of land, easements, buildings, structures, 
improvements, and equipment and machinery for use in or at the 
site of a project or on easements adjacent to the project site.  
    Subd. 10.  [COST.] "Cost" of a project means the sum of all 
obligations paid or to be paid or incurred by the borrower which 
are reasonably required for the construction and completion of 
the project, including but not limited to (i) surveys, 
estimates, plans, specifications, supervision of construction, 
and other engineering and architectural service; (ii) payments 
under construction contracts and for payment and performance 
bonds; (iii) purchase and installation of equipment and 
machinery; (iv) recording, filing, permit, legal, financial, 
underwriting, placement, commitment, publication, advertising, 
and other charges, fees, and expenses incurred for establishing 
title, mortgage liens, and security interests with respect to 
the project, for securing permits for construction and approval 
of the loan guaranty, for establishing the terms of the loan and 
underlying security agreements, and for offering, selling, or 
placing with investors and printing and delivering the 
obligations evidencing the loan; and (v) interest, discount, 
fees, and expenses accruing with respect to the loan, and taxes 
and other government charges payable with respect to the 
project, during construction.  
    Subd. 11.  [LENDER.] "Lender" means any holder or holders 
of bonds, notes, or other obligations evidencing a guaranteed 
loan, any trustee representing those holders, and any investment 
or commercial banking institution, savings and loan institution, 
insurance company, investment company, or other financial 
institution or institutional investor making, purchasing, or 
participating in a loan or any part of a loan.  
    Subd. 12.  [LOAN.] "Loan" means any obligation to repay 
money borrowed to finance the construction of a project or to 
refund or refinance such an obligation.  
    Subd. 13.  [LOAN AGREEMENT.] "Loan agreement" means a 
written agreement or agreements setting forth the terms and 
conditions of the obligation of the borrower to the lender and 
the pledges and covenants made and mortgage lien and other 
security interests granted for the security of the obligations, 
including a mortgage, note, indenture, or other agreement 
however designated.  
    Subd. 14.  [LOAN GUARANTY.] "Loan guaranty" means a written 
agreement executed on behalf of the state that guarantees, in 
accordance with the terms and conditions contained in the 
agreement or in a loan agreement, the payment of sums of money 
owing by a borrower to a lender.  
    Subd. 15.  [STATE.] "State" actions contemplated in 
sections 1 to 6 may be taken on behalf of the state by 
resolutions of the agricultural resource loan guaranty board, 
subject to approval by the governor if required by the governor, 
or by a member of the board or another state officer in the 
department headed by the member, pursuant to authority delegated 
by resolution of the board.  Resolutions of the board are 
effective when approved by the vote of a majority of its members.
    Sec. 3.  [41A.03] [LOAN GUARANTIES.] 
    Subdivision 1.  [AUTHORITY FOR AND LIMITATION OF GUARANTY.] 
Subject to the provisions of sections 1 to 6 and subject to 
section 16A.80 and upon determination that a loan will serve the 
public purposes and satisfy the conditions set forth in sections 
1 to 6, the state may guarantee and commit to guarantee against 
loss an amount not exceeding 90 percent, with accrued interest, 
of a loan for the construction of an agricultural resource 
project (or the refunding or refinancing of a loan).  The loan 
must be secured by a first mortgage lien on and security 
interest in all real and personal property comprising the 
project and other collateral as provided in the loan agreement.  
    Subd. 2.  [LIMITATION OF LOAN AMOUNT.] The total principal 
amount of any guaranteed loan may not exceed 80 percent of the 
total cost of the related project as estimated by the state at 
the time the commitment to guarantee is made or, in the case of 
a refunding or refinancing loan, 80 percent of the aggregate 
amount of principal and interest refunded or refinanced.  If the 
actual cost exceeds the estimate the state may, upon request of 
the borrower and the lender, consent to an increase of the loan 
by a principal amount not greater than 80 percent of the excess 
cost, and may increase the guaranteed amount by not more than 90 
percent of the increase in the principal amount, and accrued 
interest on that amount.  
    Subd. 3.  [REQUIRED PROVISIONS.] A loan guaranty or loan 
agreement pertaining to any loan guaranteed by the state must 
provide that:  
    (a) Payments of principal and interest made by the borrower 
under the loan shall be applied by the lender to reduce the 
guaranteed and nonguaranteed portion of the loan on a 
proportionate basis, and the nonguaranteed portion shall not in 
any event receive preferential treatment over the guaranteed 
portion.  
     (b) A period of grace shall be allowed of not less than 60 
days from a date a principal or interest payment is due, prior 
to the making of demand for payment pursuant to the loan 
guaranty, to permit adequate time for a decision on behalf of 
the state regarding principal and interest assistance in 
accordance with subdivision 4.  Payment as required by the loan 
guaranty shall be made within 60 days after receipt by the state 
of written demand complying with the terms and conditions of the 
guaranty.  
     (c) The lender may not accelerate repayment of the loan or 
exercise other remedies available to the lender if the borrower 
defaults, unless (i) the borrower fails to pay a required 
payment of principal or interest, or (ii) the state consents in 
writing, or (iii) as otherwise permitted in the loan guaranty. 
In the event of a default, the lender may not make demand for 
payment pursuant to the guaranty unless the state agrees in 
writing that such default has materially affected the rights or 
security of the parties, and finds that the lender should be 
entitled to receive payment pursuant to the loan guaranty.  
    (d) If a payment of principal or interest is made by the 
state upon default of the borrower, the state shall be 
subrogated to the rights of the lender with respect to the 
payment.  
    (e) The borrower shall have promptly prepared and delivered 
to the state annual audited financial statements of the project 
prepared according to generally accepted accounting principles.  
     (f) Duly authorized representatives of the state shall have 
access to the project site at reasonable times during 
construction and operation of the project.  
    (g) The borrower shall maintain adequate records and 
documents concerning the construction and operation of the 
project in order that representatives of the state may determine 
its technical and financial conditions and its compliance with 
environmental requirements.  The records shall include the 
amounts of all sales and use taxes paid on personal property and 
services purchased for the construction and operation of the 
project, with tax receipts furnished by the sellers or other 
supporting documentation determined by the board to be 
satisfactory.  The amounts of those taxes shall be reported to 
the board in the manner and at the times required by the board. 
     (h) The borrower shall protect and preserve at all times 
the project assets and other collateral securing the loan and 
shall assist in liquidation of collateral to minimize loss in 
the event of default.  
     (i) Orderly liquidation of assets of the project shall be 
provided for in the event of default, with an option on the part 
of the state to acquire from the lender the lender's interest in 
the assets pursuant to the nonguaranteed portion of the loan.  
    (j) The state shall be paid at or prior to the closing of 
the guaranteed loan a fee or fees for the loan guaranty or the 
commitment to guarantee the loan.  The aggregate fee may not 
exceed one percent of the total principal amount of the 
guaranteed portion of the loan.  
    (k) The lender shall perfect and maintain the mortgage lien 
on the real estate and the security interest in personal 
property and collateral granted as security for the loan, and 
shall cause all other loan servicing functions to be performed 
which are normally required or performed by a reasonable and 
prudent lender with respect to a loan without a guaranty.  
    (l) The state shall be notified in writing without delay of 
(i) the date and amount of and basis for each disbursement of 
loan proceeds; (ii) any nonpayment of principal or interest due 
(within ten days after the due date and with evidence of 
notification to the borrower); (iii) any failure to honor a 
commitment by any person of an intended source of capital for 
the project; and (iv) any significant adverse changes from 
original cash flow projections as evidenced by reports from the 
borrower, or any other known evidence that the borrower might be 
unable to meet a future scheduled payment of principal or 
interest.  
    (m) The loan agreement shall require the borrower to 
establish a reserve, from the proceeds of the loan or otherwise, 
to be maintained with the lender or with a trustee for the 
holders of the borrower's obligations in cash or securities of a 
specified market value not less than the annual amount which 
would be required to amortize the entire amount of the loan over 
the term (or at the rate of yield resulting from the interest 
rates) provided in the loan agreement.  
    Subd. 4.  [PRINCIPAL AND INTEREST ASSISTANCE.] The state 
may at any time enter into a written contract with the borrower 
to pay the lender, on behalf of the borrower, an amount not 
greater than the amount of principal and interest to become due 
on one or more subsequent dates, without acceleration, if the 
state determines that (i) the borrower is not in default in 
payment of principal or interest due more than 60 days prior to 
the date of the contract; (ii) the borrower is or may become 
unable to meet in full principal or interest payments, or both, 
which are due or to become due within a specified period; (iii) 
it is in the public interest to permit the borrower to continue 
to pursue the purposes of the project; (iv) the probable net 
financial loss to the state will be less than that which would 
result in the event of a default; (v) the borrower is obligated 
by the contract to reimburse the state for all principal or 
interest advanced, with interest on those amounts, upon terms 
and conditions satisfactory to the state; and (vi) funds are 
available for allocation to the account established for the 
project in the guaranty fund, and are continuously allocated to 
the account in accordance with the provisions of section 4, 
subdivision 3, in an amount equal to the amount of interest on 
the advances until actually reimbursed to the state by the 
borrower.  All sums so advanced and interest on those amounts 
shall be secured by the mortgage lien and security interest 
granted by the loan agreement, but none of the advances shall 
thereafter be repaid to the state until and unless all principal 
and interest currently due on the loan has been fully paid.  In 
the event of subsequent default by the borrower, acceleration by 
the lender, and payment by the state of the full amount due 
under the loan guaranty, the state shall be subrogated to the 
rights of the lender with respect to the principal paid by it 
under the contract.  Upon payment of the loan in full, with 
accrued interest, the remaining amount of the advances and 
interest on the advances may be paid to the state.  
     Sec. 4.  [41A.04] [APPLICATION AND APPROVAL.] 
    Subdivision 1.  [REQUIREMENTS.] (a) Any rural development 
finance authority, or county exercising the powers of such an 
authority, may file a written application with the state 
commissioner of finance, to be considered by the agricultural 
resource loan guaranty board, for a guaranty by the state of a 
portion of a loan for an agricultural resource project.  In 
general, the application must provide information similar to 
that required by an investment banking or other financial 
institution considering such a project for debt financing. 
Specifically, each application must include in brief but precise 
form the following information, as supplied by the applicant, 
the borrower, or the lender:  
     (1) a description of the scope, nature, extent, and 
location of the proposed project, including the identity of the 
borrower and a preliminary or conceptual design of the project;  
     (2) a description of the technology to be used in the 
project and the prior construction and operating experience of 
the borrower with such projects;  
     (3) a detailed estimate of the items comprising the total 
cost of the project, including escalation and contingencies, 
with explanation of the assumptions underlying the estimate;  
     (4) a general description of the financial plan for the 
project, including the mortgage and security interests to be 
granted for the security of the guaranteed loan, and all sources 
of equity, grants, or contributions or of borrowing the 
repayment of which is not to be secured by the mortgage and 
security interests, or, if so secured, is expressly subordinated 
to the guaranteed loan;  
     (5) an environmental report analyzing potential 
environmental effects of the project, any necessary or proposed 
mitigation measures, and other relevant data available to the 
applicant to enable the board to make an environmental 
assessment;  
     (6) a list of applications to be filed and estimated dates 
of approvals of permits required by federal, state, and local 
government agencies as conditions for construction and 
commencement of operation of the project;  
    (7) an estimated construction schedule;  
     (8) an analysis of the estimated cost of production of and 
market for the product, including economic factors justifying 
the analysis and proposed and actual marketing contracts, 
letters of intent, and contracts for the supply of feedstock;  
     (9) a description of the management experience of the 
borrower in organizing and undertaking similar projects;  
     (10) pro forma cash flow statements for the first five 
years of project operation including income statements and 
balance sheets;  
     (11) a description of the borrower's organization and, 
where applicable, a copy of its articles of incorporation or 
partnership agreement and bylaws;  
    (12) the estimated amount of the loan and percentage of 
guaranty requested, the proposed repayment schedule, and other 
terms and conditions and security provisions of the loan;  
    (13) an estimate of the amounts and times of receipt of 
guaranty fees, sales and use taxes, property tax increments, and 
any other governmental charges which may be available for the 
support of the state guaranty fund as a result of the 
construction of the project, with an analysis of the assumptions 
on which the estimate is based;  
    (14) a copy of any lending commitment issued by a lender to 
the borrower;  
    (15) a statement from the lender, if identified, as to its 
general experience in financing and servicing debt incurred for 
projects of the size and general type of the project, and its 
proposed servicing and monitoring plan; and 
    (16) additional information required by the board.  
    (b) The applicant shall pay upon filing of the application 
a fee equal to .25 percent of the amount of the loan guaranty 
requested.  The fee shall be paid to the commissioner of finance 
and deposited in the general fund.  If the board determines not 
to issue a commitment for the project, the fee shall be refunded 
to the applicant, less the board's cost of processing, 
reviewing, and evaluating the application.  If the board issues 
a commitment for the project and the application fee exceeds the 
board's cost of processing, reviewing, and evaluating the 
application, the balance shall be transferred from the general 
fund to the project account in the guaranty fund and credited 
against the amount of the commitment fee required in section 3, 
subdivision 3, clause (j).  The county or rural development 
finance authority may require the proposed borrower under the 
project to pay the application fee.  
    Subd. 2.  [ENVIRONMENTAL ASSESSMENT.] Notwithstanding any 
other law or rule, no environmental impact statement must be 
completed prior to the approval of an application and the 
issuance of a conditional commitment for the guaranty of a loan 
for an agricultural resource project, or the taking of any other 
action permitted by sections 1 to 7, including the issuance of 
bonds, which is considered necessary or desirable by the board 
to prepare for a final commitment and to make it effective. 
Environmental review, to the extent required by law, shall be 
made in conjunction with the issuance by state agencies of 
environmental permits for the project.  Permits may be applied 
for prior to the issuance of a conditional commitment.  Action 
shall be taken as expeditiously as possible on environmental 
review and all permits required.  Environmental review shall be 
completed within 180 days after the initial filing of an 
application to the pollution control agency for the first 
permit.  Final action shall be taken on permits within 90 days 
after completion of environmental review or, as to any permit 
requiring a public hearing, within 90 days after the receipt of 
the hearing examiner's report.  
    Subd. 3.  [COMMITMENT.] The board shall determine as to 
each project for which an application is submitted whether it 
appears in the board's judgment to conform to the purposes and 
policies stated in section 1 to an extent measured by criteria 
which in the board's judgment are satisfactory.  In evaluating 
applications the board shall consider the extent to which the 
public subsidies sought by the applicant under the program would 
provide the project with an unfair advantage in competing with 
other products produced or processed in Minnesota.  It may but 
need not adopt rules setting forth criteria for evaluating 
applications for loan guaranties.  Upon determination by the 
board that a project conforms to the purposes and policies in 
section 1, it may by resolution make on behalf of the state a 
conditional commitment to guarantee a portion of the proposed 
loan as it shall determine, not exceeding the limitations set 
forth in section 3.  No action is allowable under section 
116B.03, subdivision 1, with respect to acts of any person 
authorized or required in order to execute the resolution.  The 
commitment is not binding upon the state until and unless the 
following conditions are satisfied.  
    (1) the board has created a project account for the project 
in the guaranty fund and has allocated to the account, from 
funds previously appropriated by the legislature or from the 
proceeds of bonds issued or to be issued for purposes of the 
guaranty fund pursuant to authorization previously enacted by 
the legislature, and not previously allocated to any other 
project account, in an aggregate amount sufficient, with any 
other amount then on hand in the project account, to pay the 
entire guaranteed principal amount of the proposed loan, plus 
interest on that amount for one year.  The bonds authorized by 
the legislature need not be issued until and unless the proceeds 
allocated to a project account must be deposited in the account 
to comply with clause (2) or (3).  
    (2) the board has deposited in the project account bond 
proceeds or other funds in an amount not less than the annual 
amount which would be required to amortize the guaranteed 
portion of the principal of the loan over the term and at the 
interest rate (or at the rate of yield resulting from the 
interest rates) provided in the loan agreement.  
    (3) the board has executed on behalf of the state a final 
loan guaranty instrument in conformity with section 3, which 
binds the state to offer state bonds for sale at the times and 
in the amounts required, with amounts on hand in the project 
account, to pay all amounts to become due and payable under the 
loan guaranty, within the authorization and allocation referred 
to in clause (1), and when sold, to issue the bonds and apply 
the proceeds to make these payments.  
    Subd. 4.  [RULE MAKING AUTHORITY.] In order to effectuate 
the purposes of sections 1 to 7, the board shall adopt rules 
which are subject to the provisions of chapter 14.  The board 
may adopt temporary rules which may be effective until December 
31, 1985.  
    Sec. 5.  [41A.05] [MINNESOTA AGRICULTURAL RESOURCE LOAN 
GUARANTY FUND AND BONDS.] 
    Subdivision 1.  [ESTABLISHMENT OF FUND.] For the purpose of 
developing the state's agricultural resources by extending 
credit on real estate security, the agricultural resource loan 
guaranty fund is established as a special and dedicated fund to 
be held and invested separately from all other funds of the 
state.  All proceeds of state bonds authorized and issued for 
the purposes of the fund, and all guaranty fees, retail sales 
taxes, property tax increments, and other money from any source 
which may be credited to the fund pursuant to law or pursuant to 
the terms of grants, contributions, or contracts are 
appropriated and shall remain available for the purposes of the 
fund until those purposes have been fully accomplished.  The 
fund may be used only for paying amounts due under loan 
guaranties and principal and interest assistance contracts 
entered into by the state, pursuant to the agricultural resource 
loan guaranty program.  
    Subd. 2.  [ISSUANCE OF BONDS.] To provide money 
appropriated to the agricultural resource loan guaranty fund for 
the purposes of the program, when authorized by law and 
requested by the board, the commissioner of finance shall issue 
and sell bonds of the state.  The state irrevocably pledges the 
full faith, credit, and taxing powers of the state to the prompt 
and full payment of these bonds.  The proceeds of the bonds when 
issued, except accrued interest and any premium received upon 
sale, shall be credited to the guaranty fund.  All the bonds 
shall be sold and issued and shall be secured in the manner, 
upon the terms, and with the effect prescribed for state 
building bonds in chapter 16A, and with the security provisions 
set forth in chapter 16A and in article XI, sections 4 to 7 of 
the constitution.  
    Subd. 3.  [COVENANT.] In fulfillment of the state's 
covenant with the beneficiary of each loan guaranty executed by 
the board on behalf of the state pursuant to the agricultural 
resource loan guaranty program, in accordance with section 4, 
subdivision 3, the state will not limit or alter the rights 
vested in the board to comply with the terms of the loan 
guaranties.  The state agrees not to rescind or cancel any 
authorization of an amount of bonds, or the appropriation of the 
proceeds of bonds for the purposes of the program, which, with 
the sum of the amounts then held in each project account in the 
guaranty fund, would be required, in the event of an immediate 
default on each guaranteed loan, to pay the balance of the 
guaranteed portion of the principal of all guaranteed loans with 
interest accrued and to accrue thereon for one year.  
    Subd. 4.  [INCOME TAX EXEMPTION.] In the issuance of state 
bonds and the making of loan guaranties for the purposes of the 
program, the commissioner of finance and the board may and shall 
make all provisions and do or cause to be done all acts and 
things, consistent with sections 1 to 6, which are or may be 
effective under federal laws and regulations to comply with 
conditions for the exemption of interest on such bonds from 
federal income taxation.  However, if for any reason, whether 
existing at the date of issue of any bonds or the date of 
execution of any loan guaranty or thereafter, the interest on 
any such bonds shall be or become subject to federal income 
taxes, this shall not impair or affect the validity of the bonds 
or of any loan guaranty or the provisions made for the security 
thereof, and shall not impair or affect the covenant made by the 
state in subdivision 3.  Nothing herein affects the federal or 
state income tax treatment of interest on obligations of a 
borrower other than the state, whether or not guaranteed by the 
state. 
    Sec. 6.  [41A.06] [PROJECT TAXES AND OTHER CHARGES.] 
    Subdivision 1.  [APPROPRIATION.] The payments, taxes, and 
governmental charges described in this section which are 
received as a consequence of the undertaking, completion, and 
operation of each agricultural resource loan project for which a 
loan guaranty is made by the state are appropriated to the loan 
guaranty fund.  This appropriation shall not lapse at the close 
of any fiscal year under the provisions of section 16A.28, and 
the receipts from the appropriation shall remain available as 
provided in section 5, subdivision 1.  The state is not 
obligated, however, to continue the appropriation with respect 
to charges not yet collected, except to the extent determined to 
be necessary for compliance with the covenant contained in 
section 5, subdivision 3.  
    Subd. 2.  [ALLOCATION TO PROJECT ACCOUNTS.] Receipts of 
charges related to a particular project shall be deposited and 
recorded in its project account in the guaranty fund; but the 
board may reallocate receipts in any project account which cause 
the amount held in the account to exceed the minimum balance 
established initially pursuant to section 4, subdivision 3, 
clause (2).  The reallocation may be made to another project 
account for the purpose of maintaining the minimum balance in 
the account.  
     Subd. 3.  [PAYMENTS BY BORROWERS.] Guaranty and commitment 
fees paid by borrowers pursuant to the loan guaranty provision 
required by section 3, subdivision 3, clause (j), and repayments 
by borrowers of amounts advanced by the state under contracts 
referred to in section 3, subdivision 4, shall be deposited in 
the project account for the borrower's project and shall not be 
disbursed or transferred for any purpose other than the 
fulfillment of the state's obligations under the loan guaranty 
for that project.  Funds may be transferred out of the account 
if the minimum required balance in the project account is 
maintained and exceeds the aggregate amount of fees and payments 
previously received from the borrower plus interest received 
from the investment thereof.  
     Subd. 4.  [SALES AND USE TAXES.] All collections of the 
excise taxes imposed by chapter 297A upon retail sales, and upon 
the privilege of use, storage, or consumption in Minnesota, of 
personal property and services purchased for the construction or 
operation of any project for which a loan guaranty has been made 
or conditionally committed, less any refunds required by law and 
a proportionate share of the cost of administration and 
enforcement of the assessment and collection of the taxes, are 
appropriated and shall be deposited from the general fund into 
the project account in the guaranty fund at least once each year 
from and after the date of the conditional commitment.  The 
commissioner of finance shall secure from each borrower the 
amount of taxes so imposed and from the commissioner of revenue 
the amount of refunds or costs to be deducted from them.  
    Subd. 5.  [PROPERTY TAX INCREMENTS.] The applicant for a 
loan guaranty for any project, and the county in which the 
project is situated, shall do all acts and things necessary for 
the computation and segregation of property tax increments 
resulting from the construction of the project in accordance 
with the provisions of section 362A.05, and for the remittance 
to the commissioner of finance, for deposit in the loan guaranty 
fund, of all tax increments received from and after the date of 
the conditional commitment for the loan guaranty.  The board may 
agree to accept a pledge of only a portion of the tax 
increment.  If the project account contains the minimum balance 
required by section 4, subdivision 3, the board may annually 
return the excess tax increment to be distributed as provided by 
section 273.75, subdivision 2, clause (d), until the increment 
has been discharged under the agreement or section 11.  
    Sec. 7.  [41A.07] [ADVISORY COMMISSION.] 
    The board may appoint an advisory commission, consisting of 
at least five members.  The members of the commission shall 
include individuals with expertise in agricultural processing, 
commercial lending and financing of similar or related projects, 
agricultural economics, and engineering, chemistry, and other 
natural sciences related to the projects.  The commission shall 
advise the board on establishing a workable program pursuant to 
sections 1 to 6 and may provide assistance in evaluating 
applications for loan guarantees.  The terms and compensation of 
commission members shall be governed by section 15.059, except 
that subdivision 5 shall not apply.  
    Sec. 8.  Minnesota Statutes 1982, section 297A.44, 
subdivision 1, is amended to read: 
    Subdivision 1.  All revenues, including interest and 
penalties, derived from the excise and use taxes imposed by 
sections 297A.01 to 297A.44 shall be deposited by the 
commissioner in the state treasury and credited to the general 
fund.  All excise and use taxes derived from sales and use of 
property and services purchased for the construction and 
operation of an agricultural resource project, from and after 
the date on which a conditional commitment for a loan guaranty 
for the project is made pursuant to section 4, subdivision 3, 
shall be deposited in the agricultural resource loan guaranty 
fund.  The commissioner of finance shall certify to the 
commissioner the date on which the project received the 
conditional commitment.  The amount deposited in the loan 
guaranty fund shall be reduced by any refunds and by the costs 
incurred by the department of revenue to administer and enforce 
the assessment and collection of the taxes.  
    Sec. 9.  Minnesota Statutes 1982, section 362A.01, 
subdivision 1, is amended to read: 
    Subdivision 1.  Any county or combination of counties by 
resolution of the county board or boards may establish a rural 
development financing authority as a public nonprofit 
corporation with the same powers and duties as those conferred 
and imposed on a private nonprofit corporation by chapter 317, 
and all present and future laws amending or supplementing that 
chapter, except as otherwise or additionally provided herein.  
No such authority shall transact any business or exercise any 
powers until a certified copy of the resolutions of each 
participating county board has been submitted to the secretary 
of state and a certificate of incorporation issued pursuant to 
section 317.10.  Alternatively, a county may determine by 
resolution of the county board (without such filing) to exercise 
the powers granted in this chapter to a rural development 
finance authority.  
    Sec. 10.  [362A.041] [APPLICATIONS FOR LOAN GUARANTIES.] 
    The authority, or a county exercising the powers of an 
authority pursuant to section 362A.01, may undertake or 
participate in undertaking a project deemed to further the 
policies and purposes of the agricultural resource loan guaranty 
program established and described in sections 1 to 6, by 
applying to the agricultural resource loan guaranty board for a 
guaranty by the state of a portion of a loan for the project to 
be secured by the applicant, or by another eligible borrower. 
For this purpose it may do all acts and things required of an 
applicant or of a borrower under the provisions of sections 1 to 
6, including but not limited to the computation, segregation, 
and application of tax increments by deposit in the loan 
guaranty fund under the terms of the loan guaranty.  
    Sec. 11.  Minnesota Statutes 1982, section 362A.05, is 
amended to read: 
    362A.05 [AGREEMENTS FOR RESERVATION OF TAX INCREMENTS.] 
    The authority may enter into an agreement with any county 
in which a project is to be situated, or a county exercising the 
powers of an authority may adopt a resolution, under which the 
increment of taxable value of property to be created by the 
constituting an agricultural resource project for which a 
conditional commitment for a loan guaranty has been made by the 
state as provided in section 4, subdivision 3, over and above 
the taxable value of the project site as last finally determined 
before the project was undertaken, may be excluded from the 
taxable value of property on which the mill rate of taxes is 
computed in every subsequent year, for so long as may be agreed 
provided in the loan guaranty, but the aggregate mill rate of 
taxes levied by the county and all other taxing districts on 
other properties in each such year shall be spread also on the 
incremental taxable value of the project, and the tax resulting 
therefrom, when collected, shall be remitted to the authority, 
and may be pledged, together with charges or special 
assessments, to pay or guarantee the payment of its bonds, or 
may be used by the authority for the purposes stated in section 
362A.01, subdivision 2 or to the county, as the case may be, for 
deposit and use in the loan guaranty fund of the state as 
provided in sections 1 to 6.  The tax increment for an 
agricultural resource project shall be discharged when either of 
the following occurs:  (a) the loan obligation has been 
satisfied; or (b) the amount in the project account equals the 
amount of the guaranteed portion of the outstanding principal 
and interest on the guaranteed loan.  Every county shall have 
the power by resolution of the county board to do all acts and 
things necessary for the computation, segregation, and 
application of tax increments under agreements made with the 
authority the loan guaranty in accordance with this section.  
This section shall not apply with respect to any project 
established subsequent to August 1, 1979.  
    Sec. 12.  [AUTHORIZATION OF BONDS.] 
    To provide money in the state agricultural resource loan 
guaranty fund, for the purpose of the program for which this 
fund is appropriated and dedicated under the provisions of 
sections 1 to 6, the commissioner of finance may issue bonds of 
the state in the aggregate amount of $12,000,000.  Before the 
issuance of any series of the bonds the loan guaranty board 
shall determine by resolution that the amount to be issued will 
be needed to make payments due under one or more guaranties 
executed with respect to outstanding loans in the program, or is 
needed to maintain within the guaranty fund a balance sufficient 
in the judgment of the board to assure compliance by the state 
with its covenant contained in section 5, subdivision 3.  The 
bonds shall be sold and issued in the manner, upon the terms, 
and with the effect prescribed by sections 1 to 6 and by the 
constitution, article XI, sections 4 to 7.  
    Sec. 13.  [EFFECTIVE DATE.] 
    This article is effective the day following final enactment.

                               ARTICLE 11

                             SALES RATIOS 
    Section 1.  Minnesota Statutes 1982, section 124.2131, 
subdivision 1, is amended to read:  
    Subdivision 1.  [ADJUSTED ASSESSED VALUE.] (a) 
[COMPUTATION.] The equalization aid review committee, consisting 
of the commissioner of education, the commissioner of 
administration, the commissioner of agriculture, and the 
commissioner of revenue, is hereby continued and permanently 
established.  The duty of this committee shall be to review the 
assessed valuation of the districts of the state.  When such 
reviews disclose reasonable evidence that the assessed valuation 
of any district furnished by any county auditor is not based 
upon the market value of taxable property in such district, then 
said committee shall call upon the department of revenue to 
ascertain the market value of such property, and adjust such 
values as required by law to determine the adjusted assessed 
valuation The department of revenue shall annually conduct an 
assessment/sales ratio study of the taxable property in each 
school district in accordance with the procedures referenced in 
paragraphs (b) and (c).  Based upon the results of this 
assessment/sales ratio study, the department of revenue shall 
determine an aggregate equalized assessed value for the various 
strata of taxable property in each school district, which value 
shall be designated as the adjusted assessed value.  The 
department of revenue shall take such steps as are necessary in 
the performance of that duty and may incur such expense as is 
necessary therefor.  The commissioner of revenue is authorized 
to reimburse any county or governmental official for services 
performed at his request in ascertaining such adjusted 
valuation.  On or before March 15, annually, the department of 
revenue shall submit its report on the assessed values 
established by the previous year's assessment to said committee 
for approval or rejection and, if approved, such report shall be 
filed not later than the following July 1 with the commissioner 
of education and each county auditor for those school districts 
for which he has the responsibility for determination of mill 
rates.  A copy of the adjusted assessed value so filed shall be 
forthwith mailed to the clerk of each district involved and to 
the county assessor or supervisor of assessments of the county 
or counties in which such district is located. 
    (b) [METHODOLOGY.] In making its annual assessment/sales 
ratio studies, the department of revenue shall use a methodology 
consistent with the most recent Standard on Assessment Ratio 
Studies published by the assessment standards committee of the 
International Association of Assessing Officers.  The 
commissioner of revenue shall supplement this general 
methodology with specific procedures necessary for proper 
execution of the study in accordance with other Minnesota laws 
impacting the assessment/sales ratio study.  The commissioner 
shall document these specific procedures in writing and shall 
publish the procedures in the State Register, but these 
procedures will not be considered "rules" pursuant to the 
Minnesota Administrative Procedure Act.  By January 15, 1985, 
the commissioner shall report to the chairmen of the house tax 
committee and the senate committee on taxes and tax laws the 
results of a study which the commissioner shall prepare 
comparing the 1983 sales ratio study based upon the original 
1983 assessment/sales ratio study methodology with the new 
methodology as provided in clause (b).  The 1984 adjusted 
assessed values which are certified to the commissioner of 
education shall be computed using the 1983 assessment/sales 
ratio study methodology unless the 1985 legislature directs 
otherwise.  
    (c) [AGRICULTURAL LANDS.] For purposes of determining the 
adjusted assessed value of agricultural lands for the 
calculation of 1977 adjusted assessed values and thereafter, the 
market value of agricultural lands shall be the arithmetic 
average of (1) the price for which the property would sell in an 
arms length transaction, and (2) the income which could be 
derived from its free market gross rental rate capitalized at a 
rate of nine percent. 
    Sec. 2.  Minnesota Statutes 1982, section 271.01, 
subdivision 5, is amended to read: 
    Subd. 5.  [JURISDICTION.] The tax court shall have 
statewide jurisdiction.  Except for an appeal to the supreme 
court or any other appeal allowed under this subdivision, the 
tax court shall be the sole, exclusive, and final authority for 
the hearing and determination of all questions of law and fact 
arising under the tax laws of the state, as defined in this 
subdivision, in those cases that have been appealed to the tax 
court and in any case that has been transferred by the district 
court to the tax court.  The tax court shall have no 
jurisdiction in any case that does not arise under the tax laws 
of the state or in any criminal case or in any case determining 
or granting title to real property or in any case that is under 
the jurisdiction of the probate court.  The small claims 
division of the tax court shall have no jurisdiction in any case 
dealing with property valuation or assessment for property tax 
purposes until the taxpayer has appealed the valuation or 
assessment to the town or city board of equalization and to the 
county board of equalization, except for those taxpayers whose 
original assessments are determined by the commissioner of 
revenue.  A property owner, other than a public utility, mining 
company, or railroad company for which the original assessments 
are determined by the commissioner of revenue, may not appear 
before the tax court unless a timely appearance in person, by 
counsel, or by written communication has been made before the 
county board of equalization as provided in section 274.13, to 
appeal the assessment of the property, or that he can establish 
that he did not receive notice of his market value at least ten 
days before the county board of review meeting.  The tax court 
shall have no jurisdiction in any case involving an order of the 
state board of equalization unless a taxpayer contests the 
valuation of his property. Only the taxes, aids and related 
matters contained in chapters 60A, 124, 270, 272, 273, 274, 275, 
276, 277, 278, 279, 285, 287, 288, 290, 290A, 291, 292, 293, 
294, 295, 296, 297, 297A, 297B, 298, 299, 340, 473, 473F, and 
477A shall be considered tax laws of this state subject to the 
jurisdiction of the tax court.  This subdivision shall not be 
construed to prevent an appeal, as provided by law, to an 
administrative agency, board of equalization, or to the 
commissioner of revenue.  Wherever used in chapter 271, the term 
commissioner shall mean the commissioner of revenue, unless 
otherwise specified. 
    Sec. 3.  Minnesota Statutes 1982, section 271.06, 
subdivision 6, is amended to read: 
    Subd. 6.  [HEARINGS; DETERMINATION OF ISSUES; DEFAULT.] The 
tax court shall hear, consider, and determine without a jury 
every appeal de novo.  A tax court judge may empanel an advisory 
jury upon his motion.  The tax court shall hold a public hearing 
in every case.  All such parties shall have an opportunity to 
offer evidence and arguments at the hearing; provided, that the 
order of the commissioner or the appropriate unit of government 
in every case shall be prima facie valid.  When an appeal to the 
tax court has been taken from an order or determination of the 
commissioner or from the appropriate unit of government, the 
proceeding shall be an original proceeding in the nature of a 
suit to set aside or modify the order or determination. In case 
no appellant shall appear the tax court shall enter its order 
affirming the order of the commissioner of revenue or the 
appropriate unit of government from which the appeal was taken.  
If the department of revenue's sales ratio study is introduced 
in tax court as evidence, the sales ratio data from the study 
shall be admissible as evidence only as provided in section 
278.05, subdivision 4.  
    Sec. 4.  Minnesota Statutes 1983 Supplement, section 
278.01, subdivision 1, is amended to read: 
    Subdivision 1.  [DETERMINATION OF VALIDITY.] Any person 
having any estate, right, title, or interest in or lien upon any 
parcel of land, who claims that such property has been 
partially, unfairly, or unequally assessed in comparison with 
other property in the city or county, or that the parcel has 
been assessed at a valuation greater than its real or actual 
value, or that the tax levied against the same is illegal, in 
whole or in part, or has been paid, or that the property is 
exempt from the tax so levied, may have the validity of his 
claim, defense, or objection determined by the district court of 
the county in which the tax is levied or by the tax court by 
serving two copies of a petition for such determination upon the 
county auditor and one copy each on the county treasurer and the 
county attorney and filing the same, with proof of service, in 
the office of the clerk of the district court before the 16th 
day of May of the year in which the tax becomes payable.  A 
property owner, other than a public utility, mining company, or 
the railroad company for which the original assessments are 
determined by the commissioner of revenue, may not appear before 
the district court or tax court unless a timely appearance in 
person, by counsel, or by written communication has been made 
before the county board of equalization as provided in section 
274.13, to appeal the assessment of the property, or that he can 
establish that he did not receive notice of his market value at 
least ten days before the county board of review meeting.  The 
county auditor shall immediately forward one copy of the 
petition to the appropriate governmental authority in a home 
rule charter or statutory city or town in which the property is 
located if that city or town employs its own certified 
assessor.  A copy of the petition shall also be sent to the 
school board of the school district in which the property is 
located.  A petition for determination under this section may be 
transferred by the district court to the tax court.  An appeal 
may also be taken to the tax court under chapter 271 at any time 
following receipt of the valuation notice required by section 
273.121 but prior to May 16 of the year in which the taxes are 
payable. 
    Sec. 5.  Minnesota Statutes 1983 Supplement, section 
278.05, subdivision 4, is amended to read: 
    Subd. 4.  [SALES RATIO STUDIES AS EVIDENCE.] The sales 
ratio studies published by the department of revenue, or any 
part of the studies, or any copy of the studies or records 
accumulated to prepare the studies which is prepared by the 
commissioner of revenue for the equalization aid review 
committee for use in determining school aids shall be admissible 
in evidence as a public record without the laying of a 
foundation if the sales prices used in the study are adjusted 
for the terms of the sale to reflect market value and are 
adjusted to reflect the difference in the date of sale compared 
to the assessment date.  Additional evidence relevant to the 
sales ratio study is also admissible.  No sales ratio study 
received into evidence shall be conclusive or binding on the 
court and evidence of its reliability or unreliability may be 
introduced by any party including, but not limited to, evidence 
of inadequate adjustment of sale prices for terms of financing, 
inadequate adjustment of sales prices to reflect the difference 
in the date of sale compared to the assessment date, and 
inadequate sample size.  
    No reduction in value on the grounds of discrimination 
shall be granted on the basis of a sales ratio study published 
by the department of revenue unless 
    (a) the sales prices are adjusted for the terms of the sale 
to reflect market value, 
    (b) the sales prices are adjusted to reflect the difference 
in the date of sale compared to the assessment date, 
    (c) there is an adequate sample size, and 
    (d) the median ratio of the class of property of the 
subject property in the same county, city, or town of the 
subject property is lower than the assessment ratio of the 
subject property by at least ten percent.  
    If the above criteria are met and a reduction in value on 
the grounds of discrimination is granted based upon the sales 
ratio study, the reduction shall reflect only the difference 
between the assessment/sales ratio of the subject property and 
110 percent of the median ratio of the class of property of the 
subject property.  
    Sec. 6.  [EFFECTIVE DATE.] 
     Sections 2 and 4 are effective for the 1985 assessment and 
thereafter, payable 1986 and thereafter.  Sections 1, 3, and 5 
are effective the day following final enactment. 

                               ARTICLE 12 

                          CHARITABLE GAMBLING 
    Section 1.  Minnesota Statutes 1983 Supplement, section 
340.14, subdivision 2, is amended to read: 
    Subd. 2.  [RESTRICTIONS.] Every licensee shall be 
responsible for the conduct of his place of business and for 
conditions of sobriety and order therein.  No licensee shall 
keep, possess, or operate, or permit the keeping, possession, or 
operation of, on the licensed premises, or in any room adjoining 
the licensed premises, any slot machine, dice, or any gambling 
device or apparatus, nor permit any gambling therein, nor permit 
the licensed premises or any room in the same, or in any 
adjoining building, directly or indirectly under its control to 
be used as a resort for prostitutes or other disorderly persons, 
except that gambling devices may be kept or operated and raffles 
conducted on licensed premises and adjoining rooms when such 
activities are licensed by the local unit of government pursuant 
to section 349.26 charitable gambling control board under 
sections 349.11 to 349.213.  No person under 18 years of age 
shall be employed in any rooms constituting the place in which 
intoxicating liquors are sold at retail "on-sale," except that 
persons under 18 years of age may be employed as musicians or to 
perform the duties of a busboy or dishwashing services in places 
defined as a restaurant or hotel or motel serving food in rooms 
in which intoxicating liquors are sold at retail "on-sale." 
Persons under 18 years of age may be employed as waiters or 
waitresses in places defined as a restaurant, hotel or motel to 
serve food in rooms in which only wine is sold on-sale, provided 
they shall not be permitted to serve or sell wine.  
    Sec. 2.  Minnesota Statutes 1982, section 349.11, is 
amended to read: 
    349.11 [PURPOSE.] 
    The purpose of sections 349.11 to 349.23 349.22 is to 
closely regulate and control the conduct of the game of bingo 
and to prohibit commercialization of bingo legal forms of 
gambling to prevent their commercialization, to insure integrity 
of operations, and to provide for the use of net profits only 
for lawful purposes. 
    Sec. 3.  Minnesota Statutes 1982, section 349.12, is 
amended to read: 
    349.12 [DEFINITIONS.] 
    Subdivision 1.  As used in sections 349.11 to 349.23 349.22 
the following terms have the meanings given them. 
    Subd. 2.  "Lawful gambling" is the operation, conduct or 
sale of bingo, raffles, paddlewheels, tipboards, and pull-tabs.  
    Subd. 3.  "Active member" means a member who has paid all 
his dues to the organization and has been a member of the 
organization for at least six months. 
    Subd. 3 4.  "Bingo" means a game where each player has a 
card or board for which a consideration has been paid containing 
five horizontal rows of spaces, with each row except the central 
one containing five figures.  The central row has four figures 
with the word "free" marked in the center space thereof.  Bingo 
also includes games which are as described in this subdivision 
except for the use of cards where the figures are not preprinted 
but are filled in by the players.  A player wins a game of bingo 
by completing any a preannounced combination of spaces or, in 
the absence of a preannouncement of a combination of spaces, any 
combination of five spaces in a row, either vertical, horizontal 
or diagonal. 
    Subd. 4 5.  "Bingo occasion" means a single gathering or 
session at which a series of one or more successive bingo games 
is played. 
    Subd. 5 6.  "Checker" means a person who records the number 
of bingo cards purchased and played during each game and records 
the prizes awarded to the recorded cards, but does not collect 
the payment for the cards. 
    Subd. 7.  "Paddlewheel" means a wheel marked off into 
sections containing one or more numbers, and which, after being 
turned or spun, uses a pointer or marker to indicate winning 
chances.  
    Subd. 8.  "Tipboard" means a board, placard or other device 
marked off in a grid or columns, in which each section contains 
a hidden number or numbers, or other symbol, which determines 
the winning chances.  
    Subd. 9.  "Raffle" means a game in which a participant buys 
a ticket for a chance at a prize with the winner determined by a 
random drawing to take place at a location and date printed upon 
the ticket.  
    Subd. 10.  "Pull-tab" means a single folded or banded 
ticket or a card with a face covered to conceal one or more 
numbers or symbols, where one or more of each set of tickets or 
cards has been designated in advance as a winner.  "Pull-tab" 
also includes a ticket sold in a gambling device known as a 
ticket jar.  
    Subd. 6 11.  "Lawful purpose" means one or more of the 
following:  (a) benefiting persons by enhancing their 
opportunity for religious or educational advancement, by 
relieving or protecting them from disease, suffering or 
distress, by contributing to their physical well-being, by 
assisting them in establishing themselves in life as worthy and 
useful citizens, or by increasing their comprehension of and 
devotion to the principles upon which this nation was founded; 
(b) initiating, performing, or fostering worthy public works or 
enabling or furthering the erection or maintenance of public 
structures; (c) lessening the burdens borne by government or 
voluntarily supporting, augmenting or supplementing services 
which government would normally render to the people; or (d) the 
improving, expanding, maintaining or repairing real property 
owned or leased by an organization. 
    "Lawful purpose" does not include the erection or 
acquisition of any real property, unless the local unit of 
government board specifically authorizes the expenditures after 
finding that the property will be used exclusively for one or 
more of the purposes specified in this clause. 
    Subd. 7.  "Local unit of government" means the city or town 
in which bingo is proposed to be played or is played or, if 
there is no city or town, the county in which bingo is proposed 
to be played or is played.  
    Subd. 8 12.  "Organization" means any fraternal, religious, 
veterans, or other nonprofit organization. 
    Subd. 9 13.  "Profit" means the gross receipts collected 
from one or more bingo occasions lawful gambling, less 
reasonable sums necessarily and actually expended for bingo 
gambling supplies and equipment, prizes, rent, and utilities 
used during the bingo gambling occasions, bingo license fees 
compensation paid to members for conducting gambling, taxes 
related to bingo, and other expenses permitted by Laws 1976, 
Chapter 261 imposed by this chapter, and maintenance of devices 
used in lawful gambling. 
    Subd. 10.  "Bingo manager" means a member who has paid all 
his dues to the organization and has been a member of the 
organization for at least two years and has been designated by 
an organization to supervise bingo occasions conducted by it.  
    Subd. 14.  "Gambling manager" means a person who has paid 
all dues to an organization and has been a member of the 
organization for at least two years and has been designated by 
the organization to supervise lawful gambling conducted by it.  
    Subd. 15.  "Gambling equipment" means:  bingo cards and 
devices for selecting bingo numbers, pull-tabs, ticket jars, 
paddlewheels, and tipboards.  
    Subd. 16.  "Board" is the charitable gambling control board.
    Subd. 17.  "Distributor" is a person who sells gambling 
equipment he manufactures or purchases for resale.  
     Sec. 4.  Minnesota Statutes 1982, section 349.13, is 
amended to read: 
    349.13 [NOT GAMBLING IF ORGANIZATION CONDUCTS BINGO.] 
    Bingo shall Lawful gambling is not be construed as a 
lottery or as gambling within the meaning of sections 609.75 to 
609.76 if it is conducted by an organization in compliance with 
Laws 1976, Chapter 261 under this chapter. 
    Sec. 5.  Minnesota Statutes 1982, section 349.14, is 
amended to read: 
    349.14 [ORGANIZATION MAY CONDUCT BINGO; LICENSE.] 
    An organization may conduct bingo occasions lawful gambling 
if it has been in existence for at least three years, has at 
least 15 active members, has a license to conduct bingo lawful 
gambling from the local unit of government board and complies 
with sections 349.15 to 349.21 this chapter. 
     Sec. 6.  Minnesota Statutes 1982, section 349.15, is 
amended to read: 
    349.15 [USE OF PROFITS.] 
    Profits from a bingo occasion shall lawful gambling may be 
expended only for lawful purposes as authorized at a regular 
meeting of the conducting organization. 
    Sec. 7.  [349.151] [CHARITABLE GAMBLING CONTROL BOARD.] 
    Subdivision 1.  [BOARD CREATED.] The charitable gambling 
control board is created with the powers and duties established 
by subdivision 4.  
    Subd. 2.  [MEMBERSHIP.] The board consists of 13 members 
appointed as follows:  
    (1) eleven persons appointed by the governor, at least four 
of whom must reside outside of the seven-county metropolitan 
area;  
    (2) the commissioner of public safety or his designee; and 
    (3) the attorney general or his designee.  
    A member serving on the board by appointment must have been 
a resident of Minnesota for at least five years.  Of the 
appointees of the governor not more than six may belong to the 
same political party.  A member appointed to the board may be 
removed at any time by the appointing authority.  Vacancies on 
the board are filled in the same manner as the original 
appointment.  Of the members appointed by the governor, three 
are for terms expiring June 30, 1985, four are for terms 
expiring June 30, 1986, and four are for terms expiring June 30, 
1987.  After the expiration of the initial terms, appointments 
are for three years.  The governor shall appoint the chairperson 
from among his appointees.  
    Subd. 3.  [COMPENSATION.] The compensation of board members 
is $35 per day spent on commission activities, when authorized 
by the board, plus expenses in the same manner and amount as 
provided in the commissioner's plan adopted according to section 
43A.18, subdivision 2.  
    Subd. 4.  [POWERS AND DUTIES.] The board has the following 
powers and duties:  
    (1) to issue, revoke, and suspend licenses to organizations 
and suppliers under sections 349.16 and 349.161;  
    (2) to collect and deposit license fees and taxes due under 
this chapter;  
    (3) to receive reports required by this chapter and inspect 
the records, books, and other documents of organizations and 
suppliers to insure compliance with all applicable laws and 
rules;  
    (4) to make rules, including temporary rules, required by 
this chapter;  
    (5) to register gambling equipment and issue registration 
stamps under section 349.162;  
    (6) to provide by rule for the mandatory posting by 
organizations conducting lawful gambling of rules of play and 
the odds and/or house percentage on each form of lawful 
gambling; and 
    (7) to report annually to the governor and legislature on 
its activities and on recommended changes in the laws governing 
charitable gambling.  
    Subd. 5.  [EMPLOYEES.] The board shall employ an executive 
secretary in the unclassified service and such other employees 
in the classified service as are required to enable it to carry 
out its functions.  One or more of the employees must be bingo 
inspectors.  
    Subd. 6.  [ATTORNEY GENERAL.] The attorney general is the 
attorney for the board.  
     Sec. 8.  Minnesota Statutes 1982, section 349.16, is 
amended to read: 
    349.16 [LOCAL REGULATION ORGANIZATION LICENSES.] 
    Subdivision 1.  [ISSUANCE OF GAMBLING LICENSES.] Nothing in 
sections 349.11 to 349.23 shall be construed to prohibit a local 
unit of government from adopting ordinances, rules and 
regulations concerning the conduct of bingo which are more 
restrictive than state regulations, including an ordinance to 
ban the conduct of bingo.  Prior to promulgating bingo 
regulations or issuing a bingo license, the local unit of 
government shall consult with the local building inspector, if 
any, and the fire and police authorities.  A local unit of 
government which permits bingo but has not adopted regulations 
shall be deemed to have adopted the provisions of Laws 1976, 
Chapter 261 as its regulations.  A local unit of government may 
amend its regulations.  
    Subd. 2.  A local unit of government that permits bingo 
shall establish a system for licensing organizations to conduct 
bingo occasions, and shall act on a bingo license application 
within 180 days from the date of application, but shall not 
issue a license until at least 30 days after the date of 
application.  A license shall be valid for one year, and may be 
suspended or revoked by the issuing authority for violation of 
Laws 1976, Chapter 261 or of any local ordinance relating to 
bingo.  
    Subd. 3.  Each year the local unit of government shall 
allocate an amount of money at least equal to the lesser of 
$25,000 or 25 percent of the amount it collected and retained 
from bingo fees, bingo licenses, and bingo taxes in the 
preceding year for the supervision, regulation and inspection of 
the conduct of bingo Licenses authorizing organizations to 
conduct lawful gambling may be issued by the board to 
organizations meeting the qualifications of section 349.14, if 
the board determines that the license is consistent with the 
purpose of sections 349.11 to 349.22.  Licenses issued under 
this section are valid for one year and may be suspended by the 
board for a violation of law or board rule or revoked for what 
the board determines to be a pattern of willful violations of 
law or board rule.  A revocation or suspension is a contested 
case under sections 14.57 to 14.69 of the Administrative 
Procedure Act.  
    Subd. 2.  [APPLICATION.] All applications for a license 
under this section must be on a form prescribed by the board. 
The board may require the applying organization to submit a copy 
of its articles of incorporation and other documents it deems 
necessary.  
    Subd. 3.  [FEES.] The board shall by rule establish a 
schedule of fees for licenses under this section.  The schedule 
must establish three classes of license, authorizing all forms 
of lawful gambling, all forms except bingo and bingo only.  
    Sec. 9.  [349.161] [DISTRIBUTOR LICENSES.] 
    Subdivision 1.  [PROHIBITED ACTS; LICENSES REQUIRED.] No 
person may:  
    (1) sell, offer for sale, or furnish gambling equipment for 
use within the state for gambling purposes, other than for bingo 
exempt from licensing under section 340.19, except to an 
organization licensed for lawful gambling; or 
    (2) sell, offer for sale, or furnish gambling equipment to 
an organization licensed for lawful gambling without having 
obtained a distributor license under this section.  
    No licensed organization may purchase gambling equipment 
from any person not licensed as a distributor under this section.
    Subd. 2.  [LICENSE APPLICATION.] The board may issue 
licenses for the sale of gambling equipment to persons who meet 
the qualifications of this section if the board determines that 
a license is consistent with the purpose of sections 349.11 to 
349.22.  Applications must be on a form the board prescribes. 
    Subd. 3.  [QUALIFICATIONS.] A license may not be issued 
under this section to a person, or to a corporation, firm, or 
partnership which has as an officer, director, or other person 
in a supervisory or management position a person, who:  
    (1) has been convicted of a felony in a state or federal 
court within the past five years or who has a felony charge 
pending;  
    (2) has ever been convicted in a state or federal court of 
a gambling-related offense; or 
    (3) is or has ever been engaged in an illegal business.  
    Subd. 4.  [FEES.] The annual fee for a suppliers license is 
$1,500.  
    Subd. 5.  [PROHIBITION.] No distributor may also be a 
wholesale distributor of liquor or alcoholic beverages.  
    Subd. 6.  [REVOCATION AND SUSPENSION.] A license under this 
section may be suspended by the board for a violation of law or 
board rule or for failure to meet the qualifications in 
subdivision 3 at any time or revoked for what the board 
determines to be a pattern of willful violations of law or board 
rule.  A revocation or suspension is a contested case under 
sections 14.57 to 14.69 of the Administrative Procedure Act.  
    Subd. 7.  [CRIMINAL HISTORY.] The board may request the 
assistance of the bureau of criminal apprehension in 
investigating the background of an applicant for a supplier's 
license and may reimburse the bureau for the costs thereof.  The 
board has access to all criminal history data compiled by the 
bureau on licensees and applicants.  
    Sec. 10.  [349.162] [EQUIPMENT REGISTERED.] 
    Subdivision 1.  [STAMP REQUIRED.] A distributor may not 
sell to an organization and an organization may not purchase 
from a distributor gambling equipment unless the equipment has 
been registered with the board and has a registration stamp 
affixed.  The board may charge a fee of up to 25 cents for each 
stamp.  Each stamp must bear a registration number assigned by 
the board.  
    Subd. 2.  [RECORDS REQUIRED.] A distributor must maintain a 
record of all gambling equipment which it sells to 
organizations.  The record must include:  
    (1) the identity of the person or firm from whom the 
equipment was purchased;  
    (2) the registration number of the equipment;  
    (3) the name and address of the organization to which the 
sale was made; and 
    (4) the date of the sale.  
    The record for each sale must be retained for at least 
three years after the sale is completed.  For purposes of this 
section, a sale is completed when the gambling equipment is 
physically delivered to the purchaser.  
    Each distributor must report monthly to the board, on a 
form the board prescribes, its sales of each type of gambling 
equipment.  Employees of the board may inspect the books, 
records, and other documents of a distributor at any reasonable 
time without notice and without a search warrant.  
    Subd. 3.  [SALES FROM FACILITIES.] All gambling equipment 
purchased by a licensed distributor for resale in Minnesota must 
prior to its resale be unloaded into a facility located in 
Minnesota which the distributor owns or leases.  
    Sec. 11.  Minnesota Statutes 1982, section 349.17, is 
amended to read: 
    349.17 [CONDUCT OF BINGO.] 
    Subdivision 1.  [BINGO OCCASIONS.] No compensation shall be 
paid to any person in connection with a bingo occasion except an 
active member of the organization, or its auxiliary, or the 
spouse or surviving spouse of an active member, conducting the 
bingo occasion nor shall any person not an active member of the 
organization or its auxiliary or the spouse or surviving spouse 
of an active member participate in the conduct of a bingo 
occasion, except by resolution of a majority of the membership, 
recorded in the official minutes of the organization, 
non-management assistants who are not active members of the 
organization, or its auxiliary, or the spouse or surviving 
spouse of an active member, may be hired to assist members in 
conducting a bingo occasion.  Compensation shall not exceed $20 
for a bingo occasion.  
    Subd. 2.  No Not more than 104 bingo occasions each year or 
two bingo occasions each week shall may be conducted by any an 
organization, except that the local unit of government issuing 
the license may permit additional bingo occasions to be 
conducted by an organization, except as provided in this 
subdivision.  A bingo occasion shall may not continue for more 
than four consecutive hours. 
    The board may permit an organization to conduct more than 
two bingo occasions in a week and more than 104 bingo occasions 
in a year if the board determines that the additional occasions 
are consistent with the purpose of sections 349.11 to 349.22 and 
if the following procedures are followed:  
    (1) the organization applies for the additional occasions, 
stating the number of additional occasions applied for;  
    (2) the board notifies the governing body of the county or 
home rule or statutory city in which the applicant is located; 
and 
    (3) the governing body fails to adopt a resolution 
disapproving the additional occasions within 30 days of the 
notification.  
    Subd. 3 2.  [BINGO ON LEASED PREMISES.] (1) Any A person or 
corporation, other than an organization, which leases any 
premises that it owns to two or more organizations for purposes 
including the conduct of bingo occasions, shall may not allow 
more than four bingo occasions to be conducted on the premises 
in any week.  The board may waive this restriction and permit a 
person or corporation to allow a specified member of bingo 
occasions on the premises in excess of four per week if it finds 
that the waiver is consistent with the purpose of sections 
349.11 to 349.22 and if the following procedures are followed:  
    (1) the person or corporation applies for the waiver, 
stating the number of additional occasions sought per week;  
    (2) the board notifies the governing body of the county or 
home rule or statutory city in which the premises are located; 
and 
    (3) the governing body fails to adopt a resolution 
disapproving the waiver within 30 days of the notification.  
    (2) Any organization which leases any premises to one or 
more other organizations for purposes including the conduct of 
bingo occasions shall use the proceeds of the rental, less 
reasonable sums for maintenance, furnishings and other necessary 
expenses, only for lawful purposes as defined in section 
349.12.  Not less than once each year the organization shall 
report to the licensing authority the disposition of all 
receipts which it has received during the reporting period from 
the rental of its facilities to other organizations for purposes 
including the conduct of bingo occasions.  
    (3) No organization shall conduct bingo on any leased 
premises without a written lease for a term at least equal to 
the remainder of the term of the bingo license of the 
organization.  Lease payments shall be at a fixed monthly rate, 
or rate per bingo occasion, not subject to change during the 
term of the lease.  No such lease shall provide that rental 
payments be based on a percentage of receipts or profits from 
bingo occasions.  
    Subd. 4.  Prizes for a single bingo game shall not exceed 
$100 except prizes for a game of the type commonly known as a 
"cover-all" game.  "Cover-all" prizes may exceed $100 provided 
that the aggregate value of such prizes for a bingo occasion 
shall not exceed $500.  The aggregate value of prizes for a 
bingo occasion shall not exceed $2,500 except that in the case 
of a bingo occasion during which a "cover-all" game is played 
for a maximum prize of more than $100 but not more than $500, 
the aggregate value of prizes for the bingo occasion shall not 
exceed $3,000.  Merchandise prizes shall be valued at fair 
market retail value.  
    Subd. 5.  No expense shall be incurred or amounts paid in 
connection with the conduct of bingo, except those reasonably 
expended for bingo supplies and equipment, prizes, rent, or 
utilities used during the bingo occasion, bingo license fees, 
taxes related to bingo, and compensation to active members who 
conduct the game.  
    Subd. 6 3.  Each bingo winner shall must be determined and 
every prize shall be awarded and delivered the same day on which 
the bingo occasion is conducted. 
    Subd. 7.  All bingo occasions shall be under the 
supervision of a bingo manager designated by the organization 
who shall be responsible for gross receipts and profits from 
bingo and for the conduct of the bingo occasion in compliance 
with all applicable laws and ordinances.  The bingo manager 
shall give a fidelity bond in the sum of $10,000 in favor of the 
organization conditioned on the faithful performance of his 
duties. Terms of the bond shall provide that notice shall be 
given in writing to the licensing authority not less than 30 
days prior to its cancellation. The governing body of a local 
unit of government may waive this bond requirement by including 
a waiver provision in the bingo license issued to an 
organization, provided that a license containing such a 
provision shall be granted only by unanimous vote.  
    Subd. 8.  No person shall act as a bingo manager for more 
than one organization.  
    Subd. 4.  [CHECKERS.] One or more checkers must be engaged 
for each bingo occasion.  The checker or checkers must record, 
on a form the board provides, the number of cards played in each 
game and the prizes awarded to recorded cards.  The form must 
provide for the inclusion of the registration number of each 
card and must include a checker's certification that the figures 
recorded are correct to the best of the checker's knowledge.  
    Sec. 12.  Minnesota Statutes 1982, section 349.18, is 
amended to read: 
    349.18 [RECORDS; PLAYERS, CARDS AND PRIZES PREMISES USED 
FOR GAMBLING.] 
    One or more checkers shall be engaged for each bingo 
occasion.  The checker or checkers shall record the number of 
cards played in each game prior to the completion of each game 
and record the prizes awarded to the recorded cards.  Each 
checker shall certify all figures which he has recorded as 
accurate and correct to the best of his knowledge.  A local unit 
of government may require the records to be on forms which it 
provides 
    Subdivision 1.  [LEASE OR OWNERSHIP REQUIRED.] An 
organization may conduct lawful gambling only on premises it 
owns or leases.  Leases must be for a period of at least one 
year and must be in writing.  Copies of all leases must be made 
available to employees of the board on request.  A lease may not 
provide for rental payments based on a percentage of receipts or 
profits from lawful gambling.  
    Subd. 2.  [EXCEPTIONS.] (a) A licensed organization may 
conduct raffles on a premise it does not own or lease.  
    (b) A licensed organization may with the permission of the 
board, conduct bingo on premises it does not own or lease for up 
to six days in a calendar year, in connection with a county fair 
or civil celebration.  
    Subd. 3.  [PROCEEDS FROM RENTAL.] A licensed organization 
which leases premises it owns to one or more other licensed 
organizations for purposes including the conduct of lawful 
gambling may expend the rental proceeds, less reasonable 
deductions for maintenance, furnishings, and utilities, only for 
lawful purposes.  The rental proceeds must be recorded and 
reported as proceeds from gambling under section 349.19.  
     Sec. 13.  Minnesota Statutes 1982, section 349.19, is 
amended to read: 
    349.19 [EXEMPTION RECORDS AND REPORTS.] 
    Bingo may be conducted without complying with the 
requirements of sections 349.14 and 349.17, subdivisions 2 and 
3, if conducted:  (a) in connection with a county fair conducted 
by a county agricultural society or association, the state fair 
conducted by the state agricultural society or a civic 
celebration recognized by resolution or other similar official 
action of the local governing body provided that the bingo is 
conducted for no more than 12 consecutive days in any one 
calendar year; or, (b) by an organization that conducts less 
than five bingo occasions in any calendar year 
    Subdivision 1.  [REQUIRED RECORD OF RECEIPTS.] A licensed 
organization must keep a record of each occasion on which it 
conducts gambling, including each bingo occasion and each day on 
which other forms of lawful gambling are conducted.  The record 
must include gross receipts, quantities of free plays if any, 
expenses, and profits.  The board may by rule provide for the 
methods by which expenses are documented.  In the case of bingo, 
gross receipts must be compared to the checkers' records for the 
occasion by a person who did not sell cards for the occasion. 
Separate records must be kept for bingo and all other forms of 
lawful gambling.  
    Subd. 2.  [ACCOUNTS.] Gross receipts from lawful gambling 
must be segregated from all other revenues of the conducting 
organization and placed in a separate account.  The person who 
accounts for gambling gross receipts and profits may not be the 
same person who accounts for other revenues of the organization. 
    Subd. 3.  [EXPENDITURES.] All expenditures of bingo profits 
must be itemized as to payee, purpose, amount, and date of 
payment.  
    Subd. 4.  [DISCREPANCIES.] If at a bingo occasion a 
discrepancy of more than $20 is found between the gross receipts 
as reported by the checkers and the gross receipts determined by 
adding the cash receipts, the discrepancy must be reported to 
the board within five days of the bingo occasion.  
    Subd. 5.  [REPORTS.] A licensed organization must report to 
the board and to its membership monthly on its gross receipts, 
expenses, profits, and expenditure of profits from lawful 
gambling.  If the organization conducts both bingo and other 
forms of lawful gambling, the figures for both must be reported 
separately.  In addition, a licensed organization must report to 
the board monthly on its purchases of gambling equipment and 
must include the type, quantity, and dollar amount from each 
supplier separately.  The reports must be on a form the board 
prescribes.  
    Subd. 6.  [PRESERVATION OF RECORDS.] Records required to be 
kept by this section must be preserved for at least three years 
and may be inspected by employees of the board at any reasonable 
time without notice or a search warrant. 
    Subd. 7.  [TAX RECORDS.] The board may by rule require each 
licensed organization to provide copies of forms it files with 
the United States department of the treasury which are required 
for organizations exempt from income tax.  
     Sec. 14.  Minnesota Statutes 1982, section 349.20, is 
amended to read: 
    349.20 [RECORDS; RECEIPTS AND PROFITS MANAGERS.] 
    Each organization shall keep records of its gross receipts 
and profits for each bingo occasion.  Gross receipts shall be 
compared to the checker's records for the bingo occasion by a 
person who did not sell cards for the bingo occasion.  All 
deductions from gross receipts from a bingo occasion shall be 
documented with receipts or other records.  The distribution of 
profits shall be itemized as to payee, amount and date of 
payment.  
    Bingo gross receipts shall be segregated from other 
revenues of an organization and placed in a separate account. 
Each organization shall maintain separate records of its bingo 
operations.  The person who accounts for bingo gross receipts 
and profits shall not be the same person who accounts for other 
revenues of the organization.  Records required by Laws 1976, 
Chapter 261 shall be preserved for three years. The law 
enforcement agency of the licensing authority shall have the 
authority to investigate the bingo records of an organization at 
any reasonable time.  Organizations shall make available their 
bingo records for investigation upon proper notice 
     All lawful gambling conducted by a licensed organization 
must be under the supervision of one or more gambling managers. 
A gambling manager designated by an organization to supervise a 
gambling occasion is responsible for the gross receipts from the 
occasion and for its conduct in compliance with all laws and 
rules.  An organization may designate a different person to act 
as manager for each type of lawful gambling conducted.  Each 
person designated as a gambling manager must give a fidelity 
bond in the sum of $10,000 in favor of the organization 
conditioned on the faithful performance of the manager's duties, 
and the terms of the bond must provide that notice be given to 
the board in writing not less than 30 days before its 
cancellation. 
     A person may not act as a gambling manager for more than 
one organization.  
     Sec. 15.  Minnesota Statutes 1982, section 349.21, is 
amended to read: 
    349.21 [REPORTS; DISCREPANCIES, REPORTING AGENCIES 
COMPENSATION.] 
    Subdivision 1.  If any discrepancy is found between the 
amount of gross receipts for a bingo occasion as determined by 
the checker's records and the amount of gross receipts as 
determined by totaling the cash receipts and the discrepancy 
exceeds $20, the discrepancy shall be reported to and 
investigated by the licensing authority of the place where the 
bingo occasion was held.  
    Subd. 2.  An organization shall report monthly to its 
membership its gross receipts from bingo, its profits from bingo 
and the distribution of those profits itemized as required by 
section 349.20.  
    Subd. 3.  At least 30 days prior to conducting its first 
bingo occasion of the year and on an annual basis thereafter, an 
organization shall file with the local government unit which 
regulates its conduct copies of the following:  
    (a) Department of the treasury, internal revenue service, 
"Return of Organization Exempt from Income Tax," Form 990, or a 
comparable form if the organization is required to file the form 
with the department of the treasury;  
    (b) Department of the treasury, internal revenue service, 
"Exempt Organization Business Income Tax," Form 990-T, or a 
comparable form if the organization is required to file the form 
with the department of the treasury;  
    (c) A "Statement of Bingo Operations" in the form 
prescribed by the local governmental unit.  All information 
contained in the statement shall be true, correct, and complete 
to the best of the knowledge of the person or persons signing 
the statement. Any person who shall knowingly make a false 
statement or knowingly conceal a material fact in the statement 
shall be subject to the penalties provided in section 349.22;  
    (d) Any lease agreements required by Laws 1976, Chapter 
261, executed by the organization in regard to premises leased 
for the conduct of bingo 
     Compensation to persons who participate in the conduct of 
lawful gambling may be paid only to active members of the 
conducting organization or its auxiliary, or the spouse or 
surviving spouse of an active member, except that nonmanagement 
assistants who are not active members or spouses may be hired to 
assist in the conduct of lawful gambling in nonmanagement 
positions if approved by a majority of the organization's 
members.  
    The amounts of compensation which may be paid under this 
section must be provided for in a schedule of compensation 
adopted by the board by rule.  In adopting the schedule the 
board must consider the nature of the participation and the 
types of lawful gambling participated in.  
    A licensed organization may pay a percentage of the gross 
receipts from raffle ticket sales to a nonprofit organization 
which sells tickets for the licensed organization.  
    Sec. 16.  [349.211] [PRIZE LIMITS.] 
    Subdivision 1.  [BINGO.] Prizes for a single bingo game may 
not exceed $100 except prizes for a cover-all game, which may 
exceed $100 if the aggregate value of all cover-all prizes in a 
bingo occasion does not exceed $500.  Total prizes awarded at a 
bingo occasion may not exceed $2,500, unless a cover-all game is 
played in which case the limit is $3,000.  For purposes of this 
subdivision, a cover-all game is one in which a player must 
cover all spaces except a single free space to win.  
    Subd. 2.  [BINGO CUMULATIVE PRIZES.] A prize of up to 
$1,000 may be awarded for a single bingo game if the prize is an 
accumulation of prizes not won in games in previous bingo 
occasions.  The total amount awarded in cumulative prizes in any 
calendar year may not exceed $12,000.  For bingo occasions in 
which a cumulative prize is awarded the aggregate value of 
prizes which may be awarded for the occasion is increased by the 
amount of the cumulative prize so awarded less $100.  
    Subd. 3. [OTHER GAMBLING.] The board by rule shall 
establish a schedule of prize limits for all other forms of 
gambling consistent with the purposes set out in section 
349.11.  The schedule may include daily and annual prize limits 
and prize limits for each game, raffle or operation of a 
gambling device.  
    Subd. 4.  [PRIZE VALUE.] Merchandise prizes must be valued 
at their fair market value.  For purposes of sections 349.11 to 
349.22 "prizes" do not include free plays awarded.  
    Sec. 17.  [349.212] [TAX IMPOSED.] 
    Subdivision 1.  [RATE.] There is hereby imposed a tax on 
all lawful gambling conducted by licensed organizations at the 
rate specified in this subdivision.  The tax imposed by this 
section is in lieu of the tax imposed by section 297A.02 and of 
all local taxes and license fees.  
    On all lawful gambling the tax is ten percent of the gross 
receipts of a licensed organization from lawful gambling less 
prizes actually paid out, payable by the organization.  
    Subd. 2.  [COLLECTION; DISPOSITION.] The tax must be paid 
to the board at times and in a manner the board prescribes by 
rule.  The proceeds, along with the revenue received from all 
license fees and other fees under sections 349.11 to 349.21 and 
sections 16, 17, and 18 of this article, must be paid to the 
state treasurer for deposit in the general fund.  
    Subd. 3.  [ANNUAL APPROPRIATION.] At the end of each fiscal 
year, the commissioner of finance shall certify to the state 
treasurer the total revenues collected by the board from taxes 
and fees imposed by this article minus the amount appropriated 
by law from the general fund to the board for its expenses and 
operations.  The net revenue so certified shall be expended by 
legislative appropriation to the department of education for 
expenditure, in consultation with the state arts board, as 
grants for programs, construction, maintenance, and operation of 
one or more schools for the arts located within the state, or 
the purposes recommended by the Minnesota school for the arts 
planning task force except that any part of the amount so 
certified which is not appropriated for the purposes set forth 
in this subdivision may be appropriated for any other purpose.  
    Sec. 18.  [349.213] [LOCAL AUTHORITY.] 
    Subdivision 1.  [LOCAL REGULATION.] A statutory or home 
rule city or county has the authority to adopt more stringent 
regulation of any form of lawful gambling within its 
jurisdiction, including the prohibition of any form of lawful 
gambling, and may require a permit for the conduct of gambling 
exempt from licensing under section 349.214.  The authority 
granted by this subdivision does not include the authority to 
require a license or permit to conduct gambling by organizations 
licensed by the board.  
    Subd. 2.  [LOCAL APPROVAL.] Before issuing or renewing an 
organization license, the board must notify the city council of 
the statutory or home rule city in which the organization's 
premises are located or, if the premises are located outside a 
city, by the county board of the county where the premises are 
located.  If the city council or county board adopts a 
resolution disapproving the license and so informs the board 
within 30 days of receiving notice of the license, the license 
may not be issued or renewed.  
     Sec. 19.  [349.214] [EXEMPTIONS.] 
    Subdivision 1.  [BINGO.] Bingo may be conducted without a 
license and without complying with sections 349.17, subdivision 
1, and 349.18 if it is conducted:  
    (1) in connection with a county fair, the state fair, or a 
civic celebration if it is not conducted for more than 12 
consecutive days in a calendar year; or 
    (2) by an organization which conducts four or fewer bingo 
occasions in a calendar year.  
    Subd. 2.  [RAFFLES.] Raffles may be conducted by an 
organization as defined in section 349.12, subdivision 13, 
without complying with sections 349.11 to 349.213 if the value 
of all raffle prizes awarded by the organization in a calendar 
year does not exceed $750.  Merchandise prizes must be valued at 
their fair market value.  
    Subd. 3.  [RAFFLES, CERTAIN ORGANIZATIONS.] The provisions 
of sections 349.21 and 349.211, subdivision 3, and the 
membership requirements of sections 349.14 and 349.20 do not 
apply to raffles conducted by an organization which directly or 
under contract to the state or a political subdivision delivers 
health or social services and which is exempt from taxation 
under section 501(c)(3) of the Internal Revenue Code of 1954, as 
amended through December 31, 1983, if the prizes awarded in the 
raffles are real or personal property donated by an individual, 
firm, or other organization.  The person who accounts for the 
gross receipts, expenses, and profits of the raffles may be the 
same person who accounts for other funds of the organization.  
    Sec. 20.  Minnesota Statutes 1982, section 349.22, is 
amended to read: 
    349.22 [PENALTY.] 
    Violation of any provision of Laws 1976, Chapter 261 is a 
gross misdemeanor.  
    Subdivision 1.  [GROSS MISDEMEANOR.] Any other violation of 
sections 349.11 to 349.214 is a gross misdemeanor.  
    Subd. 2.  [OTHER ACTION.] This section shall does not 
preclude civil or criminal actions under other applicable law or 
preclude any agency of government from investigating or 
prosecuting violations of the provisions of Laws 1976, Chapter 
261 sections 349.11 to 349.214.  County attorneys have primary 
responsibility for prosecuting violations of sections 349.11 to 
349.214, but the attorney general may prosecute any violation of 
those sections.  
    Sec. 21.  Minnesota Statutes 1982, section 349.31, 
subdivision 1, is amended to read: 
    Subdivision 1.  [INTENTIONAL POSSESSION; WILFUL KEEPING.] 
The intentional possession or wilful keeping of a gambling 
device upon any on a licensed premises is cause for the 
revocation of any license under which the licensed business is 
carried on upon the premises where the gambling device is found, 
provided that possession of gambling devices commonly known as 
"paddlewheels"  or "tipboards" or "pull-tabs" (or "ticket jars") 
or apparatus used in conducting raffles on the premises of a 
nonprofit organization and operated by organizations licensed 
for such operation pursuant to section 349.26 equipment as 
defined in section 349.12, subdivision 17, which is used for 
gambling licensed by the charitable gambling control board and 
the manufacture of gambling devices for use in jurisdictions 
where use of the gambling device is legal as provided for by 
section 349.40 shall not be cause for revocation of a license. 
    Sec. 22.  Minnesota Statutes 1983 Supplement, section 
609.75, subdivision 3, is amended to read: 
    Subd. 3.  [WHAT ARE NOT BETS.] The following are not bets: 
    (1) A contract to insure, indemnify, guarantee or otherwise 
compensate another for a harm or loss sustained, even though the 
loss depends upon chance. 
    (2) A contract for the purchase or sale at a future date of 
securities or other commodities. 
    (3) Offers of purses, prizes or premiums to the actual 
contestants in any bona fide contest for the determination of 
skill, speed, strength, endurance, or quality or to the bona 
fide owners of animals or other property entered in such a 
contest. 
    (4) The game of bingo when conducted in compliance with 
sections 349.11 to 349.23. 
    (5) A private social bet not part of or incidental to 
organized, commercialized, or systematic gambling. 
    (6) The operation of a gambling device equipment or the 
conduct of a raffle as defined in section 349.26 under sections 
349.11 to 349.22, by an organization licensed for such operation 
by a local unit of government pursuant to section 349.26 by the 
charitable gambling control board.  
    (7) Pari-mutuel betting on horse racing when the betting is 
conducted under chapter 240.  
    Sec. 23.  Minnesota Statutes 1983 Supplement, section 
609.761, is amended to read: 
    609.761 [OPERATIONS PERMITTED.] 
    Notwithstanding sections 609.755 and 609.76, a fraternal, 
religious, veterans or other nonprofit an organization may set 
up or operate a gambling device or conduct a raffle conduct 
lawful gambling as defined in section 349.26 349.12, if licensed 
by the local unit of government charitable gambling control 
board and conducted under section 349.26 sections 349.11 to 
349.22, and a person may manufacture, sell or offer for sale a 
gambling device to the organization, and pari-mutuel betting on 
horse racing may be conducted under chapter 240.  
    Sec. 24.  [APPROPRIATION.] 
    There is appropriated from the general fund to the 
charitable gambling control board for the period beginning the 
day following final enactment of this article and ending June 
30, 1985, the sum of $556,000, or so much thereof as is 
necessary to carry out the purposes of this article.  
    Sec. 25.  [REPEALER.] 
    Minnesota Statutes 1982, section 349.26, is repealed.  
    Sec. 26.  [EFFECTIVE DATE.] 
    Sections 7 and 24 are effective the day following final 
enactment.  All other sections of this article are effective 
March 1, 1985.  All licenses issued by local units of government 
under Minnesota Statutes 1982, sections 349.16 and 349.26 expire 
on February 28, 1985. 

                               ARTICLE 13

                           LOCAL PROVISIONS 
    Section 1.  Minnesota Statutes 1982, section 458.14, is 
amended to read: 
    458.14 [RIGHT TO LEVY TAXES OR ASSESSMENTS FORBIDDEN.] 
    Subdivision 1.  [TAX LEVY BY CITY.] The port authority 
shall have no right or authority to levy any tax or special 
assessment, nor to pledge the credit of the state, or any other 
subdivision or municipal corporation thereof; nor to incur any 
obligation enforceable upon any property, either within or 
without the port district, other than property owned by the port 
authority.  Annually, at such time as may be fixed by charter, 
resolution, or ordinance of the city in and for which any such 
port authority is created, the port authority shall transmit to 
the council of such city a detailed estimate, in writing, of the 
amount of money which in its opinion will be required for the 
business and proper conduct of its affairs during the next 
ensuing fiscal year, in excess of any expected receipts from the 
conduct of its business, or other sources, and any such city, in 
addition to all other powers now possessed thereby, and in 
addition to, and in excess of any limitation upon the amount it 
is otherwise permitted by law to levy as taxes, is hereby 
granted the power and authority, in its discretion, to shall, at 
the request of the port authority, levy taxes for the benefit 
of, and for expenditure by, such port authority, not exceeding 
in any one year an amount equal to a tax of five one-hundredths 
of one mill .75 mill upon the dollar of the assessed valuation 
thereof, upon all the taxable property in such city, excluding 
money and credits, and any amount so levied for such purposes 
shall be paid over by the city treasurer to the treasurer of the 
port authority, for expenditure by it, as above provided.  The 
fiscal year of such port authority shall be identical with the 
fiscal year of such city; provided that any seaway port 
authority may, by resolution, adopt a fiscal year based on the 
international shipping season through the St. Lawrence Seaway, 
independent of the fiscal year of the city in which the seaway 
port authority is located.  The board of county commissioners of 
any county in which any such city is located, is also hereby 
authorized to appropriate for the use of such port authority, 
and to include therefor in its levy for general revenue 
purposes, such amount as it may deem proper; provided, that the 
total amount permitted by law to be levied by any county for 
general revenue purposes shall not be deemed increased by this 
provision; the board of county commissioners in any county 
entitled to appoint members of a seaway port authority, may 
annually, upon receipt of a budget as specified above from such 
port authority, in its discretion levy a tax sufficient to 
produce a sum not exceeding $50,000 for the benefit of and for 
expenditure by such port authority to defray the costs of its 
current operations in the next ensuing fiscal year which levy 
shall not be included in computing the amount of levies subject 
to tax limitations under chapter 275 or any other provision of 
law.  The appropriation to a port authority of moneys derived 
from any of the county taxes herein authorized shall not be 
subject to any budgetary law applicable to said county.  Any 
amounts so appropriated or levied by the county shall be paid 
over by the county treasurer to the port authority for 
expenditure by it as herein provided, at such times and in such 
manner as the county board may provide. When any city entitled 
to appoint members of a seaway port authority has secured the 
approval of two-thirds of the members of the city council of 
such city to issue its general obligation bonds, the proceeds of 
which are to be appropriated to such seaway port authority, the 
board of county commissioners of any county entitled to appoint 
members of such seaway port authority may by five-sevenths vote 
issue general obligation bonds of the county in an amount not to 
exceed $4,000,000, and appropriate the proceeds thereof to be 
used by such port authority for any or all of the purposes 
specified in section 458.15, if the county board by resolution 
determines that the conservation, development, reclamation, 
protection and improvement of lands under the jurisdiction of 
such port authority and the construction of port facilities 
thereon will promote the public welfare of the county at large 
and the economic well-being of its people, industries and 
commerce, and is an essential governmental function of the 
county, and can best be performed through the medium of such 
port authority. Any such bonds shall be issued, sold and secured 
as provided in sections 475.60 to 475.753; an election shall not 
be necessary to the validity of such bonds. 
    Subd. 2.  [REVERSE REFERENDUM.] If a city proposes to 
increase the levy of the city for port authority purposes 
pursuant to subdivision 1, it shall pass a resolution stating 
the amount by which the levy limit base is proposed to be 
increased.  Thereafter, the resolution shall be published for 
two successive weeks in the official newspaper of the city or if 
there is no official newspaper, in a newspaper of general 
circulation in the city, together with a notice fixing a date 
for a public hearing on the proposed increase.  The hearing 
shall be held not less than two weeks nor more than four weeks 
after the first publication of the resolution.  Following the 
public hearing, the city may determine to take no further action 
or, in the alternative, adopt a resolution authorizing the 
increase as originally proposed or approving an increase in the 
lesser amount it determines.  The resolution authorizing an 
increase shall be published in the official newspaper of the 
city if there is no official newspaper, in a newspaper of 
general circulation in the city.  If within 30 days thereafter a 
petition signed by voters equal in number to five percent of the 
votes cast in the city in the last general election requesting a 
referendum on the proposed resolution is filed with the clerk 
the resolution shall not be effective until it has been 
submitted to the voters at a general or special election and a 
majority of votes cast on the question of approving the 
resolution are in the affirmative.  The commissioner of revenue 
shall prepare a suggested form of question to be presented at 
the referendum.  The referendum must be held at a special or 
general election prior to October 1 of the year for which the 
levy increase is proposed. 
    Sec. 2.  Laws 1979, chapter 189, section 2, is amended to 
read: 
    Sec. 2.  For the purposes of this act, "residential 
customer" means a customer classified by the public utility as a 
residential heating or residential non-heating customer of the 
public utility within the city of St. Paul and "gross operating 
revenue" means all sums received by the public utility from the 
sale of gas, hot water heating or electricity, excluding any 
amounts received which result from a surcharge on the public 
utility's rate schedule for the purpose of collecting the 
franchise fee. 
    Sec. 3.  [RAMSEY-WASHINGTON METRO WATERSHED DISTRICT; WATER 
MAINTENANCE AND REPAIR FUND; CREATION OF FUNDS; TAX LEVY.] 
    The Ramsey-Washington metro watershed district may, in 
addition to its other powers, establish a water maintenance and 
repair fund which shall be kept distinct from all other funds of 
the district.  The fund shall be maintained by an annual ad 
valorem tax levy on each dollar of assessed valuation of all 
taxable property within the Ramsey-Washington metro watershed 
district sufficient to raise not more than $30,000 in 1985, and 
in subsequent years not more than $15,000.  The board of 
managers of the district shall adopt each year, by resolution, 
the amount to be raised by mill levy for the fund for the 
ensuing year, which shall be levied, collected, and distributed 
to the district in accordance with Minnesota Statutes, section 
112.611, in addition to any other money levied, collected, and 
distributed to the district.  
    Sec. 4.  [PURPOSE OF FUND.] 
    The water maintenance and repair fund may be used for any 
maintenance, repair, restoration, upkeep, and rehabilitation of 
any public ditch, drain, dams, sewer, river, stream, 
watercourse, and waterbody, natural or artificial, lying wholly 
or partly within the district.  Works performed in accordance 
with the purposes of sections 3 to 5 may include, but are not 
limited to, stream and watercourse clean up and maintenance and 
stream and watercourse bank and bed repair and stabilization.  
    Sec. 5.  [WORKS; MUNICIPALITIES.] 
    Any works to be undertaken and paid for from the water 
maintenance and repair fund shall be ordered by the board of 
managers of the district.  Before the commencement of any works 
ordered, any affected municipality shall be notified in writing 
by the district about the proposed works and estimated costs. 
Within 30 days following receipt of the written notice, any 
affected municipality may notify the district in writing that it 
will perform the works ordered by the district.  If the 
municipality undertakes the works, it shall be paid as 
previously prescribed by the district from the water maintenance 
and repair fund.  If any affected municipality fails to perform 
any works ordered by the board of managers, the district may 
have the works performed in any other manner authorized by law.  
    Sec. 6.  [CROFT HISTORICAL PARK TAX.] 
    The Croft Historical Park Board, hereafter referred to in 
sections 6 and 7 as the "board," is created.  The Croft 
Historical Park District, hereafter referred to in sections 6 
and 7 as the "district", consists of the cities of Crosby, 
Cuyuna, Deerwood, Ironton, Riverton, and Trommald and the towns 
of Deerwood, Irondale, Rabbit Lake and Wolford.  All of the 
cities and towns are located in Crow Wing county.  The board 
shall consist of three members who are residents of the 
district, each of whom shall be elected at large in the 
district.  The county board shall make arrangements for the 
holding of a special election within the district.  For the 
initial election, the terms of the board members shall be as 
follows:  one two year term, one three year term and one four 
year term.  Thereafter, each board member shall be elected for a 
four year term.  
    If approved by referendum as provided in section 7, the 
board may levy a tax not to exceed 1.0 mills on the taxable 
value of all real and personal property located within the 
district.  The amount of tax levied is in addition to all other 
taxes on the property and must be disregarded in the calculation 
of all other mill rate or per capita levy limitations imposed by 
law or charter upon the cities or towns located within the 
district.  The tax shall be collected by the Crow Wing county 
treasurer and paid directly to the board.  The proceeds of the 
tax levy shall be used by the board in conjunction with money 
received from the Iron Range Resources and Rehabilitation Board 
for operation of the Croft Historical Park.  
    Sec. 7.  [REFERENDUM.] 
    The board shall make special arrangements with the Crow 
Wing county auditor for a referendum.  The board shall submit 
the proposed levy to the eligible voters in the district at a 
general or special election.  The date of the referendum shall 
be determined by the board.  The question submitted shall read 
substantially as follows:  
    "Shall the Croft Historical Park Board be allowed to impose 
an annual levy of up to one mill upon all taxable property 
located within the boundaries of the district?  
                                   Yes .......
                                   No ........"
    If a majority of those voting on the question approve the 
proposed levy, the board may certify a levy to the Crow Wing 
county auditor as soon as practical following the referendum and 
in each subsequent year thereafter.  
    Sec. 8.  [CLOQUET; PUBLIC TRANSPORTATION.] 
    Upon conditions mutually agreed, the city of Cloquet may 
contract with a privately owned public transportation system to 
provide transportation services to the people of the city.  The 
city may disburse money to discharge the terms of the contract. 
The city may annually levy a property tax not to exceed one mill 
for the purpose of discharging the contract obligations.  The 
amount of tax levied is in addition to all others permitted by 
law and must be disregarded in the calculation of statutory or 
other limitations on property tax levies.  
    Sec. 9.  [ST. LOUIS COUNTY LAND CONVEYANCE.] 
    The state of Minnesota shall convey to Laila A. Furchner, 
Box 161, Makinen, Minnesota 55763, land in St. Louis County 
which forfeited for unpaid property taxes on February 4, 1980, 
and which is identified by parcel code number 676-10-2220 and 
legal description SE 1/4 or NW 1/4, Section 12, Township 56, 
Range 16, (Government Lot 3).  The attorney general shall 
prepare an appropriate instrument of conveyance.  The price for 
the land shall be the same as that provided for a redemption 
under Minnesota Statutes, section 281.02.  
    Sec. 10.  [CITY OF BREEZY POINT; LEVY LIMIT INCREASE.] 
    Subdivision 1.  [AUTHORIZATION.] The limitation imposed 
upon the levy of the city of Breezy Point by Minnesota Statutes, 
section 275.11, is increased by $125,000 for taxes levied in 
1984 and thereafter.  
    Subd. 2.  [REVERSE REFERENDUM.] If the Breezy Point city 
council proposes to increase the levy limit base of the city 
pursuant to subdivision 1, it shall pass a resolution stating 
the amount by which the levy limit base is proposed to be 
increased.  Thereafter, the resolution shall be published for 
two successive weeks in the official newspaper of the city or if 
there is no official newspaper, in a newspaper of general 
circulation in the city, together with a notice fixing a date 
for a public hearing on the proposed increase.  The hearing 
shall be held not less than two weeks nor more than four weeks 
after the first publication of the resolution.  Following the 
public hearing, the city may determine to take no further action 
or, in the alternative, adopt a resolution authorizing the 
increase as originally proposed or approving an increase in the 
lesser amount it determines.  The resolution authorizing an 
increase shall be published in the official newspaper of the 
city or if there is no official newspaper, in a newspaper of 
general circulation in the city.  If within 30 days thereafter a 
petition signed by voters equal in number to five percent of the 
votes cast in the city in the last general election requesting a 
referendum on the proposed resolution is filed with the clerk 
the resolution shall not be effective until it has been 
submitted to the voters at a general or special election and a 
majority of votes cast on the question of approving the 
resolution are in the affirmative.  The commissioner of revenue 
shall prepare a suggested form of question to be presented at 
the referendum.  The referendum must be held at a special or 
general election prior to October 1, 1984.  
    Sec. 11.  [APPLICABILITY.] 
    On its effective date, section 10 applies to the city of 
Breezy Point.  
    Sec. 12.  [CITY OF OAKDALE; LEVY LIMIT INCREASE.] 
    The limitation imposed upon the levy of the city of Oakdale 
by Minnesota Statutes, sections 275.50 to 275.56 is increased by 
$100,000 for taxes levied in 1984, 1985, and 1986.  This amount 
is not subject to the penalty provisions of section 275.51, 
subdivision 4.  In computing the levy limit base for taxes 
levied in 1987, $100,000 shall be subtracted from the adjusted 
levy limit base for taxes levied in 1986.  
    Sec. 13.  [REVERSE REFERENDUM.] 
    If the Oakdale city council proposes to increase the levy 
limit base of the city pursuant to section 12, it shall pass a 
resolution stating the amount by which the levy limit base is 
proposed to be increased.  Thereafter, the resolution shall be 
published for two successive weeks in the official newspaper of 
the city or if there is no official newspaper, in a newspaper of 
general circulation in the city, together with a notice fixing a 
date for a public hearing on the proposed increase.  The hearing 
shall be held not less than two weeks nor more than four weeks 
after the first publication of the resolution.  Following the 
public hearing, the city may determine to take no further action 
or, in the alternative, adopt a resolution authorizing the 
increase as originally proposed or approving an increase in the 
lesser amount it determines.  The resolution authorizing an 
increase shall be published in the official newspaper of the 
city or if there is no official newspaper, in a newspaper of 
general circulation in the city.  If within 30 days thereafter a 
petition signed by voters equal in number to ten percent of the 
votes cast in the city in the last general election requesting a 
referendum on the proposed resolution is filed with the clerk 
the resolution shall not be effective until it has been 
submitted to the voters at a general or special election and a 
majority of votes cast on the question of approving the 
resolution are in the affirmative.  The commissioner of revenue 
shall prepare a suggested form of question to be presented at 
the referendum.  The referendum must be held at a special or 
general election prior to October 1, 1984.  
    Sec. 14.  [APPLICABILITY.] 
    On its effective date, sections 12 and 13 apply to the city 
of Oakdale.  
    Sec. 15.  [MORRISON COUNTY LAND CONVEYANCE.] 
    The state of Minnesota shall convey to Richard T. Peterson, 
Route #6, Little Falls, 56345, any land in Morrison County owned 
by him in 1977 which became forfeited for unpaid property taxes 
after 1977.  The attorney general shall prepare appropriate 
instruments of conveyance with a precise description of all land 
subject to this section.  The price for the land shall be the 
same as that provided for a redemption under Minnesota Statutes, 
section 281.02.  
    Sec. 16.  [EFFECTIVE DATE.] 
    Section 2 is effective for sales after June 30, 1984. 
Sections 3 to 5 are effective the day after compliance with 
Minnesota Statutes, section 645.021, subdivision 3, by the board 
of managers of the Ramsey-Washington metro watershed district. 
Sections 6 and 7 are effective May 1, 1984.  Section 8 is 
effective upon the day after the filing of its approval by the 
governing body of the city of Cloquet in accordance with 
Minnesota Statutes, section 645.021, subdivision 3.  Pursuant to 
Minnesota Statutes, section 645.023, subdivision 1, clause (a), 
sections 10 and 11 are effective without local approval the day 
after final enactment.  Pursuant to Minnesota Statutes, section 
645.023, subdivision 1, clause (a), sections 12, 13, and 14 are 
effective without local approval the day after final enactment. 

                              ARTICLE 14 

                             MISCELLANEOUS 
    Section 1.  [16A.124] [PROMPT PAYMENT OF STATE AGENCY BILLS 
REQUIRED.] 
    Subdivision 1.  [DEFINITIONS.] For the purposes of section 
1, the following terms have the meanings here given them.  
    (a) "Commissioner" means the commissioner of finance.  
    (b) "State agency" has the meaning assigned to it in 
section 16.011.  
    Subd. 2.  [COMMISSIONER SUPERVISION.] The commissioner 
shall exercise constant supervision over state agencies to 
insure the prompt payment of vendor obligations.  
    Subd. 3.  [PAYMENT REQUIRED.] State agencies must pay each 
valid vendor obligation so that the vendor receives payment 
within the vendor's early payment discount period.  If there is 
no early payment discount period, the state agency must pay the 
vendor within 30 days following the receipt of the invoice for 
the completed delivery of the product or service.  
    Subd. 4.  [INVOICE ERRORS.] If an invoice is incorrect, 
defective, or otherwise improper, the agency must notify the 
vendor within ten days of discovering the error.  Upon receiving 
a corrected invoice, the agency must pay the bill within the 
time limitation contained in subdivision 3.  
    Subd. 5.  [PAYMENT OF INTEREST ON LATE PAYMENTS REQUIRED.] 
(a) A state agency shall pay interest to a vendor for undisputed 
billings when the agency has not paid the billing within 30 days 
following receipt of the invoice, merchandise, or service 
whichever is later.  A negotiated contract or agreement between 
a vendor and a state agency which requires an audit by the state 
agency prior to acceptance and payment of the vendor's invoice 
shall not be considered past due until 30 days after the 
completion of the audit by the state agency.  Before any 
interest payment is made, the vendor must invoice the state 
agency for such interest.  
    (b) The rate of interest paid by the agency on undisputed 
bills not paid within 30 days shall be one percent per month or 
any part thereof.  
    (c) All interest penalties and collection costs must be 
paid from the agency's current operating budget.  No agency may 
seek to increase its appropriation for the purpose of obtaining 
funds to pay interest penalties or collection costs.  
    (d) Any vendor who prevails in a civil action to collect 
interest penalties from a state agency shall be awarded its 
costs and disbursements, including attorney's fees, incurred in 
bringing the actions.  
    (e) No interest penalties may accrue against an agency that 
delays payment of a bill due to a disagreement with the vendor; 
provided, that the dispute must be settled within 30 days after 
the bill became overdue.  Upon the resolution of the dispute, 
the agency must pay the vendor accrued interest on all proper 
invoices for which payment was not received within the 
applicable time limit contained in subdivision 3.  
    (f) The minimum monthly interest penalty payment that a 
state agency shall pay a vendor for the unpaid balance for any 
one overdue bill equal to or in excess of $100 is $10.  For 
unpaid balances of less than $100, the state agency shall pay 
the actual penalty due to the vendor. 
     Subd. 6.  [AUTHORITY TO REDUCE AGENCY ALLOTMENT.] The 
commissioner shall have the authority to reduce the allotment of 
any state agency by the amount of any vendor obligations that 
are paid later than 30 days following the receipt of the invoice 
for completed delivery of the products or services.  
    Subd. 7.  [REPORT TO LEGISLATURE.] The commissioner shall 
report to the legislature each year summarizing the state's 
payment record for the preceding year.  The report shall include 
the number and dollar amount of late payments made by each 
agency, the amount of interest penalties and collection costs 
paid, and the specific steps being taken to reduce the incidence 
of late payments in the future.  
    Subd. 8.  [APPLICABILITY.] Subdivisions 1 to 7 apply to all 
agency purchases, leases, rentals, and contracts for services, 
including construction and remodeling contracts.  
    Sec. 2.  Minnesota Statutes 1983 Supplement, section 
240.18, is amended to read: 
    240.18 [BREEDERS FUND.] 
    The commission shall establish a Minnesota breeders fund 
with the money paid to it under section 240.15, subdivision 1.  
The commission, after paying the current costs of administering 
the fund, shall distribute the available net proceeds as follows:
    (1) Twenty percent of the remaining available money in the 
fund must be expended as grants for equine research and related 
education at public institutions of post-secondary learning 
within the state.  
    (2) After deducting the amount for (1), the balance of the 
fund available proceeds shall be apportioned into categories 
corresponding with the various breeds of horses which raced are 
racing at licensed Minnesota racetracks in the previous year, in 
proportion to each category's contribution to the fund.  The 
available funds in each category may be expended by the 
commission to:  
    (a) supplement purses for races held exclusively for 
Minnesota-bred, Minnesota-foaled or Minnesota-owned horses until 
January 1, 1986 1988, and for Minnesota-bred and 
Minnesota-foaled horses after that date;  
    (b) pay breeders or owners awards to the breeders or owners 
of Minnesota-bred horses which win money at licensed racetracks 
in the state; and 
    (c) provide other financial incentives to encourage the 
horse breeding industry in Minnesota. 
    The commission shall adopt rules governing the distribution 
of the fund.  The commission may establish advisory committees 
to advise it on the distribution of money under this section, 
provided that the members of an advisory committee shall serve 
without compensation. 
    Sec. 3.  Minnesota Statutes 1982, section 270A.03, 
subdivision 5, is amended to read: 
    Subd. 5.  "Debt" means a legal obligation of a natural 
person to pay a fixed and certain amount of money, which equals 
or exceeds $25 and which is due and payable to a claimant 
agency.  The term includes criminal fines imposed under section 
609.10.  A debt may arise under a contractual or statutory 
obligation, a court order, or other legal obligation, but need 
not have been reduced to judgment.  A debt does not include (1) 
any legal obligation of a current recipient of assistance which 
is based on overpayment of an assistance grant, or (2) any legal 
obligation to pay a claimant agency for medical care, including 
hospitalization if the debtor qualified for a low income credit 
equal to tax liability pursuant to section 290.06, subdivision 
3d, clause (1), at the time when the medical care was rendered. 
    Sec. 4.  Minnesota Statutes 1982, section 270A.04, 
subdivision 2, is amended to read: 
    Subd. 2.  Any debt owed to a claimant agency shall be 
submitted by the agency for collection under the procedure 
established by sections 270A.01 to 270A.12 unless (a) an 
alternative means of collection is pending and believed to be 
adequate, (b) the collection attempt would result in a loss of 
federal funds, or (c) the agency is unable to supply the 
department with the necessary identifying information required 
by subdivision 3 or rules promulgated by the commissioner, or 
(d) the debt is barred by section 541.05. 
    Sec. 5.  Minnesota Statutes 1982, section 270A.08, 
subdivision 1, is amended to read: 
    Subdivision 1.  Not later than five days after the claimant 
agency has sent notification to the department pursuant to 
section 270A.07, subdivision 1, the claimant agency shall send a 
written notification to the debtor asserting the right of the 
claimant agency to the refund or any part thereof.  If the 
notice is returned to the claimant agency as undeliverable, or 
the claimant agency has reason to believe the debtor did not 
receive the notice, the claimant agency shall obtain the current 
address of the debtor from the commissioner and resend the 
corrected notice.  
    Sec. 6.  Minnesota Statutes 1982, section 270A.08, 
subdivision 2, is amended to read: 
    Subd. 2.  (a) This written notice shall clearly and with 
specificity set forth the basis for the claim to the refund 
including the name of the benefit program involved if the debt 
arises from a public assistance grant and the dates on which the 
debt was incurred and, further, shall advise the debtor of the 
claimant agency's intention to request set-off of the refund 
against the debt.  
    (b) The notice will also advise the debtor of his right to 
contest the validity of the claim at a hearing.  The debtor must 
assert this right by written request to the claimant agency, 
which request the agency must receive within 45 days of the 
mailing date of the original notice or of the corrected notice, 
as required by subdivision 1.  If the debtor has not received 
the notice, the 45 days shall not commence until the debtor has 
received actual notice.  The debtor shall have the burden of 
showing no notice and shall be entitled to a hearing on the 
issue of notice as well as on the merits.  
    Sec. 7.  Minnesota Statutes 1982, section 287.05, is 
amended by adding a subdivision to read: 
    Subd. 3.  When a mortgage secures a revolving line of 
credit under which advances, payments, and readvances may be 
made from time to time, the tax imposed under subdivision 1 
shall be paid on the maximum amount of the line of credit which 
may be secured at any one time, as expressed in the mortgage, 
regardless of the time or amount of advances, payments, or 
readvances.  
    Sec. 8.  Minnesota Statutes 1982, section 287.05, is 
amended by adding a subdivision to read: 
    Subd. 4.  No tax under subdivision 1 shall be paid on the 
indeterminate amount which may be advanced by the mortgagee in 
protection of the mortgaged premises or the mortgage, including 
taxes, assessments, charges, claims, fines, impositions, 
insurance premiums, amounts due upon prior or superior mortgages 
and other prior or superior liens, encumbrances and interests, 
and legal expenses and attorneys' fees.  
    Sec. 9.  Minnesota Statutes 1982, section 287.05, is 
amended by adding a subdivision to read: 
    Subd. 5.  When a mortgage secures an indeterminate amount 
other than those described in subdivision 3 or 4, no tax shall 
be paid at the time the mortgage is recorded or registered, but 
the tax must be paid at the time of recording or filing an 
affidavit stating the amount and time of the actual advance.  
    Sec. 10.  Minnesota Statutes 1983 Supplement, section 
296.14, subdivision 4, is amended to read: 
    Subd. 4.  [PAYMENT AND TRANSFER OF TAX ON GASOLINE SOLD FOR 
STORAGE IN ON-FARM BULK STORAGE AND ETHYL ALCOHOL FOR PERSONAL 
USE.] Notwithstanding the provisions of this section, the 
producer of ethyl alcohol which is produced for personal use and 
not for sale in the usual course of business and a farmer who 
uses gasoline on which a tax has not been paid shall report and 
pay the tax on all ethyl alcohol or gasoline delivered into the 
supply tank of a licensed motor vehicle during the preceding 
calendar year.  The tax shall be reported and paid together with 
the income tax return of any refund claim filed by the taxpayer 
under section 296.18.  If no refund claim is filed, the tax 
shall be reported and paid annually by March 15 or more 
frequently, as the commissioner may prescribe.  The commissioner 
of revenue shall transfer the amount collected in each calendar 
year to the highway user tax distribution fund by March 30 of 
the following taxable year.  Any producer, qualifying under this 
subdivision, shall be exempt from the licensing requirements 
contained in section 296.01, subdivision 1. 
    Sec. 11.  Minnesota Statutes 1983 Supplement, section 
296.18, subdivision 1, is amended to read: 
    Subdivision 1.  [GASOLINE OR SPECIAL FUEL USED IN OTHER 
THAN MOTOR VEHICLES.] Any person who shall buy and use gasoline 
for any a qualifying purpose other than use in motor vehicles, 
snowmobiles, or motorboats, or special fuel for any a qualifying 
purpose other than use in licensed motor vehicles, and who shall 
have paid the Minnesota excise tax directly or indirectly 
through the amount of the tax being included in the price of the 
gasoline or special fuel, or otherwise, shall be eligible to 
receive the credit provided in section 290.06, subdivision 13, 
in reimbursed and repaid the amount of the tax paid by him upon 
filing with the commissioner a signed claim in writing in the 
form and containing the information the commissioner shall 
require and accompanied by the original invoice thereof.  The 
taxpayer claiming this credit shall include with his income tax 
return information including By signing any such claim which is 
false or fraudulent, the applicant shall be subject to the 
penalties provided in this section for knowingly making a false 
claim.  The claim shall set forth the total amount of the 
gasoline so purchased and used by him other than in motor 
vehicles, or special fuel so purchased and used by him other 
than in licensed motor vehicles, and shall state when and for 
what purpose it was used.  When a claim contains an error in 
computation or preparation, the commissioner is authorized to 
adjust the claim in accordance with the evidence shown on the 
claim or other information available to him.  If the 
commissioner is satisfied that the claimant is entitled to the 
payments, he shall approve the claim and transmit it to the 
commissioner of finance.  No repayment shall be made unless the 
claim and invoice shall be filed with the commissioner within 
one year from the date of the purchase.  The postmark on the 
envelope in which the claim is mailed shall determine the date 
of filing.  The words "gasoline" or "special fuel" as used in 
this subdivision do not include aviation gasoline or special 
fuel for aircraft.  Gasoline or special fuel bought and used for 
a "qualifying purpose" means:  
    (1) Gasoline or special fuel used in carrying on a trade or 
business, used on a farm situated in Minnesota, and used for a 
farming purpose.  "Farm" and "farming purpose" have the meanings 
given them in section 6420(c)(2), (3), and (4) of the Internal 
Revenue Code of 1954, as amended through December 31, 1983.  
    (2) Gasoline or special fuel used for off-highway business 
use.  "Off-highway business use" means any use by a person in 
that person's trade, business, or activity for the production of 
income.  "Off-highway business use" does not include use as a 
fuel in a motor vehicle which, at the time of use, is registered 
or is required to be registered for highway use under the laws 
of any state or foreign country.  
    Sec. 12.  Minnesota Statutes 1982, section 296.18, 
subdivision 3, is amended to read: 
    Subd. 3.  [PENALTIES FOR FILING FALSE CLAIMS.] Every person 
who shall make any false statement in any claim or invoice filed 
with the commissioner, or knowingly file with the commissioner 
any claim or invoice containing any false statement or collect 
or cause to be paid to him or to any other person a refund 
without being entitled thereto, when acting pursuant to the 
provisions of subdivision 1 or 2, clause 3, shall forfeit the 
full amount of the claim and be guilty of a misdemeanor.  Every 
person who is convicted under the provisions of this subdivision 
shall be prohibited from filing with the commissioner any claim 
for refund upon gasoline purchased within six months after such 
conviction. 
    Sec. 13.  Minnesota Statutes 1982, section 296.18, 
subdivision 8, is amended to read:  
    Subd. 8.  [APPROPRIATION.] There is hereby appropriated to 
the persons entitled to such refund under this section, from the 
fund or account in the state treasury to which the money was 
credited, an amount sufficient to make the refund and payment.  
There is annually appropriated from the highway user tax 
distribution fund to the general fund the amount required to 
make the refunds required to be paid as income tax credits 
pursuant to sections 290.06, subdivision 13 and 296.18, 
subdivision 1.  
    Sec. 14.  Minnesota Statutes 1982, section 341.05, is 
amended to read: 
    341.05 [DUTIES.] 
    Subdivision 1.  The board of boxing shall have charge and 
supervision of all boxing and sparring exhibitions held in the 
state and have power: 
    (1) To promulgate rules governing the conduct of boxing and 
sparring exhibitions and the time and place thereof; 
    (2) To issue licenses to individuals or organizations 
desiring to promote or conduct boxing or sparring exhibitions, 
and to suspend or revoke the licenses at its pleasure; every 
application for a license shall designate the territory in which 
the individual or organization intends to operate, and the 
license granted shall entitle the licensee to conduct the 
exhibitions in that territory and in no other. 
    The commissioner of revenue shall collect five percent of 
the gross receipts from admission to every boxing and sparring 
exhibition other than an amateur boxing and sparring exhibition 
held within the state, and five percent of the gross receipts 
from the lease or sale of radio, motion picture and television 
rights therein.  
    All complimentary tickets for a boxing and sparring 
exhibition other than an amateur boxing and sparring exhibition 
presented at any entrance gate shall likewise be assessed for 
the tax herein provided five percent of the value thereof.  All 
moneys so collected shall be paid into the state treasury.  
    Subd. 2.  The board of boxing shall issue a license to a 
person or organization holding, showing, or exhibiting a 
simultaneous telecast of any live, current, or spontaneous 
boxing or sparring match, exhibition, or performance on a closed 
circuit telecast or subscription television program viewed 
within the state, whether originating in this state or 
elsewhere, and for which a charge is made.  Each such person or 
organization shall apply for such a license in advance of each 
showing and shall within 24 hours after the termination of such 
showing furnish the commissioner of revenue a written report, 
duly verified by an authorized person, showing the number of 
tickets sold for such showing, the amount of the gross proceeds 
thereof, and such other matters as the commissioner of revenue 
may prescribe; and shall also, within 24 hours after the 
termination of such showing, pay to the commissioner of revenue 
five percent of the gross receipts from the sale of tickets of 
admission or moneys received from subscription for the showing 
or exhibiting of said boxing or sparring match, exhibition, or 
performance.  If the boxing or sparring match, exhibition, or 
performance is wholly amateur no payment is due.  
    Whoever violates the provisions of this subdivision is 
guilty of a misdemeanor and may be punished therefor as provided 
by law.  The penalty herein provided is in addition to any other 
penalty for violation of this subdivision as may be otherwise 
fixed in this chapter. 
     Sec. 15.  Minnesota Statutes 1982, section 473.595, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ADMISSION TAX.] Effective January 1, 1978, 
the commission shall by resolution impose a three percent 
admission tax upon the granting, sale, or distribution, by any 
private or public person, association, or corporation, of the 
privilege of admission to activities; except for those 
activities sponsored at the indoor public assembly facility at 
the metropolitan sports area known as the metropolitan sports 
center.  Commencing with the operation of sports facilities 
constructed or remodeled by the commission pursuant to sections 
473.551 to 473.595, the commission shall impose an additional 
seven percent admission tax upon activities conducted at such 
sports facilities.  Effective January 1, 1978, no other tax, 
except the taxes imposed by chapter 297A, may be levied by any 
other unit of government upon any such sale or distribution.  
The admission tax shall be stated and charged separately from 
the sales price so far as practicable and shall be collected by 
the grantor, seller, or distributor from the person admitted and 
shall be a debt from that person to the grantor, seller, or 
distributor, and the tax required to be collected shall 
constitute a debt owed by the grantor, seller, or distributor to 
the commission, which shall be recoverable at law in the same 
manner as other debts.  Every person granting, selling, or 
distributing tickets for such admissions may be required, as 
provided in resolutions of the commission, to secure a permit, 
to file returns, to deposit security for the payment of the tax, 
and to pay such penalties for nonpayment and interest on late 
payments, as shall be deemed necessary or expedient to assure 
the prompt and uniform collection of the tax. 
     Notwithstanding any other provisions of this subdivision, 
the imposition of an admission tax upon a national superbowl 
football game conducted at the commission's facilities is 
discretionary with the commission.  
    Sec. 16.  [507.325] [MORTGAGE SECURING REVOLVING LINE OF 
CREDIT; NOTICE.] 
    A mortgage securing a revolving line of credit under which 
advances, payments, and readvances may be made from time to 
time, and which states the maximum amount of the line of credit 
which may be secured at any one time, is effective as notice to 
parties from the time the mortgage is recorded as to all 
advances and readvances secured thereby, regardless of the time 
or amount of advances, payments, or readvances and whether or 
not the advances or readvances are obligatory.  
    Sec. 17.  [508.555] [MORTGAGE SECURING REVOLVING LINE OF 
CREDIT; NOTICE.] 
    A mortgage securing a revolving line of credit under which 
advances, payments, and readvances may be made from time to 
time, and which states the maximum amount of the line of credit 
which may be secured at any one time, is effective as notice to 
parties from the time the mortgage is filed and registered as to 
all advances and readvances secured thereby, regardless of the 
time or amount of advances, payments, or readvances and whether 
or not the advances or readvances are obligatory.  
    Sec. 18.  [APPROPRIATION.] 
    There is appropriated from the general fund to the finance 
department for fiscal year 1985 the sum of $240,000 for the 
operating expenses of the tax study commission.  The approved 
complement of the tax study commission for fiscal year 1985 is 
seven.  This appropriation is available until February 28, 1985. 
    Sec. 19.  H.F. No. 1393, article 9, section 9, if enacted 
during the 1984 regular session, is amended to read: 
    Sec. 9.  [EDUCATION AIDS INCREASE ACCOUNT.] 
    Subdivision 1.  [ESTABLISHMENT.] There is established an 
education aids increase account in the general fund of the state 
treasury for the deposit of funds to insure adequate funding for 
increases in aids to school districts for the biennium beginning 
July 1, 1985.  
    Subd. 2.  [INITIAL TRANSFER.] The commissioner of finance 
shall transfer $23,000,000 $21,700,000 to the education aids 
increase account on July 1, 1984.  
    Subd. 3.  [CONTINGENT TRANSFERS.] If forecasts of general 
fund revenues and expenditures prepared by the commissioner of 
finance pursuant to chapter 16A prior to December 1, 1984, 
indicate a projected general fund balance for the biennium 
ending June 30, 1985, the commissioner shall transfer the amount 
of the balance to the education aids increase account; however, 
in no case shall the cumulative total of all transfers according 
to this subdivision exceed $27,000,000 $28,300,000.  Transfers 
to the education aids increase account shall remain in the 
account until expended.  
    Subd. 4.  [EXPIRATION OF ACCOUNT.] The education aids 
increase account shall expire on June 30, 1987.  Any unexpended 
moneys in the education aids increase account on June 30, 1987, 
shall be transferred to the general fund.  
    Sec. 20.  [REPEALER.] 
    (a) Minnesota Statutes 1982, section 290.06, subdivision 
13, is repealed.  
    (b) Minnesota Statutes 1982, section 270.051, is repealed.  
    Sec. 21.  [EFFECTIVE DATE.] 
    Section 1 is effective July 1, 1984, and applies to all 
payments due on or after that date.  Section 3 is effective for 
amounts remitted or transferred to a claimant agency after the 
day of final enactment.  Sections 10 to 13 and 20, paragraph 
(a), are effective for taxable years beginning after December 
31, 1984.  Sections 14 and 20, paragraph (b), are effective July 
1, 1984.  Section 19 is effective the day after final enactment. 
    Approved April 25, 1984