Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1985, 1st Special Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1985
CHAPTER 14-H.F.No. 10
An act relating to financing and operation of state
and local government; simplifying Minnesota income tax
law by increasing conformity to federal income tax law;
changing income tax rates, rate brackets, credits, and
deductions; providing for computation of interest on
overpayments; reducing the estate tax; changing
corporate income tax provisions; rescheduling payments
and increasing the budget reserve; reducing sales tax
rate on farm machinery and providing sales tax
exemptions; changing taxation of agricultural
gasoline; changing the tax credit on fermented malt
beverages; changing motor vehicle excise taxes for
certain automobiles; authorizing lodging taxes for
towns and unorganized territories; recodifying
property tax law; changing property tax exemptions,
classes, classification ratios, and credits; changing
the taxation of telephone companies; providing for the
allocation of industrial revenue bonds; providing
economic development incentives; establishing a jobs
program; providing for retention of mortgage
registration and deed taxes by counties; altering
provisions relating to the iron range resources and
rehabilitation board; changing mining taxes;
authorizing reimbursement to local units of government
for certain railroad property tax abatements; giving
enforcement powers to the department of revenue;
changing provisions relating to leased state lands;
increasing cigarette taxes and allocating the
proceeds; providing for studies; imposing duties on
the commissioner of revenue, commissioner of natural
resources, and the state auditor; changing property
tax provisions relating to collection of property tax,
confessions of judgment, special assessments, and sale
of tax forfeit lands; changing property tax refund
benefit schedules and definitions; changing local
government aids; authorizing the issuance of bonds;
changing computation of adjusted levy limit base;
changing tax court jurisdiction; changing certain
dates; changing and adding definitions; changing
provisions relating to the Hennepin county park
reserve district; updating income tax provisions to
changes in the Internal Revenue Code; providing
penalties; appropriating money; amending Minnesota
Statutes 1984, sections 10A.31, subdivisions 1 and 3;
13.04, subdivision 2; 13.58; 15A.081, subdivisions 1
and 8; 16A.128, subdivision 2; 16A.15, subdivisions 1
and 6; 16A.641, subdivision 11; 16B.60, subdivision 5;
18.023, subdivision 7; 37.17, subdivision 1; 41.55;
47.58, subdivisions 2 and 3; 60A.15, subdivision 12;
60A.199, subdivision 8; 84B.08, subdivision 6; 85A.05,
subdivision 5; 86.33; 92.46, subdivision 1; 93.55,
subdivision 2; 97.488, subdivision 1a; 110A.28,
subdivisions 11 and 12; 115A.58, subdivision 6;
116.16, subdivisions 1 and 2; 116.17, subdivision 6;
116.18, subdivisions 1, 2a, and 3a; 116C.63,
subdivision 4; 116J.035, by adding a subdivision;
116J.64, subdivision 6; 116L.03, subdivision 7;
116L.04, by adding a subdivision; 116M.03, by adding a
subdivision; 116M.06, subdivisions 2 and 3; 116M.07,
subdivision 11, and by adding subdivisions; 116M.08,
subdivision 11; 117.55; 121.904, subdivision 4c, and
by adding a subdivision; 124.155, subdivision 2;
124.2131, subdivision 3; 124.2137, subdivision 1;
124.2138, subdivision 4; 124.2139; 124.46, subdivision
3; 124A.02, subdivisions 11 and 12; 129A.02,
subdivision 2; 136.40, subdivision 7; 136.63, by
adding a subdivision; 136C.06; 136C.43, subdivision 6;
145.882; 145.883, subdivision 8, and by adding a
subdivision; 145.884, subdivision 1; 145.885; 145.886;
167.52; 168.012, subdivision 9; 174.51, subdivision 6;
178.03, by adding a subdivision; 245.87; 248.07;
248.08; 256.01, subdivision 4; 256.736, subdivisions
1, 3, 4, 5, 7, and by adding subdivisions; 256.737;
256C.24; 256C.25, subdivision 1; 256C.26; 256D.02,
subdivision 13; 256D.03, subdivision 2; 256D.09,
subdivision 3; 268.31; 268.32; 268.33; 268.34; 268.36;
268.672, subdivisions 6 and 12; 268.673, subdivisions
3, 4, 5, and 6; 268.676; 268.677; 268.678,
subdivisions 1, 3, 4, 5, and 6; 268.679; 268.681;
268.682; 270.68, subdivision 4; 270A.07, subdivision 5;
271.01, subdivision 5; 271.12; 272.02, subdivision 1,
as amended, and by adding a subdivision; 272.03,
subdivision 1; 272.039; 272.04, subdivision 1;
272.115, subdivision 4; 273.11, subdivision 8;
273.1104, subdivision 1; 273.1105, subdivision 2;
273.111, subdivision 11; 273.115, subdivision 7;
273.116, subdivision 7; 273.118; 273.121; 273.123,
subdivisions 1 and 4; 273.13, subdivisions 4, as
amended, 6, 7, 7a, 8a, 9, 14a, 15a, 17b, 19, and by
adding subdivisions; 273.1311; 273.1313, subdivisions
1, 2, 3, and by adding a subdivision; 273.1314,
subdivisions 8 and 16a; 273.1315; 273.133, by adding a
subdivision; 273.135; subdivisions 1 and 2; 273.136,
subdivisions 1, 2, 3, and 4; 273.1391, subdivisions 1
and 2; 273.1392; 273.1393, as added; 273.38; 273.42,
subdivision 2; 273.74, subdivision 2, and by adding a
subdivision; 273.75, subdivision 4; 274.19,
subdivisions 1, 2, 3, 4, 6, 7, and by adding a
subdivision; 275.50, subdivision 5; 275.51,
subdivision 3h; 276.04; 277.03; 277.10; 278.01,
subdivisions 1 and 2; 278.05, subdivision 5; 279.01,
subdivision 1, as amended; 279.06; 279.37,
subdivisions 1, 3, 4, 8, and by adding a subdivision;
281.17; 281.23, subdivision 1; 281.29; 282.01,
subdivision 7a; 282.021; 282.261, by adding a
subdivision; 287.05, subdivision 1; 287.08; 287.09;
287.12; 287.21, subdivision 2; 287.23; 287.25; 287.27;
287.28; 287.29, subdivision 1; 287.33; 287.35; 290.01,
subdivisions 19, 20, as amended, 20a, 20b, 20d, 20e,
20f, and 21; 290.032, subdivisions 1 and 2; 290.05,
subdivision 3; 290.06, subdivisions 2c, 2d, 2f, 3f,
3g, and 11; 290.067, subdivision 1; 290.068,
subdivisions 1, 2, 3, 4, and 5; 290.069, subdivisions
2, 2a, 4a, 4b, 5, 6, and 7; 290.07, subdivisions 5 and
7; 290.071, subdivision 5; 290.079, subdivision 1;
290.08, subdivision 26; 290.088; 290.089, subdivisions
2, 3, and 7; 290.09, subdivisions 1, 2, 7, and 19;
290.091; 290.095, subdivisions 7, 9, and 11; 290.10;
290.12, subdivision 2; 290.13, subdivision 1; 290.131,
subdivision 1; 290.132, subdivision 1; 290.133,
subdivision 1; 290.135, subdivision 1; 290.136,
subdivision 1; 290.14; 290.16, subdivisions 3, 7, 9,
13, 15, 16, and by adding a subdivision; 290.17,
subdivision 2; 290.18, subdivision 2; 290.19,
subdivision 1; 290.21, subdivisions 4 and 8; 290.23,
subdivision 5; 290.26, subdivision 2; 290.31,
subdivisions 2, 4, and 5; 290.37, subdivision 1;
290.38; 290.41, subdivisions 1, 2, and by adding a
subdivision; 290.50, subdivisions 1, 5, and 6; 290.53,
subdivisions 9 and 11; 290.65, subdivision 16; 290.92,
subdivisions 2a, 11, 13, 15, 18, 19, as amended, and
21; 290.93, subdivisions 1, 3, 5, 6, 7, 9, and 10;
290.931, subdivision 1; 290.936; 290A.03, subdivisions
3, as amended, 6, 12, 13, and 14; 290A.04,
subdivisions 1, 2, and 3; 290A.06; 290A.07,
subdivisions 2a and 3; 290A.19, as amended; 291.005,
subdivision 1; 291.03, subdivision 1; 291.075; 291.09,
subdivisions 1a, 2a, and 3a; 291.11, subdivision 1;
291.15, subdivisions 1 and 3; 291.215, subdivision 1;
291.32; 294.09, subdivision 1; 295.01, subdivision 10;
295.34, subdivision 1; 296.01, subdivision 24; 296.02,
subdivisions 7 and 8; 296.18, subdivision 1, as
amended; 296.22, subdivision 13; 297.02, subdivision 1;
297.03, subdivisions 5 and 6; 297.13, subdivision 1;
297.22, subdivision 1; 297.32, subdivisions 1, 2, and
by adding a subdivision; 297.35, subdivision 1;
297A.01, subdivisions 14 and 15; 297A.02, subdivision
2; 297A.14; 297A.15, subdivision 5; 297A.25,
subdivision 1; 297A.35, subdivision 1; 297A.39,
subdivision 8; 297B.02; 297B.03; 297C.02, as added;
298.01, subdivision 1, as amended; 298.03; 298.031,
subdivisions 2 and 3; 298.09, subdivision 4; 298.223;
298.225, as amended; 298.24, subdivision 4; 298.27;
298.28, subdivisions 1, as amended, and 2; 298.282,
subdivisions 1, 4, and 5; 298.292; 298.293; 299.01,
subdivision 1, as amended; 299.05; 299F.26,
subdivision 1; 325D.41; 360.301, subdivision 1;
462.445, subdivision 13; 462A.22, subdivision 1, as
amended; 462C.02, by adding subdivisions; 462C.03,
subdivision 1, and by adding a subdivision; 462C.04,
subdivision 2; 462C.09, subdivisions 2a, 3, and by
adding a subdivision; 473.556, subdivision 4; 473F.02,
subdivisions 3 and 4; 474.16, subdivision 3, and by
adding subdivisions; 474.17; 474.19; 474.20; 474.22;
474.23; 475.52, subdivision 6; 475.54, subdivision 1,
and by adding a subdivision; 475.56; 475.58,
subdivision 1; 475.60, subdivision 2; 475.67,
subdivision 8, and by adding a subdivision; 475.754;
475A.06, subdivision 6; 477A.011, subdivisions 3, 10,
and by adding subdivisions; 477A.012; 477A.013;
477A.018; 514.03, subdivision 3; 524.3-1202; and
583.02; Laws 1967, chapter 721, section 2, as amended;
Laws 1979, chapter 288, section 2, subdivisions 2, 3,
and 4, and section 3; Laws 1981, chapter 223, section
4, subdivisions 2 and 3; Laws 1982, chapter 523,
article XXX, section 4, subdivision 1, as amended;
Laws 1984, chapter 502, article 5, section 19,
subdivision 1, and article 11, section 6; Laws 1985,
chapter 83, section 7; proposing coding for new law in
Minnesota Statutes, chapters 16A; 116; 124; 144; 145;
248; 256C; 256D; 268; 270; 272; 273; 290; 297A; 297B;
298; 325E; 462C; and 474; proposing coding for new law
as Minnesota Statutes, section 267; repealing
Minnesota Statutes 1984, sections 41.58, subdivision 3;
41.59, subdivisions 2 and 3; 55.10, subdivision 2;
62E.03, subdivision 2; 116.18, subdivision 2; 129A.02,
subdivision 4; 145.884, subdivision 2; 245.84,
subdivision 2; 256.736, subdivisions 1 and 2; 256D.02,
subdivision 8a; 256D.111, subdivision 1a; 256D.112;
268.011; 268.012; 268.013; 268.12, subdivisions 1 and
1a; 268.671; 268.672, subdivisions 2, 8, 10, and 11;
268.673, subdivisions 1 and 2; 268.674; 268.675;
268.676, subdivision 3; 268.678, subdivisions 2, 7,
and 8; 268.679, subdivisions 1 and 2; 268.68; 268.683;
268.684; 268.685; 268.686; 268.80; 268.81; 268.82;
268.83; 268.84; 270.75, subdivision 7; 273.1105;
273.13, subdivisions 2, 2a, 3, 4, 5a, 6, 6a, 7, 7b,
7c, 7d, 8a, 9, 10, 11, 12, 14a, 16, 17, 17a, 17b, 17c,
17d, 19, 20, and 21; 273.133; 273.15; 287.27; 287.29,
subdivision 3; 287.32; 290.01, subdivisions 20c and 26;
290.012; 290.06, subdivisions 3d, as amended, 3e, 14,
16, 17, 18, and 19; 290.069, subdivision 4; 290.077,
subdivision 4; 290.08, subdivisions 23 and 24;
290.089, subdivisions 4 and 6; 290.09, subdivision 29;
290.101, as amended; 290.18, subdivision 4; 290.39,
subdivision 2; 290.41, subdivision 5; 290A.04,
subdivisions 2a and 2b; 291.015; 291.03, subdivisions
3, 4, 5, 6, and 7; 291.05; 291.051; 291.06; 291.065;
291.07; 291.08; 291.09, subdivision 5; 291.111;
291.131, subdivisions 5 and 6; 291.132; 291.15,
subdivision 2; 291.18; 291.20; 291.29, subdivision 5;
295.34; 297.02, subdivision 2; 385.36; 462C.09,
subdivision 2; 474.16, subdivision 4; 474.18; 474.24;
and 477A.0131; Laws 1982, chapter 523, article VII,
section 3; and Laws 1984, chapter 502, article 2,
section 4, and chapter 582, section 23.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
INCOME TAX
Section 1. Minnesota Statutes 1984, section 10A.31,
subdivision 1, is amended to read:
Subdivision 1. Every individual resident of Minnesota who
files an income tax return or a renter and homeowner property
tax refund return with the commissioner of revenue may designate
on their original return that $2 shall be paid from the general
fund of the state into the state elections campaign fund. If a
husband and wife file a joint return, each spouse may designate
that $2 shall be paid. An individual who is 18 years of age or
older, who is a resident of Minnesota, and who is a dependent of
another individual who files a tax return or a renter and
homeowner property tax refund return, may designate that $2
shall be paid from the general fund of the state into the state
elections campaign fund. No individual shall be allowed to
designate $2 more than once in any year.
Sec. 2. Minnesota Statutes 1984, section 10A.31,
subdivision 3, is amended to read:
Subd. 3. The commissioner of the department of revenue
shall provide on the first page of the income tax form and the
renter and homeowner property tax refund return a space for the
filing individual and any adult dependent of that individual to
indicate whether or not he wishes to allocate $2 ($4 if filing a
joint return) from the general fund of the state to finance the
election campaigns of state candidates. The form shall also
contain language prepared by the commissioner which permits the
individual to direct the state to allocate the $2 (or $4 if
filing a joint return) to: (i) one of the major political
parties; (ii) any minor political party as defined in section
10A.01, subdivision 13, which qualifies under the provisions of
subdivision 3a; or (iii) all qualifying candidates as provided
by subdivision 7. The dependent on the tax return or the renter
and homeowner property tax refund return shall sign a statement
which authorizes the designation of $2. The renter and
homeowner property tax refund return shall include instructions
that the individual filing the return may designate $2 on the
return only if he has not designated $2 on the income tax return.
Sec. 3. Minnesota Statutes 1984, section 13.04,
subdivision 2, is amended to read:
Subd. 2. [INFORMATION REQUIRED TO BE GIVEN INDIVIDUAL.] An
individual asked to supply private or confidential data
concerning himself shall be informed of: (a) the purpose and
intended use of the requested data within the collecting state
agency, political subdivision, or statewide system; (b) whether
he may refuse or is legally required to supply the requested
data; (c) any known consequence arising from his supplying or
refusing to supply private or confidential data; and (d) the
identity of other persons or entities authorized by state or
federal law to receive the data. This requirement shall not
apply when an individual is asked to supply investigative data,
pursuant to section 13.82, subdivision 5, to a law enforcement
officer.
The commissioner of revenue may place the notice required
under this subdivision in the individual income tax or property
tax refund instructions instead of on those forms.
Sec. 4. Minnesota Statutes 1984, section 41.55, is amended
to read:
41.55 [ELIGIBILITY.]
A family farm security loan approval may be granted if the
following criteria are satisfied:
(a) That the applicant is a resident of the state of
Minnesota;
(b) That the applicant has sufficient education, training,
or experience in the type of farming for which he wishes the
loan and continued participation in a farm management program,
approved by the commissioner, for at least the first ten years
of the family farm security loan;
(c) That the applicant, his dependents and spouse have
total net worth valued at less than $75,000 and has demonstrated
a need for the loan;
(d) That the applicant intends to purchase farm land to be
used by the applicant for agricultural purposes;
(e) That the applicant is credit worthy according to
standards prescribed by the commissioner;
(f) That the seller has not acquired the farm land for
purposes of obtaining the income tax exemption allowed by
sections 41.58 and Laws 1976, chapter 210, section 12.
Sec. 5. Minnesota Statutes 1984, section 117.55, is
amended to read:
117.55 [PAYMENTS NOT CONSIDERED INCOME FOR TAX OR PUBLIC
ASSISTANCE PURPOSES.]
No payments received under sections 117.50 to 117.56 shall
be considered as income for the purposes of chapter 290, or for
purposes of determining the eligibility or the extent of
eligibility of any person for public assistance based on need
under the laws of the state of Minnesota.
Sec. 6. Minnesota Statutes 1984, section 270.68,
subdivision 4, is amended to read:
Subd. 4. [CONFESSION OF JUDGMENT.] (a) The commissioner
may, within 3-1/2 years after any return or report is filed,
notwithstanding section 541.09, enter judgment on any confession
of judgment contained in the return or report after ten days
notice served upon the taxpayer by mail at the address shown in
his return or report. The judgment shall be entered by the
clerk of court of any county upon the filing of a photocopy or
similar reproduction of that part of the return or report
containing the confession of judgment along with a statement of
the commissioner or his agent that the tax has not been
paid. The commissioner may prescribe the words for the
confession of judgment statement contained on the return or
report.
(b) Notwithstanding any other provision of the law to the
contrary, the commissioner may, within five years after a
written agreement is signed by the taxpayer and the commissioner
under the provisions of section 270.67, subdivision 2, enter
judgment on the confession of judgment contained within the
agreement after ten days notice served upon the taxpayer at the
address shown in the agreement. Such judgment shall be entered
by the clerk of court of any county upon the filing of the
agreement or a certified copy thereof along with a statement of
the commissioner or his agent that the tax has not been paid.
Sec. 7. Minnesota Statutes 1984, section 290.01,
subdivision 19, is amended to read:
Subd. 19. [NET INCOME.] The term "net income" means the
gross income, as defined in subdivision 20, less the following
deductions to the extent allowed by section 290.18, subdivision
1:
(a) For corporations, the deductions allowed by section
290.09;
(b) For individuals, the deductions allowed in section
290.088, without regard to sections 290.18, subdivision 1, if
the taxpayer elects to compute the taxes under section 290.06,
subdivision 2c, paragraph (a) or (c); 290.089,; and 290.09; and
(c) For estates and trusts, the deduction allowed by
section 290.088, without regard to section 290.18, subdivision 1
if the taxpayer elects to compute the taxes under section
290.06, subdivision 2c, paragraph (c).
Sec. 8. Minnesota Statutes 1984, section 290.01,
subdivision 20, as amended by Laws 1985, chapter 2, section 1,
is amended to read:
Subd. 20. [GROSS INCOME.] Except as otherwise provided in
this chapter, the term "gross income," as applied to
corporations includes every kind of compensation for labor or
personal services of every kind from any private or public
employment, office, position or services; income derived from
the ownership or use of property; gains or profits derived from
every kind of disposition of, or every kind of dealing in,
property; income derived from the transaction of any trade or
business; and income derived from any source.
The term "gross income" in its application to individuals,
estates, and trusts shall mean the adjusted gross income as
defined in the Internal Revenue Code of 1954, as amended through
the date specified herein for the applicable taxable year, with
the modifications specified in this subdivision and in
subdivisions 20a to 20f. For estates and trusts the adjusted
gross income shall be their federal taxable income as defined in
the Internal Revenue Code of 1954, as amended through the date
specified herein for the applicable taxable year, with the
modifications specified in this subdivision and in subdivisions
20a to 20f.
(i) The Internal Revenue Code of 1954, as amended through
December 31, 1976, including the amendments made to section 280A
(relating to licensed day care centers) in H.R. 3477 as it
passed the Congress on May 16, 1977, shall be in effect for the
taxable years beginning after December 31, 1976. The provisions
of the Tax Reform Act of 1976, P.L. 94-455, which affect
adjusted gross income shall become effective for purposes of
this chapter at the same time they become effective for federal
income tax purposes.
The provisions of section 4 of P.L. 95-458, sections 131,
133, 134, 141, 152, 156, 157, 405, and 543 of P.L. 95-600, and
section 2 of P.L. 96-608 (relating to pensions, individual
retirement accounts, deferred compensation plans, the sale of a
residence and to conservation payments to farmers) including the
amendments made to these sections in P.L. 96-222 shall be
effective at the same time that these provisions became
effective for federal income tax purposes.
(ii) The Internal Revenue Code of 1954, as amended through
December 31, 1979, shall be in effect for taxable years
beginning after December 31, 1979.
(iii) The Internal Revenue Code of 1954, as amended through
December 31, 1980, and as amended by sections 302(b) and 501 to
509 of Public Law Number 97-34, shall be in effect for taxable
years beginning after December 31, 1980 including the provisions
of section 404 (relating to partial exclusions of dividends and
interest received by individuals) of the Crude Oil Windfall
Profit Tax Act of 1980, P.L. 96-223. The provisions of P.L.
96-471 (relating to installment sales) sections 122, 123, 126,
201, 202, 203, 204, 211, 213, 214, 251, 261, 264, 265,
311(g)(3), 313, 314(a)(1), 321(a), 501 to 507, 811, and 812 of
the Economic Recovery Tax Act of 1981, Public Law Number 97-34
and section 113 of Public Law Number 97-119 shall be effective
at the same time that they become effective for federal income
tax purposes.
(iv) (ii) The Internal Revenue Code of 1954, as amended
through December 31, 1981, shall be in effect for taxable years
beginning after December 31, 1981. The provisions of sections
205(a), 214 to 222, 231, 232, 236, 247, 251, 252, 253, 265, 266,
285, 288, and 335 of the Tax Equity and Fiscal Responsibility
Act of 1982, Public Law Number 97-248, section 6(b)(2) and (3)
of the Subchapter S Revision Act of 1982, Public Law Number
97-354, section 517 of Public Law Number 97-424, sections 101(c)
and (d), 102(a), (aa), (f)(4), (g), (j), (l), 103(c), 104(b)(3),
105, 305(d), 306(a)(9) of Public Law Number 97-448, and sections
101 and 102 of Public Law Number 97-473 shall be effective at
the same time that they become effective for federal income tax
purposes. The Payment-in-Kind Tax Treatment Act of 1983, Public
Law Number 98-4, shall be effective at the same time that it
becomes effective for federal income tax purposes.
(v) (iii) The Internal Revenue Code of 1954, as amended
through January 15, 1983, shall be in effect for taxable years
beginning after December 31, 1982.
(vi) (iv) The Internal Revenue Code of 1954, as amended
through December 31, 1983, shall be in effect for taxable years
beginning after December 31, 1983.
The provisions of section 611(a) of the Deficit Reduction
Act of 1984, Public Law Number 98-369, shall be effective at the
same time that they become effective for federal income tax
purposes.
(v) The Internal Revenue Code of 1954, as amended through
May 25, 1985, shall be in effect for taxable years beginning
after December 31, 1984.
References to the Internal Revenue Code of 1954 in
subdivisions 20a, 20b, 20c, 20e, and 20f shall mean the code in
effect for the purpose of defining gross income for the
applicable taxable year.
Sec. 9. Minnesota Statutes 1984, 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) 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);
(4) Expenses and losses arising from a farm which are not
allowable under section 290.09, subdivision 29;
(5) Expenses and depreciation attributable to substandard
buildings disallowed by section 290.101;
(6) 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;
(7) 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;
(8) 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;
(9) (4) 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;
(10) 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;
(11) 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);
(12) (5) For an estate or trust, 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;
(13) (6) To the extent deducted in computing the estate or
trust's federal taxable income, interest, taxes and other
expenses which are not allowed under section 290.10, clause (9)
or (10); and
(14) The deduction for two-earner married couples provided
in section 221 of the Internal Revenue Code of 1954;
(15) (7) 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;
(16) Expenses and depreciation attributable to property
subject to Laws 1982, chapter 523, article 7, section 3 which
has not been registered;
(17) 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
(18) 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. 10. Minnesota Statutes 1984, 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) (4) 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 the preceding sentence,
"federal adjusted gross income" shall not include railroad
retirement or social security benefit amounts provided in
sections 86 and 72(r) of the Internal Revenue Code of 1954. 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;
(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) (5) 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) (6) 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 Pension
income as provided by section 290.08, subdivision 26;
(10) (7) 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) 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;
(12) (8) Unemployment compensation to the extent includible
in gross income for federal income tax purposes under section 85
of the Internal Revenue Code of 1954;
(13) (9) For an estate or trust, the amount of any income
or gain which is not assignable to Minnesota under the
provisions of section 290.17;
(14) 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;
(15) (10)(a) 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; (b) to the extent included
in computing federal adjusted gross income, expenses and other
items allocable to the business of mining or producing iron ore,
the mining or production of which is subject to the occupation
tax imposed by section 298.01, subdivision 1, shall be allowed
as a subtraction to the extent that the expenses or other items
are included in computing the modifications provided in section
290.01, subdivision 20a, clause (7) or paragraph (a) of this
clause and to the extent that the expenses or other items are
not deductible, capitalizable, retainable in basis, or taken
into account by allowance or otherwise in computing the
occupation tax. Occupation taxes imposed under chapter 298,
royalty taxes imposed under chapter 299, and depletion expenses
may not be subtracted under this paragraph;
(16) (11) 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 Minnesota Statutes 1984, section 290.01, subdivision
20a, clause (18). The provisions of this clause shall apply
before the provisions of clause (6) apply and an amount
subtracted under this clause may not be subtracted under clause
(6); and
(17) (12) To the extent included in federal adjusted gross
income, distributions from an individual retirement account
which represent a return of contributions if the contributions
were included in gross income pursuant to Minnesota Statutes
1984, section 290.01, subdivision 20a, clause (17). The
distribution shall be allocated first to return of contributions
included in gross income until the amount of the contributions
has been exhausted; and
(18) To the extent included in federal adjusted gross
income, social security benefits as defined and as provided in
section 86 of the Internal Revenue Code of 1954, railroad
retirement benefits as provided in section 72(r) of the Internal
Revenue Code of 1954, and sick pay paid under the Railroad
Unemployment Insurance Act as provided in section 105(i) of the
Internal Revenue Code of 1954, provided that any amount
subtracted under this clause may not be subtracted under clause
(6).
Sec. 11. Minnesota Statutes 1984, section 290.01,
subdivision 20d, is amended to read:
Subd. 20d. [MODIFICATION FOR AMOUNTS TRANSFERRED TO
SURPLUS.] Amounts transferred from a reserve or other account,
if in effect transfers to surplus, shall, for corporate
taxpayers, to the extent that the amounts were accumulated
through deductions from gross income or entered into the
computation of taxable net income during any taxable year, be
treated as gross income for the year in which the transfer
occurs, but only to the extent that the amounts resulted in a
reduction of the tax imposed by this chapter and amounts
received as refunds on account of taxes deducted from gross
income during any taxable year shall be treated as gross income
for the year in which actually received, but only to the extent
that such amounts resulted in a reduction of the tax imposed by
this chapter.
Sec. 12. Minnesota Statutes 1984, section 290.01,
subdivision 20f, is amended to read:
Subd. 20f. [MODIFICATION FOR ACCELERATED COST RECOVERY
SYSTEM.] A modification shall be made for the allowable
deduction under the accelerated cost recovery system. The
allowable deduction for the accelerated cost recovery system as
provided in section 168 of the Internal Revenue Code of 1954
shall be the same amount as provided in that section for
individuals, estates, and trusts with the following
modifications:
(1) For property placed in service after December 31, 1980,
and for taxable years beginning before January 1, 1982, 15
percent of the allowance provided in section 168 of the Internal
Revenue Code of 1954 shall not be allowed.
(2)(a) For taxable years beginning after December 31, 1981,
and before January 1, 1983, for 15-year real property as defined
in section 168 of the Internal Revenue Code of 1954, 40 percent
of the allowance provided in section 168 of the Internal Revenue
Code of 1954 shall not be allowed and for all other property, 17
percent of the allowance shall not be allowed.
(b) For taxable years beginning after December 31, 1982,
and with respect to property placed in service in taxable years
beginning before January 1, 1983, for 15-year real property as
defined in section 168 of the Internal Revenue Code of 1954, 40
percent of the allowance provided in section 168 of the Internal
Revenue Code of 1954 shall not be allowed and for all other
property 20 percent of the allowance shall not be allowed.
(3) For property placed in service in taxable years
beginning after December 31, 1982, the allowable deduction shall
be the amount provided by section 168 of the Internal Revenue
Code of 1954.
(4) For property placed in service after December 31, 1980,
for which the taxpayer elects to use the straight line method
provided in section 168(b)(3) or a method provided in section
168(e)(2) of the Internal Revenue Code of 1954, the
modifications provided in clauses (1) and (2) do not apply.
(5) For property subject to the modifications contained in
clause (1) or (2) above, the following modification shall be
made after the entire amount of the allowable deduction for that
property under the provision of section 168 of the Internal
Revenue Code of 1954 has been obtained. The remaining
depreciable basis in those assets for Minnesota purposes shall
be a depreciation allowance computed by using the straight line
method over the following number of years:
(a) 3 year property - 1 year.
(b) 5 year property - 2 years.
(c) 10 year property - 5 years.
(d) All 15 year property - 7 years.
(6) The basis of property to which section 168 of the
Internal Revenue Code of 1954 applies shall be its basis as
provided in this chapter and including the modifications
provided in this subdivision. The recapture tax provisions
provided in sections 1245 and 1250 of the Internal Revenue Code
of 1954 shall apply but shall be calculated using the basis
provided in the preceding sentence. When an asset is exchanged
for another asset including an involuntary conversion and under
the provision of the Internal Revenue Code of 1954 gain is not
recognized in whole or in part on the exchange of the first
asset, the basis of the second asset shall be the same as its
federal basis provided that the difference in basis due to
clause (1) or (2) can be written off as provided in clause (5).
(7) The modifications provided in this subdivision shall
apply before applying any limitation to farm losses contained in
section 290.09, subdivision 29.
(8) The first taxable year after the entire amount of the
allowable deduction for that property under the provisions of
section 168 of the Internal Revenue Code of 1954 has been
obtained, or where the straight line method provided in section
168(b)(3) is used, the last taxable year in which an amount of
allowable depreciation for that property under section 168 is
obtained, the remaining depreciable basis in those assets for
Minnesota purposes that is attributable to the basis reduction
made for federal purposes under section 48(q) of the Internal
Revenue Code of 1954 to reflect the investment tax credit shall
be allowed as a deduction. No amount shall be allowed as a
deduction under section 196 of the Internal Revenue Code of 1954.
Sec. 13. Minnesota Statutes 1984, section 290.032,
subdivision 2, is amended to read:
Subd. 2. The amount of tax imposed by subdivision 1 shall
be computed in the same way as the tax imposed under section
402(e) of the Internal Revenue Code of 1954, as amended through
December 31, 1983, except that the initial separate tax shall be
an amount equal to ten times the tax which would be imposed by
section 290.03 290.06, subdivision 2c, if the recipient was an
unmarried individual referred to in such section electing to
deduct federal income taxes, and the taxable net income,
excluding the credits allowed in section 290.06, subdivision 3f,
was an amount equal to one-tenth of the excess of
(i) the total taxable amount of the lump sum distribution
for the year, over
(ii) the minimum distribution allowance, and except that
references in section 402(e) of the Internal Revenue Code of
1954, as amended through December 31, 1983, to paragraph (1)(A)
thereof shall instead be references to subdivision 1 of this
section.
The amount of any distribution from a qualified pension or
profit sharing plan which is received as a lump sum distribution
shall be reduced to the extent of any contribution:
(1) not previously allowed as a deduction by reason of a
change in federal law which was not adopted by Minnesota for a
taxable year beginning in 1974 or thereafter; or
(2) designated as an employee contribution but which the
employing unit picks up and which is treated as an employer
contribution and which was taxed on the Minnesota return but not
the federal return in the year the contribution was made.
Sec. 14. Minnesota Statutes 1984, section 290.05,
subdivision 3, is amended to read:
Subd. 3. (a) An organization exempt from taxation under
subdivision 2 shall, nevertheless, be subject to tax under this
chapter to the extent provided in the following provisions of
the Internal Revenue Code:
(i) Section 527 (dealing with political organizations) and
(ii) section 528 (dealing with certain homeowners associations)
but
notwithstanding this subdivision, shall be considered an
organization exempt from income tax for the purposes of any law
which refers to organizations exempt from income taxes.
(b) The tax shall be imposed on the taxable income of
political organizations or homeowner associations. The tax
shall be at the corporate rates. The tax shall only be imposed
on income and deductions assignable to this state under sections
290.17 to 290.20. Except for section 290.09, subdivision 29, To
the extent deducted in computing federal taxable income, the
deductions contained in sections 290.09 and 290.21 shall not be
allowed in computing Minnesota taxable net income.
Sec. 15. Minnesota Statutes 1984, section 290.06,
subdivision 2c, is amended to read:
Subd. 2c. [SCHEDULE SCHEDULES OF RATES FOR INDIVIDUALS,
ESTATES, AND TRUSTS.] (a) The income taxes imposed by this
chapter upon married individuals, estates and trusts, other than
those taxable as corporations, shall filing joint returns who
elect to deduct federal income taxes under section 290.088 must
be computed by applying to their taxable net income the
following schedule of rates:
(1) On the first $500, one and six-tenths percent;
(2) On the second $500, two and two-tenths percent;
(3) On the next $1,000, three and five-tenths percent;
(4) On the next $1,000, five and eight-tenths percent;
(5) On the next $1,000, seven and three-tenths percent;
(6) On the next $1,000, eight and eight-tenths percent;
(7) On the next $2,000, ten and two-tenths percent;
(8) On the next $2,000, eleven and five-tenths percent;
(9) On the next $3,500, twelve and eight-tenths percent;
(10) On all over $12,500, and not over $20,000, fourteen
percent;
(11) On all over $20,000 and not over $27,500, fifteen
percent;
(12) On all over $27,500, sixteen percent.
If taxable net income is: The tax is:
not over $875 1.5 percent
over $875 but not $13 plus 2.0 percent of the
over $1,750 excess over $875
over $1,750 but not $31 plus 2.9 percent of the
over $3,500 excess over $1,750
over $3,500 but not $81 plus 4.8 percent of
over $5,375 the excess over $3,500
over $5,375 but not $171 plus 5.9 percent of
over $7,000 the excess over $5,375
over $7,000 but not $267 plus 6.1 percent of
over $7,125 the excess over $7,000
over $7,125 but not $275 plus 7.2 percent of
over $8,875 the excess over $7,125
over $8,875 but not $401 plus 8.3 percent of
over $12,375 the excess over $8,875
over $12,375 but not $691 plus 9.3 percent of
over $14,000 the excess over $12,375
over $14,000 but not $842 plus 10 percent of
over $16,000 the excess over $14,000
over $16,000 but not $1,042 plus 11 percent
over $21,500 of the excess over $16,000
over $21,500 but not $1,647 plus 11.3 percent
over $22,125 of the excess over $21,500
over $22,125 but not $1,718 plus 12.3 percent
over $25,500 of the excess over $22,125
over $25,500 but not $2,133 plus 12.6 percent
over $28,500 of the excess over $25,500
over $28,500 but not $2,511 plus 13.7 percent
over $31,750 of the excess over $28,500
over $31,750 $2,957 plus 14.0 percent
of the excess over $31,750
(b) The income taxes imposed by this chapter upon all other
married individuals filing joint returns must be computed by
applying to their taxable net income the following schedule of
rates:
If taxable net income is: The tax is:
not over $1,200 1.7 percent
over $1,200 but not $20 plus 2.1 percent of the
over $1,700 excess over $1,200
over $1,700 but not $31 plus 2.3 percent of the
over $2,700 excess over $1,700
over $2,700 but not $54 plus 3.3 percent of
over $5,600 the excess over $2,700
over $5,600 but not $150 plus 5.3 percent of
over $9,100 the excess over $5,600
over $9,100 but not $335 plus 6.8 percent of
over $12,600 the excess over $9,100
over $12,600 but not $573 plus 8.5 percent of
over $17,800 the excess over $12,600
over $17,800 but not $1,015 plus 9.3 percent of
over $30,800 the excess over $17,800
over $30,800 $2,224 plus 9.9 percent of
the excess over $30,800
(b) (c) The income taxes imposed by this chapter upon
unmarried individuals, married individuals filing separate
returns, estates, and trusts that elect to deduct federal income
taxes under section 290.088 must be computed by applying to
taxable net income the following schedule of rates:
If taxable net income is: The tax is:
not over $700 1.3 percent
over $700 but not $9 plus 1.9 percent of the
over $1,400 excess over $700
over $1,400 but not $22 plus 3.2 percent of the
over $2,800 excess over $1,400
over $2,800 but not $67 plus 5.4 percent of
over $4,300 the excess over $2,800
over $4,300 but not $148 plus 6.9 percent of
over $5,700 the excess over $4,300
over $5,700 but not $245 plus 8.4 percent of
over $7,100 the excess over $5,700
over $7,100 but not $362 plus 9.8 percent of
over $9,900 the excess over $7,100
over $9,900 but not $637 plus 11.1 percent of
over $12,800 the excess over $9,900
over $12,800 but not $959 plus 12.4 percent of
over $15,400 the excess over $12,800
over $15,400 but not $1,281 plus 13.6 percent of
over $19,400 the excess over $15,400
over $19,400 $1,825 plus 14 percent
of the excess over $19,400
(d) The income taxes imposed by this chapter upon all other
unmarried individuals, married individuals filing separate
returns, estates, and trusts must be computed by applying to
taxable net income the following schedule of rates:
If taxable net income is: The tax is:
not over $300 1 percent
over $300 but not $3 plus 1.3 percent of the
over $600 excess over $300
over $600 but not $7 plus 1.6 percent of the
over $900 excess over $600
over $900 but not $12 plus 2.1 percent of
over $1,300 the excess over $900
over $1,300 but not $20 plus 2.7 percent of
over $2,000 the excess over $1,300
over $2,000 but not $39 plus 3.7 percent of
over $2,800 the excess over $2,000
over $2,800 but not $69 plus 4.5 percent of
over $4,300 the excess over $2,800
over $4,300 but not $136 plus 6.1 percent of
over $6,400 the excess over $4,300
over $6,400 but not $264 plus 7.5 percent of
over $9,400 the excess over $6,400
over $9,400 but not $489 plus 9.3 percent of
over $16,200 the excess over $9,400
over $16,200 $1,122 plus 9.9 percent
of the excess over $16,200
(e) In lieu of a tax computed according to the rates set
forth in clause (a) of this subdivision, the tax of any
individual taxpayer whose taxable net income for the taxable
year is less than $40,000 shall an amount determined by the
commissioner must be computed in accordance with tables prepared
and issued by the commissioner of revenue based on income
brackets of not more than $100. The amount of tax for each
bracket shall be computed at the rates set forth in this
subdivision, provided that the commissioner may disregard a
fractional part of a dollar unless it amounts to 50 cents or
more, in which case it may be increased to $1.
(c) (f) An individual who is not a Minnesota resident for
the entire year must compute his Minnesota income tax as
provided in clause (a) this subdivision. After the application
of the nonrefundable credits provided in this chapter, the tax
liability must then be multiplied by a fraction in which:
(1) The numerator is the individual's Minnesota sourced
federal adjusted gross income, computed as if the provisions of
section 290.081, clause (a), 290.17, subdivision 2, or 290.171
applied; and
(2) the denominator is the individual's federal adjusted
gross income.
Sec. 16. Minnesota Statutes 1984, section 290.06,
subdivision 2d, is amended to read:
Subd. 2d. [INFLATION ADJUSTMENT OF BRACKETS.] For taxable
years beginning after December 31, 1980 1985, the taxable net
income brackets minimum and maximum dollar amounts for each rate
bracket for which a tax is imposed in subdivision 2c shall be
adjusted for inflation. For the purpose of making the
adjustment as provided in this subdivision all of the rate
brackets provided in subdivision 2c shall be the adjusted rate
brackets as they existed for taxable years beginning after
December 31, 1979 1984 and before January 1, 1981 1986. The
commissioner shall determine: (a) the percentage increase in
the revised consumer price index for all urban consumers for the
Minneapolis-St. Paul metropolitan area prepared by the United
States department of labor. He The rate applicable to any rate
bracket must not be changed. The dollar amounts setting forth
the tax shall be adjusted to reflect the changes in the rate
brackets. The rate brackets as adjusted must be rounded to the
nearest $10 amount. If the rate bracket ends in $5, it must be
rounded up to the nearest $10 amount.
The commissioner shall adjust the rate brackets by the
percentage determined under section 1(f) of the Internal Revenue
Code of 1954, as amended through December 31, 1984, except that
in section 1(f)(3)(B) the word "1984" shall be substituted for
the word "1983." The commissioner shall then determine the
percent change from August, 1980 the 12 months ending on
September 30, 1984, to, in 1981, August, 1981 for 1986, the 12
months ending on September 30, 1985, and in each subsequent
year, from August of the preceding year to August the 12 months
ending on September 30, 1984, to the 12 months ending on
September 30 of the current preceding year; and (b) the
percentage increase in average Minnesota gross income from tax
year 1980 to, in 1981, tax year 1981, and in each subsequent tax
year between the previous tax year and the current tax year. The
percent increases in Minnesota gross income shall be estimated
using the best available data sources and reasonable forecasting
procedures. The determination of the commissioner pursuant to
this section subdivision shall not be considered a "rule" and
shall not be subject to the administrative procedures act
contained in chapter 14.
The dollar amount in each taxable net income bracket for
the prior year in subdivision 2c shall be multiplied by a figure
calculated as one plus 100 percent of the consumer price index
increase or 100 percent of the Minnesota gross income increase,
whichever is smaller. The product of the calculation shall
yield the inflation adjusted tax brackets for each succeeding
year. If the product exceeds a whole dollar amount, it shall be
rounded to the nearest whole dollar.
No later than October 1 December 15 of each year, the
commissioner shall announce both percentage increases and the
specific percentage that will be used to adjust the tax rate
brackets, the maximum standard deduction amount, and the
personal credit amounts.
Sec. 17. Minnesota Statutes 1984, section 290.06,
subdivision 2f, is amended to read:
Subd. 2f. [SUSPENSION OF INFLATION ADJUSTMENTS.] (a) The
taxable net income rate brackets, the personal credit amounts
established pursuant to subdivision 3f and 3g, and the maximum
standard deduction provided under section 290.089, subdivision
3, shall not be adjusted for inflation pursuant to subdivision
2d, for taxable years beginning during a calendar year if the
following conditions occur:
(1) The legislature and the governor have enacted a budget
providing for an appropriation to the budget reserve account of
at least $250,000,000 for the biennium during which the calendar
year began or, in the second half of an odd-numbered year, for
the biennium which began during the calendar year; and
(2) The commissioner of finance estimated at the time the
budget is enacted that the state would receive sufficient
general fund receipts during the biennium to fund the full
appropriation to the budget reserve account; and
(3) On or before September 15 of the calendar year it is
estimated by the commissioner of finance that the probable
general fund receipts from taxes and other sources will be less
than estimated and consequently the amount available for the
remainder of the biennium after transferring any available funds
in the budget reserve account will be less than the amount
estimated or allotted to be expended or incurred from the
general fund; and
(4) The additional receipts resulting from the suspension
of the inflation adjustments, together with all other general
fund revenues, are not estimated to exceed the sum of the
amounts necessary to fund in full all appropriations, including
the appropriation to the budget reserve account, in which case
the commissioner of revenue shall provide for partial inflation
adjustments sufficient to fund in full the appropriations.
(b) The suspension of inflation adjustments shall apply
only during the biennium in which the conditions specified in
paragraph (a) have been satisfied.
(c) For taxable years beginning during a calendar year in
which the inflation adjustments of the brackets, credits, and
maximum standard deduction are not made pursuant to this
subdivision, the taxable net income adjustment factor, as
defined in section 290.18, subdivision 4, shall be the
adjustment factor applicable to taxable years beginning during
the preceding calendar year. For taxable years beginning during
a calendar year in which the inflation adjustments are suspended
for one-half of the taxable year as a result of paragraph (b),
the taxable net income adjustment factor shall be determined by
multiplying the factor for the previous year by an amount equal
to the current year factor minus one, divided by two, plus one.
(d) For taxable years beginning during a calendar year in
which the inflation adjustments are suspended pursuant to this
subdivision and for which paragraph (b) will result in the
inflation adjustments being suspended for only one-half of the
taxable year, the commissioner of revenue shall adjust the
withholding tables, notwithstanding section 290.92, subdivision
2a, so that the additional tax imposed is withheld and remitted
by employers during the first six months of the taxable year as
if the suspension were in effect for the entire year.
Sec. 18. Minnesota Statutes 1984, section 290.06,
subdivision 3f, is amended to read:
Subd. 3f. [CREDITS AGAINST TAX.] Subject to the provisions
of subdivision 3g the taxes due under the computation in
accordance with this section shall be credited with the
following amounts:
(1) In the case of an unmarried individual $68 or a married
individual filing separately, $70;
(2) In the case of a married individual, $136. If the
spouses file separate, combined or joint returns the personal
credits may be taken by either or divided between
them individuals filing a joint return, $140;
(3) In the case of an individual, $68 $70 for each person
(other than a spouse) dependent upon and receiving his chief
support from the taxpayer. One taxpayer only shall be allowed
this credit with respect to any given dependent. A payment to a
divorced or separated spouse, other than a payment for support
of minor children under a temporary order or final decree of
dissolution or legal separation, shall not be considered a
payment by the other spouse for the support of any dependent who
was claimed by the individual as a dependent on the individual's
federal income tax return as provided in sections 151(e) and 152
of the Internal Revenue Code of 1954, as amended through
December 31, 1984.
(4)(a) In the case of an unmarried individual or a married
individual filing separately who has attained the age of 65
before the close of his taxable year, an additional $68 $70;
(b) In the case of an unmarried individual or a married
individual filing separately who is blind at the close of the
taxable year, an additional $68 $70;
(c) In the case of a married individual individuals filing
a joint return, an additional $68 $70 for each spouse who has
attained the age of 65 before the close of the individual's
taxable year, and an additional $68 $70 for each spouse who is
blind at the close of the individual's taxable year. If the
spouses file separate, combined or joint returns, these credits
may be taken by either or divided between them;
(d) In the case of an individual, another $68 $70 for each
person, other than a spouse, who is blind and was claimed as a
dependent upon and receiving his chief support from the taxpayer
of the individual under clause (3);
(e) For the purposes of subparagraphs (b), (c) and (d) of
paragraph (4), an individual is blind if his central visual
acuity does not exceed 20/200 in the better eye with correcting
lenses, or if his visual acuity is greater than 20/200 but is
accompanied by a limitation in the fields of vision such that
the widest diameter of the visual field subtends an angle no
greater than 20 degrees.
(f) In the case of an unmarried individual or married
individual filing separately who is deaf at the close of the
taxable year, an additional $68 $70.
(g) In the case of a married individual individuals filing
a joint return, an additional $68 $70 for each spouse who is
deaf at the close of the taxable year. If the spouses file
separate, combined or joint returns, these credits may be taken
by either or divided between them.
(h) In the case of an individual, an additional $68 $70 for
each person (other than a spouse) who is deaf and was claimed as
a dependent upon and receiving his chief support from the
taxpayer of the individual under clause (3).
(i) For the purposes of subparagraphs (f), (g) and (h) of
paragraph (4), an individual is deaf if the average loss in the
speech frequencies (500-2000 Hertz) in the better ear, unaided,
is 92 decibels, American National Standards Institute, or worse.
(5) (a) In the case of an unmarried individual or a married
individual filing separately who is a quadriplegic at the close
of the taxable year, an additional $68 $70;
(b) In the case of a married individual individuals filing
a joint return, an additional $68 $70 for each spouse who is a
quadriplegic at the close of the taxable year. If the spouses
file separate, combined or joint returns, these credits may be
taken by either or divided between them;
(c) In the case of an individual, another $68 $70 for each
person, other than a spouse, who is quadriplegic and was claimed
as a dependent upon and receiving his chief support from the
taxpayer of the individual under clause (3); and
(d) For the purposes of subparagraphs (a), (b) and (c) of
paragraph 5, "quadriplegic" means an individual who has a
congenital or traumatic partial or total loss of all four limbs
or who has a disability that substantially impairs the
functioning of all four limbs.
(6) In the case of an insurance company, it shall receive a
credit on the tax computed as above equal in amount to any taxes
based on premiums paid by it during the period for which the tax
under this chapter is imposed by virtue of any law of this
state, other than the surcharge on premiums imposed by sections
69.54 to 69.56.
Sec. 19. Minnesota Statutes 1984, section 290.06,
subdivision 3g, is amended to read:
Subd. 3g. [INFLATION ADJUSTMENT OF CREDITS.] For taxable
years beginning after December 31, 1980 1985, the credits
provided for individuals in subdivision 3f shall be adjusted for
inflation. The dollar amount of each credit for the prior year
in subdivision 3f shall be increased in the same manner as
provided in subdivision 2d for the expansion of the taxable net
income tax rate brackets.
Sec. 20. Minnesota Statutes 1984, 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. 21. Minnesota Statutes 1984, section 290.068,
subdivision 1, is amended to read:
Subdivision 1. [CREDIT ALLOWED.] In addition to the
deduction provided in section 290.09, a credit shall be
corporation, other than a corporation with a valid election in
effect under section 290.9725, is allowed a credit against the
tax imposed by this chapter for the taxable year equal to
(a) 12.5 percent of the first $2 million of the excess (if
any) of
(1) the qualified research expenses for the taxable year,
over
(2) the base period research expenses; and
(b) 6.25 percent on all of such excess expenses over $2
million.
Sec. 22. Minnesota Statutes 1984, section 290.068,
subdivision 3, is amended to read:
Subd. 3. [LIMITATION; CARRYBACK AND CARRYOVER.] (a)(1) The
credit for the taxable year shall not exceed the liability for
tax. "Liability for tax" for purposes of this section means the
tax imposed under this chapter for the taxable year reduced by
the sum of the nonrefundable credits allowed under this chapter.
(2) In the case of an individual who a corporation which
(A) owns an interest in an unincorporated business,
(B) is a partner in a partnership,
(C) is a beneficiary of an estate or trust, or
(D) is a shareholder in an S corporation,
the credit allowed for the taxable year shall not exceed
the lesser of the amount determined under clause (1) for the
taxable year or an amount (separately computed with respect to
such person's the corporation's interest in the trade or
business or entity) equal to the amount of tax attributable to
that portion of a person's taxable income which is allocable or
apportionable to the person's corporation's interest in the
trade or business or entity.
(b) If the amount of the credit determined under this
section for any taxable year exceeds the limitation under clause
(a), the excess shall be a research credit carryback to each of
the three preceding taxable years and a research credit
carryover to each of the 15 succeeding taxable years. The
entire amount of the excess unused credit for the taxable year
shall be carried first to the earliest of the taxable years to
which the credit may be carried and then to each successive year
to which the credit may be carried. The amount of the unused
credit which may be added under this clause shall not exceed the
taxpayer's liability for tax less the research credit for the
taxable year.
For the purposes of sections 290.46 and 290.50, if the
claim for refund relates to an overpayment attributable to a
research and experimental expenditure credit 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 research and
experimental expenditure 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 of a research and experimental expenditure
credit, 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.
Sec. 23. Minnesota Statutes 1984, section 290.068,
subdivision 4, is amended to read:
Subd. 4. [ESTATES AND TRUSTS; PARTNERSHIPS.] In the case
of estates and trusts, and partnerships, the credit shall be
allocated in the same manner provided by section 44F(f)(2) of
the Internal Revenue Code.
Sec. 24. Minnesota Statutes 1984, 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 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. The principal place of
business of the transferee business entity is located in the
technology corridor project area as authorized by Laws 1984,
chapter 654, article 2, section 15, clause (k).
(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. 25. Minnesota Statutes 1984, section 290.069,
subdivision 2a, is amended 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 the
technology corridor project area.
(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. 26. Minnesota Statutes 1984, section 290.069,
subdivision 4a, is amended to read:
Subd. 4a. [RECAPTURE; EQUITY INVESTMENT CREDIT.] (a) A
taxpayer who receives a tax reduction pursuant to Minnesota
Statutes 1984, section 290.069, 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 Minnesota
Statutes 1984, section 290.069, subdivision 4, paragraph (c).
Sec. 27. Minnesota Statutes 1984, section 290.069,
subdivision 4b, is amended 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. 28. Minnesota Statutes 1984, section 290.069,
subdivision 5, is amended to read:
Subd. 5. [CARRYOVER; OTHER CONDITIONS.] 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, or 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. 29. Minnesota Statutes 1984, section 290.069,
subdivision 6, is amended to read:
Subd. 6. [REPEALER.] This section is repealed effective
for contributions made to a small business office or to an
innovation center public corporation as provided in subdivision
3, and for technology transferred as described in subdivision 2,
and for investments made as described in subdivision 4 in
taxable years beginning after December 31, 1985 1988.
Sec. 30. Minnesota Statutes 1984, section 290.069,
subdivision 7, is amended 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. 31. Minnesota Statutes 1984, section 290.08,
subdivision 26, is amended to read:
Subd. 26. [PENSION INCOME.] (a) [EXCLUSION.] Gross income
shall not include the taxpayer's pension income of a qualified
recipient and spouse if the spouse is a qualified recipient.
The maximum amount of this exclusion is the greater of the
following two amounts amount:
(1) $11,000 reduced by the amount of the taxpayer's
qualified recipient's and spouse's combined federal adjusted
gross income in excess of $17,000 excluding social security
benefits and railroad retirement benefits to the extent included
in federal adjusted gross income; 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) (2) Notwithstanding clauses clause (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 and applies
without regard to the limitation in paragraph (b), clause (4).
(3) Notwithstanding clause (1), to the extent included in
federal adjusted gross income, all railroad retirement benefits
of a qualified recipient are excludable without limitation as to
level of benefits received, maximum amount, or income offset.
(4) In the case of pension income received from the
correctional employees retirement program established pursuant
to chapter 352; the state patrol fund retirement fund
established pursuant to chapter 352B; the public employees
police and fire fund established pursuant to chapter 353; the
retirement funds enumerated in section 69.77, subdivision 1a; or
similar retirement plans established by another state or a
political subdivision of another state, an individual is a
qualified recipient without regard to age.
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 in effect for the
purpose of defining gross income for the applicable taxable year
as provided in section 290.01, subdivision 20.
(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, or
(B) as a retirement or survivor's benefit made from a plan
qualifying under section 401, 403, 404, 405, 408, or 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 "Qualified recipient" means an individual
who, at the end of the taxable year, is aged 65 or older or is
disabled as defined in section 290A.03, subdivision 9.
Sec. 32. Minnesota Statutes 1984, section 290.088, is
amended to read:
290.088 [DEDUCTION FOR FEDERAL INCOME TAXES; ELECTION.]
Adjusted gross income for individuals, estates, and trusts
shall be computed by allowing to individuals, estates, and
trusts a deduction from gross income for federal income taxes.
The amount of the deduction is determined under section 290.18,
subdivision 2. (a) In determining net income, individuals,
estates, and trusts may elect to deduct federal income taxes
from gross income after allowing the deductions under section
290.089. If the election is made, the amount of the deduction
is determined under section 290.18, subdivision 2, and the
taxpayer must compute the tax according to the schedule
contained in section 290.06, subdivision 2c, paragraph (a) or
(c), whichever applies.
(b) Individuals, estates, and trusts who elect not to
deduct federal income taxes in determining net income, must
compute the tax according to the schedule contained in section
290.06, subdivision 2c, paragraph (b) or (d), whichever applies.
Sec. 33. Minnesota Statutes 1984, section 290.089,
subdivision 2, is amended to read:
Subd. 2. [ITEMIZED DEDUCTIONS.] 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 $650 for
each dependent in grades K to 6 and $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) (b) Subtract income taxes paid or accrued within the
taxable year under this chapter;
(e) (c) Subtract income taxes paid to any other state or to
any province or territory of Canada; and
(f) (d) 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. 34. Minnesota Statutes 1984, section 290.089,
subdivision 3, is amended to read:
Subd. 3. [STANDARD DEDUCTION.] In lieu of the deductions
provided in subdivision 2, an individual may claim or be allowed
a standard deduction as follows:
(a) Subject to modification pursuant to clause (b), the
standard deduction shall be an amount equal to ten percent of
the adjusted gross income of the taxpayer or the joint gross
income of a married couple filing a joint return, up to a
maximum deduction of $2,268 $2,400.
In the case of a husband and wife married individual filing
a separate return, the standard deduction is ten percent of the
gross income of the taxpayer, up to a maximum of $1,200, except
that the standard deduction shall not be allowed to either if
the net income of one of the spouses is determined without
regard to the standard deduction.
(b) For taxable years beginning after December 31, 1985,
the maximum amount of the standard deduction shall be adjusted
for inflation in the same manner as provided in section 290.06,
subdivision 2d, for the expansion of the taxable net income rate
brackets. The commissioner shall then round the maximum amount
of the standard deduction to the nearest hundred dollar amount.
When adjusting the maximum amount of standard deduction for
inflation, the commissioner shall use the actual dollar amount
of the maximum amount of the standard deduction prior to
rounding the dollar amounts.
(c) The commissioner of revenue may establish a standard
deduction tax table incorporating the rates set forth in section
290.06, subdivision 2c, and the standard deduction. The tax of
any individual taxpayer whose adjusted gross income is less than
$20,000 shall, if an election is made not to itemize nonbusiness
deductions, be computed in accordance with tables prepared and
issued by the commissioner of revenue. The tables shall be
prepared to reflect the allowance of the standard deduction and
the personal and dependent credits.
Sec. 35. Minnesota Statutes 1984, section 290.09,
subdivision 1, is amended to read:
Subdivision 1. [LIMITATIONS.] Except as provided in this
subdivision, the deductions provided in this section from gross
income shall only be allowed to corporations in computing net
income. The provisions of subdivisions 2, clause (c), and 28,
and 29 shall also apply to individuals, estates, and trusts to
the extent provided in those subdivisions.
Sec. 36. Minnesota Statutes 1984, section 290.09,
subdivision 7, is amended to read:
Subd. 7. [DEPRECIATION.] (A) [CUMULATIVE DEPRECIATION.]
(a) There shall be allowed as a depreciation deduction a
reasonable allowance for the exhaustion, wear and tear
(including a reasonable allowance for obsolescence):
(1) of property used in the trade or business, or
(2) of property held for the production of income.
In the case of recovery property as provided in clause (c),
the deduction allowable under clause (c) shall be deemed to
constitute the reasonable allowance provided by this
subdivision, except for the provisions of Part (B) relating to
first year depreciation and except with respect to that portion
of the basis of the property to which section 167(k) of the
Internal Revenue Code of 1954, as amended through December 31,
1983, applies.
(b) The term "reasonable allowance" as used in clause (a)
shall include (but shall not be limited to) an allowance
computed in accordance with regulations prescribed by the
commissioner, under any of the following methods:
(1) the straight line method.
(2) the declining balance method, using a rate not
exceeding twice the rate which would have been used had the
annual allowance been computed under the method described in
paragraph (1).
(3) the sum of the years-digits method, and
(4) any other consistent method productive of an annual
allowance, which, when added to all allowances for the period
commencing with the taxpayer's use of the property and including
the taxable year, does not, during the first two-thirds of the
useful life of the property, exceed the total of such allowances
which would have been used had such allowances been computed
under the method described in (2). Nothing in this clause (b)
shall be construed to limit or reduce an allowance otherwise
allowable under clause (a).
(c) For purposes of this subdivision "reasonable allowance"
shall be the accelerated cost recovery system provisions of
section 168 of the Internal Revenue Code of 1954, as amended
through December 31, 1983, except as provided in this
subdivision. In the case of recovery property within the
meaning of section 168 of the Internal Revenue Code of 1954, as
amended through December 31, 1983, the term "reasonable
allowance" as used in clause (a) shall mean 85 percent of the
deduction allowed pursuant to section 168 of the Internal
Revenue Code of 1954 for property placed in service after
December 31, 1980 and for taxable years beginning before January
1, 1982.
For taxable years beginning after December 31, 1981 the
term reasonable allowance as used in clause (a) shall mean the
following percent of the deduction allowed pursuant to section
168 of the Internal Revenue Code of 1954, as amended through
December 31, 1983:
(1) For 3, 5 and 10 year property and for 15 year public
utility property the allowable percentage is 83 percent and 80
percent for taxable years beginning after December 31, 1982.
(2) For 15 year real property the allowable percentage is
60 percent.
For property placed in service after December 31, 1980 the
term "reasonable allowance" as used in clause (a) shall mean 100
percent of the deduction allowed pursuant to section 168 of the
Internal Revenue Code of 1954 where the taxpayer uses for
federal income tax purposes the straight line method provided in
section 168(b)(3) or a method provided in section 168(e)(2) of
the Internal Revenue Code of 1954, as amended through December
31, 1983. For property placed in service after December 31,
1980 and for which the full amount of the deduction allowed
under section 168 of the Internal Revenue Code of 1954, as
amended through December 31, 1983 has been allowed, the
remaining depreciable basis in those assets for Minnesota
purposes shall be a depreciation allowance computed by using the
straight line method over the following number of years:
(1) 3 year property - 1 year.
(2) 5 year property - 2 years.
(3) 10 year property - 5 years.
(4) All 15 year property - 7 years.
When an asset is exchanged for another asset including an
involuntary conversion and under the provision of the Internal
Revenue Code gain is not recognized in whole or in part on the
exchange of the first asset, the basis of the second asset shall
be the same as its federal basis provided that the difference in
basis due to the limitations provided in this clause can be
written off as provided in the preceding sentence.
After the full amount of the allowable deduction for that
property under the provision of section 168 of the Internal
Revenue Code of 1954, as amended through December 31, 1983, has
been obtained, the remaining depreciable basis in those assets
for Minnesota purposes that shall be allowed as a depreciation
allowance as provided above shall include the amount of any
basis reduction made for federal purposes under section 48(q) of
the Internal Revenue Code, as amended through December 31, 1983,
to reflect the investment tax credit. No amount shall be
allowed as a deduction under section 196 of the Internal Revenue
Code of 1954, as amended through December 31, 1983.
The provisions of section 168(i)(4) of the Internal Revenue
Code of 1954, as amended through December 31, 1983 shall apply
to restrict research credit carrybacks and net operating loss
carrybacks which are allocable to elected qualified leased
property, notwithstanding section 290.068, subdivision 3, or
290.095, subdivision 3.
The modification provided in this clause shall apply before
applying a limitation on farm losses as contained in subdivision
29.
(d) Paragraphs (2), (3), and (4) of clause (b) shall apply
only in the case of property (other than intangible property)
described in clause (a) with a useful life of three years or
more.
(1) the construction, reconstruction, or erection of which
is completed after December 31, 1958, and then only to that
portion of the basis which is properly attributable to such
construction, reconstruction, or erection after December 31,
1958, or
(2) acquired after December 31, 1958, if the original use
of such property commenced with the taxpayer and commences after
such date.
(e) Where, under rules prescribed by the commissioner, the
taxpayer and the commissioner have, after June 30, 1959, entered
into an agreement in writing specifically dealing with the
useful life and rate of depreciation of any property, the rate
so agreed upon shall be binding on both the taxpayer and the
commissioner in the absence of facts or circumstances not taken
into consideration in the adoption of such agreement. The
responsibility of establishing the existence of such facts and
circumstances shall rest with the party initiating the
modification. Any change in the agreed rate and useful life
specified in the agreement shall not be effective for taxable
years before the taxable year in which notice in writing by
certified mail is served by the party to the agreement
initiating such change. This clause shall not apply with
respect to recovery property as defined in clause (c).
(f) In the absence of an agreement under clause (e)
containing a provision to the contrary, a taxpayer may at any
time elect in accordance with rules prescribed by the
commissioner to change from the method of depreciation
prescribed in clause (b)(2) to the method described in clause
(b)(1).
(g) The basis on which exhaustion, wear and tear, and
obsolescence are to be allowed in respect of any property shall
be the adjusted basis provided in this chapter for the purpose
of determining the gain on the sale or other disposition of such
property.
(B) [FIRST YEAR DEPRECIATION.] The term "reasonable
allowance" as used in this subdivision may, at the election of
the taxpayer, include an amount as provided under section 179 of
the Internal Revenue Code of 1954, as amended through December
31, 1983.
Sec. 37. Minnesota Statutes 1984, section 290.091, is
amended to read:
290.091 [ALTERNATIVE MINIMUM TAX ON PREFERENCE ITEMS.]
Subdivision 1. [IMPOSITION OF TAX.] In addition to all
other taxes imposed by this chapter there a tax is hereby
imposed on individuals, estates, and trusts a tax which, in the
case of a resident individual, shall be equal to 40 percent of
the amount of the taxpayer's alternative minimum tax liability
for tax preference items pursuant to the provisions of sections
55, 57, 58 and 443(d) of the Internal Revenue Code of 1954 as
amended through December 31, 1983 the excess (if any) of
(a) an amount equal to four percent of alternative minimum
taxable income after subtracting the exemption amount, over
(b) the regular tax for the taxable year.
Subd. 2. [DEFINITIONS.] For purposes of the tax imposed by
this section, the following modifications shall be made terms
have the meanings given:
(a) "Alternative minimum taxable income" means the sum of
the following for the taxable year:
(1) the taxpayer's federal adjusted gross income as defined
in the Internal Revenue Code;
(2) the taxpayer's federal tax preference items; less the
sum of
(i) interest income as defined in section 290.01,
subdivision 20b, clause (1); and
(ii) the amount of interest paid or accrued within the
taxable year on indebtedness to the extent that the amount does
not exceed qualified net investment income, as defined in
section 55(e)(5) of the Internal Revenue Code. Interest does
not include amounts deducted in computing federal adjusted gross
income or amounts that are not allowable under section 55(e)(8)
of the Internal Revenue Code.
In the case of an estate or trust, adjusted gross income
must be modified as provided in section 55(e)(6)(B) of the
Internal Revenue Code.
(b) "Federal tax preference items" means items as defined
in sections 57, 58, and 443(d) of the Internal Revenue Code,
modified as follows:
(1) Alternative tax itemized deductions shall include the
amount allowable as a deduction for the taxable year under
section 164 of the Internal Revenue Code for Minnesota income
tax paid or accrued.
(2) The capital gain preference item shall be reduced where
the gain would be modified because some or all of the assets
have a higher basis for Minnesota purposes than for federal
purposes.
(3) (2) In the case of a nonresident individual, or an
estate or trust, with a net operating loss that is a larger
amount for Minnesota than for federal, the capital gain
preference item shall be reduced to the extent it was reduced in
the allowance of the net operating loss.
(4) (3) Federal preference items from the business of
mining or producing iron ore and other ores which are subject to
the occupation tax and exempt from taxation under section
290.05, subdivision 1, shall not be a preference item for
Minnesota.
(5) The term "regular tax" as defined in section 55(f)(2)
of the Internal Revenue Code shall be increased by the amount of
the credit allowable under section 38 of the Internal Revenue
Code and it shall be computed before the limitation on tax
provided in section 1301 of the Internal Revenue Code.
(6) Federal preference items which arise from a farm shall
not be a preference item to the extent they exceed the loss
allowed under section 290.09, subdivision 29, other than
interest and taxes.
In the case of any taxpayer who is not a full year resident
individual, or who is an estate or trust the tax shall equal 40
percent of that federal liability, multiplied by a fraction the
numerator of which is the amount of the taxpayer's preference
item income allocated to this state pursuant to the provisions
of sections 290.17 to 290.20, and the denominator of which is
the taxpayer's total preference item income for federal purposes.
The tax benefit rule contained in section 58(h) of the
Internal Revenue Code is applied to the Minnesota minimum tax
only to the extent that it determines if there is a federal
minimum tax. No separate tax benefit rule is allowable for the
Minnesota minimum tax.
(4) Other federal preference items to the extent not
allowed in the computation of Minnesota gross income, as
determined by the commissioner, are not preference items for
Minnesota.
For property placed in service after December 31, 1980, and
in a taxable year beginning before January 1, 1983, the
preference items contained in section 57 (a)(12) of the Internal
Revenue Code of 1954, as amended through December 31, 1983,
shall not apply.
(c) "Internal Revenue Code" means the Internal Revenue Code
of 1954, as amended through December 31, 1984.
(d) "Regular tax" means the tax that would be imposed under
this chapter (without regard to this section), reduced by the
sum of the nonrefundable credits allowed under this chapter.
Subd. 3. [EXEMPTION AMOUNT.] For purposes of computing the
alternative minimum tax, the exemption amount is:
(a) $40,000 in the case of a married couple filing a joint
return;
(b) $30,000 in the case of an individual who is not
married, as defined in section 143 of the Internal Revenue Code;
(c) $20,000 in the case of
(1) an estate or trust or
(2) a married individual who files a separate tax return.
Subd. 4. [PART YEAR RESIDENTS; ESTATES AND TRUSTS.] (a) An
individual who is not a Minnesota resident for the entire year
must compute his alternative minimum tax liability using a
regular tax liability determined under section 290.06,
subdivision 2c, paragraph (f), without regard to the provision
for allocation to Minnesota. The resulting alternative minimum
tax liability must be multiplied by the fraction defined in
section 290.06, subdivision 2c, paragraph (f).
(b) In the case of an estate or trust, the alternative
minimum tax liability must be computed by multiplying
alternative minimum taxable income and the exemption amount by a
fraction, the numerator of which is the amount of the taxpayer's
alternative minimum taxable income allocated to this state
pursuant to the provisions of sections 290.17 to 290.20, and the
denominator of which is the taxpayer's total alternative minimum
taxable income.
Subd. 5. [TAX BENEFIT RULE.] The tax benefit rule
contained in section 58(h) of the Internal Revenue Code applies
to the computation of the tax under this section only to the
extent that it determines if there is an item of tax preference
for purposes of subdivision 2, clause (a)(2).
Sec. 38. Minnesota Statutes 1984, section 290.095,
subdivision 7, is amended to read:
Subd. 7. [TENTATIVE CARRYBACK ADJUSTMENTS.] (a)
Application for adjustment. A taxpayer may file an application
for a tentative carryback adjustment of the tax for the prior
taxable year affected by a loss or credit carryback from any
taxable year. The application shall be signed and verified as
provided in section 290.37, subdivision 1, and shall be filed on
or after the date of filing of the return for the taxable year
from which the carryback results and within a period of 12
months from the end of such taxable year (or with respect to any
portion of a credit carryback from a taxable year attributable
to a loss carryback from a subsequent taxable year, the
application shall be filed within a period of 12 months from the
end of the subsequent taxable year), in the manner and form
required by rules prescribed by the commissioner. The
application shall set forth in such detail and with such
supporting data and explanation as such rules shall require:
(1) The amount of the loss or credit;
(2) The amount of the tax previously determined for the
prior taxable year affected by such carryback;
(3) The amount of decrease in such tax, attributable to
such carryback, such decrease being determined by applying the
carryback in the manner provided by law to the items on the
basis of which such tax was determined;
(4) The unpaid amount of such tax;
(5) Such other information for purposes of carrying out the
provisions of this subdivision as may be required by such rules.
An application under this subdivision shall not constitute
a claim for refund until 90 days from the date on which the
application was filed, at which time it will become a claim for
refund under the provisions of section 290.50.
(b) Allowance of adjustments. Within a period of 90 days
from the date on which an application for a tentative carryback
adjustment is filed under (a), or from the last day of the month
in which falls the last date prescribed by law (including any
extension of time granted the taxpayer) for filing the return
for the taxable year from which such carryback results,
whichever is the later, the commissioner shall make, to the
extent he deems practicable in such period a limited examination
of the application, to discover omissions and errors of
computation therein, and shall determine the amount of the
decrease in the tax attributable to such carryback upon the
basis of the application and the examination, except that the
commissioner may disallow, without further action, any
application which he finds contains errors of computation which
he deems cannot be corrected by him within such 90-day period or
material omissions. Such decrease shall be applied against any
unpaid amount of tax decreased and any remainder shall, within
such 90-day period, be either credited against any tax or
installment thereof then due from the taxpayer, or refunded to
the taxpayer.
(c) The provisions of this subdivision shall apply to net
operating loss carrybacks as provided in subdivision 3 or 11;
capital loss carrybacks as provided in section 290.16,
subdivision 6; farm loss carrybacks as provided in section
290.09, subdivision 29; research credit carrybacks as provided
in section 290.068, subdivision 3; and to any other carrybacks
which may be provided in this chapter.
Sec. 39. Minnesota Statutes 1984, section 290.095,
subdivision 9, is amended to read:
Subd. 9. [SPECIAL PERIOD OF LIMITATION WITH RESPECT TO NET
OPERATING LOSS CARRYBACKS.] For the purposes of sections 290.46
and 290.50 if the claim for refund relates to an overpayment
attributable to a net operating loss carryback under this
section or as the result in the case of an individual of an
adjustment of "federal adjusted gross income" because of the
carryback under section 172 of the Internal Revenue Code of
1954, as amended through December 31, 1983 in lieu of the period
of limitation prescribed in sections 290.46 and 290.50, the
period 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
net operating loss which results in such carryback or adjustment
of "federal adjusted gross income." During this extended
period, for taxable years beginning before January 1, 1985,
married individuals who elected to file separate returns or a
combined return may change their election and file a joint
return.
Sec. 40. Minnesota Statutes 1984, section 290.095,
subdivision 11, is amended to read:
Subd. 11. [CARRYBACK OR CARRYOVER ADJUSTMENTS.] (a) For
individuals the amount of a net operating loss that may be
carried back or carried over shall be the same dollar amount
allowable in the determination of federal adjusted gross
income. For estates and trusts the amount of a net operating
loss that may be carried back or carried over shall be the same
dollar amount allowable in the determination of federal taxable
income.
(b) The following adjustments to the amount of the net
operating loss that may be carried back or carried over must be
made for:
(1) Nonassignable income or losses as required by section
290.17, subdivision 2.
(2) Modifications required because of the restrictions on
farm losses as provided in section 290.09, subdivision 29.
(3) Adjustments to the determination of federal adjusted
gross income that must be made because of changes in the
Internal Revenue Code that have not yet been adopted by the
legislature by updating the reference to the Internal Revenue
Code contained in section 290.01, subdivision 20.
(4) Modifications to income contained in federal adjusted
gross income according to the provisions of section 290.01,
subdivision 20c.
(5) (3) Gains or losses which result from the sale or other
disposition of property having a higher adjusted basis for
Minnesota income tax purposes than for federal income tax
purposes subject to the limitations contained in section 290.01,
subdivision 20b, clauses (2) and (4) (3).
(6) (4) Interest, taxes, and other expenses not allowed
under section 290.10, clause (9) or section 290.101.
(7) (5) The modification for accelerated cost recovery
system depreciation as provided in section 290.01, subdivision
20f.
(c)(1) The net operating loss carryback or carryover
applied as a deduction in the taxable year to which the net
operating loss is carried back or carried over shall be equal to
the net operating loss carryback or carryover applied in the
taxable year in arriving at federal adjusted gross income (or
federal taxable income for trusts and estates) subject to the
modifications contained in clause (b) and to the following
modifications:
(A) Increase the amount of carryback or carryover applied
in the taxable year by the amount of losses and interest, taxes
and other expenses not assignable or allowable to Minnesota
incurred in the taxable year.
(B) Decrease the amount of carryback or carryover applied
in the taxable year by the amount of income not assignable to
Minnesota earned in the taxable year and the amount of federal
jobs credit earned in the taxable year.
(C) A taxpayer who is not a resident of Minnesota during
any part of the taxable year and who has no income assignable to
Minnesota during the taxable year shall apply no net operating
loss carryback or carryover in the taxable year.
(2) The provisions of section 172(b) of the Internal
Revenue Code of 1954 as amended through December 31, 1983
(relating to carrybacks and carryovers) shall apply. The net
operating loss carryback or carryover to the next consecutive
taxable year shall be the net operating loss carryback or
carryover as calculated in clause (c)(1) less the amount applied
in the earlier taxable year(s). No additional net operating
loss carryback or carryover shall be allowed if the entire
amount has been used to offset Minnesota income in a year
earlier than was possible on the federal return. A net
operating loss carryback or carryover that was allowed to offset
federal income in a year earlier than was possible on the
Minnesota return shall still be allowed to offset Minnesota
income but only if the loss was assignable to Minnesota in the
year the loss occurred.
(d) A net operating loss shall be allowed to be carried
back or carried forward only to the extent that loss was
assignable to Minnesota in the year the loss occurred or in the
year to which the loss was carried over, whichever would allow
more of the loss to be allowed for Minnesota purposes.
(e) If a taxpayer has a net operating loss for federal
purposes and the provisions of the farm loss limitation as
provided in section 290.09, subdivision 29 apply, the
limitations applying to the farm losses that are carried back or
carried over are applied first and the net operating loss that
is carried back or carried over is limited to the excess, if
any, that the net operating loss exceeds the farm loss
limitation.
Sec. 41. Minnesota Statutes 1984, section 290.10, is
amended to read:
290.10 [NONDEDUCTIBLE ITEMS.]
In computing the net income no deduction shall in any case
be allowed for:
(1) Personal, living or family expenses;
(2) Amounts paid out for new buildings or for permanent
improvements or betterments made to increase the value of any
property or estate, except as otherwise provided in this chapter;
(3) Amounts expended in restoring property or in making
good the exhaustion thereof for which an allowance is or has
been made;
(4) Premiums paid on any life insurance policy covering the
life of the taxpayer or of any other person;
(5) The shrinkage in value, due to the lapse of time, of a
life or terminable interest of any kind in property acquired by
gift, devise, bequest or inheritance;
(6) Losses from sales or exchanges of property, directly or
indirectly, between related taxpayers as defined and as provided
in section 267 of the Internal Revenue Code of 1954, as amended
through December 31, 1983;
(7) In computing net income, no deduction shall be allowed
under section 290.09, subdivision 2, relating to expenses
incurred or under section 290.09, subdivision 3, relating to
interest accrued as provided in section 267 of the Internal
Revenue Code of 1954, as amended through December 31, 1983;
(8)(a) Contributions by employees under the federal
railroad retirement act and the federal social security act;
(b) Payments to Minnesota or federal public employee retirement
funds; (c) Three-fourths (75 percent) 60 percent of the amount
of taxes imposed on self-employment income under section 1401 of
the Internal Revenue Code of 1954, as amended through December
31, 1983, provided that. Effective for taxable years beginning
after December 31, 1989, no deduction is allowed for
self-employment taxes where the taxpayer claimed a deduction for
those taxes under section 164(f) of the Internal Revenue Code of
1954, as amended through December 31, 1983;
(9) Expenses, interest and taxes connected with or
allocable against the production or receipt of all income not
included in the measure of the tax imposed by this chapter,
except that for persons engaged in the business of mining or
producing iron ore, the mining of which is subject to the
occupation tax imposed by section 298.01, subdivision 1, this
shall not prevent a subtraction to the extent allowed under
section 290.01, subdivision 20b, clause (10)(b), or the
deduction by a corporate taxpayer of expenses and other items to
the extent that the expenses and other items are allowable under
section 290.09 and are not deductible, capitalizable, retainable
in basis, or taken into account by allowance or otherwise in
computing the occupation tax and do not exceed the amounts taken
for federal income tax purposes for that year. Occupation taxes
imposed under chapter 298, royalty taxes imposed under chapter
299, or depletion expenses may not be deducted under this clause;
(10) In situations where this chapter provides for a
subtraction from gross income of a specific dollar amount of an
item of income assignable to this state, and within the measure
of the tax imposed by this chapter, that portion of the federal
income tax liability assessed upon such income subtracted, and
any expenses attributable to earning such income, shall not be
deductible in computing net income;
(11) Amounts paid or accrued for such taxes and carrying
charges as, under rules prescribed by the commissioner, are
chargeable to capital account with respect to property, if the
taxpayer elects, in accordance with such rules, to treat such
taxes or charges as so chargeable;
(12) No deduction or credit shall be allowed for any amount
paid or incurred during the taxable year in carrying on any
trade or business if the trade or business (or the activities
which comprise the trade or business) consists of trafficking in
controlled substances (within the meaning of schedule I and II
of the federal Controlled Substances Act) which is prohibited by
federal law or the law of Minnesota.
For purposes of this section, reference to the Internal
Revenue Code means the Internal Revenue Code of 1954, as amended
through December 31, 1984.
Sec. 42. Minnesota Statutes 1984, section 290.12,
subdivision 2, is amended to read:
Subd. 2. [ADJUSTMENTS.] In computing the amount of gain or
loss under subdivision 1 proper adjustment shall be made for any
expenditure, receipt, loss, or other item properly chargeable to
capital account by the taxpayer during his ownership thereof.
The basis shall be diminished by the amount of the deductions
for exhaustion, wear and tear, obsolescence, amortization,
depletion, and the allowance for amortization of bond premium if
an election to amortize was made in accordance with section
290.09, subdivision 13, which could, during the period of his
ownership thereof, have been deducted by the taxpayer under this
chapter in respect of such property. The basis shall also be
diminished by the amount of depreciation relating to a
substandard building disallowed by section 290.101. In
addition, if the property was acquired before January 1, 1933,
the basis, if other than the fair market value as of such date,
shall be diminished by the amount of exhaustion, wear and tear,
obsolescence, amortization, or depletion actually sustained
before such date. In respect of any period since December 31,
1932, during which property was held by a person or an
organization not subject to income taxation under this chapter,
proper adjustment shall be made for exhaustion, wear and tear,
obsolescence, amortization, and depletion of such property to
the extent sustained. For the purpose of determining the amount
of these adjustments the taxpayer who sells or otherwise
disposes of property acquired by gift shall be treated as the
owner thereof from the time it was acquired by the last
preceding owner who did not acquire it by gift, and the taxpayer
who sells or otherwise disposes of property acquired by gift
through an inter vivos transfer in trust shall be treated as the
owner from the time it was acquired by the grantor.
No adjustment shall be made:
(1) for taxes or other carrying charges described in
section 290.10, clause (11), or
(2) for expenditures described in section 290.09,
subdivision 16 (relating to circulation expenditures), for which
deductions have been taken by the taxpayer in determining
taxable income for the taxable year or prior years.
Sec. 43. Minnesota Statutes 1984, section 290.14, is
amended to read:
290.14 [GAIN OR LOSS ON DISPOSITION OF PROPERTY, BASIS.]
Except as otherwise provided in this chapter, the basis for
determining the gain or loss from the sale or other disposition
of property acquired on or after January 1, 1933, shall be the
cost to the taxpayer of such property, with the following
exceptions:
(1) If the property should have been included in the last
inventory, it shall be the last inventory value thereof;
(2) If the property was acquired by gift, it shall be the
same as it would be if it were being sold or otherwise disposed
of by the last preceding owner not acquiring it by gift; if the
facts required for this determination cannot be ascertained, it
shall be the fair market value as of the date, or approximate
date, of acquisition by the last preceding owner, as nearly as
the requisite facts can be ascertained by the commissioner;
(3) If the property was acquired by gift through an inter
vivos transfer in trust, it shall be the same as it would be if
it were being sold or otherwise disposed of by the grantor;
(4) Except as otherwise provided in this clause, the basis
of property in the hands of a person acquiring the property from
a decedent or to whom the property passed from a decedent shall,
if not sold, exchanged or otherwise disposed of before the
decedent's death by the person, be the fair market value of the
property at the date of decedent's death or, in the case of an
election under section 2032 (relating to alternate valuation) of
the Internal Revenue Code of 1954, as amended through December
31, 1983, its valuation at the applicable valuation date
prescribed by that section, or in the case of an election under
section 2032A (relating to valuation of farm real property) of
the Internal Revenue Code of 1954, as amended through December
31, 1983, its value determined by that section.
For the purposes of the preceding paragraph, the following
property shall be considered to have been acquired from or to
have passed from the decedent:
(a) Property acquired by bequest, devise, or inheritance,
or by the decedent's estate from the decedent;
(b) Property transferred by the decedent during his
lifetime in trust to pay the income for life to or on the order
or direction of the decedent, with the right reserved to the
decedent at all times before his death to revoke the trust;
(c) Property transferred by the decedent during his
lifetime in trust to pay the income for life to or on the order
or direction of the decedent with the right reserved to the
decedent at all times before his death to make any change in the
enjoyment thereof through the exercise of a power to alter,
amend, or terminate the trust;
(d) Property passing without full and adequate
consideration under a general power of appointment exercised by
the decedent by will;
(e) In the case of a decedent's dying after December 31,
1956, property acquired from the decedent by reason of death,
form of ownership, or other conditions (including property
acquired through the exercise or non-exercise of a power of
appointment), if by reason thereof the property is required to
be included in determining the value of the decedent's gross
estate for Minnesota inheritance or estate tax purposes. In
this case, if the property is acquired before the death of the
decedent, the basis shall be the amount determined under the
first paragraph of this clause reduced by the amount allowed to
the taxpayer as deductions in computing taxable net income under
this chapter or prior Minnesota income tax laws for exhaustion,
wear and tear, obsolescence, amortization, and depletion on the
property before the death of the decedent. The basis shall be
applicable to the property commencing on the death of the
decedent. This paragraph shall not apply to annuities and
property described in paragraphs (a), (b), (c) and (d) of this
clause.
This clause shall not apply to property which constitutes a
right to receive an item of income in respect of a decedent
under section 290.077.
(5) If substantially identical property was acquired in the
place of stocks or securities which were sold or disposed of and
in respect of which loss was not allowed as a deduction under
section 290.089 or section 290.09, subdivision 5, the basis in
the case of property so acquired shall be the same as that
provided in section 1091 of the Internal Revenue Code of 1954,
as amended through December 31, 1983.
(6) Neither the basis nor the adjusted basis of any portion
of real property shall, in the case of a lessor of the property,
be increased or diminished on account of income derived by the
lessor in respect of the property and excludable from gross
income under section 290.08, subdivision 14.
If an amount representing any part of the value of real
property attributable to buildings erected or other improvements
made by a lessee in respect of the property was included in
gross income of the lessor for any taxable year beginning before
January 1, 1943, the basis of each portion of the property shall
be properly adjusted for the amount included in gross income.
(7) If the property was acquired by the taxpayer as a
transfer of property in exchange for the release of the
taxpayer's marital rights, the basis of the property shall be
the same as it would be if it were being sold or otherwise
disposed of by the person who transferred the property to the
taxpayer.
(8) The basis of property subject to the provisions of
section 1034 of the Internal Revenue Code of 1954, as amended
through December 31, 1983 (relating to the rollover of gain on
sale of principal residence) shall be the same as the basis for
federal income tax purposes. The basis shall be increased by
the amount of gain realized on the sale of a principal residence
outside of Minnesota, while a nonresident of this state, which
gain was not recognized because of the provisions of section
1034.
Sec. 44. Minnesota Statutes 1984, section 290.18,
subdivision 2, is amended to read:
Subd. 2. [FEDERAL INCOME TAX PAYMENTS AND REFUNDS.] In the
case of individuals, estates, or trusts electing to deduct
federal income taxes under section 290.088, the adjusted gross
net income shall be computed by deducting from the gross income
assignable to this state under section 290.17, first the
deductions allowed under section 290.089, and second the
deduction for allowable federal income taxes determined under
the provisions of sections 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, 1983.
(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. 45. Minnesota Statutes 1984, section 290.19,
subdivision 1, is amended to read:
Subdivision 1. [COMPUTATION, BUSINESS CONDUCTED PARTLY
WITHIN STATE; APPORTIONMENT.] The taxable net income from a
trade or business carried on partly within and partly without
this state shall be computed by deducting from the gross income
of such business, wherever derived, deductions of the kind
permitted by section 290.09, so far as connected with or
allocable against the production or receipt of such income. The
remaining net income shall be apportioned to Minnesota as
follows:
(1) If the business consists of the mining, producing,
smelting, refining, or any combination of these activities of
copper and nickel ores, or of the manufacture of personal
property and the sale of said property within and without the
state, the remainder shall be apportioned to Minnesota on the
basis of the percentage obtained by taking the arithmetical
average of the following three percentages:
(a) The percentage which the sales made within this state
is of the total sales wherever made;
(b) The percentage which the total tangible property, real,
personal, and mixed, owned or rented, and used by the taxpayer
in this state during the tax period in connection with such
trade or business is of the total tangible property, real,
personal, or mixed, wherever located, owned or rented and, used
by the taxpayer in connection with such trade or business during
the tax period; and,
(c) The percentage which the taxpayer's total payrolls paid
or incurred in this state or paid in respect to labor performed
in this state in connection with such trade or business is of
the taxpayer's total payrolls paid or incurred in connection
with such entire trade or business;
(d) The percentage of such remainder to be assigned to this
state shall not be in excess of the sum of the following
percentages: 70 percent of the percentage determined under
clause (1) (a), 15 percent of the percentage determined under
clause (1) (b), and 15 percent of the percentage determined
under clause (1) (c);
(2) (a) In all other cases the remainder shall be
apportioned to Minnesota on the basis of the percentage obtained
by taking the arithmetical average of the following three
percentages:
(1) The percentage which the sales, gross earnings, or
receipts from business operations, in whole or in part, within
this state bear to the total sales, gross earnings, or receipts
from business operations wherever conducted;
(2) The percentage which the total tangible property, real,
personal, and mixed, owned or rented, and used by the taxpayer
in this state during the tax period in connection with such
trade or business is of the total tangible property, real,
personal, or mixed, wherever located, owned, or rented, and used
by the taxpayer in connection with such trade or business during
the tax period; and
(3) The percentage which the taxpayer's total payrolls paid
or incurred in this state or paid in respect to labor performed
in this state in connection with such trade or business is of
the taxpayer's total payrolls paid or incurred in connection
with such entire trade or business;
(4) The percentage of such remainder to be assigned to this
state shall not be in excess of the sum of the following
percentages: 70 percent of the percentage determined under
clause (2) (a) (1), 15 percent of the percentage determined
under clause (2) (a) (2), and 15 percent of the percentage
determined under clause (2) (a) (3);
(b) If the methods prescribed under clause (2) (a) will not
properly reflect taxable net income assignable to the state,
there may be used, if practicable and if such use will properly
and fairly reflect such income, the percentage which the sales,
gross earnings, or receipts from business operations, in whole
or in part, within this state bear to the total sales, gross
earnings, or receipts from business operations wherever
conducted; or the separate or segregated accounting method;
however, for athletic teams when the visiting team does not
share in the gate receipts, all of the team's income is
apportioned to the state in which the team's operation is based;
(3) If the business consists exclusively of the selling of
tangible personal property and services in response to orders
received by United States mail or telephone, and 100 percent of
the taxpayer's property and payroll is within Minnesota, then
the taxpayer may apportion net income to Minnesota as provided
in clause (1) or (2), except that the percentage applicable in
clause (1)(d) or (2)(a)(4) shall be 100 percent of the
percentage determined under clause (1)(a) or (2)(a)(1). In
determining eligibility for this paragraph, the sale not in the
ordinary course of business of tangible or intangible assets
used in conducting business activities shall be disregarded.
(4) The sales, payrolls, earnings, and receipts referred to
in this section shall be those for the taxable year in respect
of which the tax is being computed. The property referred to in
this section shall be the average of the property owned or
rented and used by the taxpayer during the taxable year in
respect of which the tax is being computed. For purposes of
computing the property factor referred to in this section,
United States government property which is used by the taxpayer
shall be considered as being owned by the taxpayer.
Sec. 46. Minnesota Statutes 1984, section 290.21,
subdivision 8, is amended 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 A corporation's gross income for purposes of
this clause paragraphs (b) and (c) 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. 47. Minnesota Statutes 1984, section 290.37,
subdivision 1, is amended to read:
Subdivision 1. [PERSONS MAKING RETURNS.] (a) The
commissioner of revenue shall annually determine the gross
income levels at which individuals, trusts, and estates shall be
required to file a return for each taxable year. An individual
who is not a Minnesota resident for any part of the year is not
required to file a Minnesota income tax return if the
individual's Minnesota gross income computed under section
290.06, subdivision 2c, clause (c)(1) (f)(1) is less than the
filing requirements for an individual who is a full year
resident of Minnesota with the same marital status and number of
personal credits.
The decedent's final income tax return, and all other
income tax returns for prior years where the decedent had gross
income in excess of the minimum amount at which an individual is
required to file and did not file, shall be filed by his or her
personal representative, if any. If there is no personal
representative, the return or returns shall be filed by the
transferees as defined in section 290.29, subdivision 3, who
receive any property of the decedent.
The trustee or other fiduciary of property held in trust
shall file a return with respect to the taxable net income of
such trust if that exceeds an amount determined by the
commissioner if such trust belongs to the class of taxable
persons.
Every corporation shall file a return. The commissioner
may adopt rules for the filing of one return on behalf of the
members of an affiliated group of corporations that are required
to file a combined report if the affiliated group includes a
corporation subject to tax under section 290.361. The return in
this the case of a corporation shall be signed by an officer of
a person designated by the corporation.
The receivers, trustees in bankruptcy, or assignees
operating the business or property of a taxpayer shall file a
return with respect to the taxable net income of such taxpayer
if that exceeds an amount on which a tax at the rates herein
provided would exceed the specific credits allowed a return is
required.
(b) Such return shall (1) be verified or contain a written
declaration that it is made under the penalties of criminal
liability for willfully making a false return correct and
complete, and (2) shall contain language prescribed by the
commissioner providing a confession of judgment for the amount
of the tax shown due thereon to the extent not timely paid.
(c) For purposes of this subdivision the term "gross income"
shall mean gross income as defined in section 61 of the Internal
Revenue Code of 1954, as amended through December 31, 1983,
modified and adjusted in accordance with the provisions of
sections 290.01, subdivision 20b, clauses (1), (6), and
(10) (7), and (8), 290.08, and 290.17.
Sec. 48. Minnesota Statutes 1984, section 290.38, is
amended to read:
290.38 [JOINT RETURNS OF HUSBAND AND WIFE MARRIED PERSONS.]
A husband and wife may make a single return jointly even
though one of the spouses has neither gross income nor
deductions must file a joint Minnesota income tax return if they
filed a joint federal income tax return. If a joint return is
made the tax shall be computed on the aggregate income and the
liability with respect to the tax shall be joint and several.
If both the husband and wife have gross income elected to file
separate federal income tax returns they may elect to either
file a single return jointly or may must file separate Minnesota
income tax returns pursuant to this section or as provided in
section 290.39, subdivision 2. This election to file a joint or
separate returns may must be changed within the period provided
for the assessment of additional taxes on said return or returns
if they change their election for federal purposes. In the
event taxpayers desire to change their election, such change
shall be done in the manner and on such form as the commissioner
shall prescribe by regulation rule.
No joint return shall be made if the husband and wife have
different taxable years; except that if such taxable years begin
on the same day and end on different days because of the death
of either or of both, then the joint return may be made with
respect to the taxable year of each. The above exception shall
not apply if the surviving spouse remarries before the close of
his taxable year or if the taxable year of either spouse is a
fractional part of a year under section 290.32 The determination
of whether an individual is married is made as of the close of
that person's taxable year; except that if that person's spouse
dies during the taxable year the determination is made as of the
time of the death. An individual who is legally separated from
a spouse under a decree of divorce, dissolution, or of separate
maintenance is not considered to be married.
In the case of the death of one spouse or both spouses the
joint return with respect to the decedent may be made only by
the personal representative of his estate; except that in the
case of the death of one spouse the joint return may be made by
the surviving spouse with respect to both himself and the
decedent if (a) no return for the taxable year has been made by
the decedent, (b) no personal representative has been appointed,
and (c) no personal representative is appointed before the last
day prescribed by law for filing the return of the surviving
spouse. If a personal representative of the estate of the
decedent is appointed after the joint return has been filed by
the surviving spouse, the personal representative may disaffirm
such joint return by filing, within one year after the last day
prescribed by law for filing the return of the surviving spouse,
a separate return for the taxable year of the decedent with
respect to which the joint return was made, in which case the
return made by the survivor shall constitute his separate return
provided that the election has been also disaffirmed for federal
purposes.
If husband and wife determine their federal income tax on a
joint return but determine their Minnesota income taxes
separately, they shall determine their Minnesota gross income
separately as if their federal adjusted gross incomes had been
determined separately.
Sec. 49. Minnesota Statutes 1984, section 290.41,
subdivision 2, is amended to read:
Subd. 2. [BY PERSONS, CORPORATIONS, COOPERATIVES,
GOVERNMENTAL ENTITIES OR SCHOOL DISTRICTS.] Every person,
corporation, or cooperative, the state of Minnesota and its
political subdivisions, and every city, county and school
district in Minnesota, making payments in the regular course of
a trade or business during the taxable year to any person or
corporation of $600 or more on account of rents or royalties, or
of $10 or more on account of interest, or $10 or more on account
of dividends or patronage dividends, or $600 or more on account
of either wages, salaries, commissions, fees, prizes, awards,
pensions, annuities, or any other fixed or determinable gains,
profits or income, not otherwise reportable under section
290.92, subdivision 7, or on account of earnings of $10 or more
distributed to its members by savings, building and loan
associations or credit unions chartered under the laws of this
state or the United States, (a) shall make a return (except in
cases where a valid agreement to participate in the combined
federal and state information reporting system has been entered
into, and such return is therefore filed only with the
commissioner of internal revenue pursuant to the applicable
filing and informational reporting requirements of the Internal
Revenue Code of 1954 as amended through December 31, 1983) in
respect to such payments in excess of the amounts specified,
giving the names and addresses of the persons to whom such
payments were made, the amounts paid to each, and (b) shall make
a return in respect to the total number of such payments and
total amount of such payments, for each category of income
specified, which were in excess of the amounts specified. This
subdivision shall not apply to the payment of interest or
dividends to a person who was a nonresident of Minnesota for the
entire year.
A person, corporation, or cooperative required to file
returns under this subdivision on interest, dividends, or
patronage dividend payments with respect to more than 50 payees
for any calendar year must file all of these returns on magnetic
media unless the person establishes to the satisfaction of the
commissioner that compliance with this requirement would be an
undue hardship.
Upon request from the commissioner, any public pension plan
as defined in section 356.61 in which the employer picks up the
employee contributions under section 356.62 shall furnish the
commissioner, on magnetic media to the extent possible, with the
name, address, and social security number of each employee who
participated in the plan during that calendar year for which
picked up contributions were made.
Sec. 50. [290.491] [TAX ON GAIN; DISCHARGE IN BANKRUPTCY.]
Any tax due under this chapter on a gain realized on a
forced sale pursuant to foreclosure of a mortgage or other
security interest in agricultural production property, other
real property, or equipment, used in a farm business that was
owned and operated by the taxpayer shall be a dischargeable debt
in a bankruptcy proceeding under United States Code, title 11,
section 727. A gain realized on a sale of agricultural
production property, other real property, or equipment, used in
a farm business that was owned and operated by the taxpayer
shall be exempt from taxation under this chapter, if the
taxpayer was insolvent at the time of the sale and the proceeds
of the sale were used solely to discharge indebtedness secured
by a mortgage, lien or other security interest on the property
sold. For purposes of this section, "insolvent" means insolvent
as defined in section 108(d)(3) of the Internal Revenue Code of
1954, as amended through December 31, 1984.
Sec. 51. Minnesota Statutes 1984, section 290.50,
subdivision 5, is amended to read:
Subd. 5. [OVERPAYMENTS; CREDITS AND REFUNDS.] (a) If the
amount allowable as a credit under section 290.92, subdivision
12 (relating to credit for tax withheld at source) or an amount
determined to be an overpayment under section 290.93,
subdivision 9, or 290.936 exceeds the taxes imposed by this
chapter against which such credit is allowable the amount of
such excess shall be considered an overpayment. An amount paid
as tax shall constitute an overpayment even if in fact there was
no tax liability with respect to which such amount was paid.
(b) Notwithstanding any other provision of law to the
contrary, in the case of any overpayment the commissioner,
within the applicable period of limitations, may credit the
amount of such overpayment against any liability in respect of
Minnesota income tax on the part of the person who made the
overpayment or against any liability in respect to Minnesota
income tax on the part of either spouse who shall have filed a
joint or combined return for the taxable year in which the
overpayment was made and shall refund any balance of more than
one dollar to such person if the taxpayer shall so request.
The commissioner is authorized to prescribe rules providing
for the crediting against the estimated income tax for any
taxable year of the amount determined by the commissioner to be
an overpayment of the income tax for a preceding taxable year.
Sec. 52. Minnesota Statutes 1984, section 290.50,
subdivision 6, is amended to read:
Subd. 6. [WITHHOLDING OF REFUNDS FROM CHILD SUPPORT
DEBTORS.] Upon a finding by a court of this state that a person
obligated to pay child support is delinquent in making payments,
the amount of child support unpaid and owing including attorneys
fees and costs incurred in ascertaining or collecting child
support shall be withheld from a refund due the person under
this section. The public agency responsible for child support
enforcement or the parent or guardian of a child for whom the
support, attorneys fees and costs are owed may petition the
district or county court for an order providing for the
withholding of the amount of child support, attorneys fees and
costs unpaid and owing as determined by court order. The person
from whom the refund may be withheld shall be notified of the
petition pursuant to the rules of civil procedure prior to the
issuance of an order pursuant to this subdivision. The order
may be granted on a showing to the court that required support
payments, attorneys fees and costs have not been made when they
were due.
On order of the court, the money shall be withheld by the
commissioner from the refund due to the person obligated to pay
and the amount withheld shall be remitted to the public agency
responsible for child support enforcement or to the parent or
guardian petitioning on behalf of the child, provided that any
delinquent tax obligations of the taxpayer owed to the revenue
department shall be satisfied first. Any amount received by the
responsible public agency or the petitioning parent or guardian
in excess of the amount of public assistance expended for the
benefit of the child to be supported, or the amount of any
support, attorneys fees and costs that had been the subject of
the claim pursuant to this subdivision which has been paid by
the taxpayer prior to the diversion of the refund, shall be
remitted to the person entitled to the money. If the refund is
based on a joint or combined return, the portion of the refund
that shall be remitted to the petitioner shall be the proportion
of the total refund that equals the proportion of the total
federal adjusted gross income of the spouses that is the federal
adjusted gross income of the spouse who is delinquent in making
the child support payments. A petition filed pursuant to this
subdivision shall be in effect with respect to any refunds due
under this section until the support money, attorneys fees and
costs have been paid in full or the court orders the
commissioner to discontinue withholding the money from the
refund due the person obligated to pay the support, attorneys
fees and costs. If a petition is filed pursuant to this
subdivision and a claim is made pursuant to chapter 270A with
respect to the same individual's refund and notices of both are
received prior to the time when payment of the refund is made on
either claim, the claim relating to the liability that accrued
first in time shall be paid first; any amount of the refund
remaining shall then be applied to the other claim. The
provisions of section 290.61 shall not prohibit the exchange of
information among the department, the petitioner, and the court
to the extent necessary to accomplish the intent of this
subdivision.
Sec. 53. Minnesota Statutes 1984, section 290.92,
subdivision 2a, is amended to read:
Subd. 2a. [COLLECTION AT SOURCE.] (1) [DEDUCTIONS.] Every
employer making payment of wages shall deduct and withhold upon
such wages a tax as provided in this section.
(2) [WITHHOLDING ON PAYROLL PERIOD.] The employer shall
withhold the tax on the basis of each payroll period or as
otherwise provided in this section.
(3) [WITHHOLDING TABLES.] Unless the amount of tax to be
withheld is determined as provided in subdivision 3, the amount
of tax to be withheld for each individual shall be based upon
tables to be prepared and distributed by the commissioner. The
tables shall be computed for the several permissible withholding
periods and shall take account of exemptions allowed under this
section; and the amounts computed for withholding shall be such
that the amount withheld for any individual during his taxable
year shall approximate in the aggregate as closely as possible
the tax which is levied and imposed under this chapter for that
taxable year, upon his salary, wages, or compensation for
personal services of any kind for the employer, and shall take
into consideration the allowable optional deduction for federal
income tax and the deduction allowable under section 290.089,
subdivision 3, and the personal credits allowed against the tax.
(4) [MISCELLANEOUS PAYROLL PERIOD.] If wages are paid with
respect to a period which is not a payroll period, the amount to
be deducted and withheld shall be that applicable in the case of
a miscellaneous payroll period containing a number of days,
including Sundays and holidays, equal to the number of days in
the period with respect to which such wages are paid.
(5) [MISCELLANEOUS PAYROLL PERIOD.] (a) In any case in
which wages are paid by an employer without regard to any
payroll period or other period, the amount to be deducted and
withheld shall be that applicable in the case of a miscellaneous
payroll period containing a number of days equal to the number
of days, including Sundays and holidays, which have elapsed
since the date of the last payment of such wages by such
employer during the calendar year, or the date of commencement
of employment with such employer during such year, or January 1
of such year, whichever is the later.
(b) In any case in which the period, or the time described
in clause (a), in respect of any wages is less than one week,
the commissioner, under regulations prescribed by him, may
authorize an employer to determine the amount to be deducted and
withheld under the tables applicable in the case of a weekly
payroll period, in which case the aggregate of the wages paid to
the employee during the calendar week shall be considered the
weekly wages.
(6) [WAGES COMPUTED TO NEAREST DOLLAR.] If the wages exceed
the highest bracket, in determining the amount to be deducted
and withheld under this subdivision, the wages may, at the
election of the employer, be computed to the nearest dollar.
(7) [REGULATIONS ON WITHHOLDING.] The commissioner may, by
regulations rule, authorize employers:
(a) To estimate the wages which will be paid to any
employee in any quarter of the calendar year;
(b) To determine the amount to be deducted and withheld
upon each payment of wages to such employee during such quarter
as if the appropriate average of the wages so estimated
constituted the actual wages paid; and
(c) To deduct and withhold upon any payment of wages to
such employee during such quarter such amount as may be
necessary to adjust the amount actually deducted and withheld
upon wages of such employee during such quarter to the amount
required to be deducted and withheld during such quarter without
regard to this paragraph (7).
(8) [ADDITIONAL WITHHOLDING.] The commissioner is
authorized to provide by rule for increases or decreases in the
amount of withholding otherwise required under this section in
cases where the employee requests the changes. Such additional
withholding shall for all purposes be considered tax required to
be deducted and withheld under this section.
(9) [TIPS.] In the case of tips which constitute wages,
this subdivision shall be applicable only to such tips as are
included in a written statement furnished to the employer
pursuant to section 6053 of the Internal Revenue Code of 1954,
as amended through December 31, 1983, and only to the extent
that the tax can be deducted and withheld by the employer, at or
after the time such statement is so furnished and before the
close of the calendar year in which such statement is furnished,
from such wages of the employee (excluding tips, but including
funds turned over by the employee to the employer for the
purpose of such deduction and withholding) as are under the
control of the employer; and an employer who is furnished by an
employee a written statement of tips (received in a calendar
month) pursuant to section 6053 of the Internal Revenue Code of
1954 as amended through December 31, 1983 to which subdivision 1
is applicable may deduct and withhold the tax with respect to
such tips from any wages of the employee (excluding tips) under
his control, even though at the time such statement is furnished
the total amount of the tips included in statements furnished to
the employer as having been received by the employee in such
calendar month in the course of his employment by such employer
is less than $20. Such tax shall not at any time be deducted
and withheld in an amount which exceeds the aggregate of such
wages and funds as are under the control of the employer minus
any tax required by other provisions of state or federal law to
be collected from such wages and funds.
Sec. 54. Minnesota Statutes 1984, section 290.92,
subdivision 18, is amended to read:
Subd. 18. [RETURNS; CONFESSION OF JUDGMENT.] Any return
that is required to be filed with the commissioner of revenue
under this section shall (a) contain a written declaration that
it is made under the penalties of criminal liability for
wilfully making a false return correct and complete, and (b)
shall contain language prescribed by the commissioner providing
a confession of judgment for the amount of the tax shown due
thereon to the extent not timely paid.
Sec. 55. Minnesota Statutes 1984, section 290.92,
subdivision 19, as amended by Laws 1985, chapter 210, article 1,
section 14, is amended to read:
Subd. 19. [EMPLOYEES INCURRING NO INCOME TAX LIABILITY.]
Notwithstanding any other provision of this section, except the
provisions of subdivision 5a, an employer shall not be required
to deduct and withhold any tax under this chapter upon a payment
of wages to an employee if there is in effect with respect to
such payment a withholding exemption certificate, in such form
and containing such other information as the commissioner may
prescribe, furnished to the employer by the employee certifying
that the employee
(a) incurred no liability for income tax imposed under this
chapter for his preceding taxable year, and
(b) anticipates that he will incur no liability for income
tax imposed under this chapter for his current taxable year.
When an employee anticipates no liability for the current
taxable year because of the provision contained in section
290.06, subdivision 3d, no withholding shall be required, clause
(a) notwithstanding, except for the provisions of subdivision
5a. The commissioner shall by rule provide for the coordination
of the provisions of this subdivision with the provisions of
subdivision 7.
Sec. 56. Minnesota Statutes 1984, section 290.92,
subdivision 21, is amended to read:
Subd. 21. [EXTENSION OF WITHHOLDING TO UNEMPLOYMENT
COMPENSATION BENEFITS.] For purposes of this section, any
supplemental unemployment compensation benefit paid to an
individual to the extent includable in such individual's
Minnesota adjusted gross income, shall be treated as if it were
a payment of wages by an employer to an employee for a payroll
period.
Sec. 57. Minnesota Statutes 1984, section 290.931,
subdivision 1, is amended to read:
Subdivision 1. [REQUIREMENTS OF DECLARATION.] Every
corporation subject to taxation under this chapter (excluding
section 290.92) shall make a declaration of estimated tax for
the taxable year if its tax liability so computed can reasonably
be expected to exceed $1,000, or in accordance with rules
prescribed by the commissioner for an affiliated group of
corporations electing to file one return as permitted by rules
prescribed under section 290.37, subdivision 1.
Sec. 58. Minnesota Statutes 1984, section 290A.03,
subdivision 3, as amended by Laws 1985, chapter 210, article 2,
section 9, is amended to read:
Subd. 3. [INCOME.] (1) "Income" means the sum of the
following:
(a) federal adjusted gross income as defined in the
Internal Revenue Code of 1954 as amended through December 31,
1983 May 25, 1985; and
(b) the sum of the following amounts to the extent not
included in clause (a):
(i) additions to federal adjusted gross income as provided
in Minnesota Statutes, section 290.01, subdivision 20a, clauses
(1), (2), (3), and (4), (9), (10), and (14);
(ii) all nontaxable income;
(iii) recognized net long term capital gains;
(iv) dividends and interest excluded from federal adjusted
gross income under sections section 116 or 128 of the Internal
Revenue Code of 1954;
(v) cash public assistance and relief;
(vi) any pension or annuity (including railroad retirement
benefits, all payments received under the federal social
security act, supplemental security income, and veterans
benefits), which was not exclusively funded by the claimant or
spouse, or which was funded exclusively by the claimant or
spouse and which funding payments were excluded from federal
adjusted gross income in the years when the payments were made;
(vii) nontaxable interest received from the state or
federal government or any instrumentality or political
subdivision thereof;
(viii) workers' compensation;
(ix) unemployment benefits;
(x) nontaxable strike benefits;
(xi) the gross amounts of payments received in the nature
of disability income or sick pay as a result of accident,
sickness, or other disability, whether funded through insurance
or otherwise; and
(xii) the ordinary income portion of a lump sum
distribution under section 402(e) of the Internal Revenue Code
of 1954.
In the case of an individual who files an income tax return
on a fiscal year basis, the term "federal adjusted gross income"
shall mean federal adjusted gross income reflected in the fiscal
year ending in the calendar year. Federal adjusted gross income
shall not be reduced by the amount of a net operating loss
carryback.
(2) "Income" does not include
(a) amounts excluded pursuant to the Internal Revenue Code,
Sections 101(a), 102, 117, and 121;
(b) amounts of any pension or annuity which was exclusively
funded by the claimant or spouse and which funding payments were
not excluded from federal adjusted gross income in the years
when the payments were made;
(c) surplus food or other relief in kind supplied by a
governmental agency;
(d) relief granted under this chapter; or
(e) child support payments received under a temporary or
final decree of dissolution or legal separation; or
(f) federal adjusted gross income shall be reduced by wage
or salary expense which is not allowed as a deduction under
provisions of section 280C of the Internal Revenue Code of 1954.
Sec. 59. [REPEALER.]
(a) Minnesota Statutes 1984, sections 41.58, subdivision 3;
41.59, subdivisions 2 and 3; 62E.03, subdivision 2; 290.01,
subdivisions 20c and 26; 290.012; 290.06, subdivision 3d, as
amended by Laws 1985, chapter 210, article 2, section 1,
subdivisions 3e, 14, 16, 17, 18, and 19; 290.077, subdivision 4;
290.08, subdivisions 23 and 24; 290.089, subdivisions 4 and 6;
290.09, subdivision 29; 290.101, as amended by Laws 1985,
chapter 210, article 2, section 4; 290.18, subdivision 4;
290.39, subdivision 2; 290.41, subdivision 5; Laws 1982, chapter
523, article VII, section 3; and Laws 1984, chapter 502, article
2, section 4, are repealed.
(b) Minnesota Statutes 1984, section 290.069, subdivision 4
is repealed.
Sec. 60. [CARRYOVER OF FARM LOSS DEDUCTION.]
Any remaining balance of the deductions attributable to
farming, after any carryback or carryover deductions allowed
under Minnesota Statutes 1984, section 290.09, subdivision 29 in
taxable years beginning before January 1, 1985, may be carried
forward to taxable years beginning after December 31, 1984. The
deductions carried over to taxable years beginning after
December 31, 1984, shall be allowed in an amount up to gross
income or, in the case of a corporation, taxable net income.
The term "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,
1984.
For purposes of this section, "remaining balance" means the
amount that would be allowable under the carryover provisions of
Minnesota Statutes 1984, section 290.09, subdivision 29,
paragraph (c), for taxable year 1985, if the income limitations
under Minnesota Statutes 1984, section 290.09, subdivision 29,
were not applicable. The carryover deduction provided in this
section is deductible in computing alternative minimum taxable
income for purposes of section 290.091.
Sec. 61. [EFFECTIVE DATE.]
Except as otherwise provided, sections 1 to 23, 31 to 44,
46 to 49, 51 to 56, 59, paragraph (a), and 60 are effective for
taxable years beginning after December 31, 1984. Sections 24,
25, and 29 are effective for taxable years beginning after
December 31, 1985. The provisions of Minnesota Statutes 1984,
section 290.069, subdivisions 1 to 3, and 4a to 7 remain in
effect as amended, provided that the credits are repealed as
provided in section 29. Section 59, paragraph (b) is effective
for qualified small businesses certified after June 30, 1985 and
for stock purchased after June 30, 1985 and the provisions of
sections 26 to 30 conforming to the repeal of Minnesota
Statutes, section 290.069, subdivision 4, are effective at the
same time. The amendment to Minnesota Statutes 1984, section
290.10, clause (8) in section 41 changing the percentage of
deductible self-employment tax is effective for taxable years
beginning after December 31, 1985. Section 45 is effective for
taxable years beginning after December 31, 1984 and before
January 1, 1989. Sections 50, 57 and the amendment to Minnesota
Statutes 1984, section 290.37, subdivision 1, paragraph (a), in
section 47, authorizing the adoption of rules, are effective the
day after final enactment. The provision in section 58,
clause(1)(a), updating the reference to the Internal Revenue
Code, is effective for claims based on rent paid in 1984 and
thereafter and property taxes payable in 1985 and thereafter.
The balance of section 58 is effective for claims based on rent
paid in 1985 and thereafter and property taxes payable in 1986
and thereafter.
ARTICLE 2
SALES AND EXCISE TAXES
Section 1. Minnesota Statutes 1984, section 296.01,
subdivision 24, is amended to read:
Subd. 24. [AGRICULTURAL ALCOHOL GASOLINE.] "Agricultural
alcohol gasoline" means a gasoline blend at least up to ten
percent of which is agriculturally derived fermentation ethyl
alcohol ethanol of a purity of at least 99 percent, determined
without regard to any added denaturants, denatured in conformity
with one of the approved methods set forth by the United States
Department of Treasury, Bureau of Alcohol, Tobacco and Firearms,
and derived from agricultural products such as cereal grains,
cheese whey, sugar beets, or forest products or other renewable
resources, distilled in the United States and derived from
agricultural products produced in the United States.
Sec. 2. Minnesota Statutes 1984, section 296.02,
subdivision 7, is amended to read:
Subd. 7. [TAX REDUCTION FOR AGRICULTURAL ALCOHOL
GASOLINE.] The tax on gasoline imposed by subdivision 1 shall be
reduced by two cents per gallon beginning July 1, 1983, and
continuing through June 30, 1985, and four cents per gallon
beginning July 1, 1985, and continuing through June 30, 1992,
for gasoline which is agricultural alcohol gasoline as defined
in section 296.01, subdivision 24, which is blended by a
distributor with alcohol distilled in the United States from
agricultural products produced in the United States, and which
is used on the public highways of this state. The tax imposed
by this subdivision shall be payable at the same time, and
collected in the same manner, as the tax imposed by subdivision
1 A distributor shall be allowed a credit on each gallon of fuel
grade alcohol commercially blended with gasoline or blended in a
tank trunk with gasoline on which the tax imposed by subdivision
1 is due and payable. The amount of the credit is 40 cents for
every gallon of fuel-grade alcohol blended with gasoline to
produce agricultural alcohol gasoline. The credit allowed a
distributor must not exceed the total tax liability under
subdivision 1. The tax credit received by a distributor on
alcohol blended with motor fuels shall be passed on to the
retailer.
Sec. 3. Minnesota Statutes 1984, section 296.02,
subdivision 8, is amended to read:
Subd. 8. [TAX REDUCTION FOR AGRICULTURAL ALCOHOL GASOLINE
SOLD IN BULK TO GOVERNMENT OR FOR SCHOOL TRANSPORTATION.] The
tax on gasoline imposed by subdivision 1 shall be reduced by
eight cents per gallon beginning January 1, 1984, and continuing
through June 30, 1992, for gasoline which is agricultural
alcohol gasoline as defined in section 296.01, subdivision 24,
meets the criteria established in subdivision 7, and A
distributor shall be allowed a credit of 80 cents for every
gallon of fuel grade alcohol blended with gasoline to produce
agricultural alcohol gasoline which is sold in bulk to the
state, local units of government, or for use in the
transportation of pupils to and from school or school-related
events in school buses vehicles. This reduction is in lieu of
the reductions provided in subdivision 7.
Sec. 4. Minnesota Statutes 1984, section 296.18,
subdivision 1, as amended by Laws 1985, chapter 248, section 50,
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 a qualifying purpose other than use in motor vehicles,
snowmobiles, or motorboats, or special fuel for 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 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. 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.
(3) Gasoline or special fuel placed in the fuel tanks of
new motor vehicles, manufactured in Minnesota, and shipped by
interstate carrier to destinations in other states or foreign
countries.
Sec. 5. Minnesota Statutes 1984, section 296.22,
subdivision 13, is amended to read:
Subd. 13. [GASOLINE-ALCOHOL BLENDS; IDENTIFICATION.] When
gasoline blended with alcohol is sold, offered for sale, or
dispensed for use in motor vehicles, the dispenser shall be
clearly marked to identify each type of alcohol, if more than
one percent by volume, blended with the gasoline. The marking
shall consist of a white or yellow adhesive decal not less than
two inches by six inches with clearly printed black lettering
not less than one-half inch high and one-eighth inch in stroke.
The marking shall be conspicuously displayed on the front side
of the dispenser and state that the gasoline "CONTAINS ETHANOL"
or "CONTAINS METHANOL" or has been improved "WITH ETHANOL
ENRICHMENT." This subdivision does not prohibit the posting of
other alcohol or additive information.
Sec. 6. Minnesota Statutes 1984, 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 including chain saws used for logging only if
the engine displacement equals or exceeds five cubic inches,
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. 7. Minnesota Statutes 1984, section 297A.02,
subdivision 2, is amended to read:
Subd. 2. [MACHINERY AND EQUIPMENT.] Notwithstanding the
provisions of subdivision 1, the rate of the excise tax imposed
upon sales of farm machinery, special tooling, and capital
equipment is four percent and upon sales of farm machinery is
two percent.
Sec. 8. Minnesota Statutes 1984, 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, a use tax is imposed on every person
in this state at the rate of six percent of the sales price of
sales at retail unless the tax imposed by section 297A.02 was
paid on the sales price. Notwithstanding the provisions of the
preceding sentence, the rate of the use tax imposed upon the
sales price of sales of farm machinery, special tooling, and
capital equipment is four percent and upon the sales price of
sales of farm machinery is two 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. 9. Minnesota Statutes 1984, 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. Electricity used
to make snow for outdoor use for ski hills, ski slopes, or ski
trails is included in this exemption;
(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) (o) 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) (p) The gross receipts from the sale of caskets and
burial vaults;
(r) (q) 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) (r) 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) (s) 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) (t) 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) (u) 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) (v) 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) (w) 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) (x) 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) (y) The gross receipts from the sale of sanitary
napkins, tampons, or similar items used for feminine hygiene;
(aa) (z) 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;
(bb) (aa) The gross receipts from the sale of equipment
used for processing solid or hazardous waste at a resource
recovery facility, as defined in section 115A.03, subdivision 28;
(bb) The gross receipts from the sale of repair and
replacement parts, except tires, used for maintenance or repair
of farm machinery, if the part replaces a farm machinery part
assigned a specific or generic part number by the manufacturer
of the farm machinery;
(cc) The gross receipts from sales of tickets or admissions
to regular season school games, events, and activities. For
purposes of this clause, "school" has the meaning given it in
section 120.10, subdivision 2.
Sec. 10. [297A.256] [EXEMPTIONS FOR CERTAIN NONPROFIT
GROUPS.]
Notwithstanding the provisions of this chapter, the
following sales made by a "nonprofit organization" are exempt
from the sales and use tax.
(a) All sales made by an organization for fundraising
purposes if that organization exists solely for the purpose of
providing educational or social activities for young people
primarily age 18 and under. This exemption shall apply only if
the gross annual sales receipts of the organization from
fundraising do not exceed $10,000.
(b) All sales made by an organization for fundraising
purposes if that organization is a senior citizen group which
qualifies for exemption on its purchases pursuant to section
297A.25, subdivision 1, clause (o). This exemption shall apply
only if the gross annual sales receipts of the organization from
fundraising do not exceed $10,000.
(c) The gross receipts from the sales of tangible personal
property at, admission charges for, and sales of food, meals, or
drinks at fundraising events sponsored by a nonprofit
organization when the entire proceeds, except for the necessary
expenses therewith, will be used solely and exclusively for
charitable, religious, or educational purposes. This exemption
does not apply to admission charges for events involving bingo
or other gambling activities or to charges for use of amusement
devices involving bingo or other gambling activities. For
purposes of this clause, a "nonprofit organization" means any
unit of government, corporation, society, association,
foundation, or institution organized and operated for
charitable, religious, educational, civic, fraternal, senior
citizens' or veterans' purposes, no part of the net earnings of
which enures to the benefit of a private individual.
If the profits are not used solely and exclusively for
charitable, religious, or educational purposes, the entire gross
receipts are subject to tax.
Each nonprofit organization shall keep a separate
accounting record, including receipts and disbursements from
each fundraising event. All deductions from gross receipts must
be documented with receipts and other records. If records are
not maintained as required, the entire gross receipts are
subject to tax.
The exemption provided by this section does not apply to
any sale made by or in the name of a nonprofit corporation as
the active or passive agent of a person that is not a nonprofit
corporation.
The exemption for fundraising events under this section is
limited to no more than 24 days a year. Fundraising events
conducted on premises leased or occupied for more than four days
but less than 30 days do not qualify for this exemption.
Sec. 11. Minnesota Statutes 1984, section 297B.02, is
amended to read:
297B.02 [TAX IMPOSED.]
Subdivision 1. [RATE.] There is imposed an excise tax at
the rate provided in chapter 297A on the purchase price of any
motor vehicle purchased or acquired, either in or outside of the
state of Minnesota, which is required to be registered under the
laws of this state.
Subd. 2. [IN LIEU TAX.] In lieu of the tax imposed in
subdivision 1, there is imposed a tax of $10 on the purchase
price of any passenger automobile described in section 12.
Sec. 12. [297B.025] [OLDER PASSENGER AUTOMOBILES.]
Purchase or use of a passenger automobile as defined in
section 168.011, subdivision 7, shall be taxed pursuant to
section 297B.02, subdivision 2, if the passenger automobile is
(1) in the tenth or subsequent year of vehicle life, (2) is
currently registered in Minnesota other than registration under
section 168.10, subdivisions 1a, 1b, 1c, and 1d, and (3) is not
an above-market automobile as designated by the registrar of
motor vehicles.
The registrar of motor vehicles shall prepare, and
distribute to all deputy motor vehicle registrars by July 15,
1985, a listing by make, model, and year of above-market
automobiles. The registrar must include in the list all
automobiles with a resale value of $3,000 or more, as determined
using nationally recognized sources of information on automobile
resale values. The registrar shall revise the list by February
1 of each year. The initial list and all subsequent revisions
must include only those automobiles which are in the tenth or
subsequent year of vehicle life.
Sec. 13. Minnesota Statutes 1984, 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) (o) and (r) (q).
(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. 14. Minnesota Statutes 1984, section 297C.02, as
added by Laws 1985, chapter 305, article 2, section 2, is
amended to read:
297C.02 [TAX IMPOSED.]
Subdivision 1. [DISTILLED SPIRITS AND WINE.] There is
imposed on all distilled spirits and wine manufactured,
imported, sold, or possessed in this state the following excise
tax:
Standard Metric
(a) Distilled spirits, $4.39 per gallon $1.16 per liter
liqueurs, cordials,
and specialties
regardless of
alcohol content
(excluding ethyl
alcohol)
(b) Wine containing 14 $.27 per gallon $.07 per liter
percent or less
alcohol by volume
(c) Wine containing more $.79 per gallon $.21 per liter
than 14 percent but
not more than 21
percent alcohol by
volume
(d) Wine containing more $1.58 per gallon $.42 per liter
than 21 percent but
not more than 24
percent alcohol by
volume
(e) Wine containing more $3.08 per gallon $.81 per liter
than 24 percent
alcohol by volume
(f) Natural and $1.50 per gallon $.40 per liter
artificial sparkling
wines containing
alcohol
The metric tax is imposed on all products taxable under this
subdivision when the net contents are stated in metric units of
measure.
In computing the tax on a package of distilled spirits or
wine a proportional tax at a like rate on all fractional parts
of a gallon or liter must be paid, except that the tax on a
fractional part of a gallon less than 1/16 of a gallon is the
same as for 1/16 of a gallon.
The tax on miniatures of two fluid ounces or less or 50
milliliters or less is 12 cents.
The commissioner of revenue may establish by rule a date
and procedure for the conversion of excise tax computation and
reporting from rates expressed in gallons to rates expressed in
metric volumes. The official conversion factor is one liter
equals 0.264172 U.S. gallons.
Subd. 2. [FERMENTED MALT BEVERAGES.] There is imposed on
the direct or indirect sale of fermented malt beverages the
following excise tax:
(1) On fermented malt beverages containing not more than
3.2 percent alcohol by weight, $2 per barrel of 31 gallons;
(2) On fermented malt beverages containing more than 3.2
percent alcohol by weight, $4 per barrel of 31 gallons.
The tax is at a proportional rate for fractions of a barrel
of 31 gallons.
Subd. 3. [TAX CREDIT.] A qualified brewer producing
fermented malt beverages is entitled to a tax credit of $2 $4
per barrel on the first 25,000 barrels sold in any fiscal year
beginning July 1, regardless of the alcohol content of the
product. Qualified brewers may take the credit on the 15th day
of each month, but the total credit allowed may not exceed the
allowable credit on more than 25,000 barrels produced and sold
in Minnesota in any fiscal year the lesser of (a) the liability
for tax or (b) $100,000.
For purposes of this subdivision, a "qualified brewer"
means a brewer, whether or not located in this state,
manufacturing less than 100,000 barrels of fermented malt
beverages in the calendar year immediately preceding the
calendar year for which the credit under this subdivision is
claimed. In determining the number of barrels, all brands or
labels of a brewer must be combined. All facilities for the
manufacture of fermented malt beverages owned or controlled by
the same person, corporation, or other entity must be treated as
a single brewer.
Sec. 15. Minnesota Statutes 1984, section 477A.018, is
amended to read:
477A.018 [CITY LOCAL LODGING TAX.]
Subdivision 1. [AUTHORIZATION.] Notwithstanding section
477A.016 or any other law, a statutory or home rule charter city
may by ordinance, and a town may by vote at its annual meeting,
impose a tax of up to three percent on the gross receipts from
the furnishing for consideration of lodging at a hotel, motel,
rooming house, tourist court, or other use of space by a
transient resort, other than the renting or leasing of it for a
continuous period of 30 days or more. A statutory or home rule
charter city may by ordinance impose the tax authorized under
this subdivision on the camping site receipts of a municipal
campground.
Subd. 2. [EXISTING TAXES.] No statutory or home rule
charter city or town may impose a tax under this section upon
transient lodging that, when combined with any tax authorized by
special law or enacted prior to 1972, exceeds a rate of three
percent.
Subd. 3. [DISPOSITION OF PROCEEDS.] Ninety-five percent of
the gross proceeds from any tax imposed under subdivision 1
shall be used by the statutory or home rule charter city or town
to fund a local convention or tourism bureau for the purpose of
marketing and promoting the city or town as a tourist or
convention center. This subdivision shall not apply to any
statutory or home rule charter city or town that has a lodging
tax authorized by special law or enacted prior to 1972 at the
time of enactment of this section.
Subd. 4. [UNORGANIZED TERRITORIES.] A county board acting
as a town board with respect to an unorganized territory may
impose a lodging tax within the unorganized territory according
to this section if it determines by resolution that imposition
of the tax is in the public interest.
Subd. 5. [REVERSE REFERENDUM.] If the county board passes
a resolution under subdivision 4 to impose the tax, the
resolution must be published for two successive weeks in a
newspaper of general circulation within the unorganized
territory, together with a notice fixing a date for a public
hearing on the proposed tax.
The hearing must be held not less than two weeks nor more
than four weeks after the first publication of the notice.
After the public hearing, the county board may determine to take
no further action, or may adopt a resolution authorizing the tax
as originally proposed or approving a lesser rate of tax. The
resolution must be published in a newspaper of general
circulation within the unorganized territory. The voters of the
unorganized territory may request a referendum on the proposed
tax by filing a petition with the county auditor within 30 days
after the resolution is published. The petition must be signed
by voters who reside in the unorganized territory. The number
of signatures must equal at least five percent of the number of
persons voting in the unorganized territory in the last general
election. If such a petition is timely filed, the resolution is
not effective until it has been submitted to the voters residing
in the unorganized territory 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.
Subd. 6. [JOINT POWERS AGREEMENTS.] Any statutory or home
rule charter city, town, or county when the county board is
acting as a town board with respect to an unorganized territory,
may enter into a joint exercise of powers agreement pursuant to
section 471.59 for the purpose of imposing the tax and disposing
of its proceeds pursuant to this section.
Sec. 16. Laws 1985, chapter 83, section 7, is amended to
read:
Sec. 7. [EFFECTIVE DATE.]
Sections 1 to 3 are effective the day following final
enactment, except that section 1 does not apply to written
contracts entered into before July 1, 1985, or to written bids
submitted for contracts before July 1, 1985. Sections 4 and 5
are effective July 1, 1985. Section 6 is effective for sales
tax paid on electricity billed on or after January 1, 1987.
Sec. 17. [EFFECTIVE DATE.]
Sections 1 to 3 and 5 are effective July 1, 1986. Sections
11 and 12 are effective for sales and transfers made after July
31, 1985. Section 14 is effective August 1, 1985. Sections 6
to 10 are effective for sales occurring after June 30, 1985,
except that the amendment in section 9 eliminating the exemption
for sales of telephone equipment is effective for sales after
December 31, 1986. Section 13 is effective January 1, 1987.
Section 4 applies to gasoline or special fuels placed in the
fuel tanks of new motor vehicles under the circumstances
described in section 296.18, subdivision 1, clause (3), on or
after July 1, 1982. Section 4 shall not become effective unless
the commissioner of revenue and any manufacturer of motor
vehicles in Minnesota with pending gasoline or special fuel
excise tax litigation execute an agreement to settle the
litigation under terms and conditions satisfactory to the
commissioner and the motor vehicle manufacturer before the
governor approves this act. Section 16 is effective May 9, 1985.
ARTICLE 3
PROPERTY TAX
Section 1. Minnesota Statutes 1984, section 124.2131,
subdivision 3, is amended to read:
Subd. 3. [DECREASE IN IRON ORE ASSESSED VALUE.] (1)
[REDETERMINATION OF ASSESSED VALUE.] If in any year the assessed
value of any district is less than the assessed value of the
immediate preceding year, the equalization aid review committee
shall, upon notification by the county assessor prior to October
16 of that assessment year, redetermine for all purposes the
adjusted assessed value of the immediate preceding year taking
into account the decrease in assessed value. On or before
November 1 of the assessment year, the equalization aid review
committee shall file the redetermined adjusted assessed value
with the commissioner of education who shall thereupon certify
to the county auditors and school districts affected the
redetermined adjusted assessed value and the appropriate levy
limits of the school districts affected pursuant to section
275.125, subdivision 10. Notwithstanding section 275.07, the
districts affected may certify the taxes voted to the county
auditor on or before December 1.
(2) [IRON ORE VALUE.] If in any year the assessed value of
class 1 and class 1a property, as defined in section 273.13,
subdivision 2, in any district is less than the assessed value
of such property in the immediately preceding year, the
equalization aid review committee shall redetermine for all
purposes the adjusted assessed value of the immediately
preceding year taking into account only the decrease in assessed
value of class 1 and class 1a property. If subdivision 2,
clause (a) is applicable to such a district, the decrease in
class 1 and class 1a property shall be applied to the adjusted
assessed value as limited therein. In all other respects, the
provisions of clause (1) shall be applicable.
Sec. 2. Minnesota Statutes 1984, 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 33 36 percent of the tax levy imposed on up
to 320 acres of land including the buildings and structures
thereon but excluding all dwellings and an acre of land for each
dwelling. 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 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 26
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 on timber land classified pursuant to section
273.13, subdivision 8a shall be reduced by an amount equal to 26
percent of the tax levy imposed on the property. The tax on 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 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 $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. 3. Minnesota Statutes 1984, section 272.02,
subdivision 1, as amended by Laws 1985, chapter 300, section 4,
is amended to read:
Subdivision 1. 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) Except for the taxable personal property enumerated
below, all personal property and the property described in
section 272.03, subdivision 1, clause paragraphs (c) and (d)
shall be exempt.
The following personal property shall be taxable:
(a) personal property which is part of an electric
generating, transmission, or distribution system or a pipeline
system transporting or distributing water, gas, crude oil, 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;
(b) railroad docks and wharves which are part of the
operating property of a railroad company as defined in section
270.80;
(c) personal property defined in section 272.03,
subdivision 2, clause (3);
(d) leasehold or other personal property interests which
are taxed pursuant to section 272.01, subdivision 2; 273.13,
subdivision 7b or 7d; or 273.19, subdivision 1; or any other law
providing the property is taxable as if the lessee or user were
the fee owner;
(e) property classified as class 2a property; and
(f) flight property as defined in section 270.071.
(9) 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.
(10) 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, provided it is
preserved in its natural condition and drainage of 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.
(11) 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.
(12) 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.
(13) 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.
(14) 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.
(15) If approved by the governing body of the municipality
in which the property is located, and if construction is
commenced after June 30, 1983:
(a) a "direct satellite broadcasting 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;
(b) a "fixed satellite regional or national program service
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; and
(c) a facility 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.
An exemption provided by paragraph (15) shall apply 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.
The exemptions granted by this subdivision shall be subject
to the limits contained in the other subdivisions of this
section, section 272.025, or section 273.13, subdivisions 17,
17b, 17c, or 17d.
(16) Real and personal property owned and operated by a
private, nonprofit corporation exempt from federal income
taxation pursuant to United States Code, title 26, section
501(c)(3), primarily used in the generation and distribution of
hot water for heating buildings and structures.
Sec. 4. Minnesota Statutes 1984, section 272.03,
subdivision 1, is amended to read:
Subdivision 1. [REAL PROPERTY.] (a) For the purposes of
taxation, "real property" includes the land itself, rails, ties,
and other track materials annexed to the land, and all
buildings, structures, and improvements or other fixtures on it,
bridges of bridge companies, and all rights and privileges
belonging or appertaining to the land, and all mines, minerals,
quarries, fossils, and trees on or under it.
(b) A building or structure shall include the building or
structure itself, together with all improvements or fixtures
annexed to the building or structure, which are integrated with
and of permanent benefit to the building or structure,
regardless of the present use of the building, and which cannot
be removed without substantial damage to itself or to the
building or structure.
(c) (i) The term real property shall not include tools,
implements, machinery, and equipment attached to or installed in
real property for use in the business or production activity
conducted thereon, regardless of size, weight or method of
attachment.
(ii) The exclusion provided in clause (c) (i) shall not
apply to machinery and equipment includable as real estate
by clauses paragraphs (a) and (b) even though such machinery and
equipment is used in the business or production activity
conducted on the real property if and to the extent such
business or production activity consists of furnishing services
or products to other buildings or structures which are subject
to taxation under this chapter.
(iii) The exclusion provided in clause (i) does not apply
to the exterior shell of a structure which constitutes walls,
ceilings, roofs, or floors if the shell of the structure has
structural, insulation, or temperature control functions or
provides protection from the elements. Such an exterior shell
is included in the definition of real property even if it also
has special functions distinct from that of a building.
(d) The term real property does not include tools,
implements, machinery, equipment, poles, lines, cables, wires,
conduit, and station connections which are part of a telephone
communications system, regardless of attachment to or
installation in real property and regardless of size, weight, or
method of attachment or installation.
Sec. 5. Minnesota Statutes 1984, section 273.13,
subdivision 4, as amended by Laws 1985, chapter 300, section 6,
is amended to read:
Subd. 4. [CLASS 3.] (a) Tools, implements and machinery of
an electric generating, transmission or distribution system or a
pipeline system transporting or distributing water, gas, crude
oil, or petroleum products or mains and pipes used in the
distribution of steam or hot or chilled water for heating or
cooling buildings, which are fixtures, all agricultural land,
except as provided by classes 1, 3b, 3e, shall constitute class
3 and shall be valued and assessed at 33-1/3 percent of the
market value thereof, except as provided in clause (b). All
buildings and structures assessed as personal property and
situated upon land of the state of Minnesota or the United
States government which is rural in character and devoted or
adaptable to rural but not necessarily agricultural use shall be
assessed based upon the use made of the building or structure.
Except as provided in subdivision 5a, all real property devoted
to temporary and seasonal residential occupancy for recreational
purposes, and which is not devoted to commercial purposes for
more than 200 days in the year preceding the year of assessment,
shall be class 3 property and assessed accordingly. For this
purpose, property is devoted to commercial use on a specific day
if it is used, or offered for use, and a fee is charged for such
use. Class 3 shall also include commercial use real property
used exclusively for recreational purposes in conjunction with
class 3 property devoted to temporary and seasonal residential
occupancy for recreational purposes, up to a total of two acres,
provided the property is not devoted to commercial recreational
use for more than 200 days in the year preceding the year of
assessment and is located within two miles of the class 3
property with which it is used.
Class 3 shall also include real property up to a maximum of
one acre of land owned by a nonprofit community service oriented
organization; provided that the property is not used for a
revenue-producing activity for more than six days in the
calendar year preceding the year of assessment and the property
is not used for residential purposes on either a temporary or
permanent basis. For purposes of this subdivision, a "nonprofit
community service oriented organization" means any corporation,
society, association, foundation, or institution organized and
operated exclusively for charitable, religious, fraternal,
civic, or educational purposes, and which is exempt from federal
income taxation pursuant to section 501(c)(3), (10), or (19) of
the Internal Revenue Code of 1954, as amended through December
31, 1984. For purposes of this subdivision, "revenue-producing
activities" shall include but not be limited to property or that
portion of the property that is used as an on-sale intoxicating
liquor or nonintoxicating malt liquor establishment licensed
under chapter 340A, a restaurant open to the public, bowling
alley, a retail store, gambling conducted by organizations
licensed under chapter 349, an insurance business, or office or
other space leased or rented to a lessee who conducts a
for-profit enterprise on the premises. Any portion of the
property which is used for revenue-producing activities for more
than six days in the calendar year preceding the year of
assessment shall be assessed as class 4. The use of the
property for social events open exclusively to members and their
guests for periods of less than 24 hours, when an admission is
not charged nor any revenues are received by the organization
shall not be considered a revenue-producing activity.
(b) Agricultural land which is classified as class 3 shall
be assessed at 19 18 percent of its market value. Real property
devoted to temporary and seasonal residential occupancy for
recreation purposes which is classified as class 3 shall be
assessed at 21 percent of its market value. Real property owned
by a nonprofit community service oriented organization which is
classified as class 3 shall be assessed at 21 percent of its
market value.
Sec. 6. Minnesota Statutes 1984, section 273.13,
subdivision 6, is amended to read:
Subd. 6. [CLASS 3B.] Agricultural land, except as provided
by class 1, 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 $64,000 of market value shall be
valued and assessed at 14 percent; the remaining market value
shall be valued and assessed at 19 18 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,
and 473H.10 shall be reduced by 54 percent of the tax. The
amount of the reduction shall not exceed $650 $700.
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.
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.
Agricultural land used for purposes of a homestead and
actively farmed by a person holding a vested remainder interest
in it must be classified class 3b. If agricultural land is
classified class 3b, any other dwellings on the land used for
purposes of a homestead by persons holding vested remainder
interests who are actively engaged in farming the property, and
up to one acre of the land surrounding each homestead and
reasonably necessary for the use of the dwelling as a home, must
also be assessed class 3b and is entitled to the homestead
credit.
Sec. 7. Minnesota Statutes 1984, 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 $64,000 of market value shall be valued and
assessed at 17 18 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 29 percent for
taxes levied in 1985 and payable in 1986, and at 28 percent for
taxes levied in 1986 and payable in 1987 and thereafter. The
maximum amounts of the market value of the homestead brackets
subject to the 17 18 percent and 19 percent rates rate 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 and 473H.10 shall be reduced by 54
percent of the tax imposed on the first $67,000 $68,000 of
market value. The amount of the reduction shall not
exceed $650 $700.
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 pursuant to clause (a)
only if the commissioner of human services certifies to the
assessor that the owner of the property satisfies the
requirements of this subdivision. The commissioner of human
services shall provide a copy of the certification to the
commissioner of revenue. 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 $32,000 of market value shall be valued and assessed at
five percent, the next $30,000 $32,000 of market value shall be
valued and assessed at 14 percent, and the remaining market
value shall be valued and assessed at 19 18 percent; and in the
case of all other real estate and manufactured homes, the
first $30,000 $32,000 of market value shall be valued and
assessed at five percent, the next $30,000 $32,000 of market
value shall be valued and assessed at 19 18 percent, and the
remaining market value shall be valued and assessed at 30 29
percent for taxes levied in 1985 and payable in 1986, and at 28
percent for taxes levied in 1986 and payable in 1987 and
thereafter. 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 18 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, shall be
reduced by 54 percent of the tax imposed on the first
$67,000 $68,000 of market value. The amount of the reduction
shall not exceed $650 $700.
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 the year when the treatment is initially
sought. After initial qualification for the homestead
treatment, additional applications for subsequent years are not
required.
Sec. 8. Minnesota Statutes 1984, section 273.13,
subdivision 8a, is amended to read:
Subd. 8a. [CLASS 3E.] Real estate, rural in character, and
used exclusively for the purpose of growing trees for timber,
lumber, wood and wood products shall constitute class 3e, and
shall be valued and assessed at 19 18 percent of the market
value thereof.
Sec. 9. Minnesota Statutes 1984, 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 28 percent of the first $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 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 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 $60,000 of market
value shall be valued and assessed at 31.5 28 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 1984, section 273.13,
subdivision 14a, is amended to read:
Subd. 14a. [BUILDINGS AND APPURTENANCES ON LAND NOT OWNED
BY OCCUPANT.] The property tax to be paid in respect of the
value of all buildings and appurtenances thereto owned and used
by the occupant for the purposes of a homestead, which are
located upon land subject to property taxes and the title to
which is vested in a person or entity other than the occupant,
for all purposes shall be reduced by 54 percent of the amount of
the tax in respect of the value not in excess of $67,000 $68,000
as otherwise determined by law, but not by more than $650 $700.
Sec. 11. Minnesota Statutes 1984, 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 ten 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) 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 1984, 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 34 percent of
market value. 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 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.
For purposes of this subdivision, class 3d also includes
hospitals licensed under sections 144.50 to 144.56, other than
hospitals exempt under section 272.02, and contiguous property
used for hospital purposes, without regard to whether the
property has been platted or subdivided.
For purposes of this subdivision, class 3dd shall also
include post-secondary student housing not to exceed one acre of
land which is owned by a nonprofit corporation organized under
chapter 317 and is used exclusively by a sorority or fraternity
organization for housing.
Sec. 13. Minnesota Statutes 1984, section 273.1311, is
amended to read:
273.1311 [FLEXIBLE HOMESTEAD BRACKETS.]
The maximum amount of the market value of the homestead
brackets shall be adjusted as provided in this section.
For taxes payable in 1985 1987 and subsequent years, the
commissioner shall adjust the brackets used in the preceding
assessment by the estimated percentage increase in the statewide
average assessors' estimated market value, as equalized by the
state board of equalization, of a residential home for the
current assessment over the previous assessment. The revised
bracket shall be rounded to the nearest $500 $1,000, except that
the brackets applicable to class 3cc property shall be rounded
to the nearest $500. The commissioner of revenue shall
determine and announce the revised bracket on December 15 of
each year preceding the assessment date.
Sec. 14. Minnesota Statutes 1984, section 273.133, is
amended by adding a subdivision to read:
Subd. 2a. [CONTINUING CARE FACILITIES.] When a building
containing several dwelling units is owned by an entity which is
regulated under the provisions of chapter 80D and operating as a
continuing care facility enters into residency agreements with
persons who occupy a unit in the building and the residency
agreement entitles the resident to occupancy in the building
after personal assets are exhausted and regardless of ability to
pay the monthly maintenance fee, homestead classification shall
be given to each unit so occupied and the entire building shall
be assessed in the manner provided in subdivision 1 for
cooperatives and charitable corporations.
Sec. 15. [270.068] [REVISION OF MINNESOTA ASSESSORS'
MANUAL.]
In accordance with the provisions of Minnesota Statutes,
section 270.06, clause (14), the commissioner of revenue shall
prepare a revised Minnesota assessors' manual by July 1, 1986,
and thereafter shall revise the manual in a timely manner.
Sec. 16. [LOCAL GOVERNMENT FINANCE STUDY COMMISSION.]
A local government finance 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 present local
government finance structure, concentrating on the state paid
homestead credit, agricultural credit, and local government aid
programs. The commission will study the aid distribution
patterns past and present, and relationships between the aid
programs, local government property tax levies, and local
government spending patterns. 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 system which encourage local government accountability
while at the same time attempting to simplify the property tax
system. The commission shall expire on February 1, 1986.
Expenses of the commission including per diem and expenses of
commission members will be provided by the appointing authority.
Sec. 17. [1985 ADJUSTED ASSESSED VALUES.]
The 1985 adjusted assessed value for each school district
computed pursuant to Minnesota Statutes, section 124.2131, shall
be adjusted by the department of revenue as provided in this
section. Sales occurring for the nine-month period from January
1, 1984, to September 30, 1984, shall not be adjusted for
financing terms of sales. Sales occurring for the 12-month
period from October 1, 1984, to September 30, 1985, shall be
adjusted as necessary to their cash equivalency value by taking
financing terms of the sale into account. The department shall
compute an adjusted assessed value for the school district based
upon the aggregate ratio resulting from the nine-month time
period using unadjusted sales. The department shall also
compute an adjusted assessed value based upon the aggregate
ratio resulting from the 12-month time period using sales which
have been adjusted to their cash equivalency. The school
district's 1985 adjusted assessed value shall be the arithmetic
average of the two resulting values as provided in this section.
The same methodology shall be used in determining the
aggregate ratios for distributing 1986 local government aids
pursuant to Minnesota Statutes, section 477A.011, subdivision 4.
Sec. 18. [EFFECTIVE DATE.]
Section 3 and section 4, paragraph (d), are effective
beginning with taxes assessed in 1987 and payable in 1988 and
thereafter. Sections 2, 4, paragraph (c), 5 to 12, and 14 are
effective beginning with taxes assessed in 1985 and payable in
1986 and thereafter. Sections 15 and 16 are effective the day
after final enactment. The change in the classification ratio
for employment property in section 9 does not modify the
required amount of local contribution for enterprise zones,
approved prior to enactment of this act, that provide local
contributions in lieu of the employment classification for
projects already approved.
ARTICLE 4
PROPERTY TAX RECODIFICATION
Section 1. Minnesota Statutes 1984, section 13.58, is
amended to read:
13.58 [HOMESTEAD APPLICATION DATA.]
The following data collected and maintained by political
subdivisions are classified as private data pursuant to section
13.02, subdivision 12: the social security account numbers and
detailed financial data submitted by individuals who are
applying for class 3cc 1b homestead classifications pursuant to
section 273.13.
Sec. 2. Minnesota Statutes 1984, section 16A.641,
subdivision 11, is amended to read:
Subd. 11. [CONSTITUTIONAL TAX LEVY.] Under the
Constitution, article XI, section 7, the state auditor must levy
each year on all taxable property within the state a tax
sufficient, with the amount then on hand in the state bond fund,
to pay all principal and interest on state bonds due and to
become due to and including July 1 in the second ensuing year.
If levied, this tax must be assessed and extended against real
property used for the purposes of a homestead, as well as other
taxable property, notwithstanding section 273.13, subdivisions 6
and 7. The tax is not subject to limitation of rate or amount.
However, the amount of money appropriated from other sources as
provided in subdivision 10, and actually received and on hand
prior to the levy in any year, reduces the amount of the tax
otherwise required to be levied. The proceeds of the tax must
be credited to the state bond fund.
Sec. 3. Minnesota Statutes 1984, section 16B.60,
subdivision 5, is amended to read:
Subd. 5. [AGRICULTURAL BUILDING.] "Agricultural building"
means a structure on agricultural land as defined in section
273.13, subdivision 6 23, designed, constructed, and used to
house farm implements, livestock, or agricultural produce or
products used by the owner, lessee, and sublessee of the
building and members of their immediate families, their
employees, and persons engaged in the pickup or delivery of
agricultural produce or products.
Sec. 4. Minnesota Statutes 1984, section 18.023,
subdivision 7, is amended to read:
Subd. 7. [FINANCING.] (a) A municipality may collect the
amount assessed against the property under subdivision 2 as a
special assessment and may issue obligations as provided in
section 429.101, subdivision 1, provided that a municipality at
its option make any assessment levied payable with interest in
installments not to exceed five years from the date of the
assessment.
(b) After a contract for the sanitation or approved
treatment of trees on private property has been let, or the work
commenced, the municipality may issue obligations to defray the
expense of any such work financed by special assessments imposed
upon private property. Section 429.091 shall apply to such
obligations with the following modifications:
(1) Such obligations shall be payable not more than five
years from the date of issuance; and
(2) No election shall be required.
Obligations issued under the provisions of this clause
shall not be considered bonded indebtedness for the purposes of
section 273.13, subdivisions 6 and 7. The certificates shall
not be included in the net debt of the issuing municipality.
Sec. 5. Minnesota Statutes 1984, section 47.58,
subdivision 2, is amended to read:
Subd. 2. [AUTHORIZATION.] Pursuant to rules which the
commissioner of commerce or commissioner of insurance may find
to be necessary and proper, if any, and subject to federal laws
and regulations, lenders may make investments in reverse
mortgage loans and purchases of obligations representing reverse
mortgage loans, provided the aggregate total of committed
principal of the investment in reverse mortgage loans by any
bank, savings bank, or savings and loan association, does not
exceed five percent of that lender's total deposits and savings
accounts. This limitation shall be determined at each June 30
and December 31 for the following six month period. Any decline
in the total of deposits and savings accounts subsequent to a
determination may be disregarded. Security for loans made under
this section shall be a first lien on residential property (a)
which the borrower occupies as principal residence and which
qualifies for a homestead credit classification pursuant to
section 273.13, and (b) to which the borrower alone has title.
Sec. 6. Minnesota Statutes 1984, section 47.58,
subdivision 3, is amended to read:
Subd. 3. [PAYMENT; REPAYMENT; AMOUNT.] The committed
principal amount of a reverse mortgage loan shall be paid to the
borrower over the period of months or years as specified in the
loan agreement. The borrower and lender may, by written
agreement, amend the loan agreement from time to time. Pursuant
to the terms of the contract the borrower shall make repayment
to the lender:
(a) Upon payment to the borrower of the final installment
unless, by written agreement between the borrower and lender
whereunder the borrower agrees to periodically pay the lender
interest accruing on the outstanding loan balance, repayment of
the outstanding loan balance is postponed until default in
payment of interest or until the occurrence of any of the events
specified in clauses (b) to (e);
(b) Upon sale of the property securing the loan;
(c) Upon the death of the last surviving borrower;
(d) Upon the borrower terminating use of the property as
principal residence so as to disqualify the property from the
homestead credit given in classification under section 273.13;
or
(e) Upon renegotiation of the terms of the reverse mortgage
loan agreement, unless the parties agree in writing to postpone
repayment.
Except as otherwise provided in this subdivision, the
outstanding loan balance as projected by the lender to the
anticipated time of payment to the borrower of the final
installment of committed principal shall not exceed 80 percent
of the appraised value of the property at inception of the
loan. If upon reappraisal of the property made at any time
during the term of the loan, the projected outstanding loan
balance does not exceed 70 percent of the reappraised value of
the property, the schedule of the lender's installment payments
may be extended and the amount of the committed principal amount
increased, provided the revised outstanding loan balance at
payment of the lender's final installment of committed principal
does not exceed 80 percent of the reappraised value of the
property.
Sec. 7. Minnesota Statutes 1984, section 84B.08,
subdivision 6, is amended to read:
Subd. 6. On or before December 1 in each year the state
auditor shall levy on all taxable property within the state
whatever tax may be necessary to produce an amount sufficient,
with all money then and theretofore credited to the bond
account, to pay the entire amount of principal and interest then
and theretofore due and principal and interest to become due on
or before July 1 in the second year thereafter on Voyageurs
National Park bonds. This tax shall be levied upon all real
property used for the purposes of a homestead, as well as other
taxable property, notwithstanding the provisions of section
273.13, subdivisions 6 and 7, and shall be subject to no
limitation of rate or amount until all such bonds and interest
thereon are fully paid. The proceeds of this tax are
appropriated and shall be credited to the state bond fund, and
the principal of and interest on the bonds are payable from such
proceeds, and the whole thereof, or so much as may be necessary,
is appropriated for such payments.
Sec. 8. Minnesota Statutes 1984, section 85A.05,
subdivision 5, is amended to read:
Subd. 5. [TAX LEVY.] On or before December 1 in each year
the state auditor shall levy on all taxable property within the
state whatever tax may be necessary to produce an amount
sufficient, with all money then and theretofore credited to the
Minnesota zoological garden bond account, to pay the entire
amount of principal and interest then and theretofore due and
principal and interest to become due on or before July 1 in the
second year thereafter on Minnesota zoological garden bonds.
This tax shall be levied upon all real property used for the
purposes of a homestead, as well as other taxable property,
notwithstanding the provisions of section 273.13, subdivisions 6
and 7, and shall be subject to no limitation of rate or amount
until all such bonds and interest thereon are fully paid. The
proceeds of this tax are appropriated and shall be credited to
the state bond fund, and the principal of and interest on the
bonds are payable from such proceeds, and the whole thereof, or
so much as may be necessary, is appropriated for such payments.
If at any time there is insufficient money from the proceeds of
such taxes to pay the principal and interest when due on
Minnesota zoological garden bonds, such principal and interest
shall be paid out of the general fund in the state treasury, and
the amount necessary therefor is hereby appropriated, with such
sums from tax levies and the general fund subject to future
reimbursement to the bond fund by the Minnesota zoological
garden bond account as indicated in section 85A.04, subdivision
2.
Sec. 9. Minnesota Statutes 1984, section 93.55,
subdivision 2, is amended to read:
Subd. 2. The commissioner shall notify the last owner of
record on file in either the county recorder's or registrar of
titles' office of a hearing on an order to show cause why the
mineral interest should not forfeit to the state absolutely.
The notice shall be served in the same manner as provided for
the service of summons in a civil action to determine adverse
claims under chapter 559 and shall contain the following: (1)
the legal description of the property upon or beneath which the
interest exists; (2) a recitation that the statement of severed
mineral interest either did not comply with the requirements
specified by section 93.52 for such a statement or was not filed
within the time specified in section 93.55, or both; and (3)
that the court will be requested to enter an order adjudging the
forfeiture of the mineral interest to be absolute in the absence
of a showing that there was substantial compliance with laws
requiring the registration and taxation of severed mineral
interests. For the purposes of this section, substantial
compliance with laws requiring the registration and taxation of
severed mineral interests means: (1) that the records in the
office of the county recorder or registrar of titles specified
the true ownership of the severed mineral interest during the
time period within which the statement of severed mineral
interest should have been registered with the county recorder or
the registrar of titles, or that probate, divorce, bankruptcy,
mortgage foreclosure, or other proceedings affecting the title
had been timely initiated and diligently pursued by the true
owner during the time period within which the severed mineral
interest statement should have been registered, and (2) that all
taxes relating to severed mineral interests had been timely
paid, including any taxes which would have been due and owing
under section 273.13 273.165, subdivision 2a 1, had the interest
been properly filed for record as required by section 93.52
within the time specified in section 93.55. For the purposes of
this section, "timely paid" means paid within the time period
during which tax forfeiture would not have been possible had a
real property tax been assessed against the property.
Sec. 10. Minnesota Statutes 1984, section 97.488,
subdivision 1a, is amended to read:
Subd. 1a. [APPLICATION.] The provisions of subdivision 1
do not apply to plants on land classified for property tax
purposes as class 3 or 3b 2a or 2c agricultural land pursuant to
section 273.13, or on ditches and roadways. The provisions of
subdivision 1 do not apply to noxious weeds designated pursuant
to sections 18.171 to 18.315 or to weeds otherwise designated as
troublesome by the department of agriculture. When control of
noxious weeds is necessary, it takes priority over the
protection of endangered plant species, as long as reasonable
effort is taken to preserve the endangered plant species first.
The taking or killing of an endangered plant species on
land adjacent to class 3 or 3b agricultural land as a result of
the application of pesticides or other agricultural chemical on
the class 3 or 3b land shall not be a violation of subdivision
1, as long as reasonable care is taken in the pesticide or other
chemical application to avoid impact on adjacent lands.
The accidental taking of an endangered plant, where the
existence of the plant is not known at the time of the taking,
shall not be a violation of subdivision 1.
For the purpose of this subdivision, class 3 or 3b
agricultural land does not include timber land, waste land, or
any land for which the owner receives a state paid wetlands or
native prairie tax credit.
Sec. 11. Minnesota Statutes 1984, section 110A.28,
subdivision 11, is amended to read:
Subd. 11. A district shall not, in the exercise of the
powers conferred by sections 110A.01 to 110A.36, provide service
to actual or potential residential, commercial, industrial or
publicly-owned land uses within one-half mile of the limits of a
city of up to 20,000 persons without approval by the city
council. Approval shall not be required prior to serving class
3b 2a lands as defined in section 273.13.
Sec. 12. Minnesota Statutes 1984, section 110A.28,
subdivision 12, is amended to read:
Subd. 12. A district shall not, in the exercise of the
powers conferred by sections 110A.01 to 110A.36, provide service
to actual or potential residential, commercial, industrial or
publicly-owned land uses within one mile of the limits of a city
of more than 20,000 persons without approval by the city
council. Approval shall not be required prior to serving class
3b 2a lands as defined in section 273.13.
Sec. 13. Minnesota Statutes 1984, section 115A.58,
subdivision 6, is amended to read:
Subd. 6. [SECURITY.] On or before December 1 in each year
the state auditor shall levy on all taxable property within the
state whatever tax may be necessary to produce an amount
sufficient, with all money currently credited to the debt
service account, to pay the entire amount of principal and
interest currently due and the principal and interest to become
due before July 1 in the second year thereafter on Minnesota
waste management bonds. This tax shall be levied upon all real
property used for the purposes of a homestead, as well as other
taxable property, notwithstanding the provisions of section
273.13, subdivisions 6 and 7, and shall be subject to no
limitation of rate or amount until all the bonds and interest
thereon are fully paid. The proceeds of this tax are
appropriated to the debt service account. The principal of and
interest on the bonds are payable from the proceeds of this tax.
Sec. 14. Minnesota Statutes 1984, section 116.17,
subdivision 6, is amended to read:
Subd. 6. [TAX LEVY.] On or before December 1 in each year
the state auditor shall levy on all taxable property within the
state whatever tax may be necessary to produce an amount
sufficient, with all money then and theretofore credited to the
bond account, to pay the entire amount of principal and interest
then and theretofore due and principal and interest to become
due on or before July 1 in the second year thereafter on
Minnesota water pollution control bonds. This tax shall be
levied upon all real property used for the purposes of a
homestead, as well as other taxable property, notwithstanding
the provisions of section 273.13, subdivisions 6 and 7, and
shall be subject to no limitation of rate or amount until all
such bonds and interest thereon are fully paid. The proceeds of
this tax are appropriated and shall be credited to the state
bond fund, and the principal of and interest on the bonds are
payable from such proceeds, and the whole thereof, or so much as
may be necessary, is appropriated for such payments. If at any
time there is insufficient money from the proceeds of such taxes
to pay the principal and interest when due on Minnesota water
pollution control bonds, such principal and interest shall be
paid out of the general fund in the state treasury, and the
amount necessary therefor is hereby appropriated.
Sec. 15. Minnesota Statutes 1984, section 116C.63,
subdivision 4, is amended to read:
Subd. 4. When private real property defined as class 3,
3b, 3c, 3cc, 3d, or 3f 1a, 1b, 2a, 2c, 4a, 5a, or 6a pursuant to
section 273.13 is proposed to be acquired for the construction
of a site or route by eminent domain proceedings, the fee owner,
or when applicable, the fee owner with the written consent of
the contract for deed vendee, or the contract for deed vendee
with the written consent of the fee owner, shall have the option
to require the utility to condemn a fee interest in any amount
of contiguous, commercially viable land which he wholly owns or
has contracted to own in undivided fee and elects in writing to
transfer to the utility within 60 days after his receipt of the
notice of the objects of the petition filed pursuant to section
117.055. Commercial viability shall be determined without
regard to the presence of the utility route or site. The owner
or, when applicable, the contract vendee shall have only one
such option and may not expand or otherwise modify his election
without the consent of the utility. The required acquisition of
land pursuant to this subdivision shall be considered an
acquisition for a public purpose and for use in the utility's
business, for purposes of chapter 117 and section 500.24,
respectively; provided that a utility shall divest itself
completely of all such lands used for farming or capable of
being used for farming not later than the time it can receive
the market value paid at the time of acquisition of lands less
any diminution in value by reason of the presence of the utility
route or site. Upon the owner's election made under this
subdivision, the easement interest over and adjacent to the
lands designated by the owner to be acquired in fee, sought in
the condemnation petition for a high voltage transmission line
right-of-way shall automatically be converted into a fee taking.
Sec. 16. Minnesota Statutes 1984, section 116J.64,
subdivision 6, is amended to read:
Subd. 6. The remaining 20 percent of the tax revenue
received by the county auditor under section 273.13 273.165,
subdivision 2a 1 shall be remitted by the county auditor to the
state treasurer and shall be deposited in a special account
called the "Indian business loan account", which shall be a
revolving fund created and established under the jurisdiction
and control of the agency, which may engage in a business loan
program for American Indians as that term is defined in
subdivision 2. The tribal councils may administer the fund,
provided that, before making any eligible loans, each tribal
council must submit to the agency, for its review and approval,
a plan for that council's loan program which specifically
describes, as to that program, its content, utilization of
funds, administration, operation, implementation, and other
matters required by the agency. All such programs must provide
for a reasonable balance in the distribution of funds
appropriated pursuant to this section for the purpose of making
business loans between Indians residing on and off the
reservations within the state. As a condition to the making of
such eligible loans, the tribal councils shall enter into a loan
agreement and other contractual arrangements with the agency for
the purpose of carrying out the provisions of this chapter, and
shall agree that all official books and records relating to the
business loan program shall be subject to audit by the
legislative auditor in the same manner prescribed for agencies
of state government.
Whenever any moneys are appropriated by the state treasurer
to the agency solely for the above-specified purpose or
purposes, the agency shall establish a separate bookkeeping
account or accounts in the Indian business loan fund to record
the receipt and disbursement of such moneys and of the income,
gain and loss from the investment and reinvestment thereof.
Sec. 17. Minnesota Statutes 1984, section 124.155,
subdivision 2, is amended to read:
Subd. 2. [SUBTRACTION FROM AIDS.] The amount specified in
Laws 1981, Third Special Session chapter 2, article 4, section
3, subdivision 2, as amended by Laws 1982, chapter 548, article
7, section 7, as further amended by Laws 1982, Third Special
Session chapter 1, article III, section 4 shall be subtracted
from the following state aids and credits in the order listed in
fiscal year 1983. The amount specified in subdivision 1 shall
be used to adjust the following state aids and credits in the
order listed:
(a) Foundation aid as authorized in section 124.212,
subdivision 1;
(b) Secondary vocational aid authorized in section 124.573;
(c) Special education aid authorized in section 124.32;
(d) Secondary vocational aid for handicapped children
authorized in section 124.574;
(e) Gifted and talented aid authorized in section 124.247;
(f) Aid for pupils of limited English proficiency
authorized in section 124.273;
(g) Aid for chemical use programs authorized in section
124.246;
(h) Transportation aid authorized in section 124.225;
(i) Community education programs aid authorized in section
124.271;
(j) Adult education aid authorized in section 124.26;
(k) Capital expenditure equalization aid authorized in
section 124.245;
(l) Homestead credit authorized in section 273.13,
subdivisions 6, 7, and 14a 22 and 23;
(m) Reduced assessment credit authorized in section 273.139;
(n) Wetlands credit authorized in section 273.115;
(o) (n) Native prairie credit authorized in section 273.116;
and
(p) (o) Attached machinery aid authorized in section
273.138, subdivision 3.
The commissioner of education shall schedule the timing of
the reductions from state aids and credits specified in Laws
1981, Third Special Session chapter 2, article 4, section 3,
subdivision 2, as amended by Laws 1982, chapter 548, article 7,
section 7, as further amended by article III, section 4 of this
act, and the adjustments to state aids and credits specified in
subdivision 1, as close to the end of the fiscal year as
possible and in such a manner that will minimize the impact of
Laws 1981, Third Special Session chapter 2, article 4, as
amended, on the cash flow needs of the school districts.
Sec. 18. Minnesota Statutes 1984, section 124.2131,
subdivision 3, is amended to read:
Subd. 3. [DECREASE IN IRON ORE ASSESSED VALUE.] (1) [
REDETERMINATION OF ASSESSED VALUE.] If in any year the assessed
value of any district is less than the assessed value of the
immediate preceding year, the equalization aid review committee
shall, upon notification by the county assessor prior to October
16 of that assessment year, redetermine for all purposes the
adjusted assessed value of the immediate preceding year taking
into account the decrease in assessed value. On or before
November 1 of the assessment year, the equalization aid review
committee shall file the redetermined adjusted assessed value
with the commissioner of education who shall thereupon certify
to the county auditors and school districts affected the
redetermined adjusted assessed value and the appropriate levy
limits of the school districts affected pursuant to section
275.125, subdivision 10. Notwithstanding section 275.07, the
districts affected may certify the taxes voted to the county
auditor on or before December 1.
(2) [IRON ORE VALUE.] If in any year the assessed value of
class 1 and class 1a 9a property, as defined in section 273.13,
subdivision 30, and 273.165, subdivision 2, in any district is
less than the assessed value of such property in the immediately
preceding year, the equalization aid review committee shall
redetermine for all purposes the adjusted assessed value of the
immediately preceding year taking into account only the decrease
in assessed value of class 1 and class 1a 9a property. If
subdivision 2, clause (a) is applicable to such a district, the
decrease in class 1 and class 1a 9a property shall be applied to
the adjusted assessed value as limited therein. In all other
respects, the provisions of clause (1) shall be applicable.
Sec. 19. Minnesota Statutes 1984, 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 23,
by an amount equal to 33 36 percent of the tax levy imposed on
up to 320 acres of land including the buildings and structures
thereon but excluding all dwellings and an acre of land for each
dwelling. 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 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 23, including buildings and
structures thereon but excluding all dwellings and an acre of
land for each dwelling, and on timber land classified pursuant
to section 273.13, subdivision 23, paragraph (b) by an amount
equal to ten 26 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 The tax on 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 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 $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. 20. Minnesota Statutes 1984, section 124.2138,
subdivision 4, is amended to read:
Subd. 4. [NONAGRICULTURAL DISTRICT DEFINED.] For the
purposes of this section and section 124A.037, nonagricultural
district means a district where the assessed valuation of
agricultural land identified in section 273.13, subdivisions 4,
6, and 6a subdivision 23, comprises less than 60 percent of the
assessed valuation of the district.
Sec. 21. Minnesota Statutes 1984, section 124.2139, is
amended to read:
124.2139 [REDUCTION OF HOMESTEAD CREDIT PAYMENTS TO SCHOOL
DISTRICTS.]
Beginning with homestead credit payments made to school
districts pursuant to section 273.13, subdivisions 6, 7, and
14a, in fiscal year 1985 for taxes payable in 1984, and each
year thereafter, The commissioner of revenue shall reduce these
payments to any school district homestead credit payments made
to school districts pursuant to section 273.13, subdivisions 22
and 23, by the product of:
(1) the district's fiscal year 1984 payroll for coordinated
plan members of the public employees retirement association,
times
(2) the difference between the employer contribution rate
in effect prior to July 1, 1984, and the total employer
contribution rate in effect after June 30, 1984.
Sec. 22. Minnesota Statutes 1984, section 124.46,
subdivision 3, is amended to read:
Subd. 3. The commissioner of finance shall maintain a
separate school loan bond account in the state bond fund,
showing all moneys transferred to that fund for the payment of
school loan bonds and all income received from the investment of
such moneys. Upon the issuance of each series of school loan
bonds the commissioner of finance shall deduct from the proceeds
thereof and credit to said bond account a sum sufficient, with
the balance then on hand in said account, to pay all interest to
become due on such bonds on and before July 1 in the second
ensuing year. On the first day of November in each year there
shall be transferred to the bond account all or so much of the
moneys then on hand in the loan repayment account in the maximum
effort school loan fund as will be sufficient, with the balance
then on hand in said bond account, to pay all principal and
interest then and theretofore due and to become due within the
next ensuing year and to and including July 1 in the second
ensuing year on school loan bonds issued and sold pursuant to
this section. In the event that moneys are not available for
such transfer in the full amount required, the state auditor
shall levy on all taxable property within the state a tax
sufficient to meet the deficiency. Such tax shall be levied
upon all real property used for the purposes of a homestead, as
well as other taxable property, notwithstanding the provisions
of section 273.13, subdivisions 6 and 7, and shall be and remain
subject to no limitation of rate or amount until all school loan
bonds and all interest thereon are fully paid. The proceeds of
this tax are hereby irrevocably appropriated and shall be
credited to the state bond fund, but the school loan bond
account is appropriated as the primary source of payment of such
bonds and interest, and only so much of said tax as may be
necessary is appropriated for this purpose. If any principal or
interest on school loan bonds should become due at any time when
there is not on hand a sufficient amount from any of the sources
herein appropriated for the payment thereof, it shall
nevertheless be paid out of the general fund in the state
treasury, and the amount necessary therefor is hereby
appropriated; but any such payments shall be reimbursed from the
proceeds of taxes levied as required herein, and any such
payments made from taxes shall be reimbursed from the loan
repayment account in the maximum effort school loan fund, when
the balance therein is sufficient.
Sec. 23. Minnesota Statutes 1984, section 124A.02,
subdivision 11, is amended to read:
Subd. 11. [MINIMUM AID.] A qualifying district's minimum
aid for each school year shall equal its minimum guarantee for
that school year, minus the sum of:
(1) The amount of the district's state school agricultural
tax credit aid for that school year;
(2) The amount by which property taxes of the district for
use in that school year are reduced by the homestead credit
provisions in section 273.13, subdivisions 6, 7, and 14a 22 and
23;
(3) The amount by which property taxes of the district for
use in that school year are reduced by the taconite homestead
credit provisions in section 273.135;
(4) The amount by which property taxes of the district for
use in that school year are reduced by the attached machinery
provisions in section 273.138, subdivision 6;
(5) The amount by which property taxes of the district for
use in that school year are reduced by the state paid wetlands
credit provisions in section 273.115;
(6) The amount by which property taxes of the district for
use in that school year are reduced by the state paid native
prairie credit provisions in section 273.116;
(7) The amount by which property taxes of the district for
use in that school year are reduced by the state reimbursed
disaster or emergency reassessment provisions in section
273.123; and
(8) The amount by which property taxes of the district for
use in that school year are reduced by the metropolitan
agricultural preserve provisions in section 473H.10.
Sec. 24. Minnesota Statutes 1984, section 124A.02,
subdivision 12, is amended to read:
Subd. 12. [MINIMUM AID QUALIFYING DISTRICT.] A district
where the assessed valuation of agricultural land identified in
section 273.13, subdivisions 4, 6 and 6a subdivision 23,
comprises 60 percent or more of the assessed valuation of the
district shall qualify for minimum aid.
Sec. 25. Minnesota Statutes 1984, section 136.40,
subdivision 7, is amended to read:
Subd. 7. [TAX LEVY.] On or before December 1 in each year
the state auditor shall levy on all taxable property within the
state whatever tax may be necessary to produce an amount
sufficient, with all money then and theretofore credited to the
Minnesota state university bond account, to pay the entire
amount of principal and interest then and theretofore due and
principal and interest to become due on or before July 1 in the
second year thereafter on Minnesota state university bonds.
This tax shall be levied upon all real property used for the
purposes of a homestead, as well as other taxable property,
notwithstanding the provisions of section 273.13, subdivisions 6
and 7, and shall be subject to no limitation of rate or amount
until all such bonds and interest thereon are fully paid. The
proceeds of this tax are appropriated and shall be credited to
the state bond fund, and the principal of and interest on the
bonds are payable from such proceeds, and the whole thereof, or
so much as may be necessary, is appropriated for such payments.
If at any time there is insufficient money from the proceeds of
such taxes to pay the principal and interest when due on
Minnesota state university bonds, such principal and interest
shall be paid out of the general fund in the state treasury, and
the amount necessary therefor is hereby appropriated.
Sec. 26. Minnesota Statutes 1984, section 136C.43,
subdivision 6, is amended to read:
Subd. 6. [TAX LEVY.] On or before December 1 in each year,
if the full amount appropriated to the bond account in
subdivision 5 has not been credited thereto, the tax required by
the Constitution shall be levied upon all taxable property
within the state. This tax shall be levied upon all real
property used for the purposes of a homestead, as well as other
taxable property, notwithstanding the provisions of section
273.13, subdivisions 6 and 7, and shall be subject to no
limitation of rate or amount until all vocational technical
building bonds and interest thereon are fully paid. The
proceeds of this tax are appropriated and shall be credited to
the state bond fund, and the principal of and interest on the
bonds are payable from such proceeds, and the whole thereof, or
so much as may be necessary, is appropriated for such payments.
If at any time there is not sufficient money from the proceeds
of such taxes to pay the principal and interest when due on
vocational technical building bonds, such principal and interest
shall be paid out of the general fund in the state treasury, and
the amount necessary therefor is hereby appropriated.
Sec. 27. Minnesota Statutes 1984, section 167.52, is
amended to read:
167.52 [TAX LEVY.]
The state auditor shall levy each year on all taxable
property within the state whatever tax may be necessary to
produce an amount sufficient, with all money then and
theretofore transferred under section 167.51, and all income
from the investment thereof, to pay the entire amount of
principal and interest which is then due or is to become due
within the then ensuing year and to and including July 1 of the
second ensuing year, on Minnesota trunk highway bonds heretofore
issued and all such bonds hereafter issued pursuant to section
167.50. Such tax shall be levied upon all real property used
for the purposes of a homestead, as well as other taxable
property, notwithstanding the provisions of section 273.13,
subdivisions 6 and 7. Such tax shall be subject to no
limitation of rate or amount until all such bonds and all
interest thereon are fully paid. The proceeds of such taxes are
appropriated and credited to the state bond fund, and the
principal and interest of said bonds are payable from the
proceeds of such taxes, and the whole thereof, or so much
thereof as may be necessary, is appropriated for such payments.
If at any time there is insufficient money from the proceeds of
the taxes provided for herein to pay the principal and interest
when due on such bonds, then such principal and interest shall
be paid out of the general fund in the state treasury, and the
amount necessary therefor is hereby appropriated. The general
fund shall be reimbursed from the proceeds of said taxes when
received.
Sec. 28. Minnesota Statutes 1984, section 168.012,
subdivision 9, is amended to read:
Subd. 9. Manufactured homes shall not be taxed as motor
vehicles using the public streets and highways and shall be
exempt from the motor vehicle tax provisions of this chapter.
Except as provided in section 273.13 274.19, manufactured homes
shall be taxed as personal property. The provisions of
Minnesota Statutes 1957, Section 272.02 or any other act
providing for tax exemption shall be inapplicable to
manufactured homes, except such manufactured homes as are held
by a licensed dealer and exempted as inventory. House trailers
not used on the highway during any calendar year shall be taxed
as manufactured homes if occupied as human dwelling places.
Sec. 29. Minnesota Statutes 1984, section 174.51,
subdivision 6, is amended to read:
Subd. 6. On or before December 1 in each year, if the full
amount appropriated to the bond account in subdivision 5 has not
been credited thereto, the tax required by article XI of the
constitution shall be levied upon all taxable property within
the state. This tax shall be levied upon all real property used
for the purposes of a homestead, as well as other taxable
property, notwithstanding the provisions of section 273.13,
subdivisions 6 and 7, and shall be subject to no limitation of
rate or amount until all Minnesota state transportation bonds
and interest thereon are fully paid. The proceeds of this tax
are appropriated and shall be credited to the state bond fund,
and the principal of and interest on the bonds are payable from
such proceeds, and the whole thereof, or so much as may be
necessary, is appropriated for such payments. If at any time
there is not sufficient money from the proceeds of such taxes to
pay the principal and interest when due on Minnesota state
transportation bonds, such principal and interest shall be paid
out of the general fund in the state treasury, and the amount
necessary therefor is hereby appropriated.
Sec. 30. Minnesota Statutes 1984, section 272.02,
subdivision 1, as amended by Laws 1985, chapter 300, section 4,
is amended to read:
Subdivision 1. 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 as
class 7(a), (b), (c), or (d);
(7) All public property exclusively used for any public
purpose;
(8) Except for the taxable personal property enumerated
below, all personal property and the property described in
section 272.03, subdivision 1, clause (c) shall be exempt.
The following personal property shall be taxable:
(a) personal property which is part of an electric
generating, transmission, or distribution system or a pipeline
system transporting or distributing water, gas, crude oil, 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;
(b) railroad docks and wharves which are part of the
operating property of a railroad company as defined in section
270.80;
(c) personal property defined in section 272.03,
subdivision 2, clause (3);
(d) leasehold or other personal property interests which
are taxed pursuant to section 272.01, subdivision 2; 273.13,
subdivision 7b or 7d 273.124, subdivision 7; or 273.19,
subdivision 1; or any other law providing the property is
taxable as if the lessee or user were the fee owner;
(e) property classified as class 2a property manufactured
homes and sectional structures; and
(f) flight property as defined in section 270.071.
(9) 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.
(10) 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, provided it is
preserved in its natural condition and drainage of 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.
(11) 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.
(12) 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.
(13) 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.
(14) 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.
(15) If approved by the governing body of the municipality
in which the property is located, and if construction is
commenced after June 30, 1983:
(a) a "direct satellite broadcasting 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;
(b) a "fixed satellite regional or national program service
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; and
(c) a facility 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.
An exemption provided by paragraph (15) shall apply 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.
The exemptions granted by this subdivision shall be subject
to the limits contained in the other subdivisions of this
section, section 272.025, or section 273.13, subdivisions 17,
17b, 17c, or 17d.
(16) Real and personal property owned and operated by a
private, nonprofit corporation exempt from federal income
taxation pursuant to United States Code, title 26, section
501(c)(3), primarily used in the generation and distribution of
hot water for heating buildings and structures.
Sec. 31. Minnesota Statutes 1984, section 272.02, is
amended by adding a subdivision to read:
Subd. 1a. The exemptions granted by subdivision 1 are
subject to the limits contained in the other subdivisions of
this section, section 272.025, or 273.13, subdivision 28,
paragraphs (a), (b), (c) and (d).
Sec. 32. Minnesota Statutes 1984, section 272.039, is
amended to read:
272.039 [LEGISLATIVE FINDINGS AND CONCLUSIONS RELATED TO
THE TAXATION OF MINERALS OWNED SEPARATELY FROM THE SURFACE.]
The legislature finds, for the reasons stated below, that a
class of real property has been created which, although not
exempt from taxation, is not assessed for tax purposes and does
not, therefore, contribute anything toward the cost of
supporting the governments which protect and preserve the
continued existence of the property. These reasons are as
follows: (1) In the case of Washburn v. Gregory, 1914, 125
Minn. 491, 147 N.W. 706, the Minnesota Supreme Court determined
that where mineral interests are owned separately from the
surface interests in real estate, the mineral interest is a
separate interest in land, separately taxable, and does not
forfeit if the overlying surface interest forfeits for
nonpayment of taxes due on the surface interest; (2) Since this
1914 decision, mineral interests owned separately from the
surface have been valued and assessed for tax purposes, as a
practical matter, only if the value of the minerals has been
determined through drilling and drill core analysis; and (3) The
absence of any taxation of mineral interests owned separately
from the surface, except where drilling analysis is available,
has encouraged the separation of ownership of surface and
mineral estates and resulted in the creation of hundreds of
thousands of acres of untaxed mineral estate lands which thus
are immune from tax forfeiture. The legislature also finds that
the province of Ontario in Canada, which has land ownership
patterns and mineral characteristics similar to that of
Minnesota, has imposed a tax of $.50 an acre on minerals owned
separately from the surface since 1968, and $.10 an acre before
that. The legislature further finds that the identification of
separately owned mineral interests by taxing authorities
requires title searches which are extremely burdensome and,
where no public tract index is available, prohibitively
expensive. This result is caused in part by the decision in
Wichelman v. Messner, 1957, 250 Minn. 88, 83 N.W. (2d) 800,
where the so called "40 year law" was held inapplicable to
mineral interests owned separately from surface interests. On
the basis of the above findings, and for the purpose of
requiring mineral interests owned separately from surface
interests to contribute to the cost of government at a time when
other interests in real property are heavily burdened with real
property taxes, the legislature concludes that the taxation of
severed mineral interests as provided in section 273.13 273.165,
subdivision 2a 1 is necessary and in the public interest, and
provides fair taxation of a class of real property which has
escaped taxation for many years. The legislature further
concludes that such a tax is not prohibited by Minnesota
Constitution, Article 10, Section 2. The legislature concludes
finally that the amendments and repeals made by Laws 1973,
Chapter 650 to sections 93.52 to 93.58, are necessary to provide
adequate identification of mineral interests owned separately
from the surface and to prevent the continued escape from
taxation of obscure and fractionalized severed mineral interests.
Sec. 33. Minnesota Statutes 1984, section 272.04,
subdivision 1, is amended to read:
Subdivision 1. When any mineral, gas, coal, oil, or other
similar interests in real estate are owned separately and apart
from and independently of the rights and interests owned in the
surface of such real estate, such mineral, gas, coal, oil, or
other similar interests may be assessed and taxed separately
from such surface rights and interests in such real estate,
including but not limited to the taxation provided in section
273.13 273.165, subdivision 2a 1, and may be sold for taxes in
the same manner and with the same effect as other interests in
real estate are sold for taxes.
Sec. 34. Minnesota Statutes 1984, section 272.115,
subdivision 4, is amended to read:
Subd. 4. Beginning with taxes payable in 1979, No real
estate sold on or after January 1, 1978 for which a certificate
of value is required pursuant to subdivision 1 shall receive the
homestead credit provided under section 273.13, subdivisions 6
and 7 22 and 23; the agricultural mill credit provided in
section 124.2137; or the taconite homestead credit provided in
sections 273.134 to 273.136, unless a certificate of value has
been filed with the county auditor in accordance with this
section.
This subdivision shall apply to any real estate taxes that
are payable the year or years following the sale of the property.
Sec. 35. Minnesota Statutes 1984, section 273.11,
subdivision 8, is amended to read:
Subd. 8. [LIMITED EQUITY COOPERATIVE APARTMENTS.] For the
purposes of this subdivision, the terms defined in this
subdivision have the meanings given them.
A "limited equity cooperative" is a corporation organized
under Minnesota Statutes, chapter 308, which has as its primary
purpose the provision of housing and related services to its
members, who must be persons or families of low and moderate
income as defined in section 462A.03, subdivision 10, at the
time they purchase their membership, and which meets the
following requirements:
(a) The articles of incorporation set the sale price of
occupancy entitling cooperative shares or memberships at no more
than a transfer value determined as provided in the articles.
That value may not exceed the sum of the following:
(1) the consideration paid for the membership or shares by
the first occupant of the unit, as shown in the records of the
corporation;
(2) the fair market value, as shown in the records of the
corporation, of any improvements to the real property that were
installed at the sole expense of the member with the prior
approval of the board of directors;
(3) accumulated interest, or an inflation allowance not to
exceed the greater of a ten percent annual noncompounded
increase on the consideration paid for the membership or share
by the first occupant of the unit, or the amount that would have
been paid on that consideration if interest had been paid on it
at the rate of the percentage increase in the revised consumer
price index for all urban consumers for the Minneapolis-St. Paul
metropolitan area prepared by the United States Department of
Labor, provided that the amount determined pursuant to this
clause may not exceed $500 for each year or fraction of a year
the membership or share was owned; plus
(4) real property capital contributions shown in the
records of the corporation to have been paid by the transferor
member and previous holders of the same membership, or of
separate memberships that had entitled occupancy to the unit of
the member involved. These contributions include contributions
to a corporate reserve account the use of which is restricted to
real property improvements or acquisitions, contributions to the
corporation which are used for real property improvements or
acquisitions, and the amount of principal amortized by the
corporation on its indebtedness due to the financing of real
property acquisition or improvement or the averaging of
principal paid by the corporation over the term of its real
property-related indebtedness.
(b) The articles of incorporation require that the board of
directors limit the purchase price of stock or membership
interests for new member-occupants or resident shareholders to
an amount which does not exceed the transfer value for the
membership or stock as defined in clause (a).
(c) The articles of incorporation require that the total
distribution out of capital to a member shall not exceed that
transfer value.
(d) The articles of incorporation require that upon
liquidation of the corporation any assets remaining after
retirement of corporate debts and distribution to members will
be conveyed to a charitable organization described in section
501(c)(3) of the Internal Revenue Code of 1954, as amended
through December 31, 1982 1984, or a public agency.
A "limited equity cooperative apartment" is a dwelling unit
owned or leased by a limited equity cooperative. If the
dwelling unit is leased by the cooperative the lease agreement
must meet the conditions for a cooperative lease stated in
Minnesota Statutes, section 273.133 273.124, subdivision 3 6.
"Occupancy entitling cooperative share or membership" is
the ownership interest in a cooperative organization which
entitles the holder to an exclusive right to occupy a dwelling
unit owned or leased by the cooperative.
For purposes of taxation, the assessor shall value a unit
owned by a limited equity cooperative at the lesser of its
market value or the value determined by capitalizing the net
operating income of a comparable apartment operated on a rental
basis at the capitalization rate used in valuing comparable
buildings that are not limited equity cooperatives. If a
cooperative fails to operate in accordance with the provisions
of clauses (a) to (d), the property shall be subject to
additional property taxes in the amount of the difference
between the taxes determined in accordance with this subdivision
for the last ten years that the property had been assessed
pursuant to this subdivision and the amount that would have been
paid if the provisions of this subdivision had not applied to
it. The additional taxes, plus interest at the rate specified
in section 549.09, shall be extended against the property on the
tax list for the current year.
Sec. 36. Minnesota Statutes 1984, section 273.1104,
subdivision 1, is amended to read:
Subdivision 1. The term value as applied to iron ore in
section 273.13 273.165, subdivision 2 and in section 273.15
273.13, subdivision 30, paragraph (b) shall be deemed to be
three times the present value of future income notwithstanding
the provisions of section 273.11. The present value of future
income shall be determined by the commissioner of revenue in
accordance with professionally recognized mineral valuation
practice and procedure. Nothing contained herein shall be
construed as requiring any change in the method of determining
present value of iron ore utilized by the commissioner prior to
the enactment hereof or as limiting any remedy presently
available to the taxpayer in connection with the commissioner's
determination of present value, or precluding the commissioner
from making subsequent changes in the present worth formula.
Sec. 37. Minnesota Statutes 1984, section 273.1105,
subdivision 2, is amended to read:
Subd. 2. To qualify for valuation pursuant to subdivision
1, the owner of a building shall apply to the assessor prior to
commencing a rehabilitation project. The assessor shall approve
treatment pursuant to subdivision 1 for a building if: (a) the
building is more than 25 years old; (b) the anticipated
rehabilitation costs, which are those expenses incurred in the
process of renovation, including labor, materials, and
management costs, exceed 60 percent of the estimated market
value of the building at the time when the application is made;
(c) the rehabilitation is completed within one year and prior to
the January 2 assessment date; (d) the building contains more
than three rental units; (e) the building is not used as a hotel
or motel in which the rental units are used by tenants for
rental periods of less than 30 days; (f) the property is not
classified pursuant to Minnesota Statutes, section 273.13,
subdivisions 17, 17a or 17b subdivision 28, paragraph (a) or (c);
(g) not more than 25 percent of the residential units in the
building are subsidized through section 8 of the U.S. Housing
Act of 1937, 42 USC 1437(f); and (h) limits the rehabilitation
to the original structure.
Sec. 38. Minnesota Statutes 1984, section 273.115,
subdivision 7, is amended to read:
Subd. 7. The total credits allowed by subdivision 1 shall
be deducted from the gross property tax before determination of
the homestead credit provided by section 273.13, subdivisions 6
and 7 22 and 23 and the taconite homestead credit provided by
section 273.135.
Sec. 39. Minnesota Statutes 1984, section 273.116,
subdivision 7, is amended to read:
Subd. 7. The total credits allowed by subdivision 1 shall
be deducted from the gross property tax before determination of
the homestead credit provided by section 273.13, subdivisions 6
and 7 22 and 23 and the taconite homestead credit provided by
section 273.135.
Sec. 40. Minnesota Statutes 1984, section 273.118, is
amended to read:
273.118 [TAX PAID IN RECOGNITION OF CONGRESSIONAL MEDAL OF
HONOR.]
An owner of homestead property classified under section
273.13, subdivision 6, 6a, 7, 7d, or 14a, who submits to the
commissioner of revenue his property tax statement and
reasonable proof that the owner of the property:
(a) is a veteran as defined in section 197.447;
(b) was a resident of this state for at least six months
before entering military service, or has been a resident of this
state for five consecutive years before submitting the statement
and proof; and
(c) has been awarded the congressional medal of honor;
shall be paid by the commissioner of revenue, within 30
days after the commissioner receives the statement and proof,
the amount of the owner's property tax liability as shown on the
statement, up to $2,000. The surviving spouse of a property
owner who has received a payment under this section may receive
payment of property taxes under this section as long as the
spouse continues to own and occupy the property for which the
taxes were paid under this section and the property continues to
have an eligible classification be a homestead. Property taxes
paid under this section reduce property taxes payable for
purposes of chapter 290A, the Property Tax Refund Act.
Sec. 41. Minnesota Statutes 1984, section 273.121, is
amended to read:
273.121 [VALUATION OF REAL PROPERTY, NOTICE.]
Any county assessor or city assessor having the powers of a
county assessor, valuing or classifying taxable real property
shall in each year notify those persons whose property is to be
assessed or reclassified that year if the person's address is
known to the assessor, otherwise the occupant of the property.
In the case of property owned by a married couple in joint
tenancy or tenancy in common, the assessor shall not deny the 3b
or 3c property classification homestead treatment in whole or in
part if only one of the spouses is occupying the property and
the other spouse is absent due to divorce or separation, or is a
resident of a nursing home or a boarding care facility. The
notice shall be in writing and shall be sent by ordinary mail at
least ten days before the meeting of the local board of review
or equalization. It shall contain the amount of the valuation
in terms of market value, the new classification, the assessor's
office address, and the dates, places, and times set for the
meetings of the local board of review or equalization and the
county board of equalization. If the assessment roll is not
complete, the notice shall be sent by ordinary mail at least ten
days prior to the date on which the board of review has
adjourned. The assessor shall attach to the assessment roll a
statement that the notices required by this section have been
mailed. Any such assessor who is not provided sufficient funds
from his governing body to provide such notices, may make
application to the commissioner of revenue to finance such
notices. The commissioner of revenue shall conduct an
investigation and if he is satisfied that the assessor does not
have the necessary funds, issue his certification to the
commissioner of finance of the amount necessary to provide such
notices. The commissioner of finance shall issue a warrant for
such amount and shall deduct such amount from any state payment
to such county or municipality. The necessary funds to make
such payments are hereby appropriated. Failure to receive the
notice shall in no way affect the validity of the assessment,
the resulting tax, the procedures of any board of review or
equalization, or the enforcement of delinquent taxes by
statutory means.
Sec. 42. Minnesota Statutes 1984, section 273.123,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] For purposes of this section
(a) "disaster or emergency" means
(1) a major disaster as determined by the president of the
United States;
(2) a natural disaster as determined by the secretary of
agriculture;
(3) a disaster as determined by the administrator of the
small business administration; or
(4) a tornado, storm, flood, earthquake, landslide,
explosion, fire or similar catastrophe, as a result of which a
local emergency is declared pursuant to section 12.29.
(b) "disaster or emergency area" means an area
(1) in which the president of the United States, the
secretary of agriculture, or the administrator of the small
business administration has determined that a disaster exists
pursuant to federal law or in which a local emergency has been
declared pursuant to section 12.29; and
(2) for which an application by the local unit of
government requesting property tax relief under this section has
been received by the governor and approved by the executive
council.
(c) "homestead property" means homestead dwelling located
on property classified pursuant to section 273.13, subdivision
6, 6a, 7, 7b, 7d, or 14a, including manufactured homes and
sectional homes used as homesteads and taxed pursuant to section
273.13, subdivision 3, clause (b), (c), or (d) that is
classified as class 1a, 1b, or 2a property or a manufactured
home or sectional home used as a homestead and taxed pursuant to
section 274.19, subdivision 8, paragraph (b), (c), or (d).
Sec. 43. Minnesota Statutes 1984, section 273.123,
subdivision 4, is amended to read:
Subd. 4. [STATE REIMBURSEMENT.] The county auditor shall
calculate the tax on the property described in subdivision 2
based on the assessment made on January 1 2 of the year in which
the disaster or emergency occurred. The difference between the
tax determined on the January 1 2 assessed value and the tax
actually payable based on the reassessed value determined under
subdivision 2 shall be reimbursed to each taxing jurisdiction in
which the damaged property is located. The amount shall be
certified by the county auditor and reported to the commissioner
of revenue. The commissioner shall make the payments to the
taxing jurisdictions containing the property at the time
distributions are made pursuant to section 273.13, subdivision
15a, in the same proportion that the ad valorem tax is
distributed.
Sec. 44. [273.124] [HOMESTEAD DETERMINATION; SPECIAL
RULES.]
Subdivision 1. [GENERAL RULE.] Residential real estate
that is occupied and used for the purposes of a homestead by its
owner, who must be a Minnesota resident, is a homestead. Dates
for establishment of a homestead and homestead treatment
provided to particular types of property are as provided in this
section.
The assessor shall require proof, by affidavit or
otherwise, of the facts upon which classification as a homestead
may be determined.
For purposes of this section, homestead property 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 the year when
the treatment is initially sought. After initial qualification
for the homestead treatment, additional applications for
subsequent years are not required.
Subd. 2. [TOWNHOUSES; COMMON AREAS; CONDOMINIUMS;
COOPERATIVES.] (a) The total value of townhouse property,
including the value added as provided in this paragraph, must
have the benefit of homestead treatment or other special
classification if the townhouse otherwise qualifies. The value
of townhouse property must be increased by the value added by
the right to use any common areas in connection with the
townhouse development. The common areas of the development must
not be separately taxed.
(b) Condominium property qualifying as a homestead under
section 515A.1-105 and property owned by a cooperative
association that qualifies as a homestead must have the benefit
of homestead treatment or other special classification if the
condominium or cooperative association property otherwise
qualifies.
(c) If the condominium, townhouse, or cooperative
association property is owned by the occupant and used for the
purposes of a homestead but is located upon land which is
leased, that leased land must be valued and assessed as if it
were homestead property within class 1 if all of the following
criteria are met:
(1) the occupant is using the property as his permanent
residence;
(2) the occupant or the cooperative association is paying
the ad valorem property taxes and any special assessments levied
against the land and structure;
(3) the occupant or the cooperative association has signed
a land lease; and
(4) the term of the land lease is at least 50 years,
notwithstanding the fact that the amount of the rental payment
may be renegotiated at shorter intervals.
Subd. 3. [COOPERATIVES AND CHARITABLE CORPORATIONS.] When
one or more dwellings, or one or more buildings which each
contain several dwelling units, are owned by a corporation or
association organized under sections 308.05 to 308.18, and each
person who owns a share or shares in the corporation or
association is entitled to occupy a dwelling, or dwelling unit
in the building, the corporation or association may claim
homestead treatment for each dwelling, or for each unit in case
of a building containing several dwelling units, for the
dwelling or for the part of the value of the building occupied
by a shareholder. Each dwelling or unit must be designated by
legal description or number, and the assessed value of each
dwelling that qualifies for assessment under this subdivision
must include not more than one-half acre of land, if platted,
nor more than 80 acres if unplatted. The assessed value of the
building or buildings containing several dwelling units is the
sum of the assessed values of each of the respective units
comprising the building. To qualify for the treatment provided
by this subdivision, the corporation or association must be
wholly owned by persons having a right to occupy a dwelling or
dwelling unit owned by the corporation or association. A
charitable corporation organized under the laws of Minnesota and
not otherwise exempt thereunder with no outstanding stock
qualifies for homestead treatment with respect to member
residents of the dwelling units who have purchased and hold
residential participation warrants entitling them to occupy the
units.
Subd. 4. [NONPROFIT CORPORATIONS.] When a building
containing several dwelling units is owned by an entity
organized under chapter 317 and operating as a nonprofit
corporation which enters into membership agreements with persons
under which they are entitled to life occupancy in a unit in the
building, homestead classification must be given to each unit so
occupied and the entire building must be assessed in the manner
provided in subdivision 3 for cooperatives and charitable
corporations.
Subd. 5. [CONTINUING CARE FACILITIES.] When a building
containing several dwelling units is owned by an entity which is
regulated under the provisions of chapter 80D and operating as a
continuing care facility enters into residency agreements with
persons who occupy a unit in the building and the residency
agreement entitles the resident to occupancy in the building
after personal assets are exhausted and regardless of ability to
pay the monthly maintenance fee, homestead classification shall
be given to each unit so occupied and the entire building shall
be assessed in the manner provided in subdivision 1 for
cooperatives and charitable corporations.
Subd. 6. [LEASEHOLD COOPERATIVES.] When one or more
dwellings or one or more buildings which each contain several
dwelling units is owned by a nonprofit corporation subject to
the provisions of chapter 317 or a limited partnership which
corporation or partnership operates the property in conjunction
with a cooperative association, homestead treatment may be
claimed for each dwelling unit occupied by a member of the
cooperative. To qualify for the treatment provided by this
subdivision, the following conditions must be met: (a) the
cooperative association must be organized under sections 308.05
to 308.18; (b) the cooperative association must have a lease for
occupancy of the property for a term of at least 20 years; (c)
the cooperative association must have a right under a written
agreement with the owner to purchase the property if the owner
proposes to sell it; if the cooperative association does not
purchase the property when it is offered for sale, the owner may
not subsequently sell the property to another purchaser at a
price lower than the price at which it was offered for sale to
the cooperative association unless the cooperative association
approves the sale; and (d) if a limited partnership owns the
property, it must include as the managing general partner either
the cooperative association or a nonprofit organization
operating under the provisions of chapter 317. Homestead
treatment must be afforded to units occupied by members of the
cooperative association and the units must be assessed as
provided in subdivision 1, provided that any unit not so
occupied shall be classified and assessed pursuant to the
appropriate class. No more than three acres of land may, for
assessment purposes, be included with each dwelling unit that
qualifies for homestead treatment under this subdivision.
Subd. 7. [LEASED BUILDINGS OR LAND.] For purposes of class
1 determinations, homesteads include:
(a) buildings and appurtenances owned and used by the
occupant as a permanent residence which are located upon land
the title to which is vested in a person or entity other than
the occupant;
(b) all buildings and appurtenances located upon land owned
by the occupant and used for the purposes of a homestead
together with the land upon which they are located, if all of
the following criterial are met:
(1) the occupant is using the property as his permanent
residence;
(2) the occupant is paying the property taxes and any
special assessments levied against the property;
(3) the occupant has signed a lease which has an option to
purchase the buildings and appurtenances; and
(4) the term of the lease is at least five years.
Any taxpayer meeting all the requirements of this paragraph
must notify the county assessor, or the assessor who has the
powers of the county assessor pursuant to section 273.063, in
writing, as soon as possible after signing the lease agreement
and occupying the buildings as his homestead.
Subd. 8. [HOMESTEAD OWNED BY FAMILY FARM CORPORATION OR
PARTNERSHIP.] (a) Each family farm corporation and each
partnership operating a family farm is entitled to class 1
assessment for one homestead occupied by a shareholder or
partner thereof who is residing on the land and actively engaged
in farming of the land owned by the corporation or partnership.
Homestead treatment applies even if legal title to the property
is in the name of the corporation or partnership and not in the
name of the person residing on it. "Family farm corporation"
and "family farm" have the meanings given in section 500.24.
(b) In addition to property specified in paragraph (a), any
other residences owned by corporations or partnerships described
in paragraph (a) which are located on agricultural land and
occupied as homesteads by shareholders or partners who are
actively engaged in farming on behalf of the corporation or
partnership must also be assessed as class 1 property, but the
property eligible is limited to the residence itself and as much
of the land surrounding the homestead, not exceeding one acre,
as is reasonably necessary for the use of the dwelling as a
home, and does not include any other structures that may be
located on it.
Subd. 9. [HOMESTEAD ESTABLISHED AFTER ASSESSMENT DATE.]
Any property that was not used for the purpose of a homestead on
the assessment date, but which was used for the purpose of a
homestead on June 1 of a year, constitutes class 1 to the extent
of one-half of the valuation that would have been includable in
class 1.
Any taxpayer meeting the requirements of this subdivision
must notify the county assessor, or the assessor who has the
powers of the county assessor pursuant to section 273.063, in
writing, prior to June 15 of the year of occupancy in order to
qualify under this subdivision.
The county assessor and the county auditor may make the
necessary changes on their assessment and tax records to provide
for proper homestead classification as provided in this
subdivision.
The owner of any property qualifying under this
subdivision, which has not been accorded the benefits of this
subdivision, regardless of whether or not the notification has
been timely filed, may be entitled to receive homestead
classification by proper application as provided in section
270.07 or 375.192.
The county assessor shall publish in a newspaper of general
circulation within the county no later than June 1 of each year
a notice informing the public of the requirement to file an
application for homestead prior to June 15.
Subd. 10. [REAL ESTATE PURCHASED FOR OCCUPANCY AS A
HOMESTEAD.] Real estate purchased for occupancy as a homestead
must be classified as class 1 if the purchaser is prevented from
obtaining possession on January 2 next following the purchase by
reason of federal or state rent control laws or regulations.
Subd. 11. [LIMITATION ON HOMESTEAD CLASSIFICATION.] If the
assessor has classified a property as both homestead and
nonhomestead, the greater of the value attributable to the
portion of the property classified as class 1a, 1b, or 2a or the
value of the first tier of assessment percentages provided under
section 273.13, subdivision 22, paragraph (a) or (b) or
subdivision 23, paragraph (a) is entitled to homestead
treatment, except as provided in subdivision 26 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 in section
273.13, subdivisions 22 and 23, and the reductions in tax
provided under sections 273.135 and 273.1391 apply to the value
of both the homestead and the nonhomestead portions of the
property.
Subd. 12. [HOMESTEAD OF MEMBER OF U.S. ARMED FORCES.] Real
estate actually occupied and used for the purpose of a homestead
by a member of the armed forces of the United States, or by a
member of his immediate family shall, notwithstanding the
absence of the person, while on active duty with the armed
forces of the United States or his family under such conditions,
be classified as a homestead provided that absence of the owner
is solely by reason of service in the armed forces, and that he
intends to return as soon as discharged or relieved from
service, and claims it as his homestead. Every person who, for
the purpose of obtaining or aiding another in obtaining any
benefit under this subdivision, shall knowingly make or submit
to any assessor any affidavit or other statement which is false
in any material matter shall be guilty of a felony.
Sec. 45. Minnesota Statutes 1984, section 273.13,
subdivision 7a, is amended to read:
Subd. 7a. [PERCENTAGE OF MARKET VALUE.] Except as
otherwise provided for the purpose of determining tax
limitations established by statute or by charter, class 3b 2a
and class 3c 1a property shall be figured at 33 1/3 percent and
40 percent of the market value thereof, respectively.
Sec. 46. Minnesota Statutes 1984, section 273.13,
subdivision 15a, is amended to read:
Subd. 15a. [GENERAL FUND, REPLACEMENT OF REVENUE.] (1)
Payment from the general fund shall be made, as provided herein,
for the purpose of replacing revenue lost as a result of the
reduction of property taxes provided in subdivisions 6, 7, and
14a 22 and 23.
(2) Each county auditor shall certify, not later than May 1
of each year to the commissioner of revenue the amount of
reduction resulting from subdivisions 6, 7, and 14a 22 and 23 in
his county. This certification 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 such certifications to determine their
accuracy. He may make such changes in the certification as he
may deem necessary or return a certification to the county
auditor for corrections.
(3) Based on current year tax data reported in the
abstracts of tax lists, the commissioner of revenue shall
annually determine the taxing district distribution of the
amounts certified under clause (2). The commissioner of revenue
shall pay to each taxing district, other than school districts,
its total payment for the year in equal installments on or
before July 15, August 15, September 15, October 15, November
15, and December 15 of each year.
Sec. 47. Minnesota Statutes 1984, section 273.13, is
amended by adding a subdivision to read:
Subd. 22. [CLASS 1.] (a) Except as provided in subdivision
23, real estate which is residential and used for homestead
purposes is class 1. The market value of class 1a property must
be determined based upon the value of the house, garage, and
land.
The first $64,000 of market value of class 1a property must
be assessed at 18 percent of its market value. The homestead
value of class 1a property that exceeds $64,000 must be assessed
at 28 percent of its value.
(b) Class 1b property includes real estate or manufactured
homes used for the purposes of a homestead by
(1) 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
(2) any person, hereinafter referred to as "veteran," who:
(i) served in the active military or naval service of the
United States; and
(ii) 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
(iii) 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
(3) any person who:
(i) is permanently and totally disabled and
(ii) receives 90 percent or more of his or her total income
from
(A) aid from any state as a result of that disability; or
(B) supplemental security income for the disabled; or
(C) workers' compensation based on a finding of total and
permanent disability; or
(D) 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
(E) aid under the Federal Railroad Retirement Act of 1937,
United States Code Annotated, title 45, section 228b(a)5; or
(F) a pension from any local government retirement fund
located in the state of Minnesota as a result of that disability.
Property is classified and assessed pursuant to clause (1)
only if the commissioner of human services certifies to the
assessor that the owner of the property satisfies the
requirements of this subdivision. The commissioner of human
services shall provide a copy of the certification to the
commissioner of revenue.
Class 1b property is valued and assessed as follows: in
the case of agricultural land, including a manufactured home,
used for a homestead, the first $32,000 of market value shall be
valued and assessed at five percent, the next $32,000 of market
value shall be valued and assessed at 14 percent, and the
remaining market value shall be valued and assessed at 18
percent; and in the case of all other real estate and
manufactured homes, the first $32,000 of market value shall be
valued and assessed at five percent, the next $32,000 of market
value shall be valued and assessed at 18 percent, and the
remaining market value shall be valued and assessed at 28
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 18 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 18 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.
(c) Class 1c property is commercial use real property that
abuts a lakeshore line and is devoted to temporary and seasonal
residential occupancy for recreational purposes but not devoted
to commercial purposes for more than 200 days in the year
preceding the year of assessment, and that includes a portion
used as a homestead by the owner. It must be assessed at 12
percent of market value with the following limitation: the area
of the property must not exceed 100 feet of lakeshore footage
for each cabin or campsite located on the property up to a total
of 800 feet and 500 feet in depth, measured away from the
lakeshore.
(d) The tax to be paid on class 1a or class 1b property,
less any reduction received pursuant to sections 273.123 and
473H.10, shall be reduced by 54 percent of the tax imposed on
the first $68,000 of market value. The amount of the reduction
shall not exceed $700.
Sec. 48. Minnesota Statutes 1984, section 273.13, is
amended by adding a subdivision to read:
Subd. 23. [CLASS 2.] (a) Class 2a property is agricultural
land that is homesteaded, together with the house and garage.
The first $64,000 of market value of an agricultural homestead
is valued at 14 percent. The remaining value of class 2a
property is assessed at 18 percent of market value.
Noncontinguous land shall constitute class 2a only if the
homestead is classified as class 2a 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.
Agricultural land used for purposes of a homestead and
actively farmed by a person holding a vested remainder interest
in it must be classified class 2a. If agricultural land is
classified class 2a, any other dwellings on the land used for
purposes of a homestead by persons holding vested remainder
interests who are actively engaged in farming the property, and
up to one acre of the land surrounding each homestead and
reasonably necessary for the use of the dwelling as a home, must
also be assessed class 2a and is entitled to the homestead
credit.
The tax to be paid on class 2a property, less any reduction
received pursuant to sections 124.2137, 273.123, and 473H.10
shall be reduced by 54 percent of the tax. The amount of the
reduction shall not exceed $700.
(b) Class 2b property is real estate, rural in character
and used exclusively for growing trees for timber, lumber, and
wood and wood products. It is assessed at 18 percent of market
value.
(c) Class 2c Property is real estate that is nonhomestead
agricultural land. It is assessed at 18 percent of market value.
Agricultural land as used in this section 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. 49. Minnesota Statutes 1984, section 273.13, is
amended by adding a subdivision to read:
Subd. 24. [CLASS 3.] (a) Commercial and industrial
property is class 3a. It is assessed at 28 percent of the first
$60,000 of market value and 43 percent for the market value over
$60,000. In the case of state-assessed commercial or industrial
property owned by one person or entity, only one parcel may
qualify for the 28 percent assessment. In the case of other
commercial or industrial property owned by one person or entity,
only one parcel in each county may qualify for the 28 percent
assessment.
(b) Employment property defined in section 273.1313, during
the period provided in section 273.1313, shall constitute class
3b 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 $60,000 of market value
shall be valued and assessed at 28 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).
(c) 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 3c and shall be valued and
assessed at 40 percent of market value.
Sec. 50. Minnesota Statutes 1984, section 273.13, is
amended by adding a subdivision to read:
Subd. 25. [CLASS 4.] (a) Class 4a is residential real
estate containing four or more units and used or held for use by
the owner or by the tenants or lessees of the owner as a
residence for rental periods of 30 days or more. Class 4a also
includes hospitals licensed under sections 144.50 to 144.56,
other than hospitals exempt under section 272.02, and contiguous
property used for hospital purposes, without regard to whether
the property has been platted or subdivided. Class 4a property
is assessed at 34 percent of market value.
(b) Class 4b is tools, implements, and machinery of an
electric generating, transmission, or distribution system or a
pipeline system transporting or distributing water, gas, crude
oil, or petroleum products or mains and pipes used in the
distribution of steam or hot or chilled water for heating or
cooling buildings, which are fixtures. Class 4b property is
assessed at 33-1/3 percent of market value.
Sec. 51. Minnesota Statutes 1984, section 273.13, is
amended by adding a subdivision to read:
Subd. 26. [CLASS 5.] (a) Residential real estate
containing less than four units, other than seasonal
residential, recreational, and homesteads, is class 5a. Class
5a shall also include post-secondary student housing not to
exceed one acre of land which is owned by a nonprofit
corporation organized under chapter 317 and is used exclusively
by a sorority or fraternity organization for housing. Class 5a
property is assessed at 28 percent of market value.
(b) Structures of five stories or more and constructed with
materials meeting the requirements for type I or II construction
as defined in the state building code, if at least 90 percent of
the structure is used or to be used as apartment housing, is
class 5b. Class 5b property is assessed at 25 percent of market
value. The 25 percent assessment ratio applies to these
structures for a period of 40 years from the date of completion
of original construction, or the date of initial though partial
use, whichever is earlier.
Sec. 52. Minnesota Statutes 1984, section 273.13, is
amended by adding a subdivision to read:
Subd. 27. [CLASS 6.] (a) Except as provided in subdivision
22, real property devoted to temporary and seasonal residential
occupancy for recreation purposes is class 6a.
Class 6a property also includes real property devoted to
temporary and seasonal residential occupancy for recreation
purposes and not devoted to commercial purposes for more than
200 days in the year preceding the year of assessment. For this
purpose, property is devoted to commercial use on a specific day
if it is used, or offered for use, and a fee is charged for the
use. Class 6a shall also include commercial use real property
used exclusively for recreational purposes in conjunction with
class 6a property devoted to temporary and seasonal residential
occupancy for recreational purposes, up to a total of two acres,
provided the property is not devoted to commercial recreational
use for more than 200 days in the year preceding the year of
assessment and is located within two miles of the class 6a
property with which it is used. Class 6a property and the
remainder of class 1 resorts is assessed at 21 percent.
(b) Class 6b is real property up to a maximum of one acre
of land owned by a nonprofit community service oriented
organization; provided that the property is not used for a
revenue-producing activity for more than six days in the
calendar year preceding the year of assessment and the property
is not used for residential purposes on either a temporary or
permanent basis. For purposes of this subdivision, a "nonprofit
community service oriented organization" means any corporation,
society, association, foundation, or institution organized and
operated exclusively for charitable, religious, fraternal,
civic, or educational purposes, and which is exempt from federal
income taxation pursuant to section 501(c)(3), (10), or (19) of
the Internal Revenue Code of 1954, as amended through December
31, 1984. For purposes of this subdivision, "revenue-producing
activities" shall include but not be limited to property or that
portion of the property that is used as an on-sale intoxicating
liquor or nonintoxicating malt liquor establishment licensed
under chapter 340A, a restaurant open to the public, bowling
alley, a retail store, gambling conducted by organizations
licensed under chapter 349, an insurance business, or office or
other space leased or rented to a lessee who conducts a
for-profit enterprise on the premises. Any portion of the
property which is used for revenue-producing activities for more
than six days in the calendar year preceding the year of
assessment shall be assessed as class 3a. The use of the
property for social events open exclusively to members and their
guests for periods of less than 24 hours, when an admission is
not charged nor any revenues are received by the organization
shall not be considered a revenue-producing activity. Class 6b
property is assessed at 21 percent of market value.
Sec. 53. Minnesota Statutes 1984, section 273.13, is
amended by adding a subdivision to read:
Subd. 28. [CLASS 7.] (a) Class 7a is a structure that is
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. Class 7a property must, 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.
(b) Class 7b is 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. Class 7b property must, 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.
(c) Class 7c is 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; and
(3) financed by a direct loan or insured loan from the
farmers home administration;
Class 7c property must be assessed at ten percent of its market
value for 15 years from the date of the completion of the
original construction or for the original term of the loan
except that if (1) construction of the structure had been
commenced after December 31, 1983; and (2) the project had been
approved by the governing body of the municipality in which it
is located after June 30, 1983; and (3) financing of the project
had been approved by a federal or state agency after June 30,
1983, it must be assessed at 20 percent.
The 20 percent and ten percent assessment ratios apply to
the properties described in paragraphs (a), (b), and (c) only in
proportion to occupancy of the structure by elderly or
handicapped persons or low and moderate income families as
defined in the applicable laws unless construction of the
structure had been commenced prior to January 1, 1984; or the
project had been approved by the governing body of the
municipality in which it is located prior to June 30, 1983; or
financing of the project had been approved by a federal or state
agency prior to June 30, 1983.
For all properties described in paragraphs (a), (b), and
(c), the market value determined by the assessor must be based
on the normal approach to value using normal unrestricted rents.
The provisions of paragraphs (a) and (c) apply only to
nonprofit and limited dividend entities.
(d) Class 7d property is a parcel of land, not to exceed
one acre, and its improvements or a parcel of unimproved land,
not to exceed one acre, if it is owned by a neighborhood real
estate trust and at least 60 percent of the dwelling units, if
any, on all land owned by the trust are leased to or occupied by
lower income families. Class 7d land and improvements, if any,
shall be assessed at 20 percent of the market value. This
paragraph shall not apply to any portion of the land or
improvements used for nonresidential purposes. For purposes of
this paragraph, a lower income family is a family with an income
that does not exceed 65 percent of the median family income for
the area as determined by the U.S. Secretary of Housing and
Urban Development. For purposes of this paragraph,
"neighborhood real estate trust" means an entity which is
certified by the governing body of the municipality in which it
is located to have the following characteristics: (1) it is a
nonprofit corporation organized under chapter 317; (2) it has as
its principal purpose providing housing for lower income
families in a specific geographic community designated in its
articles or bylaws; (3) it limits membership with voting rights
to residents of the designated community; and (4) it has a board
of directors consisting of at least seven directors, 60 percent
of whom are members with voting rights and, to the extent
feasible, 25 percent of whom are elected by resident members of
buildings owned by the trust.
Sec. 54. Minnesota Statutes 1984, section 273.13, is
amended by adding a subdivision to read:
Subd. 29. [CLASS 8.] Distribution lines, and the
attachments and appurtenances to them, used primarily for
supplying electricity to farmers at retail, as described in
section 273.38 is class 8 and is assessed at five percent of
market value.
Sec. 55. Minnesota Statutes 1984, section 273.13, is
amended by adding a subdivision to read:
Subd. 30. [CLASS 9.] (a) Unmined iron ore is class 9a and
is assessed at 50 percent of market value.
(b) Class 9b consists of all low-grade iron-bearing
formations as defined in section 273.14. Class 9b shall be
assessed at the following percentages of its value: If the
tonnage recovery is less than 50 percent and not less than 49
percent, the assessed value shall be 48-1/2 percent of the
value; if the tonnage recovery is less than 49 percent and not
less than 48 percent, the assessed value shall be 47 percent of
the value; and for each subsequent reduction of one percent in
tonnage recovery, the percentage of assessed value to value
shall be reduced an additional 1-1/2 percent of the value, but
the assessed value shall never be less than 30 percent of the
value. The land, exclusive of the formations, shall be assessed
as otherwise provided by law. The commissioner of revenue may
estimate the reasonable market value of the iron ore on any
parcel of land which at the assessment date is considered
uneconomical to mine.
Sec. 56. Minnesota Statutes 1984, section 273.13, is
amended by adding a subdivision to read:
Subd. 31. [CLASS 10.] All property not included in any
other class is class 10 property and is assessed at 43 percent
of market value.
Sec. 57. Minnesota Statutes 1984, section 273.1311, is
amended to read:
273.1311 [FLEXIBLE HOMESTEAD BRACKETS.]
The maximum amount of the market value of the homestead
brackets shall be adjusted as provided in this section.
For taxes payable in 1985 1987 and subsequent years, the
commissioner shall adjust the brackets used in the preceding
assessment by the estimated percentage increase in the statewide
average assessors' estimated market value, as equalized by the
state board of equalization, of a residential home for the
current assessment over the previous assessment. The revised
bracket shall be rounded to the nearest $500 $1,000, except that
the brackets applicable to class 1b property shall be rounded to
the nearest $500. The commissioner of revenue shall determine
and announce the revised bracket on December 15 of each year
preceding the assessment date.
Sec. 58. Minnesota Statutes 1984, section 273.1313,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] (a) As used in this section,
the following terms have the meanings given them.
(b) "Commissioner" means the commissioner of revenue.
(c) "Employment property" means taxable property, excluding
land but including buildings, structures, fixtures, and
improvements that satisfy each of the following conditions:
(1) The property is located within an enterprise zone
designated according to section 273.1312.
(2) The property is commercial or industrial property which
is not used in a trade or business which either is described in
section 103(b)(6)(O) of the Internal Revenue Code of 1954, as
amended through January 15, 1983 December 31, 1984, or is
property of a public utility.
(d) "Market value" of a parcel of employment property means
the value of the taxable property as annually determined
pursuant to section 273.12, less (i) the market value of all
property existing at the time of application for classification,
as last assessed prior to the time of application, and (ii) any
increase in the market value of the property referred to in
clause (i) as assessed in each year after the employment
property is first placed in service. In each year, any change
in the values of the employment property and the other property
on the land shall be deemed to be proportionate unless caused by
a capital improvement or loss.
(e) "Municipality" means any home rule charter or statutory
city or county, but a county may not exercise the powers granted
in this section with reference to property situated within a
city.
(f) Notwithstanding the provisions of paragraphs (c) and
(d) "employment property" and "market value" includes in the
case of taxable real property located in an enterprise zone
designated under section 273.1312, subdivision 4, paragraph (c),
clause (3), the entire value of the commercial and industrial
property, including land, used in a trade or business which is
not used in a trade or business which either is described in
section 103(b)(0)(ii) of the Internal Revenue Code of 1954, as
amended through January 15, 1983 December 31, 1984, or is the
property of a public utility. The provisions of this paragraph
shall not apply to employment property located in an enterprise
zone designated pursuant to section 273.1312, subdivision 4,
paragraph (c), clause (3), that is assessed pursuant to the
first clause of the first sentence of section 273.13,
subdivision 9 24, paragraph (4) (b).
Sec. 59. Minnesota Statutes 1984, section 273.1313,
subdivision 2, is amended to read:
Subd. 2. [PROGRAM.] (a) The governing body of any
municipality which contains a designated enterprise zone as
provided by section 273.1312 shall by resolution establish a
program for classification of new property or improvements to
existing property as employment property pursuant to the
provisions of this section. Applications for classification
under the program shall be filed with the municipal clerk or
auditor in a form prescribed by the commissioner, with additions
as may be prescribed by the municipal governing body. The
application shall contain, where appropriate, a legal
description of the parcel of land on which the facility is to be
situated or improved; a general description of the facility or
improvement and its proposed use, the probable time schedule for
undertaking any construction or improvement, and information
regarding the matters referred to in paragraph (d); the market
value and the assessed value of the land and of all other
taxable property then situated on it, according to the most
recent assessment; and if the property is to be improved or
expanded, an estimate of the probable cost of the new
construction or improvement and the market value of the new or
improved facility (excluding land) when completed.
(b) Upon receipt of an application the municipal clerk or
auditor, subject to any prior approval required by the
resolution establishing the program, shall furnish a copy to the
assessor for the property and to the governing body of each
school district and other public body authorized to levy taxes
on the property, and shall publish a notice in the official
newspaper of the time and place of a hearing to be held by the
governing body on the application, not less than 30 days after
the notice is published, stating that the applicant, the
assessor, representatives of the affected taxing authorities,
and any taxpayer of the municipality may be heard or may present
their views in writing at or before the hearing. The hearing
may be adjourned from time to time, but the governing body shall
take action on the application by resolution within 30 days
after the hearing. If disapproved, the reasons shall be set
forth in the resolution, and the applicant may appeal to the
commissioner within 30 days thereafter, but only on the ground
that the determination is arbitrary, in relation to prior
determinations as to classification under the program, or based
upon a mistake of law. If approved, the resolution shall
include determinations as to the matters set forth in paragraph
(d), and the clerk or auditor shall transmit it to the
commissioner.
(c) Within 60 days after receipt of an approved application
or an appeal from the disapproval of an application, the
commissioner shall take action on it. The commissioner shall
approve each application approved by the governing body if he
finds that it complies with the provisions of this section. If
he disapproves the application, or finds grounds exist for
appeal of a disapproved application, he shall transmit the
finding to the governing body and the applicant. When grounds
for appeal have been determined to exist, the governing body
shall reconsider and take further action on the application
within 30 days after receipt of the commissioner's notice and
serve written notice of the action upon the applicant. The
applicant, within 30 days after receipt of notice of final
disapproval by the commissioner or the governing body, may
appeal from the disapproval to a court of competent jurisdiction.
(d) In the case of enterprise zones qualifying pursuant to
section 273.1312, subdivision 4, paragraph (c), clause (1), an
application shall not be approved unless the governing body
finds and determines that the construction or improvement of the
facility:
(1) Is reasonably likely to create new employment or
prevent a loss of employment in the municipality;
(2) Is not likely to have the effect of transferring
existing employment from one or more other municipalities within
the state;
(3) Is not likely to cause the total market value of
employment property within the municipality to exceed five
percent of the total market value of all taxable property within
the municipality; or if it will, the resulting limitation upon
the increase of the assessed value of all taxable property
within the municipality, considering the amount of additional
municipal services likely to be required for the employment
property, is not likely to substantially impede the operation or
the financial integrity of the municipality or any other public
body levying taxes on property in the municipality; and
(4) Will not result in the reduction of the assessed value
of existing property within the municipality owned by the
applicant, through abandonment, demolition, or otherwise,
without provision for the restoration of the existing property
within a reasonable time in a manner sufficient to restore the
assessed valuation.
(e) In the case of enterprise zones qualifying pursuant to
section 273.1312, subdivision 4, paragraph (c), clause (3), an
application for assessment as employment property under section
273.13, subdivision 9 24, paragraph (b), or for a tax reduction
pursuant to section 273.1314, subdivision 9, may not be approved
unless the governing body finds and determines that the
construction or improvement of the facility is not likely to
have the effect of transferring existing employment from one or
more other municipalities within the state.
Sec. 60. Minnesota Statutes 1984, section 273.1313,
subdivision 3, is amended to read:
Subd. 3. [CLASSIFICATION.] Property shall be classified as
employment property and assessed as provided for class 4d
property in section 273.13, subdivision 9 24, paragraph (4) (b),
for taxes levied in the year in which the classification is
approved and for the four succeeding years after the approval.
If the classification is revoked, the revocation is effective
for taxes levied in the next year after revocation.
Sec. 61. Minnesota Statutes 1984, section 273.1315, is
amended to read:
273.1315 [CERTIFICATION OF 3CC 1B PROPERTY.]
Any property owner seeking classification and assessment of
his homestead as class 3cc 1b property pursuant to section
273.13, subdivision 7, clause (b) or (c) 22, paragraph (b),
clause (2) or (3), shall file with the commissioner of revenue
for each assessment year a 3cc 1b homestead declaration, on a
form prescribed by the commissioner. The declaration shall
contain the following information:
(a) the information necessary to verify that the property
owner or his spouse satisfies the requirements of section
273.13, subdivision 7 22, for 3cc 1b classification;
(b) the property owner's household income, as defined in
section 290A.03, for the previous calendar year; and
(c) any additional information prescribed by the
commissioner.
The declaration shall be filed on or before March 1 of each
year to be effective for property taxes payable during the
succeeding calendar year. The declaration and any supplementary
information received from the property owner pursuant to this
section shall be subject to section 290A.17.
The commissioner shall provide to the assessor on or before
April 1 a listing of the parcels of property qualifying for 3cc
1b classification.
Sec. 62. Minnesota Statutes 1984, section 273.135,
subdivision 1, is amended to read:
Subdivision 1. The property tax to be paid in respect to
property taxable within a tax relief area on class 3b property,
on class 3c property, and on class 3cc homestead property, as
otherwise determined by law and regardless of the market value
of the property, for all purposes shall be reduced in the amount
prescribed by subdivision 2, subject to the limitations
contained therein.
Sec. 63. Minnesota Statutes 1984, 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 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 reduction shall not exceed the
maximum 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 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
reduction shall not exceed the maximum amounts specified in
clause (c).
(c) (1) The maximum reduction of the net tax up to the
taconite breakpoint is $225.40 on property described in clause
(a) and $200.10 on property described in clause (b), for taxes
payable in 1985. These maximum amounts shall increase by $15
times the quantity one minus the homestead credit equivalency
percentage per year for taxes payable in 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 22 or 23, "taconite breakpoint"
means the lowest possible net tax for a homestead qualifying for
the maximum reduction pursuant to section 273.13, subdivision 7
22, 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
22.
Sec. 64. Minnesota Statutes 1984, section 273.1391,
subdivision 1, is amended to read:
273.1391 [SUPPLEMENTARY HOMESTEAD PROPERTY TAX RELIEF.]
Subdivision 1. The property tax to be paid in respect to
property taxable within a tax relief area described in
subdivision 2 on class 3b property, on class 3c property, and on
class 3cc homestead property, as otherwise determined by law and
regardless of the market value of the property, for all purposes
shall be reduced in the amount prescribed by subdivision 2,
subject to the limitations contained therein.
Sec. 65. Minnesota Statutes 1984, 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 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 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 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
maximums specified in clause (c).
(c) (1) The maximum reduction of the net tax up to the
taconite breakpoint is $200.10 for taxes payable in 1985. This
maximum amount shall increase by $15 multiplied by the quantity
one minus the homestead credit equivalency percentage per year
for taxes payable in 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 22 or 23, "taconite breakpoint"
means the lowest possible net tax for a homestead qualifying for
the maximum reduction pursuant to section 273.13, subdivision 7
22, 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
22.
Sec. 66. Minnesota Statutes 1984, section 273.1392, is
amended to read:
273.1392 [PAYMENT; AIDS TO SCHOOL DISTRICTS.]
The amounts of homestead credit under section 273.13,
subdivisions 6, 7, and 14a 22 and 23; wetlands credit and
reimbursement under section 273.115; native prairie credit and
reimbursement under section 273.116; disaster or emergency
reimbursement under section 273.123; attached machinery aid
under section 273.138; reimbursement under section 273.139; and
metropolitan agricultural preserve reduction under section
473H.10, shall be certified to the department of education by
the department of revenue. The amounts so certified shall be
paid according to the schedule for payment of foundation aids
pursuant to section 124.11 for fiscal year 1983. Beginning in
fiscal year 1984, The amounts so certified shall be paid
according to section 124.195, subdivisions 6 and 10.
Sec. 67. Minnesota Statutes 1984, section 273.1393, as
added by Laws 1985, chapter 300, section 8, is amended to read:
Sec. 8. [273.1393] [COMPUTATION OF NET PROPERTY TAXES.]
Notwithstanding any other provisions to the contrary, "net"
property taxes are determined by subtracting the credits in the
order listed from the gross tax:
(1) disaster credit as provided in section 273.123;
(2) wetlands credit as provided in section 273.115;
(3) native prairie credit as provided in section 273.116;
(4) powerline credit as provided in section 273.42;
(5) agricultural preserves credit as provided in section
473H.10;
(6) enterprise zone credit as provided in section 273.1314;
(7) state school agricultural credit as provided in section
124.2137;
(8) state paid homestead credit as provided in section
273.13, subdivisions 6 and 7 22 and 23;
(9) taconite homestead credit as provided in section
273.135;
(10) supplemental homestead credit as provided in section
273.1391.
The combination of all property tax credits must not exceed
the gross tax amount.
Sec. 68. [273.165] [TAXATION OF SEPARATE MINERAL INTERESTS
AND UNMINED IRON ORE.]
Subdivision 1. [MINERAL INTEREST.] "Mineral interest," for
the purpose of this subdivision, means an interest in any
minerals, including but not limited to gas, coal, oil, or other
similar interest in real estate, which is owned separately and
apart from the fee title to the surface of such real property.
Mineral interests which are filed for record in the offices of
either the county recorder or registrar of titles, whether or
not filed pursuant to sections 93.52 to 93.58, are taxed as
provided in this subdivision unless specifically excluded by
this subdivision. A tax of 25 cents per acre or portion of an
acre of mineral interest is imposed and is payable annually. If
an interest is a fractional undivided interest in an area, the
tax due on the interest per acre or portion of an acre is equal
to the product obtained by multiplying the fractional interest
times 25 cents, computed to the nearest cent. However, the
minimum annual tax on any mineral interest is $2. No such tax
on mineral interests is imposed on the following: (1) mineral
interests valued and taxed under other laws relating to the
taxation of minerals, gas, coal, oil, or other similar
interests; or (2) mineral interests which are exempt from
taxation pursuant to constitutional or related statutory
provisions. Taxes received under this subdivision must be
apportioned to the taxing districts included in the area taxed
in the same proportion as the surface interest mill rate of a
taxing district bears to the total mill rate applicable to
surface interests in the area taxed. The tax imposed by this
subdivision is not included within any limitations as to rate or
amount of taxes which may be imposed in an area to which the tax
imposed by this subdivision applies. The tax imposed by this
subdivision does not cause the amount of other taxes levied or
to be levied in the area, which are subject to any such
limitation, to be reduced in any amount. Twenty percent of the
revenues received from the tax imposed by this subdivision must
be distributed under the provisions of section 116J.64.
Subd. 2. [IRON ORE.] Unmined iron ore included in class 9
must be assessed with and as a part of the real estate in which
it is located, but at the rate established in section 273.13,
subdivision 30. The real estate in which iron ore is located,
other than the ore, must be classified and assessed in
accordance with the provisions of the appropriate classes. In
assessing any tract or lot of real estate in which iron ore is
known to exist, the assessable value of the ore exclusive of the
land in which it is located, and the assessable value of the
land exclusive of the ore must be determined and set down
separately and the aggregate of the two must be assessed against
the tract or lot.
Sec. 69. Minnesota Statutes 1984, section 273.38, is
amended to read:
273.38 [PERCENTAGE OF ASSESSMENTS; EXCEPTIONS.]
The commissioner of revenue shall assess at five percent of
market value distribution lines, and the attachments and
appurtenances thereto, used primarily for supplying electricity
to farmers at retail, and which shall be taxed at the average
rate of taxes levied for all purposes throughout the county, and
which shall be entered, certified and credited as provided in
section 273.42. It is further provided that the distribution
lines and the attachments and appurtenances thereto of
cooperative associations organized under the provisions of Laws
1923, Chapter 326, and laws amendatory thereof and supplemental
thereto, and engaged in the electrical heat, light and power
business, upon a mutual, non-profit and cooperative plan, shall
be assessed and taxed as provided in sections 273.40 and 273.41.
Sec. 70. Minnesota Statutes 1984, section 273.42,
subdivision 2, is amended to read:
Subd. 2. Owners of land defined as class 3, 3b, 3c, 3cc,
3d or 3f 1a, 1b, 2a, 2c, 4a, 5a, or 6a, pursuant to section
273.13 listed on records of the county auditor or county
treasurer over which runs a high voltage transmission line as
defined in section 116C.52, subdivision 3, except a high voltage
transmission line the construction of which was commenced prior
to July 1, 1974, shall receive a property tax credit in an
amount determined by multiplying a fraction, the numerator of
which is the length of high voltage transmission line which runs
over that parcel and the denominator of which is the total
length of that particular line running over all property within
the city or township by ten percent of the transmission line tax
revenue derived from the tax on that portion of the line within
the city or township pursuant to section 273.36. In the case of
property owners in unorganized townships, the property tax
credit shall be determined by multiplying a fraction, the
numerator of which is the length of the qualifying high voltage
transmission line which runs over the parcel and the denominator
of which is the total length of the qualifying high voltage
transmission line running over all property within all the
unorganized townships within the county, by the total utility
property tax credit fund amount available within the county for
that year pursuant to section 273.42, subdivision 1. Where a
right-of-way width is shared by more than one property owner,
the numerator shall be adjusted by multiplying the length of
line on the parcel by the proportion of the total width on the
parcel owned by that property owner. The amount of credit for
which the property qualifies shall not exceed 20 percent of the
total gross tax on the parcel prior to deduction of the state
paid agricultural credit and the state paid homestead credit,
provided that, if the property containing the right of way is
included in a parcel which exceeds 40 acres, the total gross tax
on the parcel shall be multiplied by a fraction, the numerator
of which is the sum of the number of acres in each
quarter-quarter section or portion thereof which contains a
right of way and the denominator of which is the total number of
acres in the parcel set forth on the tax statement, and the
maximum credit shall be 20 percent of the product of that
computation, prior to deduction of those credits. The auditor
of the county in which the affected parcel is located shall
calculate the amount of the credit due for each parcel and
transmit that information to the county treasurer. The county
auditor, in computing the credits received pursuant to sections
273.13 and 273.135, shall reduce the gross tax by the amount of
the credit received pursuant to this section, unless the amount
of the credit would be less than $10.
If, after the county auditor has computed the credit to
those qualifying property owners in unorganized townships, there
is money remaining in the utility property tax credit fund, then
that excess amount in the fund shall be returned to the general
school fund of the county.
Sec. 71. Minnesota Statutes 1984, section 274.19,
subdivision 1, is amended to read:
Subdivision 1. Each manufactured home constituting class
2a property shall be valued each year by the assessor and be
assessed with reference to its value on January 2 of that year.
Notice of the value shall be mailed to the person to be assessed
at least ten days before the meeting of the local board of
review or equalization. The notice shall contain the amount of
valuation in terms of market value, the assessor's office
address, and the date, place, and time set for the meeting of
the local board of review or equalization and the county board
of equalization.
Sec. 72. Minnesota Statutes 1984, section 274.19,
subdivision 2, is amended to read:
Subd. 2. On or before May 1, the assessor shall return to
the county auditor his assessment books relating to the
assessment of class 2a property manufactured homes. After
receiving the assessment books, the county auditor shall
determine the tax to be due by applying the rate of levy of the
preceding year and shall transmit a list of the taxes to the
county treasurer not later than May 30.
Sec. 73. Minnesota Statutes 1984, section 274.19,
subdivision 3, is amended to read:
Subd. 3. Not later than July 15 in the year of assessment
the county treasurer shall mail to the taxpayer a statement of
tax due on class 2a property a manufactured home. The taxes
shall be due on the last day of August. Taxes remaining unpaid
after the due date shall be deemed delinquent, and a penalty of
eight percent shall be assessed and collected as part of the
unpaid taxes. On September 30 the county treasurer shall make a
list of taxes remaining unpaid and shall certify the list
immediately to the clerk of district court, who shall issue
warrants to the sheriff for collection.
Sec. 74. Minnesota Statutes 1984, section 274.19,
subdivision 4, is amended to read:
Subd. 4. Any person who claims that his class 2a property
manufactured home has been unfairly or unequally assessed, or
that such property 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 filing a petition for such determination, in
the office of the clerk of the district court on or before the
first day of September of the year in which such tax becomes
payable. A petition for determination under this section may be
transferred by the district court to the tax court.
Sec. 75. Minnesota Statutes 1984, section 274.19,
subdivision 6, is amended to read:
Subd. 6. If the local board of review or equalization or
the county board of equalization change the assessor's valuation
of class 2a property a manufactured home, the change shall be
transmitted to the county auditor, who shall immediately
recompute the tax and advise the treasurer of the corrected
tax. If the property is entitled to homestead
classification and tax credit pursuant to section 273.13,
subdivision 16, the auditor shall also take appropriate action
to reflect the reduction in tax.
Sec. 76. Minnesota Statutes 1984, section 274.19,
subdivision 7, is amended to read:
Subd. 7. The tax assessed on class 2a property
manufactured homes shall be deemed to be a personal property tax
and laws relating to assessment, review, and collection of
personal property taxes shall be applicable to this tax, if not
inconsistent with provisions in Laws 1975, Chapter 376 this
section.
Sec. 77. Minnesota Statutes 1984, section 274.19, is
amended by adding a subdivision to read:
Subd. 8. [MANUFACTURED HOMES; SECTIONAL STRUCTURES.] (a)
For purposes of this section, a "manufactured home" means a
structure transportable in one or more sections, which is built
on a permanent chassis, and designed to be used as a dwelling
with or without a permanent foundation when connected to the
required utilities, and contains the plumbing, heating,
air-conditioning, and electrical systems therein, including any
accessory structure which is an addition or supplement to the
manufactured home and, when installed, becomes a part of the
manufactured home.
(b) A manufactured home which meets each of the following
criteria must be valued and assessed as an improvement to real
property, the appropriate real property classification shall
apply and the valuation is subject to review and the taxes
payable in the manner provided for real property:
(i) the owner of the unit holds title to the land upon
which it is situated;
(ii) the unit is affixed to the land by a permanent
foundation or is installed at its location in accordance with
the manufactured home building code contained in sections 327.31
to 327.34, and the rules adopted thereto, or is affixed to the
land in a manner comparable to other real property in the taxing
district; and
(iii) the unit is connected to public utilities, has a well
and septic tank system, or is serviced by water and sewer
facilities comparable to other real property in the taxing
district.
(c) A manufactured home which meets each of the following
criteria must be assessed at the rate provided by the
appropriate real property classification but must be classified
as a manufactured home, and the valuation is subject to review
and the taxes payable thereon in the manner provided in this
section:
(i) the owner of the unit is a lessee of the land pursuant
to the terms of a lease;
(ii) the unit is affixed to the land by a permanent
foundation or is installed at its location in accordance with
the manufactured homes building code contained in sections
327.31 to 327.34, and the rules adopted thereto, or is affixed
to the land in a manner comparable to other real property in the
taxing district; and
(iii) the unit is connected to public utilities, has a well
and septic tank system, or is serviced by water and sewer
facilities comparable to other real property in the taxing
district.
(d) Sectional structures must be valued and assessed as an
improvement to real property if the owner of the structure holds
title to the land upon which it is located or is a qualifying
lessee of the land under the provisions of this section. For
purposes of this paragraph "sectional structure" means a
building or structural unit which has been in whole or
substantial part manufactured or constructed at an off site
location to be wholly or partially assembled on site alone or
with other units and attached to a permanent foundation.
(e) The commissioner of revenue may adopt rules pursuant to
the administrative procedure act for the purpose of establishing
additional criteria for the classification of manufactured homes
and sectional structures under this subdivision.
Sec. 78. Minnesota Statutes 1984, section 275.50,
subdivision 5, is amended to read:
Subd. 5. Notwithstanding any other law to the contrary for
taxes levied in 1983 payable in 1984 and subsequent years,
"special levies" means those portions of ad valorem taxes levied
by governmental subdivisions to:
(a) satisfy judgments rendered against the governmental
subdivision by a court of competent jurisdiction in any tort
action, or to pay the costs of settlements out of court against
the governmental subdivision in a tort action when substantiated
by a stipulation for the dismissal of the action filed with the
court of competent jurisdiction and signed by both the plaintiff
and the legal representative of the governmental subdivision,
but only to the extent of the increase in levy for such
judgments and out of court settlements over levy year 1970,
taxes payable in 1971;
(b) pay the costs of complying with any written lawful
order initially issued prior to January 1, 1977 by the state of
Minnesota, or the United States, or any agency or subdivision
thereof, which is authorized by law, statute, special act or
ordinance and is enforceable in a court of competent
jurisdiction, or any stipulation agreement or permit for
treatment works or disposal system for pollution abatement in
lieu of a lawful order signed by the governmental subdivision
and the state of Minnesota, or the United States, or any agency
or subdivision thereof which is enforceable in a court of
competent jurisdiction. The commissioner of revenue shall in
consultation with other state departments and agencies, develop
a suggested form for use by the state of Minnesota, its agencies
and subdivisions in issuing orders pursuant to this subdivision;
(c) pay the costs to a governmental subdivision for their
minimum required share of any program otherwise authorized by
law for which matching funds have been appropriated by the state
of Minnesota or the United States, excluding the administrative
costs of public assistance programs, to the extent of the
increase in levy over the amount levied for the local share of
the program for the taxes payable year 1971. This clause shall
apply only to those programs or projects for which matching
funds have been designated by the state of Minnesota or the
United States on or before September 1, of the previous year and
only when the receipt of these matching funds is contingent upon
the initiation or implementation of the project or program
during the year in which the taxes are payable or those programs
or projects approved by the commissioner;
(d) pay the costs not reimbursed by the state or federal
government, of payments made to or on behalf of recipients of
aid under any public assistance program authorized by law, and
the costs of purchase or delivery of social services. Except
for the costs of general assistance as defined in section
256D.02, subdivision 4, general assistance medical care under
section 256D.03 and the costs of hospital care pursuant to
section 261.21, the aggregate amounts levied pursuant to this
clause are subject to a maximum increase of 18 percent over the
amount levied for these purposes in the previous year;
(e) pay the costs of principal and interest on bonded
indebtedness or to reimburse for the amount of liquor store
revenues used to pay the principal and interest due in the year
preceding the year for which the levy limit is calculated on
municipal liquor store bonds;
(f) pay the costs of principal and interest on certificates
of indebtedness, except tax anticipation or aid anticipation
certificates of indebtedness, issued for any corporate purpose
except current expenses or funding an insufficiency in receipts
from taxes or other sources or funding extraordinary
expenditures resulting from a public emergency; and to pay the
cost for certificates of indebtedness issued pursuant to
sections 298.28 and 298.282;
(g) fund the payments made to the Minnesota state armory
building commission pursuant to section 193.145, subdivision 2,
to retire the principal and interest on armory construction
bonds;
(h) provide for the bonded indebtedness portion of payments
made to another political subdivision of the state of Minnesota;
(i) pay the amounts required to compensate for a decrease
in manufactured homes property tax receipts to the extent that
the governmental subdivision's portion of the total levy in the
current levy year, pursuant to section 273.13 274.19,
subdivision 3 8, as amended, is less than the distribution of
the manufactured homes tax to the governmental subdivision
pursuant to Minnesota Statutes 1969, section 273.13, subdivision
3, in calendar year 1971;
(j) pay the amounts required, in accordance with section
275.075, to correct for a county auditor's error of omission but
only to the extent that when added to the preceding year's levy
it is not in excess of an applicable statutory, special law or
charter limitation, or the limitation imposed on the
governmental subdivision by sections 275.50 to 275.56 in the
preceding levy year;
(k) pay amounts required to correct for an error of
omission in the levy certified to the appropriate county auditor
or auditors by the governing body of a city or town with
statutory city powers in a levy year, but only to the extent
that when added to the preceding year's levy it is not in excess
of an applicable statutory, special law or charter limitation,
or the limitation imposed on the governmental subdivision by
sections 275.50 to 275.56 in the preceding levy year;
(l) pay the increased cost of municipal services as the
result of an annexation or consolidation ordered by the
Minnesota municipal board but only to the extent and for the
levy years as provided by the board in its order pursuant to
section 414.01, subdivision 15. Special levies authorized by
the board shall not exceed 50 percent of the levy limit base of
the governmental subdivision and may not be in effect for more
than three years after the board's order;
(m) pay the increased costs of municipal services provided
to new private industrial and nonresidential commercial
development, to the extent that the extension of such services
are not paid for through bonded indebtedness or special
assessments, and not to exceed the amount determined as
follows. The governmental subdivision may calculate the
aggregate of:
(1) The increased expenditures necessary in preparation for
the delivering of municipal services to new private industrial
and nonresidential commercial development, but limited to one
year's expenditures one time for each such development;
(2) The amount determined by dividing the overall levy
limitation established pursuant to sections 275.50 to 275.56,
and exclusive of special levies and special assessments, by the
total taxable value of the governmental subdivision, and then
multiplying this quotient times the total increase in assessed
value of private industrial and nonresidential commercial
development within the governmental subdivision. For the
purpose of this clause, the increase in the assessed value of
private industrial and nonresidential commercial development is
calculated as the increase in assessed value over the assessed
value of the real estate parcels subject to such private
development as most recently determined before the building
permit was issued. In the fourth levy year subsequent to the
levy year in which the building permit was issued, the increase
in assessed value of the real estate parcels subject to such
private development shall no longer be included in determining
the special levy.
The aggregate of the foregoing amounts, less any costs of
extending municipal services to new private industrial and
nonresidential commercial development which are paid by bonded
indebtedness or special assessments, equals the maximum amount
that may be levied as a "special levy" for the increased costs
of municipal services provided to new private industrial and
nonresidential commercial development. In the levy year
following the levy year in which the special levy made pursuant
to this clause is discontinued, one-half of the amount of that
special levy made in the preceding year shall be added to the
permanent levy base of the governmental subdivision;
(n) recover a loss or refunds in tax receipts incurred in
non-special levy funds resulting from abatements or court action
in the previous year pursuant to section 275.48;
(o) pay amounts required by law to be paid to pay the
interest on and to reduce the unfunded accrued liability of
public pension funds in accordance with the actuarial standards
and guidelines specified in sections 356.215 and 356.216 reduced
by 106 percent of the amount levied for that purpose in 1976,
payable in 1977. For the purpose of this special levy, the
estimated receipts expected from the state of Minnesota pursuant
to sections 69.011 to 69.031 or any other state aid expressly
intended for the support of public pension funds shall be
considered as a deduction in determining the required levy for
the normal costs of the public pension funds. No amount of
these aids shall be considered as a deduction in determining the
governmental subdivision's required levy for the reduction of
the unfunded accrued liability of public pension funds;
(p) the amounts allowed under section 174.27 to establish
and administer a commuter van program;
(q) pay the costs of financial assistance to local
governmental units and certain administrative, engineering, and
legal expenses pursuant to Laws 1979, chapter 253, section 3;
(r) compensate for revenue lost as a result of abatements
or court action pursuant to sections 270.07, 270.17 or 278.01
due to a reassessment ordered by the commissioner of revenue
pursuant to section 270.16;
(s) pay the total operating cost of a county jail as
authorized in section 641.01. If the county government utilizes
this special levy, then any amount levied by the county
government in the previous year for operating its county jail
and included in its previous year's levy limitation computed
pursuant to section 275.51 shall be deducted from the current
levy limitation;
(t) pay the costs of implementing section 18.023, including
sanitation and reforestation; and
(u) pay the estimated cost for the following calendar year
of the county's share of funding the Minnesota cooperative soil
survey.
Sec. 79. Minnesota Statutes 1984, 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 from the parcel of
real property for which a particular tax statement is prepared.
The dollar amounts due the 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, including the dollar amount of any special assessments,
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 manufactured homes and sectional structures taxed as personal
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 manufactured homes and
sectional structures taxed as personal 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 22 and 23 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. 80. Minnesota Statutes 1984, section 278.01,
subdivision 2, is amended to read:
Subd. 2. [HOMESTEADS.] Any person having any estate,
right, title or interest in or lien upon any parcel which is
classified as homestead under the provisions of section 273.13,
subdivisions 6, 6a, 7, 7b, 10 or 12 22 or 23, who claims that
said parcel has been assessed at a valuation which exceeds by
ten percent or more the valuation which the parcel would have if
it were valued at the average assessment/sales ratio for real
property in the same class, in that portion of the county in
which that parcel is located, for which the commissioner is able
to establish and publish a sales ratio study as determined by
the applicable real estate assessment/sales ratio study
published by the commissioner of revenue, 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 such service, in the office of the clerk of the
district court before the 16th day of May of the year in which
such tax becomes payable. 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.
Sec. 81. Minnesota Statutes 1984, section 278.05,
subdivision 5, is amended to read:
Subd. 5. Any time after the filing of the petition and
before the trial of the issues raised thereby, when the defense
or claim presented is that the property has been partially,
unfairly, or unequally assessed, or that the parcel has been
assessed at a valuation greater than its real or actual value,
or that a parcel which is classified as homestead under the
provisions of section 273.13, subdivisions 6, 6a, 7, 7b, 10 or
12 22 or 23, has been assessed at a valuation which exceeds by
ten percent or more the valuation which the parcel would have if
it were valued at the average assessment/sales ratio for real
property in the same class in that portion of the county in
which the parcel is located, for which the commissioner is able
to establish and publish a sales ratio study, the attorney
representing the state, county, city or town in the proceedings
may serve on the petitioner, or his attorney, and file with the
clerk of the district court, an offer to reduce the valuation of
any tract or tracts to a valuation set forth in the offer. If,
within ten days thereafter, the petitioner, or his attorney,
gives notice in writing to the county attorney, or the attorney
for the city or town, that the offer is accepted, he may file
the offer with proof of notice, and the clerk shall enter
judgment accordingly. Otherwise, the offer shall be deemed
withdrawn and evidence thereof shall not be given; and, unless a
lower valuation than specified in the offer is found by the
court, no costs or disbursements shall be allowed to the
petitioner, but the costs and disbursements of the state,
county, city or town, including interest at six percent on the
tax based on the amount of the offer from and after the 16th day
of October of the year the taxes are payable, shall be taxed in
its favor and included in the judgment and when collected shall
be credited to the county revenue fund, unless the taxes were
paid in full before the 16th day of October of the year in which
the taxes were payable, in which event interest shall not be
taxable.
Sec. 82. Minnesota Statutes 1984, section 279.01,
subdivision 1, as amended by Laws 1985, chapter 300, section 12,
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 1c, 2c, or
6a, and on other commercial use real property classified as
class 4c 3a, provided that over 60 percent of the gross income
earned by the enterprise on the class 4c 3a property is earned
during the months of May, June, July, and August. Any property
owner of such class 4c 3a 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 $50, 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 $100, upon resolution of
the county board, 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. 83. Minnesota Statutes 1984, section 279.06, is
amended to read:
279.06 [COPY OF LIST AND NOTICE.]
Within five days after the filing of such list, the clerk
shall return a copy thereof to the county auditor, with a notice
prepared and signed by him, and attached thereto, which may be
substantially in the following form:
State of Minnesota )
) ss.
County of ............... )
District Court
.......... Judicial District.
The state of Minnesota, to all persons, companies, or
corporations who have or claim any estate, right, title, or
interest in, claim to, or lien upon, any of the several parcels
of land described in the list hereto attached:
The list of taxes and penalties on real property for the
county of ............................... remaining delinquent
on the first Monday in January, 19....., has been filed in the
office of the clerk of the district court of said county, of
which that hereto attached is a copy. Therefore, you, and each
of you, are hereby required to file in the office of said clerk,
on or before the 20th day after the publication of this notice
and list, your answer, in writing, setting forth any objection
or defense you may have to the taxes, or any part thereof, upon
any parcel of land described in the list, in, to, or on which
you have or claim any estate, right, title, interest, claim, or
lien, and, in default thereof, judgment will be entered against
such parcel of land for the taxes on such list appearing against
it, and for all penalties, interest, and costs. Based upon said
judgment, the land shall be sold to the state of Minnesota on
the second Monday in May, 19... The period of redemption for
all lands sold to the state at a tax judgment sale shall be
three years from the date of sale to the state of Minnesota if
the land is within an incorporated area unless it is: (a)
homesteaded land as defined in section 273.13, subdivision 7 22;
(b) homesteaded agricultural land as defined in section 273.13,
subdivision 6 23, paragraph (a); or (c) seasonal recreational
land as defined in section 273.13, subdivision 4 22, paragraph
(c) or subdivision 27, paragraph (a), in which event the period
of redemption is five years from the date of sale to the state
of Minnesota.
The period of redemption for all other lands sold to the
state at a tax judgment sale shall be five years from the date
of sale.
Inquiries as to the proceedings set forth above can be made
to the county auditor of ..... county whose address is ..... .
(Signed) ...............................,
Clerk of the District Court of the County
of ......................................
(Here insert list.)
The list referred to in the notice shall be substantially
in the following form:
List of real property for the county of
......................., on which taxes remain delinquent on the
first Monday in January, 19...:
Town of (Fairfield),
Township (40), Range (20),
Names (and
Current Filed
Addresses) for
the Taxpayers
and Fee Owners
and in Addition
Those Parties
Who Have Filed
Their Addresses Tax
Pursuant to Subdivision of Parcel Total Tax
section 276.041 Section Section Number and Penalty
$ cts.
John Jones S.E. 1/4 of S.W. 1/4 10 23101 2.20
(825 Fremont
Fairfield, MN
55000)
Bruce Smith That part of N.E. 1/4
(2059 Hand of S.W. 1/4 desc. as
Fairfield, follows: Beg. at the
MN 55000) S.E. corner of said
and N.E. 1/4 of S.W. 1/4;
Fairfield thence N. along the E.
State Bank line of said N.E. 1/4
(100 Main of S.W. 1/4 a distance
Street of 600 ft.; thence W.
Fairfield, parallel with the S.
MN 55000) line of said N.E. 1/4
of S.W. 1/4 a distance
of 600 ft.; thence S.
parallel with said E.
line a distance of 600
ft. to S. line of said
N.E. 1/4 of S.W. 1/4;
thence E. along said S.
line a distance of 600
ft. to the point of
beg. ............... 21 33211 3.15
As to platted property, the form of heading shall conform
to circumstances and be substantially in the following form:
City of (Smithtown)
Brown's Addition, or Subdivision
Names (and
Current Filed
Addresses) for
the Taxpayers
and Fee Owners
and in Addition
Those Parties
Who have Filed
Their Addresses Tax
Pursuant to Parcel Total Tax
section 276.041 Lot Block Number and Penalty
$ cts
John Jones 15 9 58243 2.20
(825 Fremont
Fairfield,
MN 55000)
Bruce Smith 16 9 58244 3.15
(2059 Hand
Fairfield,
MN 55000)
and
Fairfield
State Bank
(100 Main Street
Fairfield,
MN 55000)
The names, descriptions, and figures employed in
parentheses in the above forms are merely for purposes of
illustration.
The name of the town, township, range or city, and addition
or subdivision, as the case may be, shall be repeated at the
head of each column of the printed lists as brought forward from
the preceding column.
Errors in the list shall not be deemed to be a material
defect to affect the validity of the judgment and sale.
Sec. 84. Minnesota Statutes 1984, section 281.17, is
amended to read:
281.17 [PERIOD FOR REDEMPTION.]
The period of redemption for all lands sold to the state at
a tax judgment sale shall be three years from the date of sale
to the state of Minnesota if the land is within an incorporated
area unless it is: (a) nonagricultural homesteaded land as
defined in section 273.13, subdivision 7 22, (b) homesteaded
agricultural land as defined in section 273.13, subdivision 6
23, paragraph (a), or (c) seasonal recreational land as defined
in section 273.13, subdivision 4 27, paragraph (a), or
subdivision 22, paragraph (c), in which event the period of
redemption is five years from the date of sale to the state of
Minnesota.
The period of redemption for all other lands sold to the
state at a tax judgment sale shall be five years from the date
of sale.
Sec. 85. Minnesota Statutes 1984, section 290A.03,
subdivision 6, is amended to read:
Subd. 6. [HOMESTEAD.] "Homestead" means the dwelling
occupied by a claimant as his principal residence and so much of
the land surrounding it, not exceeding ten acres, as is
reasonably necessary for use of the dwelling as a home and any
other property used for purposes of a homestead as defined in
section 273.13, subdivision 7 22, except for agricultural land
assessed as part of a homestead pursuant to section 273.13,
subdivision 6 23, "homestead" is limited to 320 acres or, where
the farm homestead is rented, one acre. The homestead may be
owned or rented and may be a part of a multi-dwelling or
multi-purpose building and the land on which it is built. A
manufactured home, as defined in section 168.011, subdivision 8,
assessed as personal property may be a dwelling for purposes of
this subdivision.
Sec. 86. Minnesota Statutes 1984, section 290A.03,
subdivision 12, is amended to read:
Subd. 12. [GROSS RENT.] "Gross rent" means rental paid for
the right of occupancy, at arms-length, of a homestead,
exclusive of charges for any medical services furnished by the
landlord as a part of the rental agreement, whether expressly
set out in the rental agreement or not. If the landlord and
tenant have not dealt with each other at arms-length and the
commissioner determines that the gross rent charged was
excessive, he may adjust the gross rent to a reasonable amount
for purposes of this chapter.
Any amount paid by a claimant residing in property assessed
pursuant to section 273.133 273.13, subdivisions 3, 4, 5, or 6
for occupancy in that property shall be excluded from gross rent
for purposes of this chapter. However, property taxes imputed
to the homestead of the claimant or the dwelling unit occupied
by the claimant that qualifies for homestead treatment pursuant
to section 273.133 273.13, subdivisions 3, 4, 5, or 6 shall be
included within the term "property taxes payable" as defined in
subdivision 13, notwithstanding the fact that ownership is not
in the name of the claimant.
Sec. 87. Minnesota Statutes 1984, section 290A.03,
subdivision 13, is amended to read:
Subd. 13. [PROPERTY TAXES PAYABLE.] "Property taxes
payable" means the property tax exclusive of special
assessments, penalties, and interest payable on a claimant's
homestead before reductions made pursuant to section 273.13,
subdivisions 6, 7 and 14a 22 and 23, but after deductions made
pursuant to sections 124.2137, 273.115, 273.116,
273.135, 273.139, 273.1391, 273.42, subdivision 2, and any other
state paid property tax credits in any calendar year. In the
case of a claimant who makes ground lease payments, "property
taxes payable" includes the amount of the payments directly
attributable to the property taxes assessed against the parcel
on which the house is located. No apportionment or reduction of
the "property taxes payable" shall be required for the use of a
portion of the claimant's homestead for a business purpose if
the claimant does not deduct any business depreciation expenses
for the use of a portion of the homestead in the determination
of federal adjusted gross income. For homesteads which are
manufactured homes as defined in section 168.011, subdivision 8,
"property taxes payable" shall also include the amount of the
gross rent paid in the preceding year for the site on which the
homestead is located, which is attributable to the net tax paid
on the site. The amount attributable to property taxes shall be
determined by multiplying the net tax on the parcel by a
fraction, the numerator of which is the gross rent paid for the
calendar year for the site and the denominator of which is the
gross rent paid for the calendar year for the parcel. When a
homestead is owned by two or more persons as joint tenants or
tenants in common, such tenants shall determine between them
which tenant may claim the property taxes payable on the
homestead. If they are unable to agree, the matter shall be
referred to the commissioner of revenue and his decision shall
be final. Property taxes are considered payable in the year
prescribed by law for payment of the taxes.
In the case of a claim relating to "property taxes
payable," the claimant must have owned and occupied the
homestead on January 2 of the year in which the tax is payable
and (i) the property must have been classified as homestead
property pursuant to section 273.13, subdivisions 6, 7, or 14a
subdivisions 22 or 23 on or before June 1 of the year in which
the "property taxes payable" were levied; or (ii) the claimant
must provide documentation from the local assessor that
application for homestead classification has been made prior to
October 1 of the year in which the "property taxes payable" were
payable and that the assessor has approved the application.
Sec. 88. Minnesota Statutes 1984, section 290A.03,
subdivision 14, is amended to read:
Subd. 14. [NET TAX.] "Net tax" means
(a) the property tax, exclusive of special assessments,
interest, and penalties, and after reduction for any state paid
property tax credits as required in subdivision 13 except for
the reduction pursuant to section 273.13, subdivisions 6, 7, and
14a 22 and 23, or
(b) the payments made in lieu of ad valorem taxes,
including payments of special assessments imposed in lieu of ad
valorem taxes,
for the calendar year in which the rent was paid. If a
portion of the property is occupied as a homestead or is used
for other than rental purposes, the net tax shall be the amount
of tax reduced by the percentage that the nonrental use
comprises of the total square footage of the building. If a
portion of the property is used for purposes other than for
residential rental and none of the property is occupied as a
homestead, the net tax shall be the amount of the tax of the
parcel multiplied by a fraction, the numerator of which is the
assessed value of the residential rental portion and the
denominator of which is the total assessed value of the parcel.
If a portion of the property is used for other than rental
residential purposes, the county treasurer shall list on the
property tax statement the amount of net tax pertaining to the
rental residential portion of the property.
The amount of the net tax shall not be reduced by an
abatement or a court ordered reduction in the property tax on
the property made after the certificate of rent constituting
property tax has been provided to the renter.
Sec. 89. Minnesota Statutes 1984, section 290A.04,
subdivision 2, is amended to read:
Subd. 2. A claimant whose property taxes payable or rent
constituting property taxes are in excess of the percentage of
the household income stated below shall pay an amount equal to
the percent of income shown for the appropriate household income
level and the state refund will be equal to an amount up to the
state refund amount shown below.
Percent State
Household Income of Income Refund
Net loss and
up to $2,999 0.5 percent $13
3,000 to 3,499 0.6 percent $15
3,500 to 3,999 0.6 percent $18
4,000 to 4,499 0.7 percent $20
4,500 to 4,999 0.7 percent $23
5,000 to 5,999 0.8 percent $40
6,000 to 6,999 0.9 percent $54
7,000 to 7,999 1.0 percent $70
8,000 to 8,999 1.1 percent $88
9,000 to 9,999 1.2 percent $108
10,000 to 10,999 1.3 percent $130
11,000 to 11,999 1.4 percent $154
12,000 to 12,999 1.5 percent $180
13,000 to 13,999 1.5 percent $195
14,000 to 14,999 1.5 percent $210
15,000 to 15,999 1.5 percent $225
16,000 to 16,999 1.5 percent $240
17,000 to 17,999 1.5 percent $255
18,000 to 18,999 1.5 percent $270
19,000 to 19,999 1.5 percent $285
20,000 to 20,999 1.6 percent $320
21,000 to 21,999 1.6 percent $336
22,000 to 22,999 1.6 percent $352
23,000 to 23,999 1.8 percent $414
24,000 to 24,999 1.8 percent $432
25,000 to 25,999 1.8 percent $450
26,000 to 26,499 2.0 percent $520
26,500 to 26,999 2.0 percent $530
27,000 to 27,499 2.0 percent $540
27,500 to 27,999 2.0 percent $550
28,000 to 28,499 2.0 percent $560
28,500 to 28,999 2.0 percent $570
29,000 to 29,499 2.0 percent $580
29,500 to 29,999 2.0 percent $590
30,000 to 30,499 2.0 percent $600
30,500 to 30,999 2.0 percent $610
31,000 to 31,499 2.2 percent $620
31,500 to 31,999 2.2 percent $630
32,000 to 32,499 2.2 percent $640
32,500 to 32,999 2.2 percent $650
33,000 to 33,999 2.2 percent $700
34,000 to 34,999 2.2 percent $600
35,000 to 35,999 2.2 percent $500
36,000 to 36,999 2.4 percent $400
37,000 to 37,999 2.4 percent $300
38,000 to 38,999 2.4 percent $200
39,000 to 39,999 2.4 percent $100
The payment made to a claimant shall be the amount of the
state refund calculated pursuant to this subdivision, less the
homestead credit given pursuant to section 273.13,
subdivisions 6, 7 and 14a 22 and 23.
Sec. 90. Minnesota Statutes 1984, section 297A.01,
subdivision 14, is amended to read:
Subd. 14. "Handicapped" means a permanent and total
disability as defined in section 273.13, subdivision 7 22.
Sec. 91. Minnesota Statutes 1984, section 360.301,
subdivision 1, is amended to read:
Subdivision 1. The commissioner of finance shall maintain
in the state bond fund a separate account, designated as the
Minnesota aeronautics bond account, showing all taxes levied for
such fund pursuant to this section and all moneys transferred to
the fund pursuant to section 360.306 for the payment of
Minnesota aeronautics bonds issued under section 360.302. The
auditor shall levy each year on all taxable property within the
state a tax sufficient, with all moneys then and theretofore
transferred under section 360.306, to pay all such bonds and
interest thereon which are due and to become due within the then
ensuing year and to and including July 1 in the second ensuing
year. Such tax shall be levied upon all real property used for
the purposes of a homestead, as well as other taxable property,
notwithstanding the provisions of section 273.13, subdivisions 6
and 7, and shall be and remain subject to no limitation of rate
or amount until all such bonds and all interest thereon are
fully paid. All proceeds of such taxes are appropriated and
shall be credited to the state bond fund, and the principal and
interest of state bonds shall be payable from the proceeds of
such taxes, and so much thereof as may be necessary is hereby
appropriated for such payments; provided that such principal and
interest, if any, as may become due at any time when there is
not on hand a sufficient amount from the proceeds of such taxes
to pay the same, shall be paid out of the general fund in the
state treasury, and the amount necessary therefor is hereby
appropriated, to be reimbursed from the proceeds of such taxes
when received.
Sec. 92. Minnesota Statutes 1984, section 473F.02,
subdivision 3, is amended to read:
Subd. 3. "Commercial-industrial property" means the
following categories of property, as defined in section 273.13,
excluding that portion of such property (a) (1) which may, by
law, constitute the tax base for a tax increment pledged
pursuant to section 462.585 or 474.10, certification of which
was requested prior to August 1, 1979, to the extent and while
such tax increment is so pledged; (b) (2) which may, by law,
constitute the tax base for tax revenues set aside and paid over
for credit to a sinking fund pursuant to direction of the city
council in accordance with Laws 1963, chapter 881, as amended,
to the extent that such revenues are so treated in any year;
or (c) (3) which is exempt from taxation pursuant to section
272.02:
(a) That portion of class 3 property defined in Minnesota
Statutes 1971, section 273.13, consisting of stocks of
merchandise and furniture and fixtures used therewith;
manufacturers' materials and manufactured articles; and tools,
implements and machinery, whether fixtures or otherwise.
(b) Class 3h property.
(c) Class 3j property.
(d) That portion of class 4 property defined in Minnesota
Statutes 1971, section 273.13, which is either used or zoned for
use for any commercial or industrial purpose, except for such
property which is, or, in the case of property under
construction, will when completed be used exclusively for
residential occupancy and the provision of services to
residential occupants thereof. Property shall be considered as
used exclusively for residential occupancy only if each of not
less than 80 percent of its occupied residential units is, or,
in the case of property under construction, will when completed
be occupied under an oral or written agreement for occupancy
over a continuous period of not less than 30 days.
If the classification of property prescribed by section
273.13 is modified by legislative amendment, the references in
this subdivision shall be to such successor class or classes of
property, or portions thereof, as embrace the kinds of property
designated in this subdivision.
Sec. 93. Minnesota Statutes 1984, section 473F.02,
subdivision 4, is amended to read:
Subd. 4. "Residential property" means the following
categories of property, as defined in section 273.13, excluding
that portion of such property exempt from taxation pursuant to
section 272.02:
(a) Class 3b 1a, 1b, 2a, 4a, 5a, 5b, 7a, 7b, 7c, and 7d
property
(b) Class 3c property
(c) Class 3cc property
(d) Class 3f property
(e) And that portion of class 4 3a, 3b, and 10 property
used exclusively for residential occupancy.
(f) That property valued and assessed under section 273.13,
subdivision 17.
Sec. 94. Minnesota Statutes 1984, section 475.754, is
amended to read:
475.754 [DISASTERS OR PUBLIC EMERGENCIES, CERTIFICATES OF
INDEBTEDNESS.]
If in any fiscal year the receipts from taxes or other
sources are insufficient to meet the expenses incurred or to be
incurred in said year by any city however organized, county or
town by reason of any natural disaster or other public emergency
requiring the making of extraordinary expenditures, the
governing body of any such city, county or town may authorize
the sale of certificates of indebtedness to mature within three
years and to bear interest at a rate not to exceed the amount
prescribed in this chapter. The certificates may be issued with
or without advertising for bids on such terms and conditions as
the governing body may determine and shall be in such form as
the state auditor in cooperation with the commissioner of
commerce shall prescribe. All certificates and interest thereon
shall be payable from taxes levied within existing limitations
or from other available revenue. Certificates of indebtedness
issued under the provisions of this section shall not be
considered bonded indebtedness for the purposes of sections
273.13, subdivisions 6 and 7; and section 275.50, subdivision 5,
clause (h). The certificates shall not be included in the net
debt of the issuing city, county or town.
Sec. 95. Minnesota Statutes 1984, section 475A.06,
subdivision 6, is amended to read:
Subd. 6. On or before December 1 in each year the state
auditor shall levy on all taxable property within the state
whatever tax may be necessary to produce an amount sufficient,
with all money then and theretofore credited to the Minnesota
state municipal aid bond account, to pay the entire amount of
principal and interest then and theretofore due and principal
and interest to become due on or before July 1 in the second
year thereafter on Minnesota state municipal aid bonds. This
tax shall be levied upon all real property used for the purposes
of a homestead, as well as other taxable property,
notwithstanding the provisions of section 273.13, subdivisions 6
and 7, and shall be subject to no limitation of rate or amount
until all such bonds and interest thereon are fully paid. The
proceeds of this tax are appropriated and shall be credited to
the state bond fund, and the principal of and interest on the
bonds are payable from such proceeds, and the whole thereof, or
so much as may be necessary, is appropriated for such payments.
If at any time there is insufficient money from the proceeds of
such taxes to pay the principal and interest when due on
Minnesota state municipal aid bonds, such principal and interest
shall be paid out of the general fund in the state treasury, and
the amount necessary therefor is hereby appropriated.
Sec. 96. Minnesota Statutes 1984, section 514.03,
subdivision 3, is amended to read:
Subd. 3. The lien shall extend to all the interest and
title of the owner in and to the premises improved, not
exceeding 80 acres, except in the case of homesteaded
agricultural land as used in section 273.13, subdivision 6 23,
where the lien shall be limited to 40 acres.
Sec. 97. Minnesota Statutes 1984, section 583.02, is
amended to read:
583.02 [DEFINITIONS.]
As used in sections 583.01 to 583.12, the term "homestead"
means residential or agricultural real estate, a portion or all
of which is entitled to receive homestead credit classification
under section 273.13, subdivision 15a 22 or 23.
Sec. 98. [REPEALER.]
Minnesota Statutes 1984, sections 273.1105; 273.13,
subdivisions 2, 2a, 3, 4, 5a, 6, 6a, 7, 7b, 7c, 7d, 8a, 9, 10,
11, 12, 14a, 16, 17, 17a, 17b, 17c, 17d, 19, 20, and 21;
273.133; and 273.15, are repealed.
Sec. 99. [EFFECTIVE DATE.]
This article is effective for taxes levied in 1986, payable
in 1987 and thereafter, provided that sections 2, 7, 8, 13, 14,
22, 25 to 27, 29, 91, and 95 are effective for bonds issued
after the date of final enactment of this act.
ARTICLE 5
PROPERTY TAX REFUND
Section 1. Minnesota Statutes 1984, section 290A.03,
subdivision 3, as amended by Laws 1985, chapter 210, article 2,
section 9, is amended to read:
Subd. 3. [INCOME.] (1) "Income" means the sum of the
following:
(a) federal adjusted gross income as defined in the
Internal Revenue Code of 1954 as amended through December 31,
1983 May 25, 1985; and
(b) the sum of the following amounts to the extent not
included in clause (a):
(i) additions to federal adjusted gross income as provided
in Minnesota Statutes, section 290.01, subdivision 20a, clauses
(1), (2), (4), (9), (10), and (14);
(ii) all nontaxable income;
(iii) recognized net long term capital gains;
(iv) dividends and interest excluded from federal adjusted
gross income under sections 116 or 128 of the Internal Revenue
Code of 1954;
(v) cash public assistance and relief;
(vi) any pension or annuity (including railroad retirement
benefits, all payments received under the federal social
security act, supplemental security income, and veterans
benefits), which was not exclusively funded by the claimant or
spouse, or which was funded exclusively by the claimant or
spouse and which funding payments were excluded from federal
adjusted gross income in the years when the payments were made;
(vii) nontaxable interest received from the state or
federal government or any instrumentality or political
subdivision thereof;
(viii) workers' compensation;
(ix) unemployment benefits;
(x) nontaxable strike benefits;
(xi) the gross amounts of payments received in the nature
of disability income or sick pay as a result of accident,
sickness, or other disability, whether funded through insurance
or otherwise; and
(xii) the ordinary income portion of a lump sum
distribution under section 402(e) of the Internal Revenue Code
of 1954; and
(xiii) contributions made by the claimant to an individual
retirement account, including a qualified voluntary employee
contribution; simplified employee pension plan; self-employed
retirement plan; cash or deferred arrangement plan under section
401(k) of the Internal Revenue Code of 1954; or deferred
compensation plan under section 457 of the Internal Revenue Code
of 1954.
In the case of an individual who files an income tax return
on a fiscal year basis, the term "federal adjusted gross income"
shall mean federal adjusted gross income reflected in the fiscal
year ending in the calendar year. Federal adjusted gross income
shall not be reduced by the amount of a net operating loss
carryback.
(2) "Income" does not include
(a) amounts excluded pursuant to the Internal Revenue Code,
Sections 101(a), 102, 117, and 121;
(b) amounts of any pension or annuity which was exclusively
funded by the claimant or spouse and which funding payments were
not excluded from federal adjusted gross income in the years
when the payments were made;
(c) surplus food or other relief in kind supplied by a
governmental agency;
(d) relief granted under this chapter;
(e) child support payments received under a temporary or
final decree of dissolution or legal separation; or
(f) federal adjusted gross income shall be reduced by wage
or salary expense which is not allowed as a deduction under
provisions of section 280C of the Internal Revenue Code of 1954;
or
(g) the first $2,000 of household income if the claimant
was disabled on or before June 1 or attained the age of 65 prior
to June 1 of the year following the year for which the taxes
were levied or in which the rent was paid.
Sec. 2. Minnesota Statutes 1984, section 290A.04,
subdivision 1, is amended to read:
Subdivision 1. A credit refund shall be allowed each
claimant in the amount that property taxes payable or rent
constituting property taxes exceed the percentage of the
household income of the claimant specified in subdivision 2 in
the year for which the taxes were levied or in the year in which
the rent was paid as specified in subdivision 2. If the amount
of property taxes payable or rent constituting property taxes is
equal to or less than the percentage of the household income of
the claimant specified in subdivision 2 in the year for which
the taxes were levied or in the year in which the rent was paid,
the claimant shall not be eligible for a state refund pursuant
to this section. For purposes of claiming this credit refund, a
claimant who owns his own homestead part of the year and rents
part of the year may add his rent constituting property taxes to
the qualifying tax on his homestead.
Sec. 3. Minnesota Statutes 1984, section 290A.04,
subdivision 2, is amended to read:
Subd. 2. A claimant whose property taxes payable or rent
constituting property taxes are in excess of the percentage of
the household income stated below shall pay an amount equal to
the percent of income shown for the appropriate household income
level and along with the percent to be paid by the claimant of
the remaining amount of property taxes payable or rent
constituting property taxes. The state refund will be equal to
an the amount of property taxes payable or rent constituting
property taxes that remain, up to the state refund amount shown
below.
Percent State Percent Maximum
Household Income of Income Refund Paid by State
Claimant Refund
Net loss and
up to $2,999 0.5 1.0 percent $13 5 percent $1,125
3,000 to 3,499 0.6 1.0 percent $15 6 percent $1,125
3,500 to 3,999 0.6 1.0 percent $18 7 percent $1,125
4,000 to 4,499 0.7 1.0 percent $20 8 percent $1,125
4,500 to 4,999 0.7 1.0 percent $23 9 percent $1,125
5,000 to 5,999 0.8 1.0 percent $40 10 percent $1,125
6,000 to 6,999 0.9 1.0 percent $54 11 percent $1,125
7,000 to 7,999 1.0 percent $70 12 percent $1,125
8,000 to 8,999 1.1 percent $88 13 percent $1,125
9,000 to 9,999 1.2 percent $108 14 percent $1,125
10,000 to 10,999 1.3 percent $130 15 percent $1,125
11,000 to 11,999 1.4 percent $154 16 percent $1,125
12,000 to 12,999 1.5 percent $180 17 percent $1,125
13,000 to 13,999 1.5 percent $195 18 percent $1,125
14,000 to 14,999 1.5 percent $210 19 percent $1,125
15,000 to 15,999 1.5 percent $225 20 percent $1,125
16,000 to 16,999 1.5 percent $240 21 percent $1,125
17,000 to 17,999 1.5 percent $255 22 percent $1,125
18,000 to 18,999 1.5 percent $270 23 percent $1,125
19,000 to 19,999 1.5 percent $285 24 percent $1,125
20,000 to 20,999 1.6 percent $320 25 percent $1,125
21,000 to 21,999 1.6 percent $336 27 percent $1,125
22,000 to 22,999 1.6 percent $352 29 percent $1,125
23,000 to 23,999 1.8 percent $414 31 percent $1,125
24,000 to 24,999 1.8 percent $432 33 percent $1,105
25,000 to 25,999 1.8 percent $450 35 percent $1,080
26,000 to 26,499 2.0 percent $520
26,500 to 26,999 2.0 percent $530 38 percent $1,050
27,000 to 27,499 2.0 percent $540
27,500 to 27,999 2.0 percent $550 41 percent $1,020
28,000 to 28,499 2.0 percent $560
28,500 to 28,999 2.0 percent $570 44 percent $ 990
29,000 to 29,499 2.0 percent $580
29,500 to 29,999 2.0 percent $590 47 percent $ 960
30,000 to 30,499 2,0 percent $600
30,500 to 30,999 2.0 percent $610 50 percent $ 930
31,000 to 31,499 2.2 percent $620
31,500 to 31,999 2.2 percent $630 50 percent $ 900
32,000 to 32,499 2.0 percent $640
32,500 to 32,999 2.2 percent $650 50 percent $800
33,000 to 33,999 2.2 percent $700 50 percent $700
34,000 to 34,999 2.2 percent $600 50 percent $600
35,000 to 35,999 2.2 percent $500 50 percent $500
36,000 to 36,999 2.4 percent $400 50 percent $400
37,000 to 37,999 2.4 percent $300 50 percent $300
38,000 to 38,999 2.4 percent $200 50 percent $200
39,000 to 39,999 2.4 percent $100 50 percent $100
40,000 and over 2.4 percent 50 percent -0-
The payment made to a claimant shall be the amount of the
state refund calculated pursuant to this subdivision, less the
homestead credit given pursuant to section 273.13, subdivisions
6, 7 and 14a. No payment is allowed if the claimant's household
income is $40,000 or more.
Sec. 4. Minnesota Statutes 1984, section 290A.04,
subdivision 3, is amended to read:
Subd. 3. The commissioner of revenue shall construct and
make available to taxpayers a comprehensive table showing the
property taxes to be paid and credit refund allowed at various
levels of income and assessment. The table shall follow the
schedule of income percentages, maximums and other provisions
specified in subdivisions subdivision 2, 2a, and 2b, except that
the commissioner may graduate the transition between income
brackets. All refunds shall be computed in accordance with
tables prepared and issued by the commissioner of revenue.
Sec. 5. Minnesota Statutes 1984, section 290A.06, is
amended to read:
290A.06 [FILING TIME LIMIT, LATE FILING.]
Any claim for property taxes payable shall be filed with
the department of revenue on or before August 31 15 of the year
in which the property taxes are due and payable. Any claim for
rent constituting property taxes shall be filed with the
department of revenue on or before August 31 15 of the year
following the year in which the rent was paid. The commissioner
may extend the time for filing these claims for a period not to
exceed six months in the case of sickness, absence, or other
disability, or when in his judgment other good cause exists.
A claim filed after the original or extended due date shall
be allowed, but the amount of credit shall be reduced by five
percent of the amount otherwise allowable, plus an additional
five percent for each month of delinquency, not exceeding a
total reduction of 25 percent which may be cancelled or reduced
by the commissioner in the case of sickness, absence, or other
disability, or when in his judgment other good cause exists. In
any event no claim shall be allowed if the initial claim is
filed two years one year after the original due date for filing
the claim.
The time limit on redetermination of claims for refund and
examination of records shall be governed by sections 290.49,
290.50, and 290.56 and for purposes of computing the time limit
as provided in these sections the due date of the property tax
refund return shall be the same as the due date contained in
section 290.42 for an income tax return covering the year in
which the rent was paid or the year preceding the year in which
the property taxes are payable.
Sec. 6. Minnesota Statutes 1984, section 290A.19, as
amended by Laws 1985, chapter 210, article 1, section 20, is
amended to read:
290A.19 [OWNER OR MANAGING AGENT TO FURNISH RENT
CERTIFICATE; PENALTY.]
(a) The owner or managing agent of any property for which
rent is paid for occupancy as a homestead shall furnish a
certificate of rent constituting property tax to each person who
is a renter on December 31, in the form prescribed by the
commissioner. If the renter moves prior to December 31, the
owner or managing agent shall at his option either provide the
certificate to the renter at the time he moves, or mail the
certificate to the forwarding address if an address has been
provided by the renter. The certificate shall be made available
to the renter not later than January 31 of the year following
the year in which the rent was paid. Any owner or managing
agent who willfully fails to furnish a certificate as provided
herein shall be liable to the commissioner for a penalty of $20
for each act or failure to act. The penalty shall be assessed
and collected in the manner provided in chapter 290 for the
assessment and collection of income tax.
(b) If the owner or managing agent elects to provide the
renter with the certificate at the time he moves, rather than
after December 31, the amount of rent constituting property
taxes shall be computed as follows:
(i) The net tax shall be reduced by 1/12th for each month
remaining in the calendar year.
(ii) In calculating the denominator of the fraction
pursuant to section 290A.03, subdivision 11, the gross rent paid
through the last month of claimant's occupancy shall be
substituted for "the gross rent paid for the calendar year for
the property in which the unit is located."
(c) The certificate of rent constituting property taxes
shall include the address of the property, including the county,
and the property tax parcel identification number and any
additional information which the commissioner determines is
appropriate.
(d) If the owner or managing agent fails to provide the
renter with a certificate of rent constituting property taxes,
the commissioner shall allocate the net tax on the building to
the unit on a square footage basis or other appropriate basis as
the commissioner determines. The renter shall supply the
commissioner with a statement from the county treasurer which
gives the amount of property tax on the parcel, the address and
property tax parcel identification number of the property, and
the number of units in the building.
(e) Notwithstanding the provisions of section 290A.17, the
commissioner shall provide to the commissioner of energy and
economic development a copy of all certificates of rent
constituting property taxes that have been filed with the
department. No certificates of rent constituting property taxes
for any county need be given to the commissioner of energy and
economic development by the commissioner if a book has been
published detailing the property taxes for each parcel in the
county for the given year. The copies of the certificates shall
be provided by February 1 of the year following the year in
which the property tax refund return was filed.
Sec. 7. [REPEALER.]
Minnesota Statutes 1984, section 290A.04, subdivisions 2a
and 2b are repealed.
Sec. 8. [EFFECTIVE DATE.]
This article is effective for claims based on rent paid in
1985 and thereafter and for property taxes payable in 1986 and
thereafter, except that section 6 and the change in section 5
reducing the time to file an initial claim to one year are
effective the day after final enactment.
ARTICLE 6
LOCAL GOVERNMENT AIDS
Section 1. Minnesota Statutes 1984, section 477A.011, is
amended by adding a subdivision to read:
Subd. 1a. [CITY.] City means a statutory or home rule
charter city.
Sec. 2. Minnesota Statutes 1984, section 477A.011,
subdivision 3, is amended to read:
Subd. 3. [POPULATION.] Population means the population
established by the most recent federal census, by a special
census conducted under contract with the United States bureau of
the census, by a population estimate made by the metropolitan
council, or by a population estimate of the state demographer
made pursuant to section 116K.04, subdivision 4, clause (10),
whichever is the most recent as to the stated date of the count
or estimate. The term "per capita" refers to population as
defined by this subdivision.
Sec. 3. Minnesota Statutes 1984, section 477A.011,
subdivision 10, is amended to read:
Subd. 10. [MAXIMUM AID AMOUNT.] For the 1984 aid
distribution, a municipality's maximum aid amount shall be 106
percent of the amount it was certified to receive in 1983
pursuant to sections 477A.011 to 477A.03, plus any amounts
certified in 1983 pursuant to Minnesota Statutes 1982, sections
273.138 and 273.139, including any amount certified by a
district as defined by section 273.73, subdivision 9, or which
qualifies for exemption pursuant to section 273.78, which lies
totally within the municipality, and including any amount which
would have been received in 1983 pursuant to section 273.139 by
a district as defined by section 273.73, subdivision 9, lying
totally within the municipality, for a project approved by the
Minnesota housing finance agency or the United States department
of housing and urban development prior to March 1, 1983, had the
project been completed and subject to taxation based upon full
market value for taxes payable in 1983.
For any subsequent calendar year aid distribution, a
municipality's city's maximum aid amount shall be 106 percent of
the amount received in the previous year pursuant to sections
477A.011 to 477A.03 its previous year aid amount, provided that
its previous year aid amount exceeded $150 per capita. If its
previous year aid amount was less than $150 per capita, its
maximum aid amount shall be the lesser of: (a) 112 percent of
its previous year aid amount, or (b) $159 multiplied by the
population figure used in determining its previous year aid.
Sec. 4. Minnesota Statutes 1984, section 477A.011, is
amended by adding a subdivision to read:
Subd. 12. [PREVIOUS YEAR AID AMOUNT.] For any calendar
year aid distribution, a municipality's previous year aid amount
means the amount that it was certified to receive for the
previous calendar year pursuant to sections 477A.011 to 477A.03.
Sec. 5. Minnesota Statutes 1984, section 477A.011, is
amended by adding a subdivision to read:
Subd. 13. [FISCAL NEED FACTOR.] For any calendar year aid
distribution, a city's fiscal need factor means the three-year
average of the sum of its municipal levy including its fiscal
disparities distribution amount, and its local government aid
distribution amount, for taxes payable and distribution amounts
receivable in the three years immediately preceding the aid
distribution year.
The fiscal need factor of any city that issued general
obligation bonds in 1982 to pay for the construction or
reconstruction of water wells which replaced a municipal water
supply found to be an environmental health hazard by the state
department of health shall be increased by one-fourth of the
amount of the bonds issued.
For any city which received more than $70 per capita in
attached machinery aids in 1983 pursuant to Minnesota Statutes
1982, section 273.138, the local government aid amounts for 1984
and 1985 used in the calculation of the fiscal need factor shall
be reduced by the amount of attached machinery aids received in
1983.
Sec. 6. Minnesota Statutes 1984, section 477A.011, is
amended by adding a subdivision to read:
Subd. 14. [LOCAL EFFORT MILL RATE.] For any calendar year
aid distribution, a city's local effort mill rate means its
fiscal need factor per capita divided by $16 per capita per mill
for the first $300 of its fiscal need factor per capita; plus
its fiscal need factor per capita divided by $14 per capita per
mill on that part of its fiscal need factor per capita, if any,
in excess of $300. In no case shall a city's local effort mill
rate be less than eight mills.
Sec. 7. Minnesota Statutes 1984, section 477A.012, is
amended to read:
477A.012 [COUNTY GOVERNMENT DISTRIBUTIONS.]
In each calendar year 1986, every each county government
shall receive a distribution equal to 60 percent of the aid
amount certified for 1983 pursuant to sections 477A.011 to
477A.03.
Sec. 8. Minnesota Statutes 1984, section 477A.013, is
amended to read:
477A.013 [MUNICIPAL GOVERNMENT DISTRIBUTIONS.]
Subdivision 1. [TOWNS.] (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 1986, each
town which 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 the greater of: (a) 60
percent of the amount received in 1983 pursuant to Minnesota
Statutes 1982, sections 273.138, 273.139, and 477A.011 to
477A.03.
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 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.
Subd. 3. [AID LIMITATION.] The aid amount determined
pursuant to subdivision 2 shall be limited so that it is not
greater than the municipality's maximum aid amount; or (b) 106
percent of the amount received in 1985 pursuant to Minnesota
Statutes 1984, sections 477A.011 to 477A.03.
Subd. 2. [CITIES.] In calendar year 1986, each city shall
receive a local government aid distribution as determined by the
following steps.
(1) A preliminary aid amount shall be computed for each
city equal to the amount obtained by subtracting its local
effort mill rate multiplied by its equalized assessed value from
its fiscal need factor, except that its preliminary aid amount
may not be less than its previous year aid amount.
For any city which received more than $70 per capita in
attached machinery aids in 1983 pursuant to Minnesota Statutes
1982, section 273.138, an amount equal to the amount of attached
machinery aids received in 1983 shall be added to the
preliminary aid amount.
(2) For each city, an aid increase amount equal to the
amount by which its preliminary aid amount exceeds its previous
year aid amount shall be determined. Each city's aid increase
amount shall be reduced by a uniform percentage as determined by
the commissioner of revenue, to make the sum of the final aid
distributions for all cities equal the aid limitation imposed by
subdivision 3.
(3) Each city's final aid amount shall be equal to the sum
of its aid increase amount, as adjusted, and its previous year
aid amount; provided, however, that no city's aid shall exceed
its maximum aid amount, and further provided that no city which
is a city of the first class shall have a final aid amount which
is less than 102 percent of its previous year aid.
Subd. 3. [AID LIMITATION.] The total amount available for
distribution to cities pursuant to subdivision 2 shall be
$286,000,000 for calendar year 1986.
Sec. 9. [PAYMENT DATE EXCEPTION.]
Notwithstanding the provisions of Minnesota Statutes,
section 477A.015, any city containing property which qualifies
for reductions pursuant to Minnesota Statutes, section 273.1391,
subdivision 2, clause (b), may apply to the commissioner of
revenue to have the entire amount of its local government aid
distribution paid on July 15, for the calendar year 1985
distribution only. Applications pursuant to this section must
be received by the commissioner no later than July 1, 1985.
Sec. 10. [REPEALER.]
Minnesota Statutes 1984, section 477A.0131, is repealed.
Sec. 11. [EFFECTIVE DATE.]
This article is effective for local government aid
distributions in calendar year 1986, except for section 9 which
is effective the day following final enactment.
ARTICLE 7
HENNEPIN COUNTY PARK RESERVE DISTRICT
Section 1. Laws 1967, chapter 721, section 2, as amended
by Laws 1969, chapter 885, section 1; Laws 1971, chapter 954,
section 1; Laws 1973, chapter 473, section 1; and Laws 1979,
chapter 288, section 1, is amended to read:
Sec. 2. [HENNEPIN COUNTY; PARK RESERVE DISTRICT; TAX
LEVY.]
Subdivision 1. [LEVY.] To provide funds for the purposes
of the Hennepin county park reserve district as set forth in its
annual budget, in lieu of the levies authorized by any other
special law for such purposes, the board of county park district
commissioners of Hennepin county upon approval of each annual
budget may levy taxes on all the taxable property in the county
and park district at a rate not exceeding 1.0 mill 1.3 mills on
the assessed valuation thereof. Notwithstanding Minnesota
Statutes, section 398.16, on or before October 1 of each year,
after public hearing, the board of park district commissioners
shall adopt a budget for the ensuing year and shall determine
the total amount necessary to be raised from ad valorem tax
levies to meet its budget. The board of park district
commissioners shall submit the budget to the county board. The
county board may veto or modify an item contained in the budget.
If the county board determines to veto or to modify an item in
the budget, it must, within 15 days after the budget was
submitted by the district board, state in writing the specific
reasons for its objection to the item vetoed or the reason for
the modification. The park reserve district board, after
consideration of the county board's objections and proposed
modifications, may reapprove a vetoed item or the original
version of an item with respect to which a modification has been
proposed, by a two-thirds majority. If the district board does
not reapprove a vetoed item, the item shall be deleted from the
budget. If the district board does not reapprove the original
version of a modified item, the item shall be included in the
budget as modified by the county board. After adoption of the
final budget and no later than October 1, the superintendent of
the park district shall certify to the office of the Hennepin
county director of tax and public records exercising the
functions of the county auditor the total amount to be raised
from ad valorem tax levies to meet its budget for the ensuing
year. The director of tax and public records shall add the
amount of any levy certified by the district to other tax levies
on the property of the county within the district for collection
by the director of tax and public records with other taxes.
When collected, the director shall make settlement of such taxes
with the district in the same manner as other taxes are
distributed to the other political subdivisions in Hennepin
county. The levy authorized by this section shall be in
addition to any other taxes authorized by law.
Subd. 2. [BONDS.] To provide funds for the acquisition and
betterment of park properties and facilities of the district in
accordance with plans filed by it under Minnesota Statutes,
section 398.19, upon request of the board of park district
commissioners by a resolution or resolutions regularly adopted
by a majority of all members thereof, the board of county
commissioners of Hennepin county may, prior to the effective
date of this article, in addition to bonds issued by the county
for this purpose before January 1, 1973, by resolution issue and
sell general obligation bonds of the county in the manner
provided in Minnesota Statutes, sections 475.60 to 475.753, in
an aggregate amount not exceeding $2,500,000. Taxes for the
payment of the principal of and interest on such bonds shall be
assessed and extended upon all taxable property in the county.
Such bonds shall not be subject to the limitations of Minnesota
Statutes, sections 475.51 to 475.59, but the maturity years and
amounts and interest rates of each series of bonds shall be
fixed so that the maximum amount of principal and interest to
become due in any year on the bonds authorized by this law and
all bonds issued by the county for the purposes of the district
before January 1, 1973, shall not exceed an amount equal to
three tenths of one mill times the assessed value of all taxable
property in the county as last finally equalized before the
issuance of the new series. Taxes for the payment of principal
and interest on bonds issued after the effective date of this
article shall be assessed and extended upon all taxable property
in the park district.
Sec. 2. Laws 1979, chapter 288, section 2, subdivision 2,
is amended to read:
Subd. 2. Three Two park district commissioners shall be
appointed by the park and recreation board of the city of
Minneapolis from among its membership board of commissioners of
Hennepin county. An appointee must be a resident of the
Hennepin county park reserve district in order to qualify and
serve as a park district commissioner. Each park district
commissioner appointed pursuant to this subdivision shall serve
for a four-year term coinciding with his term on the park and
recreation board of the city of Minneapolis, and until a
successor is appointed and qualifies. If a vacancy occurs among
the commissioners appointed pursuant to this subdivision,
the park and recreation board of the city of Minneapolis
commissioners of Hennepin county shall appoint a successor.
Sec. 3. Laws 1979, chapter 288, section 2, subdivision 3,
is amended to read:
Subd. 3. Four Five park district commissioners shall be
elected as provided in this subdivision to represent those
portions of Hennepin county outside of the city of Minneapolis.
One park district commissioner shall be elected without party
designation from each of the districts established pursuant to
subdivision 4. Elections under this subdivision shall be held
at the same time and in the same manner as elections for the
office of county commissioner beginning at the 1986 general
election. Each park district commissioner elected pursuant to
this subdivision shall be a resident of the district he
represents and shall serve for a term of four years and until a
successor is elected and qualifies, except that the term of
office of each park district commissioner elected at the general
election held in the year of a federal census shall be only two
years and until a successor is elected and qualifies. At the
general election following redistricting as required in
subdivision 4, the three commissioners from odd-numbered
districts shall be elected for four-year terms and the two
commissioners from even-numbered districts shall be elected for
two-year terms. If a vacancy occurs in the office of any
commissioner elected pursuant to this subdivision, the board of
park district commissioners shall appoint a successor residing
in that district to fill the unexpired term.
Sec. 4. Laws 1979, chapter 288, section 2, subdivision 4,
is amended to read:
Subd. 4. By no later than August 1, 1980 After September
1, 1985, and after at least 30 days notice and public hearing,
the board of park district commissioners of the Hennepin county
park reserve district shall divide the territory of Hennepin
county outside the city of Minneapolis into four five districts,
which constitute the Hennepin county park reserve district.
Each district shall be composed of contiguous territory as
regular and compact in form as practicable and as nearly equal
in population as possible, provided that no district shall vary
in population more than ten percent from the average of all the
districts, unless compliance with this requirement requires
division of a voting precinct. After each federal census and by
not later than 120 days before the next ensuing general
election, after at least 30 days notice and public hearing, the
board of park district commissioners of the Hennepin county park
reserve district shall redistrict the territory of the Hennepin
county outside the city of Minneapolis park reserve district
into new commissioner districts as necessary to comply with the
provisions of this subdivision. The districts established
pursuant to this subdivision shall remain effective until new
districts are established. Any person aggrieved by a
districting plan established pursuant to this subdivision may
challenge the plan in the same manner as a county commissioner
districting plan may be challenged pursuant to Minnesota
Statutes, section 375.025. The district court in reviewing any
challenge to a districting plan under this subdivision shall
proceed in the manner prescribed by Minnesota Statutes, section
375.025. Each districting plan established pursuant to this
subdivision shall be filed in the office of the director of
finance of Hennepin county or any successor office and shall be
effective 31 days after its publication in a newspaper of
general circulation in the county.
Sec. 5. Laws 1979, chapter 288, section 3, is amended to
read:
Sec. 3. [TRANSITION TO ELECTED BOARD.] Notwithstanding any
law to the contrary, until January 1, 1983, The park district
commissioners of the Hennepin county park reserve
district appointed by the Minneapolis park and recreation board
shall continue to be appointed and vacancies shall continue to
be filled as provided in Laws 1963, Chapter 883, Section 1 serve
until September 1, 1985, when their terms expire. After
September 1, 1985, the board of park district commissioners
shall appoint one commissioner from the residents of the park
district to serve at large until January 1, 1987. The board of
commissioners of Hennepin county shall appoint two commissioners
from the park reserve district to serve at large beginning after
September 1, 1985. One appointee shall serve until January 1,
1987, and the other until January 1, 1989. The county board
shall designate the terms of the two appointees. On January
1, 1983 1987, the terms of office of all commissioners appointed
pursuant to Laws 1963, Chapter 883, Section 1, then serving on
the park reserve district board, except the appointee of the
county board designated to serve until January 1, 1989, shall
expire and the first commissioners appointed or elected as
provided in section 2 shall take office, except that the three
commissioners from odd-numbered districts shall be elected for
four-year terms and the two commissioners from even-numbered
districts shall be elected for two-year terms at the 1986
general election. Thereafter the park district commissioners of
the Hennepin county park reserve district shall be appointed or
elected and vacancies shall be filled as provided in section 2.
Sec. 6. [DEPOSITORIES.]
Notwithstanding Minnesota Statutes, section 398.18, the
Hennepin county park reserve district may exercise the powers of
a municipality under chapter 118.
Sec. 7. [DISTRICT RENAMING.]
The Hennepin county park reserve district, a local
government unit organized and existing under the provisions of
Minnesota Statutes, sections 398.01 to 398.36, is renamed the
suburban Hennepin regional park district. The district so named
is the legal successor in all respects of the Hennepin county
park reserve district as originally named and constituted. All
bonds, resolutions, contracts, and liabilities of the Hennepin
county park reserve district are the bonds, resolutions,
contracts, and liabilities of the suburban Hennepin regional
park district as so renamed and reconstituted.
Sec. 8. [EFFECTIVE DATE.]
This article is effective the day after approval by the
board of park district commissioners of the Hennepin county park
reserve district and the board of commissioners of Hennepin
county and upon compliance with Minnesota Statutes, section
645.021, provided that this article is effective only if
compliance with Minnesota Statutes, section 645.021, is
completed by August 1, 1985.
ARTICLE 8
ECONOMIC DEVELOPMENT
Section 1. Minnesota Statutes 1984, section 37.17,
subdivision 1, is amended to read:
Subdivision 1. [LICENSE, REGULATION.] The society may
license and regulate all shows, exhibitions, performances, and
privileges on the fairgrounds, revoke any licenses, and
prohibit, remove, and summarily stop all exhibitions,
performances, or privileges which violate society rules or which
are otherwise contrary to law. If the society includes in a
contract governing a show or performance on the fairgrounds a
condition prohibiting the performer from performing elsewhere in
the state, the prohibition may apply only to performances
occurring within 100 miles of the fairgrounds and within 30 days
of the date of the performance at the fairgrounds.
Sec. 2. Minnesota Statutes 1984, section 116M.03, is
amended by adding a subdivision to read:
Subd. 28. [QUALIFIED DIVERSIFICATION PROJECT.] A qualified
economic diversification project means the provision of special
assistance under section 116M.07, subdivision 11, paragraph (d)
to a business, if the following criteria are satisfied.
(1) If the business is located outside of a distressed
county, the following conditions must be satisfied:
(a) the business is principally engaged in manufacturing;
(b) the primary market for the product of the business is
national or international in scope;
(c) the business would not locate or expand or continue to
expand in Minnesota if special assistance were not provided;
(d) the project will result in the addition of at least 50
permanent employees;
(e) the total capital investment for the project exceeds
$3,000,000;
(f) the provision of special assistance to the business
will result in diversification of the state's economy by
expanding the types of products produced or technologies by
establishing new markets for Minnesota products or technologies;
and
(g) the project will not directly result in a reduction in
the employment of other Minnesota businesses.
(2) If the business is located in a distressed county, the
following conditions must be satisfied:
(a) The business is principally engaged in manufacturing or
in selling of tangible personal property or services in response
to orders received by mail or telephone or in providing business
services by mail or electronic data transmission.
(b) The business would not locate in the distressed county
or an adjacent Minnesota county if special assistance were not
provided;
(c) The total capital investment for the project exceeds
$3,000,000 and the business will increase employment by 25
permanent positions or the total capital investment for the
project exceeds $1,000,000 and the business will increase
employment by 50 additional positions.
(d) For purposes of this subdivision, "manufacturing" has
the meaning given in section 474.16, subdivision 6, except that
the provisions of clause (b) do not apply.
Sec. 3. Minnesota Statutes 1984, section 116M.06,
subdivision 2, is amended to read:
Subd. 2. [USE OF FUNDS.] The authority may use the energy
loan insurance fund as provided in section 116M.11. The
authority may use the economic development fund in connection
with small business loans, pollution control loans, and farm
loans to provide financial assistance to eligible small
businesses; it may use the economic development fund in
connection with business loans when the loans are made as a part
of the special assistance program under section 116M.07,
subdivision 11; and the authority may use the energy development
fund in connection with energy loans to provide financial
assistance to businesses; as follows:
(a) to provide loan guarantees or insurance, in whole or in
part, to businesses in connection with business loans, small
business loans, energy loans, farm loans, or pollution control
loans;
(b) to provide direct loans to businesses in connection
with business loans, small business loans, energy loans, farm
loans, or pollution control loans;
(c) to participate in other investment programs as
appropriate under the terms of this chapter and chapters 472 and
474;
(d) to purchase loan packages made to businesses by
financial institutions in the state in connection with business
loans, small business loans, energy loans, farm loans, or
pollution control loans;
(e) to enter into or to pay fees on insurance contracts,
letters of credit, municipal bond insurance, surety bonds, or
similar obligations and other agreements or contracts with
financial institutions or providers of similar services;
(f) to guarantee or insure bonds and notes issued by the
authority, in whole or in part;
(g) to make interest subsidy payments on behalf of eligible
small businesses to be applied to the payment of interest on
bonds or notes of the authority equal to the difference in
interest payable on loans and the interest payable on bonds or
notes of the authority where the proceeds of these bonds or
notes are used to make or participate in making these loans;
(h) for any legal purpose or program of the authority,
including without limitation the payment of the cost of issuing
authority bonds and notes and authority administrative costs and
expenses;
(i) to pay tax reimbursements for qualified economic
diversification projects under the special assistance program
pursuant to section 116M.07, subdivision 11, paragraph (d).
In addition, the authority may use the economic development
fund to purchase, lease, or license technology-related products
for education or training or to participate in programs where
technology-related products are purchased, leased, or licensed.
The authority may create separate accounts within any of
the funds for use in accordance with the separate purposes
listed in this section and may irrevocably pledge and allocate
moneys on deposit in any of the funds to the accounts for the
purposes. The authority may make contracts with note and bond
holders, trustees for them, financial institutions, or other
persons interested in the disposition of moneys in the funds or
their accounts with respect to the conditions upon which money
in any fund or its accounts is to be held, invested, applied,
and disposed of and the use of the fund and its accounts and the
termination of accounts. The authority may determine to
leverage amounts in accounts to be used to guarantee or insure
bonds and notes of the authority or loans to businesses and may
covenant as to the rate of leveraging with holders of the
authority's bonds and notes or any trustee for them, financial
institutions, or other persons. Money in the funds and their
accounts shall, consistent with contracts with holders of the
authority's bonds and notes or any trustee for them, financial
institutions, or other interested persons, be invested in
accordance with section 116M.08, subdivision 15, and the
investment income from them, absent contractual provisions to
the contrary, shall be added to and retained in the funds or
their accounts if provided by the authority. The repayments to
the authority of any direct loans made by the authority from
money in the funds or their accounts shall be paid by the
authority into the particular fund that was used in conjunction
with the loan being repaid, or, as provided by the authority,
into an account. The authority may collect fees, initially or
from time to time, or both, with respect to any direct loan it
extends or any insurance or guarantee it grants. The authority
may enter into contracts and security instruments with
businesses, with bond and note holders or any trustee for them,
or financial institutions or other persons to provide for and
secure the repayment to the authority of money provided by the
authority from the funds or their accounts for direct loans or
which have been paid by the authority from the fund or accounts
pursuant to an authority guarantee or insurance.
The state covenants with all holders of the authority's
bonds and notes, financial institutions, and other persons
interested in the disposition of money in the funds or their
accounts, which money the authority has irrevocably pledged and
allocated for any authorized purpose described in this
subdivision, that the state will not take any action to limit
the effect of the pledge and allocation and will not take any
action to limit the effect of contracts entered into as
authorized in this subdivision with respect to the pledge and
allocation and will not limit or alter the rights vested in the
authority or the state to administer the application of money
pursuant to the pledge and allocation and to perform its
obligations under the contracts. The authority may include and
recite this covenant of the state in any of its bonds or notes
benefitting from the pledge and allocation or contracts or
related documents or resolutions.
Sec. 4. Minnesota Statutes 1984, section 116M.06,
subdivision 3, is amended to read:
Subd. 3. [ECONOMIC DEVELOPMENT FUNDS; PREFERENCES.] (a)
The following eligible small businesses have preference among
all business applicants for financial assistance from the
economic development fund:
(1) businesses located in areas of the state that are
experiencing the most severe unemployment rates in the state;
(2) businesses that are likely to expand and provide
additional permanent employment;
(3) businesses located in border communities that
experience a competitive disadvantage due to location;
(4) businesses that have been unable to obtain traditional
financial assistance due to a disadvantageous location, minority
ownership, or other factors rather than due to the business
having been considered a poor financial risk;
(5) businesses that utilize state resources, thereby
reducing state dependence on outside resources, and that produce
products or services consistent with the long-term social and
economic needs of the state;
(6) businesses located in designated enterprise zones, as
described in section 273.1312, subdivision 4; and
(7) business located in federally designated economically
distressed areas.
(b) Except in connection with the issuance of authority
bonds or notes, the authority may not invest the funds in a
program that does not have financial participation from the
private sector, as determined by the authority.
(c) The provisions of this subdivision do not apply to
economic diversification projects.
Sec. 5. Minnesota Statutes 1984, section 116M.07, is
amended by adding a subdivision to read:
Subd. 7a. [HEALTH CARE EQUIPMENT LOANS; AUTHORITY.] The
authority may make or participate in making health care
equipment loans in any amount and may enter into commitments
therefor. The loans may be made only from the proceeds of bonds
or notes issued pursuant to subdivision 7b. Before making a
commitment for a loan, the authority shall forward the
application to the commissioner of health for review under
subdivision 7c. The authority must not approve or enter into a
commitment for a loan unless the application has been approved
by the commissioner of health.
Sec. 6. Minnesota Statutes 1984, section 116M.07, is
amended by adding a subdivision to read:
Subd. 7b. [HEALTH CARE EQUIPMENT LOANS; BONDS AND
NOTES.] The authority may issue its bonds and notes to provide
money for the purposes specified in subdivision 7a. For this
purpose, the authority may exercise all of the powers conferred
on it by sections 116M.03 and 116M.06 to 116M.08 with respect to
business loans, except as limited by subdivisions 7a to 7c. The
principal amount of bonds and notes issued and outstanding under
this subdivision at any time, computed as specified in section
116M.08, subdivision 11, may not exceed $95,000,000. This
authorization is in addition to the authorization contained in
section 116M.08, subdivision 11. The bonds and notes issued to
make the loans may not be insured by the authority but shall be
insured by a letter of credit or bond insurance issued by a
private insurer.
Sec. 7. Minnesota Statutes 1984, section 116M.07, is
amended by adding a subdivision to read:
Subd. 7c. [HEALTH CARE EQUIPMENT LOANS;
ADMINISTRATION.] (a) The commissioner of health shall review
each loan application received from the authority to determine
whether the application is an approvable application. An
application is approvable if the following criteria are
satisfied:
(1) the hospital is owned and operated by a county,
district, municipality or nonprofit corporation;
(2) the loan would not be used to refinance existing debt;
(3) the hospital was unable to obtain suitable financing
from other sources;
(4) the loan is necessary to establish or maintain patient
access to an essential health care service that would not
otherwise be available within a reasonable distance from that
facility; and
(5) the project to be financed by the loan is
cost-effective and efficient.
(b) The commissioner shall determine whether the allocation
available for the health care equipment loan program for a
period of time specified in a rule is sufficient for all
approvable applications received during the period of time. If
the allocations are sufficient, the commissioner shall approve
all approvable applications. If the allocations are not
sufficient, the commissioner shall compare the relative merits
of the approvable applications in relation to the criteria in
clauses (4) and (5), rank the applications in order of priority,
and approve the applications in order of priority to the extent
possible within the available allocation.
(c) The commissioner of energy and economic development may
charge a reasonable fee under section 16A.128 to an applicant
for the costs of the departments of health and energy and
economic development in the review of the application. The
commissioner of energy and economic development shall transfer
to the commissioner of health from the fees collected an amount
sufficient to pay the costs of the commissioner of health in the
review of applications effective July 1, 1985. The commissioner
of health may adopt permanent rules to implement subdivisions 7a
to 7c of this section. The commissioner of energy and economic
development may adopt permanent rules to implement subdivisions
7a to 7c.
Sec. 8. Minnesota Statutes 1984, section 116M.07,
subdivision 11, is amended to read:
Subd. 11. [SPECIAL ASSISTANCE PROGRAM.] (a) The authority
may operate a special assistance program and may designate
certain businesses as being in need of special assistance. In
connection with the special assistance program the authority may
borrow money and may issue negotiable bonds and notes in
accordance with section 116M.08, subdivisions 11 and 12.
Notwithstanding any provision to the contrary in section
116M.08, subdivision 11, the aggregate principal amount of the
authority's bonds and notes outstanding at any one time and
issued in connection with the special assistance program,
excluding the amount satisfied and discharged by payment and
deducting amounts held in debt service reserve funds and amounts
used to make loans guaranteed or insured by the federal
government or a department, agency, or instrumentality of the
federal government or by a private insurer or guarantor
authorized to do business in the state of Minnesota and
acceptable to the authority, shall not exceed
$10,000,000 $25,000,000. This authorization is in addition to
the authorization contained in section 116M.08, subdivision 11.
(b) No business shall be eligible to receive special
assistance unless the authority has first passed a resolution
designating the business as being in need of special
assistance. The resolution shall include findings that the
designation and receipt of the special assistance will be of
exceptional benefit to the state of Minnesota in that at least
three of the following criteria are met:
(1) in order to expand or remain in Minnesota, the business
has demonstrated that it is unable to obtain suitable financing
from other sources;
(2) special assistance will enable a business not currently
located in Minnesota to locate a facility within Minnesota which
directly increases the number of jobs within the state;
(3) the business will create or retain significant numbers
of jobs within a community in Minnesota;
(4) the business has a significant potential for growth in
jobs or economic activities within Minnesota within the ensuing
five-year period; and
(5) the business will maintain a significant level of
productivity within Minnesota within the ensuing five-year
period.
(c) Special assistance may include:
(1) a business loan;
(2) a small business loan; or
(3) use of moneys in the economic development fund to
provide financial assistance to businesses in accordance with
section 116M.06, subdivision 2, except that section 116M.06,
subdivision 2, clause (g), shall apply only to eligible small
businesses.
(d) In the case of a qualified economic diversification
project, special assistance may include, in addition:
(1) reimbursement of expenses paid or to be paid by the
business for property or sales taxes for a period not to exceed
five years; or
(2) use of moneys in the economic development fund to
provide interest subsidy payments under section 116M.06,
subdivision 2, clause (g) without regard to whether the business
is an eligible small business.
In the case of an economic diversification project, the
total amount of special assistance provided to a business may
not exceed 20 percent of the total capital investment in the
project. If special assistance is provided for a project
located in an enterprise zone, the sum of the amount of special
assistance and the tax reductions provided under section
273.1314, subdivision 9, may not exceed 30 percent of the total
capital investment in the project. The amount of special
assistance provided for an economic diversification project may
not exceed $20,000 for each permanent job to be created by the
project.
Sec. 9. Minnesota Statutes 1984, section 116M.08,
subdivision 11, is amended to read:
Subd. 11. It may borrow money to carry out and effectuate
its purposes and may issue its negotiable bonds or notes as
evidence of any such borrowing in accordance with sections
462A.08 to 462A.13, 462A.16 and 462A.17, all with the force and
effect stated and the incidental powers granted and duties
imposed in those sections. The bonds and notes may be issued
pursuant to a trust indenture that is substantially identical to
a resolution pursuant to which the authority issues bonds and
notes as provided in sections 462A.08 to 462A.13, 462A.16, and
462A.17, except that the authority may pledge money and
securities to a trustee for the security of the holders of bonds
and notes. The authority may refund bonds and notes and may
guarantee or insure its bonds and notes in whole or in part with
money from the funds or an account created by the authority for
that purpose. The aggregate principal amount of the authority's
bonds and notes outstanding at any one time, excluding the
amount satisfied and discharged by payment or provision for
payment in accordance with their terms, and deducting amounts
held in debt service reserve funds therefor and amounts used to
make loans guaranteed or insured by the federal government or a
department, an agency or instrumentality of the federal
government or by a private insurer or guarantor authorized to do
business in the state of Minnesota and acceptable to the
authority, shall not exceed $30,000,000 $50,000,000 unless
authorized by another law.
Sec. 10. [272.026] [TAX STATUS OF PROPERTY MANAGED BY A
HOUSING REDEVELOPMENT AUTHORITY OR PUBLIC HOUSING AGENCY.]
Any property that is under the direct management and
control of, but is not owned by, a housing redevelopment
authority or public housing agency, and is used in a manner
authorized and contemplated by chapter 462, and for which the
authority or agency is eligible for assistance payments under
federal law, is public property used for essential public and
governmental purposes, and the property and the authority or
agency is exempt from all taxes and special assessments of the
city, the county, the state, or any political subdivision of the
state in the same manner as property referred to in section
462.575, subdivision 1. Payments in lieu of taxes for the
property shall remain as provided in section 272.68 or 462.575,
subdivision 3.
Sec. 11. Minnesota Statutes 1984, section 273.1313, is
amended by adding a subdivision to read:
Subd. 6. [ECONOMIC DIVERSIFICATION
PROJECTS.] Notwithstanding any provision of sections 273.1312 to
273.1314 to the contrary, a municipality may classify the
property of a business provided special assistance as a
qualified economic diversification project pursuant to section
116M.07, subdivision 11, clause (d), as employment property
under provisions of this section.
Sec. 12. Minnesota Statutes 1984, 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 $35,600,000 $36,400,000. 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 $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 $16,610,940 and $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, the refundable income tax credits, and the sales
tax exemption, as 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 for the zone, the
commissioner shall implement a plan to reduce the available tax
reductions in the zone to an amount within the sum certified for
the zone. 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. Of the $36,400,000 in tax reductions authorized
under this subdivision, an additional $800,000 in tax reductions
may be authorized within an enterprise zone located within five
municipalities which was designated by the commissioner in 1984.
Sec. 13. Minnesota Statutes 1984, section 273.1314,
subdivision 16a, is amended to read:
Subd. 16a. [ZONE BOUNDARY REALIGNMENT.] The commissioner
may approve specific applications by a municipality to amend the
boundaries of a zone or of an area or areas designated pursuant
to section 273.1314, subdivision 9, paragraph (e) at any time.
Boundaries of a zone may not be amended to create noncontiguous
subdivisions. If the commissioner approves the amended
boundaries, the change is effective on the date of
approval. Notwithstanding the area limitation under section
273.1312, subdivision 4, paragraph (b), the commissioner may
approve a specific application to amend the boundaries of an
enterprise zone which is located within five municipalities and
was designated in 1984, to increase its area to not more than
800 acres.
Sec. 14. Minnesota Statutes 1984, section 273.74,
subdivision 2, is amended to read:
Subd. 2. [CONSULTATIONS; COMMENT AND FILING.] Before
formation of a tax increment financing district, the authority
shall provide an opportunity to the members of the county boards
of commissioners of any county in which any portion of the
proposed district is located and the members of the school board
of any school district in which any portion of the proposed
district is located to meet with the authority. The authority
shall present to the members of the county boards of
commissioners and the school boards its estimate of the fiscal
and economic implications of the proposed tax increment
financing district. The members of the county boards of
commissioners and the school boards may present their comments
at the public hearing on the tax increment financing plan
required by subdivision 3. The county auditor shall not certify
the original assessed value of a district pursuant to section
273.76, subdivision 1, until the county board of commissioners
has presented its written comment on the proposal to the
authority, or 30 days has passed from the date of the
transmittal by the authority to the board of the information
regarding the fiscal and economic implications, whichever occurs
first. Upon adoption of the tax increment financing plan, the
authority shall file a copy of the same plan with the
commissioner of energy and economic development. The authority
must also file with the commissioner a copy of the development
plan for the project area.
Sec. 15. Minnesota Statutes 1984, section 273.74, is
amended by adding a subdivision to read:
Subd. 6. [FINANCIAL REPORTING.] (a) The state auditor
shall develop a uniform system of accounting and financial
reporting for tax increment financing districts. The system of
accounting and financial reporting shall, as nearly as possible:
(1) provide for full disclosure of the sources and uses of
public funds in the district;
(2) permit comparison and reconciliation with the affected
local government's accounts and financial reports;
(3) permit auditing of the funds expended on behalf of a
district, including a single district that is part of a
multidistrict project or that is funded in part or whole through
the use of a development account funded with tax increments from
other districts or with other public moneys;
(4) be consistent with generally accepted accounting
principles.
(b) The authority must annually submit to the state
auditor, on or before July 1, a financial report in compliance
with paragraph (a). Copies of the report must also be provided
to the county and school district boards and to the governing
body of the municipality, if the authority is not the
municipality. To the extent necessary to permit compliance with
the requirement of financial reporting, the county and any other
appropriate local government unit or private entity must provide
the necessary records or information to the authority or the
state auditor as provided by the system of accounting and
financial reporting developed pursuant to paragraph (a).
(c) The annual financial report must also include the
following items:
(1) the original assessed value of the district;
(2) the captured assessed value of the district, including
the amount of any captured assessed value shared with other
taxing districts;
(3) the outstanding principal amount of bonds issued or
other loans incurred to finance project costs in the district;
(4) for the reporting period and for the duration of the
district, the amount budgeted under the tax increment financing
plan, and the actual amount expended for, at least, the
following categories:
(A) acquisition of land and buildings through condemnation
or purchase;
(B) site improvements or preparation costs;
(C) installation of public utilities or other public
improvements;
(D) administrative costs, including the allocated cost of
the authority;
(5) for properties sold to developers, the total cost of
the property to the authority and the price paid by the
developer;
(6) the amount of tax exempt obligations, other than those
reported under clause (3), that were issued on behalf of private
entities for facilities located in the district.
(d) The reporting requirements imposed by this subdivision
are in lieu of the annual disclosure required by subdivision 5.
Sec. 16. Minnesota Statutes 1984, section 273.75,
subdivision 4, is amended to read:
Subd. 4. [LIMITATION ON USE OF TAX INCREMENT.] All
revenues derived from tax increment shall be used in accordance
with the tax increment financing plan. The revenues shall be
used solely for the following purposes: (a) to pay the
principal of and interest on bonds issued to finance a project;
(b) by a rural development financing authority for the purposes
stated in section 362A.01, subdivision 2, by a port authority or
municipality exercising the powers of a port authority to
finance or otherwise pay the cost of redevelopment pursuant to
chapter 458, by a housing and redevelopment authority to finance
or otherwise pay public redevelopment costs pursuant to chapter
462, by a municipality to finance or otherwise pay the capital
and administration costs of a development district pursuant to
chapter 472A, by a municipality or redevelopment agency to
finance or otherwise pay premiums for insurance or other
security guaranteeing the payment when due of principal of and
interest on the bonds pursuant to chapters 462C, 474, or both
chapters, or to accumulate and maintain a reserve securing the
payment when due of the principal of and interest on the bonds
pursuant to chapters 462C, 474, or both chapters, which revenues
in the reserve shall not exceed, subsequent to the fifth
anniversary of the date of issue of the first bond issue secured
by the reserve, an amount equal to 20 percent of the aggregate
principal amount of the outstanding and nondefeased bonds
secured by the reserve. Revenues derived from tax increment may
be used to finance the costs of an interest reduction program
operated pursuant to section 462.445, subdivisions 10 to 13, or
pursuant to other law granting interest reduction authority and
power by reference to those subdivisions only under the
following conditions: (a) tax increments may not be collected
for a program for a period in excess of 12 years after the date
of the first interest rate reduction payment for the program,
(b) tax increments may not be used for an interest reduction
program, if the proceeds of bonds issued pursuant to section
273.77 after December 31, 1985, have been or will be used to
provide financial assistance to the specific project which would
receive the benefit of the interest reduction program, and (c)
not more than 50 percent of the estimated tax increment derived
from a project may be used to finance an interest reduction
program for owner-occupied single-family dwellings unless a
project is located either in an area which would qualify as a
redevelopment district or within a city designated as an
enterprise zone pursuant to section 273.1312, subdivision 4,
clause (c)(3). These revenues shall not be used to circumvent
existing levy limit law. No revenues derived from tax increment
shall be used for the construction or renovation of a
municipally owned building used primarily and regularly for
conducting the business of the municipality; this provision
shall not prohibit the use of revenues derived from tax
increments for the construction or renovation of a parking
structure, a commons area used as a public park or a facility
used for social, recreational or conference purposes and not
primarily for conducting the business of the municipality.
Sec. 17. Minnesota Statutes 1984, section 297A.15,
subdivision 5, is amended to read:
Subd. 5. [REFUND; APPROPRIATION.] Notwithstanding the
provisions of section sections 297A.02, subdivision 2, and
297A.257 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, or the exemption under section
297A.257 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, or 297A.257. 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. 18. [297A.257] [DISTRESSED COUNTIES; CAPITAL
EQUIPMENT EXEMPTION.]
Subdivision 1. [DESIGNATION OF DISTRESSED COUNTIES.] (a)
The commissioner of energy and economic development shall
annually on June 1 designate those counties which are
distressed. A county is distressed if it satisfies either of
the following two criteria:
(1) The county has an average unemployment rate of ten
percent or more for the one-year period ending on April 30 of
the year in which the designation is made; or
(2) the unemployment rate for the entire county was greater
than 110 percent of the state average for the 12-month period
ending the previous April 30, and 20 percent or more of the
county's economy, as determined by the commissioner of economic
security, is dependent upon agriculture.
If, as a result of a plant closing, layoffs or another
similar event affecting a significant number of employees in the
county, the commissioner has reason to believe that the average
unemployment in the county will exceed ten percent during the
one-year period beginning April 30, the commissioner may
designate the county as distressed, notwithstanding clause (1).
(b) The commissioner shall designate a portion of a county
containing a city of the first class located outside of the
metropolitan area as a distressed county if:
(1) that portion of the county has an unemployment rate of
ten percent or more for the one-year period ending on April 30
of the year in which the designation is made; and
(2) that portion of the county has a population of at least
50,000 as determined by the 1980 federal census.
(c) A county or the portion of a county designated pursuant
to this subdivision shall be considered a distressed county for
purposes of this section and chapter 116M.
(d) Except as otherwise specifically provided, the
determination of whether a county is distressed must be made
using the most current data available from the state
demographer. The designation of a distressed county is
effective for the 12-month period beginning July 1. A county
may be designated as distressed as often as it qualifies.
(e) The authority to designate counties as distressed
expires on June 30, 1989.
Subd. 2. [SALES TAX EXEMPTION.] Purchase and use of
capital equipment is exempt from the sales and use tax imposed
by chapter 297A if the capital equipment is placed in service in
connection with the construction of a new or an expansion of an
existing manufacturing facility in a distressed county.
Purchase or use of equipment for use in an existing plant
qualifies under this section and section 297A.01, subdivision
16, as an expansion if either the production capacity of the
plant is increased by at least 20 percent as a result or if the
total capital investments made within a 12-month period exceed
$25,000,000. Purchases of capital equipment are exempt under
this section only to the extent that the purchases of capital
equipment for the project during the calendar year exceed
$100,000. The county is a distressed county for purposes of
this subdivision if it was designated as a distressed county for
the time period during which the contract to purchase the
equipment was executed.
Subd. 3. [RULEMAKING AUTHORITY.] In order to carry out the
purposes of this section, the commissioner of energy and
economic development may adopt administrative rules under
chapter 14. The commissioner may adopt emergency rules
effective through December 31, 1986.
Sec. 19. Minnesota Statutes 1984, section 462.445,
subdivision 13, is amended to read:
Subd. 13. [INTEREST REDUCTION PROGRAM.] The authority to
authorize payment of interest reduction assistance pursuant to
subdivisions 10, 11 and 12 shall expire on January 1, 1986 1987.
Interest reduction assistance payments authorized prior to
January 1, 1986 1987 may be paid after January 1, 1986 1987.
Sec. 20. Minnesota Statutes 1984, section 462A.22,
subdivision 1, as amended by Laws 1985, chapter 6, section 1, is
amended to read:
Subdivision 1. The aggregate principal amount of bonds and
notes which are outstanding at any time, excluding the principal
amount of any bonds and notes refunded by the issuance of new
bonds or notes, shall not exceed the sum of $1,620,000,000
$1,990,000,000.
Sec. 21. Minnesota Statutes 1984, section 462C.02, is
amended by adding a subdivision to read:
Subd. 10. "Mortgage credit certificate" means any
certificate which satisfies the definition of such term as
contained in section 25(c)(1) of the Internal Revenue Code of
1954, as amended through July 18, 1984.
Sec. 22. Minnesota Statutes 1984, section 462C.02, is
amended by adding a subdivision to read:
Subd. 11. "Qualified mortgage credit certificate program"
means any program which satisfies the definition of such term as
contained in section 25(c)(2) of the Internal Revenue Code of
1954, as amended through July 18, 1984.
Sec. 23. Minnesota Statutes 1984, section 462C.03,
subdivision 1, is amended to read:
Subdivision 1. The housing plan shall at a minimum set
forth:
(a) the housing needs of the city and the data
demonstrating those needs;
(b) the plan of the city to meet identified housing needs,
and the specific methods to be used to carry out the plan;
(c) target areas, if any, of the city for each method;
(d) The financing a general description of the program or
programs to be included in implemented to meet the housing needs
identified in the plan;
(e) The number and qualifications of lenders eligible to
participate in the program;
(f) The estimated amount of mortgage or rehabilitation
loans to be made or purchased in each program and the estimated
amounts and timing of the sale of revenue bonds required to
finance such loans, fund appropriate reserves, and pay costs of
issuance;
(g) (e) methods for monitoring the implementation by
participants to insure that the programs will be consistent with
the plan and its objectives; and
(h) (f) the administrative capacity of the city to monitor
and supervise housing finance programs;
(i) The cost to the city, including administrative costs;
and
(j) An analysis of how the programs will meet the needs of
low and moderate income families in the city.
Sec. 24. Minnesota Statutes 1984, section 462C.03, is
amended by adding a subdivision to read:
Subd. 1a. In addition to the requirements provided in
subdivisions 2 and 3, if applicable, each program to be
developed and administered by a city under a housing plan shall,
at a minimum, set forth:
(a) a general description of the program;
(b) a designation of the geographic location to which the
program will be limited;
(c) in the case of a program for single family housing, the
number and qualifications of lenders eligible to participate in
the program;
(d) in the case of a program for single family housing, the
estimated amount of mortgage or rehabilitation loans to be made
or purchased in the program;
(e) the estimated amounts and timing of the sale of revenue
bonds required to finance the program, including the funding of
appropriate reserves, and paying costs of issuance;
(f) methods for monitoring the implementation by
participants to insure that the program will be consistent with
the plan and its objectives;
(g) the portion, if any, of the state ceiling for qualified
mortgage bonds needed for the program;
(h) an analysis of how the program will meet the needs of
low and moderate income families; and
(i) for mortgage credit certificate programs the program
shall additionally set forth, or contain as an exhibit, the
following:
(1) the range of credit certificate rates to be used and
how the rates are assigned to certificate recipients;
(2) the nonissued bond amount as that term is used in
section 25(d)(2)(B) of the Internal Revenue Code of 1954, as
amended through July 18, 1984;
(3) the form used to elect under section 25(c)(2)(A)(ii) of
the Internal Revenue Code of 1954, as amended through July 18,
1984;
(4) the plan submitted to the secretary of the treasury
pursuant to section 25(d)(3) of the Internal Revenue Code of
1954, as amended through July 18, 1984; and
(5) how the city will ensure compliance with all of the
requirements of section 25 of the Internal Revenue Code of 1954,
as amended through July 18, 1984.
Sec. 25. Minnesota Statutes 1984, section 462C.04,
subdivision 2, is amended to read:
Subd. 2. A public hearing shall be held on each program
after one publication of notice in a newspaper circulating
generally in the city, at least 15 days before the hearing,
after which the program may be adopted with or without
amendment. On or before the day on which notice of the public
hearing is published, the city shall submit the program to the
metropolitan council, if the city is located in the metropolitan
area as defined in section 473.121, subdivision 2, or to the
regional development commission for the area in which the city
is located, if any, for review and comment. The appropriate
reviewing agency shall comment on:
(a) whether the program is consistent with the housing plan
of the city; and
(b) whether the program is consistent with the metropolitan
development guide, if the city is located in the metropolitan
area, or adopted policies of the regional development commission.
Review of the program may be conducted either by the board
of the reviewing agency or by the staff of the agency. Any
comment submitted by the reviewing agency to the city must be
presented to the body considering the proposed program at the
public hearing held on the program.
A member or employee of the reviewing agency shall be
permitted to present the comments of the reviewing agency at the
public hearing. After conducting the public hearing, the
program may be adopted with or without amendment, provided that
any amendments must not be inconsistent with the comments, if
any, of the reviewing agency and must not contain any material
changes from the program submitted to the reviewing agency other
than changes in the financial aspects of any proposed issue of
bonds or obligations. If any material change other than a
change in the financial aspects of a proposed issue of bonds or
obligations, or any change which is inconsistent with the
comments of the reviewing agency is adopted, the amended program
shall be resubmitted to the appropriate reviewing agency for
review and comment, and a public hearing shall be held on the
amended program after one publication of notice in a newspaper
circulating generally in the city at least 15 days before the
hearing. The amended program shall be considered after the
public hearing in the same manner as consideration of the
initial program. Each program shall be submitted to the
Minnesota housing finance agency for review and approval. The
agency shall determine reject any program that:
(a) whether the program furthers does not comply with
statewide housing policies;
(b) whether the program is capable of implementation
without if implemented will cause a material adverse effect on
financing programs of the agency, without subjecting will
subject the interest on future bonds of the agency to federal
income tax under any limitations imposed at the time by federal
law;
(c) whether the program provides for administrative and
bond issuance costs that are reasonable; and unreasonable; or
(d) whether the program complies does not comply with all
other requirements of sections 462C.01 to 462C.08.
The agency shall have 30 days from submission to complete
its review and shall notify the city of its decision within 30
days. A failure to notify within 30 days constitutes
approval reject a program. Submission shall be the date on
which a complete document describing the program is submitted to
the agency. If the agency rejects a program it shall
communicate the fact of that rejection, in writing, to the city
with 15 days of the rejection. If the agency fails to reject a
program within 30 days of submission, or fails to communicate a
rejection, in writing, to the city within 15 days of the
rejection, then the agency is precluded from rejecting the
program. For purposes of sections 462C.01 to 462C.08, the
agency's failure to reject a program is considered an approval
of the program. The agency may collect reasonable fees and
charges in connection with its review of a city's housing
program. The fees and charges shall be limited to the amounts
required to pay the actual costs to the agency.
The Minnesota housing finance agency, in cooperation with
the metropolitan council and the regional development
commissions, shall report annually to the legislature on the
number and amounts of bond issues and the number of housing
programs established pursuant to sections 462C.01 to 462C.08.
Sec. 26. Minnesota Statutes 1984, section 462C.09,
subdivision 2a, is amended to read:
Subd. 2a. [1985 CITY ALLOCATION.] Notwithstanding the
allocation provisions of subdivision 2, this subdivision applies
to the January 1985 allocations. Unless otherwise authorized by
law, a city that intends to issue during the any calendar year
1985 mortgage revenue bonds that are subject to the volume
limitation imposed by section 103A(g) of the Internal Revenue
Code of 1954, as amended through March 1, 1983, shall by January
2, 1985 of that year submit to the Minnesota housing finance
agency a program that will use a portion of the state mortgage
revenue bond ceiling. The total amount of bonds included in all
programs submitted pursuant to this subdivision by a city may
not exceed $10,000,000. Each program shall be accompanied by a
certificate from the city that states that the revenue bond
issue is feasible. By February 1, the Minnesota housing finance
agency shall review each program pursuant to section 462C.04,
subdivision 2. The Minnesota housing finance agency shall
approve all programs that the agency determines are consistent
with this chapter, and that meet the following conditions:
(a) all of the loans must be reserved for a period of not
less than six months for persons and families whose adjusted
family income is below 80 percent of the limits on adjusted
gross income provided in section 462C.03, subdivision 2; and
(b) loans must be made only to finance homes that are
serviced by municipal water and sewer utilities; provided that
if the approval of all programs would result in an allocation to
cities in excess of 27-1/2 percent of the state ceiling for the
calendar year 1985, reduced by the amount of bonds that are
allocated by law to specified cities, the Minnesota housing
finance agency shall approve programs that are submitted by a
city which meets any of the following three criteria: (1) a
city of the first class, or (2) a city that did not receive an
allocation under this subdivision or subdivision 2 during the
preceding two calendar years, or (3) a group of cities that plan
to jointly issue bonds for the program provided further that if
approval of all of the programs submitted by cities that meet
one or more of the criteria in (1), (2), or (3) would result in
a total allocation to cities in excess of the portion of the
state ceiling available for allocation, then from among those
programs the agency shall select by lot the programs to be
approved. If a portion of the state ceiling remains unallocated
after the agency has approved all programs submitted by cities
that meet one or more of the criteria in (1), (2), or (3), the
Minnesota housing finance agency shall select by lot from among
the remaining programs the programs to be approved. The
Minnesota housing finance agency shall determine if a program
meets the conditions in clauses (a) and (b) based solely upon
the program with accompanying information submitted to the
agency. Approval of a program shall constitute an allocation of
a portion of the state ceiling for mortgage revenue bonds equal
to the proposed bond issue or issues contained in the program,
provided that the allocation for the last selected program that
receives an allocation may be equal to or less than the amount
of the bond issue or issues proposed in the program.
If a city which received an allocation pursuant to this
subdivision, or which has been allocated a portion of the state
ceiling by law and has received approval of one or more
programs, has not issued bonds by September 1 in an amount equal
to the allocation, and the city intends to issue mortgage
revenue bonds prior to the end of the calendar year, the city
shall by September 1 submit to the Minnesota housing finance
agency for each program a letter that states the city's intent
to issue the mortgage revenue bonds prior to the end of the
calendar year. If the Minnesota housing finance agency does not
receive the letter from the city, then the allocation of the
state ceiling for that program shall expire on September 1, and
the applicable limit for the Minnesota housing finance agency
shall be increased by an amount equal to the unused portion of
the allocation to the city. A city referred to in subdivision
1, clause (i), shall not be required to apply under this
subdivision with respect to bonds allocated by law to any such
city. Nothing in this subdivision shall prevent any such city
from applying for an additional allocation of bonds under this
subdivision.
Sec. 27. Minnesota Statutes 1984, section 462C.09,
subdivision 3, is amended to read:
Subd. 3. [ADDITIONAL CITY ALLOCATION.] On or before
September 1 of each year, the Minnesota housing finance agency
shall identify the amount, if any, of its applicable limit for
housing mortgage bonds for that calendar year that it does not
intend to issue. Any city that intends to issue mortgage
revenue bonds prior to the end of the calendar year for which it
has not received an allocation of the state ceiling may submit a
program for approval on or before September 1 to the Minnesota
housing finance agency for a portion of the amount of the
Minnesota housing finance agency's applicable limit as provided
in subdivision 1 which the agency does not intend to issue. The
total amount of bonds included in all programs of any city
submitted pursuant to this subdivision shall not exceed
$10,000,000. The program shall be accompanied by the same
certificate required by subdivision 2 2a. The Minnesota housing
finance agency shall allocate the amount of the state ceiling to
be allocated pursuant to this subdivision using the same factors
listed in subdivision 2 2a, provided that a program for any city
receiving an allocation pursuant to subdivision 2 2a during the
calendar year shall be ranked below all other programs if the
bonds proposed in the program, when added to the bonds included
in programs approved pursuant to subdivision 2 2a, exceed
$10,000,000. A city that submitted a program pursuant to
subdivision 2 2a but that did not receive an allocation may
renew its application with a letter of intent to issue. Nothing
in this subdivision shall prevent any city referred to in
subdivision 1, clause (i), from applying for an additional
allocation of bonds under this subdivision.
Sec. 28. Minnesota Statutes 1984, section 462C.09, is
amended by adding a subdivision to read:
Subd. 6. [CORRECTION AMOUNTS FOR MORTGAGE CREDIT
CERTIFICATE PROGRAMS.] A reduction in the state ceiling for
qualified mortgage bonds caused by the failure of a mortgage
credit certificate program to comply with a federal statute or
regulation shall be assessed against the amount of qualified
mortgage bonds allocated by law, other than by way of this
section, to the city which adopted the program; provided that if
no such allocation exists or it is less than the correction
amount determined by the secretary of the treasury, then the
amount of the correction amount in excess of the allocation
shall be assessed against the 27-1/2 percent of the state
ceiling allocated to the cities under subdivision 2a.
Sec. 29. [462C.11] [MORTGAGE CREDIT CERTIFICATE PROGRAMS.]
Subdivision 1. [CITY PROGRAM.] A city may include in the
housing plan a program to issue and administer mortgage credit
certificates, under a qualified mortgage credit certificate
program, to assist in the acquisition, qualified rehabilitation,
or qualified home improvement of the recipient's principal
residence.
Subd. 2. [PROGRAM REQUIREMENTS.] Mortgage credit
certificate programs adopted by the city shall comply with all
of the provisions of section 25 of the Internal Revenue Code of
1954, as amended through July 18, 1984.
Subd. 3. [CORRECTION AMOUNTS.] Correction amounts
determined by the secretary of the treasury because of the
failure of a mortgage credit certificate program to comply with
a federal statute or regulation shall be assessed pursuant to
section 28.
Sec. 30. [462C.12] [MINNEAPOLIS/ST. PAUL HOUSING FINANCE
BOARD; POWERS; JURISDICTION.]
Subdivision 1. [ESTABLISHMENT OF HOUSING BOARD
RATIFIED.] The establishment of the Minneapolis/St. Paul housing
finance board in accordance with a joint powers agreement
entered into between the Minneapolis community development
agency and the housing and redevelopment authority of the city
of St. Paul, and accepted by the cities of Minneapolis and St.
Paul under section 471.59, is ratified and approved.
Subd. 2. [POWERS.] The board is granted the following
powers:
(a) The board may issue obligations and other forms of
indebtedness under this section, subject to the terms and
conditions set forth in the joint powers agreement, as may be
from time to time amended.
(b) The board is authorized to exercise the powers
conferred upon the cities of Minneapolis and St. Paul and their
designated housing and redevelopment authorities, or the powers
of an agency exercising the powers of a housing and
redevelopment authority by chapters 462 and 462C and any other
general or special law of the state of Minnesota relating to
housing or housing finance. The powers which may be exercised
by the board include, without limitation, the power to undertake
and implement projects, developments, or programs, the power to
issue and sell obligations and other forms of indebtedness
payable exclusively from the revenues of the programs, projects,
or developments undertaken by the board, or any of the powers
the Minnesota housing finance agency may exercise under chapter
462A, provided that the obligations and other forms of
indebtedness may be sold upon terms and conditions as the board
may from time to time determine. The board may exercise the
powers conferred by this section only with respect to projects,
programs, or developments within the corporate limits of the
cities of Minneapolis and St. Paul, except as may be otherwise
provided in a joint powers agreement entered into under section
471.59 between the board and any other city, housing and
redevelopment authority, or port authority in the state of
Minnesota.
(c) For the purposes of section 462C.09, the board may be
authorized by the cities of Minneapolis and St. Paul, or by any
other city with which the board enters into a joint powers
agreement, to issue revenue bonds or obligations in an amount
not to exceed the amount of bonds allocated by general or
special law to such cities, or the board may issue mortgage
credit certificates in lieu thereof.
Subd. 3. [JURISDICTION.] Notwithstanding any other
provision of law, the territorial jurisdiction of the board
shall extend to all of the area within the corporate limits of
the cities of Minneapolis and St. Paul and shall for the
purposes of any particular project, development, or program
undertaken in whole or part for any other city include all of
the area within the corporate limits of the city. For the
purposes of any provision of law intended to apply within a
particular jurisdiction, the provision shall be construed to
apply to the entire area within the corporate limits of the
cities of Minneapolis and St. Paul, together with the entire
area within the corporate limits of any other city with which
the board has entered into a joint powers agreement and on whose
behalf a project, development, or program is undertaken or
implemented, or on whose behalf obligations or other forms of
indebtedness are issued by the board.
Subd. 4. [POWERS SUPPLEMENTARY.] The powers granted by
this section are in addition and supplemental to the powers
granted by section 471.59, or the law under which a project,
development, or program is undertaken or implemented by the
board, or under which the board issues obligations or other
forms of indebtedness.
Sec. 31. Minnesota Statutes 1984, section 474.16,
subdivision 3, is amended to read:
Subd. 3. "Entitlement issuer" means a local an issuer with
an average annual previous use of $1,000,000 or more based on
the highest annual use in three of the calendar years from 1980
to 1983 provided an allocation under section 474.17.
Sec. 32. Minnesota Statutes 1984, section 474.16, is
amended by adding a subdivision to read:
Subd. 6. "Manufacturing project" means properties, real or
personal, used in connection with a revenue producing enterprise
in connection with assembling, fabricating, manufacturing,
mixing, or processing any products of agriculture, forestry,
mining, or manufacture. Properties used for storing,
warehousing, or distributing qualify under this definition (a)
if they are used as part of or in connection with an assembly,
fabricating, manufacturing, mixing, or processing facility or
(b) if they are used for the storing of agricultural products
and are located outside of the metropolitan area, as defined in
section 473.121, subdivision 2. Manufacturing project includes
properties, real or personal, used in connection with research
and development activity to develop or improve products,
production processes, or materials. For purposes of this
subdivision, "a product of manufacture" includes information and
directions which dictate the functions to be performed by data
processing equipment, commonly called computer software,
regardless of whether they are embodied in or recorded on
tangible personal property. A project qualifies as a
manufacturing project only if 75 percent of the proceeds of the
proposed obligations will be used for construction, acquisition,
installation, or addition of properties described in this
subdivision.
Sec. 33. Minnesota Statutes 1984, section 474.16, is
amended by adding a subdivision to read:
Subd. 7. "Pollution control project" means properties,
real or personal, used in the abatement or control of noise,
air, or water pollution, or in the disposal of solid waste, in
connection with a revenue producing enterprise, engaged in or to
be engaged in any business or industry. A project qualifies as
a pollution control project only:
(a) if 75 percent of the proceeds of the obligations will
be used for the construction, acquisition, installation, or
addition of properties described in this subdivision; or
(b) if it is not a manufacturing project and 75 percent of
the proceeds of the obligations will be used for the
construction, acquisition, installation, or addition of
properties described in this subdivision and in subdivision 6.
Sec. 34. Minnesota Statutes 1984, section 474.16, is
amended by adding a subdivision to read:
Subd. 8. "Waste management project" means a project which
is authorized by chapter 115A or 400, or sections 473.801 to
473.834.
Sec. 35. Minnesota Statutes 1984, section 474.16, is
amended by adding a subdivision to read:
Subd. 9. "Commercial redevelopment project" means a
project as defined in section 474.02, if it is not a
manufacturing or pollution control project and one of the
following conditions is met:
(a) The project site would qualify as a redevelopment
district as defined in section 273.73, subdivision 10. To
qualify the project need not be included in a tax increment
financing district.
(b) Seventy-five percent of the proceeds of the obligations
will be used to acquire and rehabilitate or replace an existing
structure which is functionally obsolete or contains structural
or other defects justifying substantial renovation or clearance.
(c) The project will be undertaken and the obligations
issued pursuant to a written program administered by the local
issuer and the financing provides for a substantial commitment
of local public funds.
(d) Substantially all of the proceeds of the obligations
will be used to finance facilities with respect to which an
urban development action grant has been made under section 119
of the federal Housing and Community Development Act of 1974.
Sec. 36. Minnesota Statutes 1984, section 474.16, is
amended by adding a subdivision to read:
Subd. 10. "Written development program" or "program" means
a written economic development plan that contains at least
substantially all of the following:
(a) a description of the area subject to the plan, which
may not exceed 20 percent of the total acreage of the issuer;
(b) a statement of the objectives for the development of
the area subject to the plan;
(c) a statement of the development plan for the area
subject to the plan, including the property within the area, if
any, which is to be acquired by a governmental unit;
(d) a description of the type of specific development
reasonably expected to take place within the area subject to the
plan; and
(e) a description of the kind and an estimate of the amount
of public funds, including local public funds, expected to be
spent in connection with the development of the area subject to
the plan.
Sec. 37. Minnesota Statutes 1984, section 474.16, is
amended by adding a subdivision to read:
Subd. 11. "Substantial commitment of local public funds"
means that either of the following two conditions is satisfied.
(a) Under the project financing the governmental unit
appropriates, pledges, guarantees, or otherwise provides local
public funds to pay part of the cost of financing the
obligations, including bond issuance, debt service, loan
origination, and carrying expenses, or of the facility financed
with the proceeds of the obligations. This condition is
satisfied only if at the time the obligations are issued, the
issuer reasonably expects that the aggregate value of the local
public funds will exceed the lesser of $1,000,000 or one percent
of the face amount of the obligations. No provision may be made
for a nonexempt person to reimburse the governmental unit for
the local public funds.
(b) The governmental unit appropriates, pledges,
guarantees, or otherwise provides a program contribution of
local public funds or governmental services to the program or a
facility financed with the proceeds of the obligations. This
condition is satisfied only if the issuer reasonably expects at
the time the obligations are issued that the aggregate value of
the local public funds will exceed $5,000,000 or five percent of
the aggregate face amount of the obligations. The issuer must
value the services at the reasonable cost of delivering them.
The program contribution must be used for one or more of the
following purposes:
(i) reducing the cost of financing the obligations, as
described in paragraph (a);
(ii) securing the payment of debt service on obligations
issued pursuant to the program;
(iii) financing public improvements under a comprehensive
redevelopment or renewal program, if the costs are reasonably
allocable to a facility financed with the proceeds of the
obligations and if the improvements are made no earlier than
three years prior to issuance of the obligations to which the
contribution applies or more than one year after issuance; or
(iv) other costs reasonably related to the program.
If the governmental unit is reimbursed by a nonexempt person for
any part of the program within five years after the contribution
was made, the reimbursement must be applied for one or more of
the purposes described in this paragraph.
For purposes of this subdivision, "governmental unit" means
the local issuer that issues the obligations for the project or
the governmental unit that approves the obligations for purposes
of section 103(k)(2) of the Internal Revenue Code of 1954, as
amended through December 31, 1984, or both.
Sec. 38. Minnesota Statutes 1984, section 474.16, is
amended by adding a subdivision to read:
Subd. 12. "Local public funds" means the funds of a
governmental unit except the following:
(a) the proceeds of an obligation subject to a federal
limitations act;
(b) payments or property furnished by a nonexempt person to
repay or secure the loan of proceeds of an obligation subject to
a federal limitations act or other payments made in
consideration of the issuance of an obligation subject to a
federal limitations act;
(c) payments furnished by a nonexempt person for its right
to use in its trade or business a facility financed with the
proceeds of obligations subject to a federal limitations act;
(d) tax increments, as defined in section 273.76; or
(e) tax reductions provided pursuant to sections 273.1312
to 273.1314.
Sec. 39. Minnesota Statutes 1984, section 474.16, is
amended by adding a subdivision to read:
Subd. 13. "Nonexempt person" means a person or entity
other than an exempt person as defined in section 103(b)(3) of
the Internal Revenue Code of 1954, as amended through December
31, 1984.
Sec. 40. Minnesota Statutes 1984, section 474.16, is
amended by adding a subdivision to read:
Subd. 14. "Preliminary resolution" means a resolution
adopted by the governing body of the issuer or in the case of
the iron range resources and rehabilitation board by the
commissioner of the board. The resolution must express a
preliminary intention of the issuer to issue obligations for a
specific project and must identify the proposed project, the
proposed site for the project, and the proposed amount of the
obligations to be issued. The resolution for a waste management
project need not include the site for the project if the
resolution identifies a specific process and a deadline for site
selection.
Sec. 41. Minnesota Statutes 1984, section 474.16, is
amended by adding a subdivision to read:
Subd. 15. "Issuer" means any entity authorized by state
law to issue obligations subject to a federal limitation act and
specifically includes the higher education coordinating board,
the energy and economic development authority, the commissioner
of the iron range resources and rehabilitation board, and any
local issuer.
Sec. 42. Minnesota Statutes 1984, section 474.17, is
amended to read:
474.17 [ALLOCATION OF PRIVATE ACTIVITY BONDS.]
Subdivision 1. [HIGHER EDUCATION COORDINATING BOARD
ALLOCATION.] $30,000,000 for calendar year 1984 and $10,000,000
for calendar year 1985 and $25,000,000 for each subsequent
calendar year of the aggregate limit of bond issuance authority
allocated to the state pursuant to a federal limitation act is
allocated to the higher education coordinating board for the
issuance of obligations pursuant to chapter 136A. On September
1, 1985, any unused portion of the bonding authority allocated
to the higher education coordinating board pursuant to this
subdivision shall be canceled and the authority shall be
allocated pursuant to section 474.19. If the energy and
economic development authority determines that pursuant to a
federal limitation act, the higher education coordinating board
cannot issue obligations whose interest is exempt from inclusion
in gross income for purposes of federal income taxation pursuant
to section 103(a) of the Internal Revenue Code of 1954, as
amended, this allocation shall cancel and the allocation
provided in subdivision 3 shall be increased to $55,000,000 for
calendar year 1984 and to $65,000,000 for calendar year 1985.
Subd. 2. [IRON RANGE RESOURCES AND REHABILITATION
ALLOCATION.] From January 1 to August 31 of each calendar
year, $25,000,000 $30,000,000 of the aggregate limit of bond
issuance authority allocated to the state for any calendar year
pursuant to a federal limitation act is allocated to the iron
range resources and rehabilitation commissioner. From September
1 to October 31 of each year, the iron range resources and
rehabilitation commissioner may retain his allocation or a
portion of it only if he has submitted to the energy and
economic development authority on or before September 1 a letter
which states (a) his intent to issue obligations pursuant to his
allocation or a portion of it before the end of the calendar
year or within the time period permitted by a federal limitation
act and (b) a description of the specific project or projects
for which the obligations will be issued, together with an
application deposit in the amount of one percent of the amount
of the remaining unused allocation or the portion of it pursuant
to which he intends to issue obligations. If the iron range
resources and rehabilitation commissioner does not submit the
required letter of intent and the application deposit, the
amount originally allocated to the iron range resources and
rehabilitation commissioner or the portion not already used not
subject to a letter of intent shall be canceled and subject to
reallocation in accordance with section 474.19. If the iron
range resources and rehabilitation commissioner returns for
reallocation all or any part of his allocation on or before
October 31, that portion of his application deposit equal to one
percent of the amount returned shall be refunded within 30
days. The iron range resources and rehabilitation commissioner
may enter into a joint powers agreement with any other state or
municipal entity which has authority to issue obligations
subject to a federal limitation act whereby the other entity
issues the bonds on behalf of the iron range resources and
rehabilitation commissioner.
Upon the request of a statutory city located in the
taconite tax relief area which received an entitlement
allocation under Minnesota Statutes, section 474.18 of
$5,000,000 or more for calendar year 1985, the iron range
resources and rehabilitation commissioner shall enter into an
agreement with the city whereby the commissioner issues
obligations, in an amount requested by the city but not to
exceed $5,000,000, on behalf of the city.
Subd. 3. [ENERGY AND ECONOMIC DEVELOPMENT AUTHORITY
ALLOCATION.] From January 1 to August 31 of calendar year 1984,
$40,000,000 and for calendar year 1985 $60,000,000 of the
aggregate limit of bond issuance authority allocated for each
calendar year to the state pursuant to a federal limitation act
is allocated to the department of energy and economic
development authority for use or allocation pursuant to section
116J.58, clause (2) subdivision 4. From September 1 to October
After August 31 of each year, the energy and economic
development authority or any entity which receives an allocation
from the department of energy and economic development authority
pursuant to section 116J.58, clause (2) subdivision 4, may
retain its allocation or a portion of it only if it has
submitted to the division department of the energy and economic
development authority responsible for administering Laws 1984,
chapter 582, on or before September 1 a letter which states (a)
its intent to issue obligations pursuant to its allocation or a
portion of it before the end of the calendar year or within the
time period permitted by a federal limitation act, and (b) a
description of the specific project or projects for which the
obligations will be issued, together with an application deposit
in the amount of one percent of the amount of its remaining
unused allocation or the portion of it pursuant to which it
intends to issue obligations. If the energy and economic
development authority or any entity which receives an allocation
from the department of energy and economic development authority
pursuant to section 116J.58, clause (2) subdivision 4, does not
submit the required letter of intent and the application
deposit, the amount originally allocated to the energy and
economic development authority or any entity which receives an
allocation from the department of energy and economic
development authority pursuant to section 116J.58, clause (2)
subdivision 4, or the portion not already used and not subject
to a letter of intent shall be canceled and subject to
reallocation in accordance with section 472.09, subdivision
8 474.19. If the energy and economic development authority or
any entity which receives an allocation from the energy and
economic development authority pursuant to section
116J.58, clause (2) subdivision 4, returns for reallocation all
or any part of its allocation on or before October 31, that
portion of its application deposit equal to one percent of the
amount returned shall be refunded within 30 days.
Subd. 3a. [ENTITLEMENT CITIES.] From January 1 to August
31 of each calendar year an amount of bond issuance authority
shall be allocated to (a) cities of the first class and (b) the
largest Minnesota city located in a standard metropolitan
statistical area that does not contain a city of the first
class, if the city has a population of 25,000 or more. The
amount allocated to a first class city shall be an amount equal
to $200 multiplied by the city's population. The amount
allocated to each city qualifying under clause (b) is $5,000,000.
After August 31 of each year, a local issuer receiving an
allocation under this subdivision may retain all or a portion of
its allocation only if it has submitted to the department of
energy and economic development by September 1 a letter stating
its intent to issue obligations pursuant to its allocation
before the end of the calendar year or within the time permitted
by a federal limitation act and an application deposit equal to
one percent of the amount of the unused allocation for which it
intends to issue obligations. The portion of any unused
issuance authority for which an application deposit and letter
of intent has not been received by the department on September
1, is cancelled and must be reallocated under section 474.19.
If a local issuer returns for reallocation all or part of its
allocation under this subdivision by October 31, the application
deposit for the amount of the returned authority must be
refunded to the local issuer.
For purposes of this subdivision, "city" means a statutory
or home rule charter city and "population" means the population
determined under section 477A.011, subdivision 3.
Subd. 3b. [ENTITLEMENT TRANSFERS.] An entitlement issuer
may enter into an agreement with another entitlement issuer
whereby the recipient entitlement issuer issues bonds pursuant
to issuance authority allocated to the original entitlement
issuer under section 474.17.
Subd. 4. [LOCAL ISSUER POOL ALLOCATION.] Any amount of the
aggregate limit of bond issuance authority allocated to the
state for any calendar year pursuant to a federal limitation act
which is not allocated pursuant to subdivisions 1 to 3a shall be
allocated among local issuers pursuant to sections 474.18 474.19
to 474.23.
Sec. 43. Minnesota Statutes 1984, section 474.19, is
amended to read:
474.19 [ALLOCATION OF POOL AMOUNT.]
Subdivision 1. [POOL AMOUNT.] From January 1 to August 31
of each year, 20 percent of the amount determined pursuant to do
not qualify as entitlement issuers and shall be allocated as
provided in this section. From September 1 to October 31 of any
calendar year, any the amounts remaining available for
allocation or reallocation pursuant to section 474.18 474.17 or
this section shall be allocated among all local issuers and the
energy and economic development authority and the iron range
resources and rehabilitation commissioner, pursuant to this
section. An entitlement issuer, the energy and economic
development authority or the iron range resources and
rehabilitation commissioner may apply for an allocation pursuant
to this section after August 15 and only if the applicant has
issued adopted a final resolution authorizing the sale of bonds
equal to any allocation received pursuant to section 474.17 or
474.18 or has returned any remaining allocation for reallocation
pursuant to this section. A city of the first class may apply
for an allocation for a manufacturing project at any time,
notwithstanding the preceding sentence.
Subd. 2. [APPLICATION.] A local issuer that is not An
entitlement issuer may apply for an allocation of bond issuance
authority pursuant to this section by submitting to
the department of energy and economic development authority on
or before the 20th 10th or the 25th day of any month from
December to September or on or before the tenth of October an
application on forms provided by the department of energy and
economic development authority, accompanied by (i) a preliminary
resolution of the local issuer expressing a preliminary
intention to issue obligations adopted in accordance with
section 474.01, subdivision 7b, if applicable, which identifies
the proposed project and the proposed amount of the obligations
to be issued; and (ii) an application deposit in the amount of
one percent of the requested allocation. A local issuer may
enter into a joint powers agreement with any other state or
municipal entity which has authority to issue obligations
subject to a federal limitation act whereby the other entity
issues the bonds on behalf of the local issuer for the project
for which an allocation was received by the local issuer. A
local issuer may request an allocation for obligations issued
prior to the effective date of this subdivision. A local issuer
may elect not to submit an application for an allocation of bond
issuance authority for a project for which the local issuer
previously adopted a preliminary resolution.
After July 31 of any year, an entitlement issuer may also
apply for an allocation under this section. Its application
need not comply with clause (i).
Subd. 3. [ALLOCATION CRITERIA.] The department of energy
and economic development authority shall rank each application
on the basis of the number of points awarded to it, with one
point being awarded for each of the following criteria satisfied:
(1) The current rate of unemployment for the applicant is
at or above 110 percent of the statewide average unemployment
rate for the previous year most recently available reporting
period, as determined by the department of economic security.
The unemployment rate for the applicant shall be the greater of
(i) the most recent estimate available for the smallest
jurisdiction which wholly includes the jurisdiction of the
applicant, as reported by the department of economic security,
or (ii) another estimate supplied by the applicant with respect
to its jurisdiction, which is documented by the applicant.
(2) The number of individuals employed in the applicant's
jurisdiction declined from the second calendar year before the
application, to the first calendar year before the application.
The estimate of the number of individuals employed for each year
shall be based on the same source, and shall be (i) the most
recent estimate available for the smallest jurisdiction which
wholly includes the applicant, as reported by the department of
economic security, or (ii) another estimate supplied by the
applicant with respect to its jurisdiction, which is documented
by the applicant.
(3) The number of jobs to be created by the project
described in the application is at least 1/10 of one percent of
the number of individuals employed in the applicant's
jurisdiction in the first calendar year before the application
as determined in the manner provided in clause (2) The project
will provide additional general tax revenue to the taxing
jurisdictions in which the project is located beginning not
later than three years after issuance and sale of the
obligations.
(4) The number of jobs to be created by the project
described in the application is at least two jobs for each
$100,000 of issuance authority requested for the project.
(5) As of the date of application the total market value of
all taxable property in the applicant's jurisdiction, as based
on the most recent certification of assessed value to the
commissioner of revenue, has either (i) declined in relation to
the first calendar year before the certification, or (ii)
increased in relation to the first calendar year before the
certification at a rate which is not in excess of 90 percent of
the rate of increase of the state average market value over the
same period.
(6) The estimated market value of the project described in
the application is at least one-half of one percent of the total
market value of all taxable property in the applicant's
jurisdiction as based on the most recent certification of
assessed value to the commissioner of revenue The total capital
expenditures for the project exceed by ten percent the amount of
the proceeds of the obligations to be issued for the project.
(7) The project is wholly located in an enterprise zone
designated pursuant to section 273.1312.
(8) The project site meets the criteria necessary to
qualify as a tax increment redevelopment district as defined in
section 273.73, subdivision 10. To qualify under this clause
the project need not be included in a tax increment financing
district.
(9) The project meets one of the following energy
conservation criteria: (i) the project is eligible for the
additional federal investment tax credits for energy property,
(ii) the project involves construction or expansion of a
district heating system as defined in section 116J.36, or (iii)
the project involves construction of an alternative energy
source as described in section 116J.26, clause (a), (b), or (d),
or 116J.922, subdivision 6 or 7 116M.03, subdivisions 23 and 26.
(10) Ninety percent or more of the proceeds of the proposed
obligations will be used for construction, installation, or
addition of equipment used primarily to abate or control
pollutants to meet or exceed state laws, rules, or standards.
(11) The project consists of the renovation,
rehabilitation, or reconstruction of an existing building which
is (i) located in a historic district designated under section
138.73, or on a site listed in the state registry of historical
sites under sections 138.53 to 138.5819; or (ii) designated in
the National Register pursuant to United States Code, title 16,
section 470a.
(12) Ninety percent or more of the proceeds of the proposed
obligations will be used to finance facilities for waste
management as defined in section 115A.03, subdivision 36, or
solid waste as defined in section 116.06, subdivision 10.
(13) (11) Service connections to sewer and water systems
are available to the project at the time the application is
submitted.
(14) The minority population in the applicant's
jurisdiction is at least 110 percent of the statewide average as
determined by the affirmative action division of the department
of economic security according to the most recent census data.
(12) As provided by a binding agreement with the
municipality, at least ten percent of the individuals employed
by the principal user or users of the project will be minority
or low income individuals.
(15) (13) When the application is submitted either (a)
neither the anticipated owner of the project, nor any party of
which the owner was a controlling partner or shareholder, or
which was a controlling shareholder or partner of the owner,
owned or operated a substantially similar business within the
state or (b) the project is an expansion of the operations of an
existing business which is not likely to have the effect of
transferring existing employment from one or more other
municipalities within the state to the municipality in which the
project is located.
(16) (14) A controlling interest in the project will be
owned by one or more women or minority persons.
(17) (15) Seventy-five percent or more of the proceeds of
the proposed issue will be used to rehabilitate an existing
structure.
(18) At the time of application, the property on which the
project is to be located is properly zoned for the proposed use.
(19) The bond issue involves a credit enhancement device
providing additional security for bondholders involving
commitments or fees to be paid by the issuer other than from
bond proceeds. No points shall be awarded for credit
enhancement devices financed directly or indirectly by a
private, for-profit party which has a financial interest in or
is related to any party which has a financial interest in the
project.
Subd. 4. [ALLOCATION PROCEDURE.] (a) The department of
energy and economic development authority shall allocate
available issuance authority to applications by the fifth tenth
day of the month succeeding each application deadline specified
in subdivision 2 in the following order of priority and
available issuance authority may not be allocated to any other
project:
(i) applications for manufacturing projects;
(ii) applications for pollution control projects or waste
management projects; and
(iii) applications for commercial redevelopment projects.
Within each category of applications available authority
shall be assigned on the basis of the numerical rank determined
pursuant to this section, but (i) no allocation shall be awarded
to an application demonstrating less than four points, (ii) any
project which is authorized by chapter 115A, chapter 400, or
sections 473.801 to 473.834, shall receive an allocation of
issuance authority without regard to its numerical rank to the
extent that the amount of issuance authority allocated to the
project when added to the issuance authority previously
allocated during the calendar year pursuant to this clause does
not exceed 49 percent of the amount provided in subdivision 1,
provided that if obligations for any project described in this
clause are not subject to a federal limitation act, no
allocation shall be made pursuant to this clause, (iii) if on or
before September 1, the energy and economic development
authority returns a portion of its allocation for reallocation
pursuant to this section, and the iron range resources and
rehabilitation commissioner has issued obligations in an amount
equal to its allocation or has submitted a letter of intent for
any amount not issued, applications from the iron range
resources and rehabilitation commissioner which demonstrate four
or more points shall receive an allocation up to an amount equal
to $10,000,000 or the amount returned for reallocation by the
energy and economic development authority or the amount
remaining to be allocated, whichever is less, (iv) if on or
before September 1, the iron range resources and rehabilitation
commissioner returns a portion of his allocation for
reallocation pursuant to this section, and the energy and
economic development authority has issued obligations in an
amount equal to its allocation or has submitted a letter of
intent for any amount not issued, applications from the energy
and economic development authority which demonstrate four or
more points shall receive an allocation up to an amount equal to
$10,000,000 or the amount returned for reallocation by the iron
range resources and rehabilitation commissioner or the amount
remaining to be allocated, whichever is less, and (v). In the
case of an application for issuance authority that includes more
than one project to be financed by one issue of obligations, the
points assigned to the application shall be computed on the
basis of the weighted average of points for the projects. The
projects must all be of the same category of projects to be
submitted as a multiproject application. If two or more
applications have the same numerical rank, the allocation of
issuance authority as between the applications shall be by lot
unless otherwise agreed by the respective local issuers. If an
application is rejected, the department of energy and economic
development authority shall return the application deposit to
the applicant within 30 days.
(b)(i) From January 1 through October 31, no more than 35
percent of the total amount of issuance authority available for
allocation during the calendar year pursuant to this section may
be allocated to pollution control and waste management projects.
(ii) From January 1 through October 31, no more than 20
percent of the total amount of issuance authority available for
allocation during the calendar year pursuant to this section may
be allocated to commercial redevelopment projects. This amount
is increased to 30 percent of the total available authority for
the next month's allocation if the following two conditions
occur. (A) On or after June 30 the total amount of issuance
authority available under this section which has not been
allocated or has been allocated to but was returned by an issuer
exceeds 45 percent of the total amount of issuance authority
available for allocation under this section for the calendar
year. (B) The entire amount of issuance authority available
under this subparagraph for commercial redevelopment projects
has been allocated.
Subd. 5. [LETTER OF INTENT.] A local issuer which has
received an allocation pursuant to this section prior to
September 1 and which intends to issue obligations pursuant to
it after August 31 of the year in which the allocation was
received, shall submit to the department of energy and economic
development authority on or before September 1 a letter stating
its intent to issue bonds before the end of the calendar year or
within the time period permitted by a federal limitation act.
If the letter of intent is not submitted to the department of
energy and economic development authority, the one percent
application deposit shall be returned to the local issuer, the
issuance authority shall be canceled, and the issuance authority
previously allocated to the local issuer will be available for
reallocation pursuant to this section. If a local issuer
returns for reallocation all or any part of its allocation on or
before October 31, that portion of its application deposit equal
to one percent of the amount returned shall be refunded within
30 days.
Subd. 6. [FINAL ALLOCATION.] From November 1 to December
31 of each year any amount determined pursuant to section
474.17, which is not both previously allocated and subject to a
preliminary resolution for a specific project, whether or not
committed pursuant to a letter of intent, is available for
allocation or reallocation and shall be allocated among local
issuers based on a ranking of points for criteria as set forth
in subdivisions 3 and 4. No minimum number of points shall be
required for allocation. If two or more applications receive an
equal number of points, allocation among them shall be made by
lot unless otherwise agreed by the respective
applicants. Applications for an allocation under this
subdivision must be submitted on or before the tenth day prior
to the following allocation dates: November 5, December 5, and
December 20. An application for this allocation shall be
submitted by October 20, shall must include evidence of passage
of a preliminary resolution giving approval to a specific
project and stating state that it is the intent of the applicant
that the obligations will be issued by the end of the year or
within the time period permitted by a federal limitation act,
and shall must be accompanied by an application deposit in the
amount of one percent of the requested allocation.
The department of energy and economic development authority
shall notify applicants of their allocation on or
before November 5 the fifth day after the allocation date.
Any amounts of authority which may become available for
reallocation after November 5 shall be allocated among issuers
which filed an application by October 20, pursuant to the
criteria stated in subdivision 3.
Authority may be allocated under this subdivision to any
project, notwithstanding the percentage limits and other
restrictions contained in subdivision 4. Applications must be
ranked and authority allocated first according to the order of
priority and ranking of points under subdivisions 3 and 4. The
remaining authority must be allocated according to the ranking
of points under subdivision 3. If two or more applications
receive an equal number of points, allocations among them must
be made by lot unless otherwise agreed by the respective
applicants.
If issuance authority remains or becomes available
following the final December 20th allocation, the department of
energy and economic development must allocate the available
authority to the higher education coordinating board.
Subd. 7. [RETURN OF ALLOCATION.] If prior to December 20
of any year, an issuer determines that it will not issue
obligations pursuant to authority allocated to it pursuant to
this section or section 459.35 or 462.556 474.17 by the end of
that year or within the time period permitted by a federal
limitation act, the issuer may notify the department of energy
and economic development authority and such amount will be
available for reallocation pursuant to this subdivision. In
such case, the department of energy and economic development
authority shall refund to the issuer within 30 days that portion
of any application deposit equal to one-third of one percent of
the amount returned for reallocation. The amounts available for
reallocation shall be allocated on or before December 31 of each
year among issuers which have submitted an application by
December 10, and which have certified that the project to which
the application relates qualifies for carryover treatment of
allocated authority according to the terms of a federal
limitation act, such that obligations may be issued pursuant to
such allocation of authority after the end of the year, without
expiration of such authority. If there is insufficient
authority for allocation among applications received pursuant to
this subdivision, allocation among them shall be made by lot
unless otherwise agreed by the respective applicants pursuant to
subdivision 6.
Sec. 44. Minnesota Statutes 1984, section 474.20, is
amended to read:
474.20 [NOTICES REQUIRED.]
Subdivision 1. [NOTICE OF ISSUE.] Any issuer of
obligations subject to limitation under a federal limitation act
shall give a notice of issue stating the date of issuance of the
obligations, the allocation under which the obligations are
issued, and the principal amount of the obligations to the
department of energy and economic development authority within
five days after the obligations are issued. If obligations are
to be issued as a series of obligations, the notice of issue
must be filed within five days after each of the series of
obligations is issued. If the notice of issue is not filed
within five days after the obligations are issued or within five
days after each of the series of obligations are issued that are
a part of obligations to be issued as a series of obligations,
the obligations shall be void unless this provision is waived by
the department of energy and economic development authority.
Within 30 days after receipt of the notice, the department of
energy and economic development authority shall refund a portion
of any application deposit equal to one percent of the principal
amount of the obligations issued.
Subd. 2. [NOTICE OF AVAILABLE AUTHORITY.] The department
of energy and economic development authority shall as soon as
possible after the fifth day of each month publish in the State
Register a notice of the amount of authority available for
allocation or reallocation in the following month as of the
fifth day of the month during which the notice is published,
after allocation of authority pursuant to section 474.19.
Sec. 45. Minnesota Statutes 1984, section 474.22, is
amended to read:
474.22 [LEGISLATIVE REVIEW.]
On March 1, 1986, the department of energy and economic
development authority shall deliver a comprehensive report to
the secretary of the senate and the clerk of the house which
provides detailed information concerning the allocation of
issuing authority pursuant to sections 474.16 to 474.20.
Sec. 46. Minnesota Statutes 1984, section 474.23, is
amended to read:
474.23 [ADDITIONAL CONDITIONS.]
Subdivision 1. [PROJECTS NOT INCLUDED.] If a federal
limitation act as defined in section 474.16, subdivision 5, is
adopted, Action under chapter 474 with respect to any project
which is to be financed by obligations which are subject
to volume limitation of a federal limitation act shall be
subject to the following conditions:
(a) No municipality or redevelopment agency shall undertake
any project, except a project referred to in section 474.02,
subdivision 1f, unless its governing body finds that the project
would not be undertaken but for the availability of industrial
development bond financing.
(b) Notwithstanding any provision of this chapter, the term
"project" shall not include: an airplane; a private luxury box;
a facility primarily used for gambling; or a store the principal
business of which is the sale of alcoholic beverages for
consumption off premises.
(c) No more than ten percent of the proceeds of revenue
bonds may be used to finance movable equipment not constituting
a fixture, No more than 25 percent of the proceeds of revenue
bonds may be used to finance the acquisition of land, and not
more than $10,000,000 in revenue bonds which are industrial
development bonds subject to the exemption described in section
103(b)(6) of the Internal Revenue Code of 1954, as amended
through December 31, 1983, may be issued with respect to any one
building which is used for commercial, office or industrial
purposes, without regard to ownership of condominium units
within the building.
Subd. 2. [WAREHOUSE PROJECTS PROHIBITED.] Notwithstanding
any provision of this chapter, proceeds of obligations which are
subject to volume limitation of a federal limitation act may not
be used for the financing of a warehouse project. For the
purposes of this section, "warehouse project" means any building
or structure that is used primarily for the self storage by an
individual of goods, wares, or merchandise for compensation.
"Warehouse project" does not include a safe deposit box or a
storage area on the grounds of, and maintained primarily for the
convenience of the occupants of, residential housing structures.
This section takes effect 90 days after the federal
limitation act is signed by the president or passed over his
veto.
Sec. 47. [474.26] [APPROPRIATION.]
The amount necessary to pay the return or refund of
application deposits required by sections 474.17 and 474.19 is
annually appropriated to the department of energy and economic
development from the general fund.
Sec. 48. [RATIFICATION.]
All actions of the department taken in allocating bond
issuance authority under the 1984 federal limitations act are
ratified, confirmed, and approved.
Sec. 49. Minnesota Statutes 1984, section 475.52,
subdivision 6, is amended to read:
Subd. 6. [CERTAIN PURPOSES.] Any municipality may issue
bonds for paying judgments against it; for refunding outstanding
bonds; or for funding floating indebtedness; or for funding all
or part of the municipality's current and future unfunded
liability for a pension or retirement fund or plan referred to
in section 356.20, subdivision 2, as those liabilities are most
recently computed pursuant to sections 356.215 and 356.216 by
purchasing one or more insurance policies or annuity contracts
to pay all or a specified part of the liability within the
period required by law. The board of trustees or directors of a
pension fund or relief association referred to in section 69.77
or chapter 422A must consent and must be a party to any contract
made under this section with respect to the fund held by it for
the benefit of and in trust for its members.
Sec. 50. Minnesota Statutes 1984, section 475.54,
subdivision 1, is amended to read:
Subdivision 1. Except as provided in subdivision 3 or 5a,
or as expressly authorized in another law, all
obligations authorized under this chapter of each issue shall
mature serially or be subject to mandatory sinking fund
redemption in annual or semiannual installments., the first
installment shall mature not later than three years from the
date of the obligations and the last installment shall mature
not more later than 30 years from such the date of the issue.
No amount of principal of any obligations the issue payable in
any calendar year shall exceed five times the amount of the
smallest amount payable in any preceding calendar year ending
three years or more after date of the issue date.
Sec. 51. Minnesota Statutes 1984, section 475.54, is
amended by adding a subdivision to read:
Subd. 5a. Any obligation may be issued giving its owner
the right to tender, or the municipality to demand tender of,
the obligation to the municipality or another person designated
by it, for purchase at a specified time or times, if the
municipality has first entered into an agreement with a suitable
financial institution obligating the financial institution to
provide funds on a timely basis for purchase of bonds tendered.
The obligation shall not be deemed to mature on any tender date,
within the meaning of subdivision 1, and the purchase of a
tendered obligation shall not be deemed a payment or discharge
of the obligation by the municipality. Obligations tendered for
purchase may be remarketed by or on behalf of the municipality
or any other purchaser. The municipality may enter into
agreements deemed appropriate to provide for the purchase and
remarketing of tendered obligations, including provisions under
which undelivered obligations may be deemed tendered for
purchase and new obligations may be substituted for them,
provisions for the payment of charges of tender agents,
remarketing agents, and financial institutions extending lines
of credit or letters of credit assuring repurchase, and for
reimbursement of advances under letters of credit, which charges
and reimbursements may be paid from the proceeds of the
obligations or from tax and other revenues appropriated for the
payment and security of the obligations, and similar or related
provisions.
Sec. 52. Minnesota Statutes 1984, section 475.56, is
amended to read:
475.56 [INTEREST RATE.]
(a) Any municipality issuing obligations under any law may
issue obligations bearing interest at a single rate or at rates
varying from year to year which may be lower or higher in later
years than in earlier years. Such higher rate for any period
prior to maturity may be represented in part by separate coupons
designated as additional coupons, extra coupons, or B coupons,
but the highest aggregate rate of interest contracted to be so
paid for any period shall not exceed the maximum rate authorized
by law. Such higher rate may also be represented in part by the
issuance of additional obligations of the same series, over and
above but not exceeding two percent of the amount otherwise
authorized to be issued, and the amount of such additional
obligations shall not be included in the amount required by
section 475.59 to be stated in any bond resolution, notice, or
ballot, or in the sale price required by section 475.60 or any
other law to be paid; but if the principal amount of the entire
series exceeds its cash sale price, such excess shall not, when
added to the total amount of interest payable on all obligations
of the series to their stated maturity dates, cause the average
annual rate of such interest to exceed the maximum rate
authorized by law. This section does not authorize a provision
in any such obligations for the payment of a higher rate of
interest after maturity than before.
(b) Any obligation of an issue of obligations otherwise
subject to section 475.55, subdivision 1, may bear interest at a
rate varying periodically at the time or times and on the terms,
including convertibility to a fixed rate of interest, determined
by the governing body of the municipality, but the rate of
interest for any period shall not exceed the maximum rate of
interest for the obligations determined in accordance with
section 475.55, subdivision 1. For purposes of section 475.61,
subdivisions 1 and 3, the interest payable on variable rate
obligations for their term shall be determined as if their rate
of interest is the maximum rate permitted for the obligations
under section 475.55, subdivision 1, or the lesser maximum rate
of interest payable on the obligations in accordance with their
terms, but if the interest rate is subsequently converted to a
fixed rate the levy may be modified to provide at least five
percent in excess of amounts necessary to pay principal of and
interest at the fixed rate on the obligations when due. For
purposes of computing debt service or interest pursuant to
section 475.67, subdivision 12, interest throughout the term of
bonds issued pursuant to this subdivision is deemed to accrue at
the rate of interest first borne by the bonds. The provisions
of this paragraph do not apply to obligations issued by a
statutory or home rule charter city with a population of less
than 10,000, as defined in section 477A.011, subdivision 3, or
to obligations that are not rated A or better, or an equivalent
subsequently established rating, by Standard and Poor's
Corporation, Moody's Investors Service or other similar
nationally-recognized rating agency.
Sec. 53. Minnesota Statutes 1984, section 475.58,
subdivision 1, is amended to read:
Subdivision 1. [APPROVAL BY MAJORITY OF ELECTORS;
EXCEPTIONS.] Obligations authorized by law or charter may be
issued by any municipality upon obtaining the approval of a
majority of the electors voting on the question of issuing the
obligations, but an election shall not be required to authorize
obligations issued:
(1) to pay any unpaid judgment against the municipality;
(2) for refunding obligations;
(3) for an improvement, which obligation is payable wholly
or partly from the proceeds of special assessments levied upon
property specially benefited by the improvement, or of taxes
levied upon the increased value of property within a district
for the development of which the improvement is undertaken,
including obligations which are the general obligations of the
municipality, if the municipality is entitled to reimbursement
in whole or in part from the proceeds of such special
assessments or taxes and not less than 20 percent of the cost of
the improvement is to be assessed against benefited property or
is estimated to be received from such taxes within the district;
(4) payable wholly from the income of revenue producing
conveniences;
(5) under the provisions of a home rule charter which
permits the issuance of obligations of the municipality without
election; and
(6) under the provisions of a law which permits the
issuance of obligations of a municipality without an election;
and
(7) to fund pension or retirement fund liabilities pursuant
to section 475.52, subdivision 6.
Sec. 54. Minnesota Statutes 1984, section 475.60,
subdivision 2, is amended to read:
Subd. 2. [REQUIREMENTS WAIVED.] The requirements as to
public sale shall not apply to:
(1) Obligations issued under the provisions of a home rule
charter or of a law specifically authorizing a different method
of sale, or authorizing them to be issued in such manner or on
such terms and conditions as the governing body may determine;
(2) Obligations sold by an issuer in an amount not
exceeding the total sum of $300,000 in any three month period;
(3) Obligations issued by a governing body other than a
school board in anticipation of the collection of taxes or other
revenues appropriated for expenditure in a single year, if sold
in accordance with the most favorable of two or more proposals
solicited privately; and
(4) Obligations sold to any board, department, or agency of
the United States of America or of the state of Minnesota, in
accordance with rules or regulations promulgated by such board,
department, or agency; and
(5) Obligations issued to fund pension and retirement fund
liabilities under section 475.52, subdivision 6, obligations
issued with tender options under section 475.54, subdivision 5a,
crossover refunding obligations referred to in section 475.67,
subdivision 13, and any issue of obligations comprised in whole
or in part of obligations bearing interest at a rate or rates
which vary periodically referred to in section 475.56.
Sec. 55. Minnesota Statutes 1984, section 475.67,
subdivision 8, is amended to read:
Subd. 8. Securities purchased for the escrow account shall
be limited to:
(a) general obligations of the United States, securities
whose principal and interest payments are guaranteed by the
United States, and securities issued by the following agencies
of the United States: Banks for Cooperatives, Federal Home Loan
Banks, Federal Intermediate Credit Banks, Federal Land Banks,
and the Federal National Mortgage Association; or
(b) obligations issued or guaranteed by any state or any
political subdivision of a state, which at the date of purchase
are rated the highest or the next highest rating given by
Standard and Poor's Corporation, Moody's Investors Service, or a
similar nationally recognized rating agency, but not less than
the rating on the refunded bonds immediately prior to the
refunding.
Sec. 56. Minnesota Statutes 1984, section 475.67, is
amended by adding a subdivision to read:
Subd. 13. Crossover refunding obligations may be issued by
a municipality without regard to the limitations in subdivisions
4 to 10. The proceeds of crossover refunding obligations, less
any proceeds applied to payment of the costs of their issuance,
shall be deposited in a debt service fund irrevocably
appropriated to the payment of principal of and interest on the
refunding obligations until the date the proceeds are applied to
payment of the obligations to be refunded. The debt service
fund shall be maintained as an escrow account with a suitable
financial institution within or without the state and amounts in
it shall be invested in securities described in subdivision 8.
Excess proceeds, if any, of the tax levy pursuant to section
475.61, subdivision 1, made with respect to the obligations to
be refunded, and any other available amounts, may be deposited
in the escrow account. In the resolution authorizing the
issuance of crossover refunding obligations, the governing body
may pledge to their payment any source of payment of the
obligations to be refunded. Subdivisions 11 and 12 shall not
apply to any crossover refunding obligations, or the obligations
to be refunded. Subject to section 475.61, subdivision 3, in
the case of general obligiation bonds, taxes shall be levied
pursuant to section 475.61 and appropriated to the debt service
fund in the amounts needed, together with estimated investment
income of the debt service fund and any other revenues available
upon discharge of the obligations refunded, to pay when due the
principal of and interest on the refunding obligations. The
levy so imposed may be reduced by earnings to be received from
investments on hand in the debt service fund to the extent the
applicable recording officer certifies to the county auditor
that the earnings are expected to be received in amounts and at
such times as to be sufficient, together with the remaining
levy, to satisfy the purpose of the levy requirements under
section 475.61.
Sec. 57. Laws 1981, chapter 223, section 4, subdivision 2,
is amended to read:
Subd. 2. [INSTALLMENT PAYMENTS.] Alternatively, the city
may accept payment by a promissory note in a principal amount
equal to the contract price, repayable in equal periodic
installments, including both principal and interest on the
declining principal balance, payable on the due dates of bills
for utility service furnished by the city and made available to
the home from the completion date until the principal and
interest are fully paid, and matching as closely as possible the
estimated reduction in current home energy cost resulting from
the project; with such provisions as may be agreed, permitting
or restricting prepayment. The installments shall be added
to and deemed a part of the charges for municipal utility
service to the premises, but shall be deposited when received in
a special fund or funds separate from other utility or municipal
funds and used only for the payment and security of revenue
bonds or notes issued by the city to finance the cost of
projects to be paid as provided in this subdivision.
Sec. 58. Laws 1981, chapter 223, section 4, subdivision 3,
is amended to read:
Subd. 3. [LIEN FOR COLLECTION OF UNPAID INSTALLMENTS.] The
resolutions establishing a home energy conservation program may
provide that the payment of note installments may be enforced in
the same manner as other utility charges. The and that the
installments are a first and prior lien on the property improved
as provided in Minnesota Statutes, section 514.67, and if not
paid when due shall be entered upon the tax rolls and collected
with and as a part of the taxes on the property, with the same
interest and penalties, or that the lien is subject to mortgages
or other encumbrances of record.
Sec. 59. Laws 1984, chapter 502, article 5, section 19,
subdivision 1, is amended to read:
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 home rule city or statutory 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 home rule city or statutory
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.
Sec. 60. [APPROPRIATION.]
The sum of $8,800,000 is appropriated from the general fund
to the economic development fund to provide special assistance
for qualified economic diversification projects. Of this
amount, $4,400,000 must be used for projects located in
distressed counties. Notwithstanding the provisions of
Minnesota Statutes, section 16A.28, the amounts appropriated by
this section shall not lapse or cancel.
Sec. 61. [LAKEVILLE AND FERGUS FALLS BOND APPLICATION
DEPOSIT REFUNDS.]
The department of energy and economic development shall
refund to the city of Fergus Falls and the city of Lakeville the
application deposits received during calendar year 1984 from the
city of Fergus Falls and the city of Lakeville under Minnesota
Statutes, section 474.19 and retained by the department.
$46,060 is appropriated from the general fund to the department
of energy and economic development to refund the industrial
development bond allocation application deposits to the city of
Lakeville and the city of Fergus Falls.
Sec. 62. [EMERGENCY RULES.]
The energy and economic development authority may adopt
emergency rules under Minnesota Statutes, chapter 14, for
purposes of the special assistance program for economic
diversification projects under Minnesota Statutes, section
116M.07, subdivision 11.
Sec. 63. [REPEALER.]
Minnesota Statutes 1984, sections 462C.09, subdivision 2;
474.16, subdivision 4; 474.18; 474.24; and Laws 1984, chapter
582, section 23, are repealed. Laws 1984, chapter 582, sections
1, 6, and 9 to 22 remain in effect until provided otherwise by
other law.
Sec. 64. [EFFECTIVE DATE.]
Section 15 is effective August 1, 1985. Section 16 is
effective for interest reduction programs established after
December 31, 1985, and for tax increment financing districts if
the authority submits the request for certification of the
original assessed value after December 31, 1985. Sections 17
and 18 are effective for sales made after August 1, 1985, and
the commissioner of energy and economic development is
authorized to designate distressed counties for the period from
August 1, 1985 to June 30, 1986, on or before August 1, 1985.
Sections 23 to 25 are effective for all plans and programs
submitted for review after August 1, 1985. Section 30 is
effective the day after compliance by the governing bodies of
the cities of Minneapolis and St. Paul with the provisions of
Minnesota Statutes, section 645.021, subdivision 3. Sections 31
to 39, and 42 to 44 are effective beginning with the calendar
year 1986 allocation of private activity bond issuance
authority, provided however, that section 31 and subdivision 3b
of section 42 are effective the day following final enactment
for purposes of the powers of the commissioner of iron range
resources and rehabilitation and for the 1985 allocation permit
transfer of issuance authority to any other issuer of private
activity bonds. Sections 40, 41, 45 to 56, and 59 are effective
the day following final enactment. The amendments contained in
section 43 to Minnesota Statutes 1984, section 474.19,
subdivisions 2, 6, and 7 are effective August 1, 1985, except
that for purposes of the calendar year 1985 allocation under
subdivision 6, no minimum number of points is required,
allocations among applications with an equal number of points
shall be made by lot unless otherwise agreed to by the
applicants, and the next to the last paragraph of the amended
subdivision 6 does not apply to the calendar year 1985
allocations. The amendments contained in subdivision 1 of
section 46 apply to obligations issued pursuant to an allocation
of the state ceiling whether issued before or after the
effective date of the section, and no obligation is invalid for
failure to comply with the provisions of Minnesota Statutes
1984, section 474.23, subdivision 1, paragraph (c). Sections 57
and 58 are effective the day after compliance by the Duluth city
council with Minnesota Statutes, section 645.021, subdivision 3.
ARTICLE 9
JOBS
Section 1. [PURPOSE.]
The legislature finds that, to maximize productivity of
human resources and economic opportunity within the state of
Minnesota, it is necessary to streamline and coordinate the
state's employment, training, and income maintenance programs
and to set new priorities so that state government might better
achieve its goal of helping its citizens realize the dignity of
a paycheck and achieve economic independence. Further, the
legislature finds it necessary to act swiftly and decisively to
achieve the dual goal of lowering the unemployment rate among
the people of this state and decreasing the income maintenance
caseload that is at once a reflection of the difficulties
challenging some and a burden that must be borne by all.
Sec. 2. Minnesota Statutes 1984, section 15A.081,
subdivision 1, is amended to read:
Subdivision 1. The governor shall set the salary rate
within the ranges listed below for positions specified in this
subdivision, upon approval of the legislative commission on
employee relations and the legislature as provided by section
43A.18, subdivisions 2 and 5:
Salary Range
Effective
July 1, 1983
Commissioner of education; $57,500-$70,000
Commissioner of finance;
Commissioner of transportation;
Commissioner of human services;
Chancellor, community college system;
Chancellor, state university system;
Director, vocational technical
education;
Executive director, state board of
investment;
Commissioner of administration; $50,000-$60,000
Commissioner of agriculture;
Commissioner of commerce;
Commissioner of corrections;
Commissioner of economic security
jobs and training;
Commissioner of employee relations;
Commissioner of energy and economic
development;
Commissioner of health;
Commissioner of labor and industry;
Commissioner of natural resources;
Commissioner of revenue;
Commissioner of public safety;
Chairperson, waste management board;
Chief administrative law judge; office of
administrative hearings;
Director, pollution control agency;
Director, state planning agency;
Executive director, higher education
coordinating board;
Executive director, housing finance
agency;
Executive director, teacher's
retirement association;
Executive director, state retirement
system;
Coordinator of full productivity
and opportunity;
Commissioner of human rights; $40,000-$52,500
Director, department of public service;
Commissioner of veterans' affairs;
Director, bureau of mediation services;
Commissioner, public utilities commission;
Member, transportation regulation board;
Director, zoological gardens.
Sec. 3. Minnesota Statutes 1984, section 86.33, is amended
to read:
86.33 [APPROVAL OF PROJECT BY GOVERNOR.]
Subdivision 1. [MANNER OF APPROVAL.] All such projects
shall be first approved by the governor upon the recommendation
of the commissioner of natural resources and after consultation
with the legislative advisory commission in the same manner as
he consults with such commission in making expenditures from the
general contingent fund as provided by section 3.30.
Subd. 2. [PROJECT COORDINATION.] The commissioner of
natural resources shall consult with the full productivity and
opportunity coordinator and develop a plan that establishes: a
priority for unemployed youths who are economically, socially,
physically, or educationally disadvantaged; the ways in which
participants will be assisted in gaining ongoing employment or
training upon completing the projects; the ways in which
exclusive bargaining representatives are to be consulted in
regard to the positions and job duties of persons employed in
projects; and how the projects are coordinated with other
publicly authorized or subsidized programs.
The commissioner shall submit the plan to the full
productivity and opportunity coordinator in each even-numbered
year, according to standards established by the coordinator for
use in developing a biennial statewide employment and training
plan.
Subd. 3. [REPORTING; CORPS MEMBER STATUS; FEES.] The
commissioner of natural resources shall cooperate with the full
productivity and opportunity coordinator in developing and
implementing any evaluation and reporting systems for employment
and training programs. All camp staff except camp directors in
the young adult program are corps members. Corps members are
not eligible for unemployment compensation or other benefits
except workers' compensation, and they are not employees of the
state of Minnesota within the meaning of section 43A.02,
subdivision 21. The commissioner may charge a fee for any
service performed by the corps.
Sec. 4. Minnesota Statutes 1984, section 116J.035, is
amended by adding a subdivision to read:
Subd. 3. [PLAN.] The commissioner shall prepare a plan
that must cover economic development, the community development
corporation, and community development program activities, and
shall submit the plan to the full productivity and opportunity
coordinator in each even-numbered year, according to standards
established by the coordinator, for use in developing a biennial
statewide employment and training plan.
Sec. 5. Minnesota Statutes 1984, section 116L.03,
subdivision 7, is amended to read:
Subd. 7. [OFFICES.] The commissioner of administration
jobs and training shall, upon request, provide office space and
support services for the board within the capitol area complex.
Sec. 6. Minnesota Statutes 1984, section 116L.04, is
amended by adding a subdivision to read:
Subd. 3. [PLAN.] The board shall prepare a plan and submit
it to the full productivity and opportunity coordinator in each
even-numbered year, according to standards established by the
coordinator, for use in developing a biennial statewide
employment and training plan.
Sec. 7. Minnesota Statutes 1984, section 129A.02,
subdivision 2, is amended to read:
Subd. 2. [COMMISSIONER.] The commissioner is the chief
executive officer of the department of jobs and training and is
the successor to the powers and duties of the former assistant
commissioner of vocational rehabilitation. The commissioner
shall be appointed by the governor and serve under the
provisions of section 15.06. The commissioner shall be a person
having substantial experience in the administration and
financing of vocational rehabilitation programs.
Sec. 8. Minnesota Statutes 1984, section 136.63, is
amended by adding a subdivision to read:
Subd. 1b. [PLAN.] Before prescribing a program involving
training in semiprofessional and technical fields or adult
education, the board shall consult with the full productivity
and opportunity coordinator. The board shall prepare a plan and
submit it to the full productivity and opportunity coordinator
in each even-numbered year, according to standards established
by the coordinator, for use in developing a biennial statewide
employment and training plan.
Sec. 9. Minnesota Statutes 1984, section 136C.06, is
amended to read:
136C.06 [SOLE STATE AGENCY.]
The state board of vocational technical education is the
sole state agency to receive and disburse federal funds
authorized by the Vocational Education Act of 1963, as amended
in the education amendments of 1976, Public Law Number 94-482,
and Code of Federal Regulations, title 34, part 400. The state
board shall develop and submit the state plan for vocational
technical education. The state board shall develop the state
plan according to terms of agreement with the state board of
education. Before developing and submitting the state plan, the
state board shall consult with the full productivity and
opportunity coordinator. The state board shall submit the state
plan to the full productivity and opportunity coordinator for
use in developing a biennial statewide employment and training
plan.
Sec. 10. Minnesota Statutes 1984, section 178.03, is
amended by adding a subdivision to read:
Subd. 5. [COORDINATION AND PLANNING.] The commissioner of
labor and industry, after consulting with the apprenticeship
advisory council and the apprenticeship committees, shall
prepare a plan for preparing, recruiting, and placing
economically disadvantaged, chronically unemployed, minority,
and female individuals in apprenticeship programs. The
commissioner shall submit the plan to the full productivity and
opportunity coordinator in each even-numbered year, according to
standards established by the coordinator, for use in developing
a biennial statewide employment and training plan.
Sec. 11. Minnesota Statutes 1984, section 245.87, is
amended to read:
245.87 [ALLOCATIONS.]
For the purposes of section 245.84, subdivision 2, the
commissioner shall allocate money appropriated between the
metropolitan area, comprising the counties of Anoka, Carver,
Dakota, Hennepin, Ramsey, Scott and Washington, and the area
outside the metropolitan area so that no more than 55 percent of
the total fund goes to either area after excluding allocations
for migrant day care services, administrative costs and
statewide projects. At least ten percent of the total program
allocation under section 245.84, subdivision 1 shall be
designated for interim financing. The commissioner is further
instructed that the allocation in each area be based on a need
and population basis.
Sec. 12. Minnesota Statutes 1984, section 248.07, is
amended to read:
248.07 [COMMISSIONER OF HUMAN SERVICES JOBS AND TRAINING,
DUTIES.]
Subdivision 1. [COOPERATION.] It shall be the duty of the
commissioner of human services jobs and training, referred to in
sections 248.07, 248.08, and 248.085 as the commissioner, to
cooperate with state and local boards and agencies, both public
and private, in preventing loss of sight, in alleviating the
condition of blind persons and persons of failing sight, in
extending and improving the education, advisement, training,
placement, and conservation of the blind, and in promoting their
personal, economic, social, and civic well being. The
commissioner shall create a distinct organizational unit,
separate from the vocational rehabilitation unit and with its
own activity budget, within the department of jobs and training
to provide and coordinate services to the blind.
Subd. 2. [STATISTICS.] The commissioner of human services
shall collect statistics of the blind, including their present
physical and mental condition, causes of blindness, capacity for
education and industrial training, and any further information
looking toward the improvement of their condition that may be
desired.
Subd. 3. [SPECIAL ATTENTION.] The commissioner of human
services shall give special attention to the cases of
handicapped youth who are eligible to attend the Minnesota
Braille and sight-saving school, the Minnesota school for the
deaf, or the public school classes for handicapped children, but
are not in attendance thereat, or are not receiving adequate
instruction elsewhere. The commissioner shall report all such
cases to the school district of the individual's residence and
to the state board of education.
Subd. 4. [VOCATIONAL TRAINING.] The commissioner of human
services shall endeavor to secure for the adult blind of the
state and youths of legal working age such vocational training,
labor, and employment as may be adapted to their respective
capacity, and shall so far as may be feasible aid such persons
in securing any provisions which may be made by the school for
the blind or other state agencies for the betterment of their
lot. When vocational training under the division of vocational
rehabilitation is secured, such aid may take the form of
payments for the maintenance of persons in training, under rules
to be adopted by the commissioner of human services. Any person
who shall be entitled to training under this subdivision shall
have the right to choose from available programs such training
as in his opinion would be suitable and practical for him.
Subd. 5. [AIDS.] The commissioner of human services shall
further be empowered to aid the blind: (1) By home instruction
and training; (2) by assisting them in securing tools,
appliances, and supplies; (3) by aid in marketing the products
of their labors; (4) by care and relief for blind persons who
are not capable of self-support; and, (5) in any other
practicable means of alleviating their condition.
Subd. 7. [BLIND, VENDING STANDS AND MACHINES ON
GOVERNMENTAL PROPERTY.] Notwithstanding any other law, for the
rehabilitation of blind persons the commissioner of human
services shall have exclusive authority to establish and to
operate vending stands and vending machines in all buildings and
properties owned or rented exclusively by any department of the
state of Minnesota except the department of natural resources
properties operated directly by the Division of State Parks and
not subject to private leasing. The merchandise to be dispensed
by such vending stands and machines may include soft drinks,
(except 3.2 beer), milk, food, candies, tobacco, souvenirs,
notions and related items. Such vending stands and vending
machines herein authorized shall be operated on the same basis
as other vending stands for the blind established and supervised
by the commissioner of human services. The commissioner of
human services may waive this authority to displace any present
private individual concessionaire in any state-owned or rented
building or property. With the consent of the governing body of
a governmental subdivision of the state, the commissioner may
establish and supervise vending stands and vending machines for
the blind in any building or property exclusively owned or
rented by the governmental subdivision.
Subd. 8. [USE OF REVOLVING FUND, LICENSES FOR OPERATION OF
VENDING MACHINES.] The revolving fund created by Laws 1947,
Chapter 535, Section 5, is continued as provided in this
subdivision and shall be known as the revolving fund for
vocational rehabilitation of the blind. It shall be used for
the purchase of equipment and supplies for establishing and
operating of vending stands by blind persons. All income,
receipts, earnings, and federal grants due to the operation
thereof shall also be paid into the fund. All equipment,
supplies, and expenses for setting up these stands shall be paid
for from the fund. Authority is hereby given to the
commissioner of human services to use the moneys available in
the revolving fund for the establishment, operation and
supervision of vending stands by blind persons for the following
purposes: (1) purchase, upkeep and replacement of equipment;
(2) purchase of initial and replacement stock of supplies and
merchandise; (3) expenses incidental to the setting up of new
stands and improvement of old stands; (4) purchase of general
liability insurance as deemed advisable for any vending stand by
the commissioner; (5) reimbursement to individual blind vending
operators for reasonable travel and maintenance expenses
incurred in attending supervisory meetings as called by the
commissioner of human services; (6) purchase of fringe benefits
for blind vending operators and their employees such as group
health insurance, retirement program, vacation or sick leave
assistance provided that the purchase of any fringe benefit is
approved by a majority vote of blind vending operators licensed
pursuant to this subdivision after the commissioner provides to
each blind vending operator information on all matters relevant
to the fringe benefits. Fringe benefits shall be paid only from
assessments of operators for specific benefits, gifts to the
fund for fringe benefit purposes, and vending income which is
not assignable to an individual stand.
The commissioner shall issue each license for the operation
of a vending stand or vending machine for an indefinite period
but he may terminate any license in the manner provided. In
granting licenses for new or vacated stands preference on the
basis of seniority of experience in operating stands under the
control of the commissioner shall be given to capable operators
who are deemed competent to handle the enterprise under
consideration. Application of this preference shall not
prohibit the commissioner from selecting an operator from the
community in which the stand is located.
Subd. 9. [TRAINING OF SELECTED APPLICANTS.] Each applicant
selected by the commissioner for a license to operate a vending
stand or vending machine shall be given training in the
operation and conduct of such vending stand or vending machine.
Subd. 10. [REVOCATION OF LICENSES; HEARING.] The
commissioner shall not revoke any license except for good cause
shown. An opportunity for a fair hearing shall be afforded any
operator within 30 days after revocation of license.
Subd. 11. [POLICY CHANGES; NOTICE AND HEARING.] Any major
changes in policies made by the commissioner in the conduct of
this program will be preceded by a public hearing. Each
operator shall be given 30 days notice of such hearing.
Subd. 12. [REIMBURSEMENT OUT OF STATE DISTRIBUTION OF
BRAILLE AND TALKING BOOKS.] The commissioner of human services
shall obtain reimbursement from other states for the estimated
cost of handling of Braille books and talking books for the
blind distributed by the department of human services jobs and
training to users in such other states and may contract with the
appropriate authorities of such states to effect such
reimbursement. All money received hereunder shall be paid to
the state treasurer and placed in the general fund.
Subd. 13. [REHABILITATION FACILITIES.] From the funds
appropriated for vocational rehabilitation of the blind and
matching federal funds available for the purpose, the
commissioner of human services may make grants, upon such terms
as he may determine, to public or nonprofit organizations for
the establishment, maintenance or improvement of rehabilitation
facilities or sheltered workshops for the blind.
Subd. 14. [TRAINING OF WORKERS FOR REHABILITATION OF
BLIND.] From funds provided by the state or the United States
for the rehabilitation of blind persons, the commissioner of
human services may make provision for:
(1) Specialized supplementary training of professional
workers employed by services for the blind, which shall consist
of selected courses of study designed to improve worker
techniques in providing assistance with adjustment to blindness,
guidance, training and vocational placement services to blind
children and adults;
(2) The employment of student trainees enrolled in graduate
school programs. Such trainees to be employed on a one-third
time basis during the regular school term and on a full time
basis during the extra school term. Student trainees shall not
be counted against the regular staff complement and shall not
exceed eight in number employed concurrently.
Subd. 14a. [RULES.] The commissioner of human services
shall, no later than February 1, 1985, adopt rules to set
standards for the provision of rehabilitative services to blind
and visually handicapped persons. The rules shall, at a
minimum, contain program definitions and set standards for basic
eligibility, including financial need eligibility and
definitions of legal blindness.
The rules shall provide for the development of formal
rehabilitation plans for eligible clients and shall govern the
provision of direct rehabilitative services to clients,
including placement in training programs, and providing tools
and equipment. In addition, the rules shall set standards for
appeals filed under subdivision 15, and include specific
requirements for timely responses by the agency.
Subd. 15. [APPEALS FROM AGENCY ACTION.] An applicant for
or recipient of rehabilitation service who is dissatisfied with
an agency's action with regard to the furnishing or denial of
services may:
(1) File a request for an administrative review and
redetermination of that action to be made by a member or members
of the supervisory staff of the state agency the commissioner.
(2) When an individual is dissatisfied with the findings of
this administrative review, he shall be granted an opportunity
for a fair hearing before the state administrator or his
designee.
(3) If further appeal is deemed necessary by the applicant
or recipient, his grievance shall be considered and relief if
any recommended by an appeal committee. The committee shall be
composed of one person nominated by the applicant or recipient,
one person nominated by the agency, and a third person nominated
jointly by the applicant or recipient and the agency. If the
third person cannot be mutually agreed upon within ten days of
the applicant's or recipient's request for a committee hearing,
the judge of the district court in the applicant's or
recipient's county of residence shall make the third appointment.
Sec. 13. Minnesota Statutes 1984, section 248.08, is
amended to read:
248.08 [PAYMENTS BY COMMISSIONER OF HUMAN SERVICES.]
The commissioner of human services is hereby authorized to
may defray the necessary expenses of the work from the
appropriation for the current expenses of the commissioner of
human services; provided, that in any county of this state now
or hereafter having a population of over 150,000, and an
assessed valuation of over $200,000,000, including money and
credits, the county board is hereby authorized to may defray
part or all of the necessary expenses of maintaining the work
within the county from the general revenue fund of the county,
not exceeding the total sum of $3,600, in any one calendar year;
and, in carrying on this work, may appoint and employ an
assistant to the regular field agent for the blind in the
county, who shall work under the direction of the agent in the
county. The portion of the salary of the field agent, and of
any assistant to be paid by the county, shall be fixed by the
county board at its first meeting in January in each year; and
such salary of the field agent and assistant shall be paid in
the same manner as the salary of other county officers and
employees are paid. All necessary expenses of the agent and
assistant in carrying on this work in the county, not paid by
the commissioner of human services, shall be paid by the county
board as other claims against the county are paid.
Sec. 14. [248.10] [COUNCIL FOR THE BLIND.]
Subdivision 1. [MEMBERSHIP.] The Minnesota council for the
blind consists of seven members appointed by the commissioner.
At least four of the council members must be blind or visually
handicapped. Council members are appointed for four-year terms,
except for the members first appointed, of whom three are
appointed for a term ending December 31, 1990, two for terms
ending December 31, 1989, and two for terms ending December 31,
1988.
Subd. 2. [REMOVAL; VACANCIES.] The compensation, removal
of members, and filling of vacancies on the council are as
provided in section 15.0575.
Subd. 3. [DUTIES.] The council shall:
(1) advise the commissioner on the qualifications for the
director of services for the blind;
(2) advise the commissioner on the development of policies,
programs, and services affecting the blind and visually
impaired, and on the use of appropriate federal money;
(3) advise the commissioner on policies relating to
eligibility determinations;
(4) create a public awareness of the special needs and
potential of blind and visually impaired persons; and
(5) provide the commissioner with a review of ongoing
services, programs, and proposed legislation affecting the blind
and visually impaired.
Sec. 15. Minnesota Statutes 1984, section 256.01,
subdivision 4, is amended to read:
Subd. 4. [DUTIES AS STATE AGENCY.] The state agency shall:
(1) Supervise the administration of assistance to dependent
children under Laws 1937, chapter 438, by the county agencies in
an integrated program with other service for dependent children
maintained under the direction of the state agency;
(2) May subpoena witnesses and administer oaths, make rules
and regulations, and take such action as may be necessary, or
desirable for carrying out the provisions of Laws 1937, Chapter
438. All rules and regulations made by the state agency shall
be binding on the counties and shall be complied with by the
respective county agencies;
(3) Establish adequate standards for personnel employed by
the counties and the state agency in the administration of Laws
1937, Chapter 438, and make the necessary rules and regulations
to maintain such standards;
(4) Prescribe the form of and print and supply to the
county agencies blanks for applications, reports, affidavits,
and such other forms as it may deem necessary and advisable;
(5) Cooperate with the federal government and its public
welfare agencies in any reasonable manner as may be necessary to
qualify for federal aid for aid to dependent children and in
conformity with the provisions of Laws 1937, Chapter 438,
including the making of such reports and such forms and
containing such information as the Federal Social Security Board
may from time to time require, and comply with such provisions
as such board may from time to time find necessary to assure the
correctness and verification of such reports; and
(6) May cooperate with other state agencies in establishing
reciprocal agreements in instances where a child receiving aid
to dependent children moves or contemplates moving into or out
of the state, in order that such child may continue to receive
supervised aid from the state from which he has moved until he
shall have resided for one year in the state to which he has
moved; and
(7) On or before October 1 in each even-numbered year make
a biennial report to the governor concerning the activities of
the agency; and
(8) Prepare a plan and submit it to the full productivity
and opportunity coordinator in each even-numbered year,
according to standards established by the coordinator, for use
in developing a biennial statewide employment and training plan;
and
(9) Enter into agreements with other departments of the
state as necessary to meet all requirements of the federal
government.
Sec. 16. Minnesota Statutes 1984, section 256.736,
subdivision 1, is amended to read:
256.736 [WORK INCENTIVE PROGRAM EMPLOYMENT AND TRAINING
PROGRAMS.]
Subdivision 1. [CREATION COMMISSIONER.] There is hereby
established a program to help appropriate recipients of aid to
families with dependent children become self-supporting members
of society To the extent permitted by law, the commissioner of
jobs and training shall administer, on behalf of the
commissioner of human services, the aspects of the aid to
families with dependent children program, excluding categorical
and financial eligibility, that directly relate to:
(1) recipients' participation in employment and training
services;
(2) requirements for and conditions of participating in
employment and training services;
(3) the design and administration of employment and
training services; and
(4) the supervision of county boards in carrying out
responsibilities related to employment and training services.
The commissioner of jobs and training and the commissioner
of human services may implement those programs and authorities,
including supported work programs, employment search, and
demonstration projects authorized under federal regulations to
increase services or federal reimbursement available to provide
employment and training services for recipients of aid to
families with dependent children. Before a demonstration
project is implemented, the conditions under section 256.01,
subdivision 2, clause 12, must be met.
Sec. 17. Minnesota Statutes 1984, section 256.736,
subdivision 3, is amended to read:
Subd. 3. [OPERATION OF PROGRAM PROGRAMS.] To determine who
shall be designated as an appropriate individual for
certification to the commissioner of economic security for
employment and training services, the commissioner of human
services jobs and training shall provide, by rule, standards for
county welfare agencies and human services boards consistent
with the standards promulgated by the secretary of health and
human services. County welfare agencies boards shall certify
appropriate individuals to the commissioner of economic security
for employment and training services, shall notify the
commissioner of human services, and shall require that every
individual certified, as a condition of receiving aid to
families with dependent children, register for employment
services, training, and employment, unless such individual is:
(1) a child who is under age 16, a child age 16 or 17 who
is attending elementary or secondary school or a secondary level
vocational or technical school full time, or a full-time student
age 18 who is attending a secondary school or a secondary level
vocational or technical program and who is expected to complete
the school or program before reaching age 19;
(2) a person who is ill, incapacitated or of advanced age;
(3) a person so remote from a work incentive project an
employment and training service and where transportation is not
reasonably available that his effective participation is
precluded;
(4) a person whose presence in the home is required because
of illness or incapacity of another member of the household;
(5) a parent or other caretaker relative of a child under
the age of six who personally provides full-time care for the
child;
(6) a parent or other caretaker if another adult relative
in the house is registered and has not, without good cause,
failed or refused to participate or accept employment; or
(7) a pregnant woman in the last trimester of pregnancy; or
(8) a parent who is not the principal earner if the parent
who is the principal earner is not exempt under clauses (1) to
(6) (7).
Any individual referred to in clause clauses (5) to (8)
shall must be advised of the option to register for employment
services, training services, and employment if the individual so
desires, and shall must be informed of the child care and other
services, if any, which will be available if the individual
decides to register.
If, after planning with a recipient, a decision is made
that the recipient must register for employment services,
training, and employment, the county welfare department board
shall give notice in writing to the recipient stating that he or
she must register with the commissioner of economic security for
participation in a work incentive program an employment and
training service and that the recipient has a right to a fair
hearing under section 256.045 with respect to the
appropriateness of the registration.
Sec. 18. Minnesota Statutes 1984, section 256.736,
subdivision 4, is amended to read:
Subd. 4. [CONDITIONS OF CERTIFICATION.] The commissioner
of human services shall:
(1) Arrange for or provide any relative or child certified
to the commissioner of economic security required to register
for employment and training services pursuant to this section
with child-care services, transportation, and other necessary
family services;
(2) Pay ten percent of the cost of programs of training and
employment established by the commissioner of economic security
for persons certified hereunder the work incentive program and
any other costs that are required of that agency by federal
regulation for employment and training services for recipients
of aid to families with dependent children;
(3) Provide that in determining a recipient's needs any
monthly incentive training payment made to the recipient by the
department of economic security jobs and training is disregarded
and the additional expenses attributable to his participation in
a program are taken into account in grant determination to the
extent permitted by federal regulations; and
(4) Provide that when it has been certified by the
commissioner of economic security jobs and training,
certification to be binding upon the commissioner of human
services, that a relative or child certified under the work
incentive an employment and training program to the commissioner
of economic security jobs and training has been found by the
commissioner, after a hearing conducted in the manner prescribed
by section 268.10, subdivision 3, with the right of review in
accordance with the provisions of section 268.10, subdivision 8,
to have refused without good cause to participate under a work
incentive program in appropriate employment and training
services or to have refused without good cause to accept a bona
fide offer of public or other employment, the county welfare
departments board shall provide that:
(a) If the relative makes the refusal, the relative's needs
shall not be taken into account in making the grant
determination, and aid for any dependent child in the family
will be made in the form of protective or vendor payments,
except that when protective payments are made, the local agency
may continue payments to the relative if a protective payee
cannot reasonably be found.
(b) Aid with respect to a dependent child will be denied if
a child who makes the refusal is the only child receiving aid in
the family.
(c) If there is more than one child receiving aid in the
family, aid for the child who makes the refusal will be denied
and his or her needs will not be taken into account in making
the grant determination.
(d) If the assistance unit's eligibility is based on
the nonexempt principal earner's unemployment and the principal
earner fails or refuses without good cause to participate or to
accept employment, the entire assistance unit is ineligible for
benefits under sections 256.72 to 256.87, if the family is
subject to requirements of the work incentive program.
Sec. 19. Minnesota Statutes 1984, section 256.736,
subdivision 5, is amended to read:
Subd. 5. [EXTENSION OF WORK INCENTIVE EMPLOYMENT AND
TRAINING OPPORTUNITIES.] The commissioner of human services
shall cooperate with the commissioner of economic security jobs
and training to promote extend the availability of training and
employment opportunities on a state wide basis.
Sec. 20. Minnesota Statutes 1984, section 256.736,
subdivision 7, is amended to read:
Subd. 7. [COMPLIANCE WITH FEDERAL CHANGES RULEMAKING.] The
commissioner of human services is authorized to promulgate such,
in cooperation with the commissioner of jobs and training, may
make rules and regulations as are necessary to qualify for any
federal funds available under this section and to carry out this
section.
Sec. 21. Minnesota Statutes 1984, section 256.736, is
amended by adding a subdivision to read:
Subd. 8. [SPECIAL NEEDS.] The commissioner of human
services shall amend the state plan for aid to families with
dependent children to provide, as special needs payments, money
for the costs of child care, transportation, tuition, and items
associated with education or seeking employment to the extent
allowed under federal regulations and state appropriations.
Sec. 22. Minnesota Statutes 1984, section 256.736, is
amended by adding a subdivision to read:
Subd. 9. [CHANGES IN STATE PLAN AND RULES; WAIVERS.] The
commissioner of human services shall make changes in the state
plan and rules or seek any waivers or demonstration authority
necessary to minimize barriers to participation in the
employment and training services or to employment. Changes must
be sought in at least the following areas: allowances, child
care, work expenses, the amount and duration of earnings
incentives, medical care coverage, limitations on the hours of
employment, and administrative standards and procedures. The
commissioner shall implement each change as soon as possible.
Before implementing any demonstration project or a program that
is a result of a waiver, the conditions under section 256.01,
subdivision 1, clause (12), must be met, and the chair of the
senate health and human services committee and the chair of the
house of representatives health and human services committee
must be notified.
Sec. 23. Minnesota Statutes 1984, section 256.737, is
amended to read:
256.737 [COMMUNITY WORK EXPERIENCE PROGRAM.]
Subdivision 1. [PILOT PROGRAMS.] In order that persons
receiving aid under this chapter may be assisted in achieving
self-sufficiency by enhancing their employability through
meaningful work experience and training and the development of
job search skills, the commissioner of human services may
continue the pilot community work experience demonstration
programs that were approved by January 1, 1984. No new pilot
community work experience demonstration programs may be
established under this subdivision. The commissioner shall:
(a) assist counties in the design, implementation, and
evaluation of these demonstration programs; (b) promulgate, in
accordance with chapter 14, emergency rules necessary for the
implementation of this section, except that the time
restrictions of section 14.35 shall not apply and the rules may
be in effect until the termination of the demonstration
programs; and (c) seek any federal waivers necessary for proper
implementation of this section in accordance with federal law.
The commissioner shall prohibit use of participants in the
programs to do work that was part or all of the duties or
responsibilities of an authorized public employee position
established as of January 1, 1983 1985. The exclusive
bargaining representative shall be notified no less than 14 days
in advance of any placement by the community work experience
program. Concurrence with respect to job duties of persons
placed under the community work experience program shall be
obtained from the appropriate exclusive bargaining
representative. The appropriate oversight committee shall be
given monthly lists of all job placements under a community work
experience program.
Projects shall end no later than June 30, 1985 1987, and a
preliminary report shall be made to the legislature by February
15, 1985 1987, on the feasibility of permanent implementation
and on the cost effectiveness of each of the demonstration
programs.
Subd. 2. [ADDITIONAL PROGRAMS.] In addition to the pilot
programs established in subdivision 1, the commissioner may
approve the application of up to eight additional counties to
enter into a community work experience program. The programs
under this subdivision are governed by subdivision 1 except as
in paragraphs (a) and (b).
(a) As a condition to placing a person receiving aid to
families with dependent children in a program under this
subdivision, the county shall first provide the recipient the
opportunity to participate in the following services:
(1) placement in suitable subsidized or unsubsidized
employment; or
(2) basic educational or vocational or occupational
training for an identifiable job opportunity.
(b) If the recipient refuses suitable employment and a
training program, the county may require the recipient to
participate in a community work experience program as a
condition of eligibility.
Sec. 24. Minnesota Statutes 1984, section 256C.24, is
amended to read:
256C.24 [REGIONAL SERVICE CENTERS.]
Subdivision 1. [LOCATION.] The commissioner of economic
security human services shall establish up to eight regional
service centers for hearing impaired persons. The centers shall
be co-located with existing vocational rehabilitation field
offices and be distributed regionally to provide access for
hearing impaired persons in all parts of the state. The center
shall maintain a current registry of those persons having or
suspected of having a hearing impairment who live in that
region. A special task of the registry is to assure that
referrals and follow-up services are completed with respect to
persons in the register.
Subd. 2. [RESPONSIBILITIES.] The regional service center
shall:
(a) Serve as the central entry point for hearing impaired
persons in need of human services and make referrals to the
services needed;
(b) Employ staff trained to work with hearing impaired
persons;
(c) Provide to all hearing impaired persons interpreter
services which are necessary to help them obtain human services;
(d) Serve as the regional interpreter referral center for
hearing impaired persons and human services agencies;
(e) Loan equipment and resource materials to hearing
impaired persons; and
(f) Cooperate with the department of human services
responsible departments and administrative authorities to
provide access for hearing impaired persons to services provided
by state, county and regional human services agencies.
Subd. 3. [ADVISORY COMMITTEE.] The commissioner of
economic security, in consultation with the commissioner of
human services shall appoint an advisory committee of eight
persons for each regional service center. Members shall include
four persons who are hearing impaired persons or who are the
parents of a hearing impaired child and four representatives of
county and regional human services, including representatives of
private service providers. Members shall serve without payment
by the state of per diem or expense. The commissioner of
economic security human services shall designate one member as
chairperson. The commissioners of economic security and
commissioner of human services shall assign staff to serve as ex
officio members of the committee.
Sec. 25. Minnesota Statutes 1984, section 256C.25,
subdivision 1, is amended to read:
Subdivision 1. [ESTABLISHMENT.] The commissioner of
economic security human services shall supervise the development
and implementation of a statewide interpreter referral service.
The commissioner of economic security human services shall
contract with appropriate organizations to provide this
centralized service.
Sec. 26. Minnesota Statutes 1984, section 256C.26, is
amended to read:
256C.26 [EMPLOYMENT SERVICES.]
The commissioner of economic security jobs and training
shall develop and implement a include in the biennial
plan submitted to the full productivity and opportunity
coordinator a method to deal with the underemployment of hearing
impaired persons. The plan shall provide for training regarding
the nature of hearing handicaps for department staff who consult
with prospective employers or who provide job placement services.
Sec. 27. [256C.28] [COUNCIL FOR THE HEARING IMPAIRED.]
Subdivision 1. [MEMBERSHIP.] The Minnesota council for the
hearing impaired consists of seven members appointed by the
commissioner of human services and a member from each advisory
council established under section 256C.24, subdivision 3. At
least four of the members appointed by the commissioner must be
hearing impaired. Council members appointed by the commissioner
serve four-year terms, except for the members first appointed,
of whom three are appointed for a term ending December 31, 1990,
two for terms ending December 31, 1989, and two for terms ending
December 31, 1988.
Subd. 2. [REMOVAL; VACANCIES.] The compensation, removal
of members, and filling of vacancies on the council are as
provided in section 15.0575.
Subd. 3. [DUTIES.] The council shall:
(1) advise the commissioner on the development of policies,
programs, and services affecting the hearing impaired, and on
the use of appropriate federal and state money;
(2) create a public awareness of the special needs and
potential of hearing impaired persons; and
(3) provide the commissioner with a review of ongoing
services, programs, and proposed legislation affecting the
hearing impaired.
Sec. 28. Minnesota Statutes 1984, section 256D.02,
subdivision 13, is amended to read:
Subd. 13. "Suitable employment" means an appropriate
income producing job including, but not limited to, all public
publicly subsidized jobs procured through the work equity
program services administered by or coordinated with the
commissioner of jobs and training.
Sec. 29. Minnesota Statutes 1984, section 256D.03,
subdivision 2, is amended to read:
Subd. 2. After December 31, 1980, state aid shall be paid
to local agencies for 75 percent of all general assistance
grants up to the standards of section 256D.01, subdivision 1 1a,
and according to procedures established by the commissioner.
After December 31, 1986, state aid must be paid to local
agencies for 65 percent of work readiness assistance paid under
section 256D.051 if the county does not have an approved and
operating community investment program.
Any local agency may, from its own resources, make payments
of general assistance: (a) at a standard higher than that
established by the commissioner without reference to the
standards of section 256D.01, subdivision 1; or, (b) to persons
not meeting the eligibility standards set forth in section
256D.05, subdivision 1, but for whom the aid would further the
purposes established in the general assistance program in
accordance with rules promulgated by the commissioner pursuant
to the administrative procedure act.
Sec. 30. Minnesota Statutes 1984, section 256D.09,
subdivision 3, is amended to read:
Subd. 3. [EMPLOYMENT PAYMENTS FUNDED BY GRANT DIVERSION.]
Notwithstanding the provisions of subdivision 1, the
commissioner may of jobs and training shall establish by rule or
emergency rule a grant diversion program process for payment of
all or a part of a recipient's grant or work readiness
assistance payment to a private, or nonprofit, or public
employer who agrees to employ the recipient in a permanent job
or to a public employer who agrees to employ the recipient in a
permanent job or an approved community investment program. The
commissioner of jobs and training shall design the program to
provide, to the extent possible, employment or
employment-related training that will enable recipients to
become self-supporting. A recipient shall be eligible for
general assistance medical care during the term of the grant
diversion contract to the extent that medical care coverage is
not provided by the employer. Any rule adopted by the
commissioner of jobs and training:
(a) Shall require the local agencies to administer the and
deliver the grant diversion program diversions directly or to
delegate administration contract for the delivery of the program
to another unit of government according to section 268.871;
(b) Shall require that grants or work readiness assistance
payments paid to employers be paid pursuant to a written grant
diversion contract;
(c) Shall determine the amount of the grant or work
readiness assistance payment to be paid to the employer and the
term of the grant diversion contract;
(d) Shall establish standards to ensure that recipients
hired pursuant to grant diversion contracts do not displace
other workers;
(e) Shall provide for the amount of the wage to be paid to
the recipient, which shall not be less than the minimum wage for
jobs with nonprofit and public employers and shall be the usual
and customary wage for comparable jobs with private the
employers;
(f) Shall provide for require that the minimum number of
hours per month the recipient must work, which shall be job
provide sufficient hours of work each month to provide a net
monthly wage equal to or exceeding the difference between the
amount of the grant or work readiness assistance payment
retained by the recipient and 150 percent of the recipient's
monthly grant or work readiness assistance payment standard if
the recipient were not employed; and
(g) May establish other terms and conditions for the
operation of the grant diversion program process.
Sec. 31. [256D.113] [EMPLOYMENT EXPERIENCE PROGRAM.]
Subdivision 1. [CREATION AND PURPOSE.] A county that does
not have an approved community investment program may, in
cooperation with the commissioner of jobs and training,
establish a locally administered employment experience program
for persons receiving work readiness assistance. The purpose of
the program is to help recipients achieve self-sufficiency by
enhancing their employability through training and work
experience.
Subd. 2. [COMMISSIONER OF JOBS AND TRAINING.] The
commissioner of jobs and training shall assist counties in the
design, implementation, and evaluation of the employment
experience program. The commissioner of jobs and training may
make emergency and permanent rules to carry out this section.
Subd. 3. [RESPONSIBILITY; COUNTY BOARDS OF COMMISSIONERS.]
A county may establish an employment experience program and may
assign work to the recipient that he or she is able to perform.
Work performed through this program must not displace persons
currently employed or fill an established vacant position. The
county must provide workers' compensation or other comparable
protection for an employment experience participant. A
participant is not eligible for unemployment compensation, and
is not an employee of the state of Minnesota within the meaning
of section 43A.02, subdivision 21.
Subd. 4. [PARTICIPATION REQUIREMENTS.] A county may
require a registrant under section 256D.051 to participate in an
employment experience program. If possible, the recipient must
be placed in other employment and training services, including
grant diversion or training, before placement in an employment
experience program. The county may terminate assistance
payments provided for by this chapter for a recipient who may be
required to participate in an employment experience program but
who refuses to participate in an employment experience program
or other employment and training services.
Subd. 5. [PARTICIPANT REIMBURSEMENT.] A participant is
required to participate in an employment experience program for
no more than the number of hours equal to the work readiness
assistance payment divided by the state minimum wage. A county
shall provide transportation, child care, and work related
expenses according to standards prescribed by the commissioner
of jobs and training.
Sec. 32. [267.01] [PURPOSE.]
The legislature finds that changes in the state economy and
the structure of federal support have altered the role of state
government in the planning, development, and delivery of
employment, job training, job creation, income maintenance, and
human services programs; that the proliferation of these
programs, coupled with the changing characteristics and
requirements of people seeking employment, has produced a need
for the state to coordinate the delivery of services and
programs; that there exists no office with interagency and
intergovernmental focus sufficient to develop a plan to achieve
full economic productivity and opportunity in Minnesota and
effectively coordinate the delivery of services and programs for
the purpose of simultaneously reducing unemployment rates and
welfare caseloads.
Sec. 33. [267.02] [DEFINITIONS.]
Subdivision 1. [APPLICABILITY.] For purposes of sections
267.02 to 267.06, the following terms have the meanings given
them.
Subd. 2. [COORDINATOR.] "Coordinator" means the full
productivity and opportunity coordinator.
Subd. 3. [EMPLOYMENT AND TRAINING SERVICES.] "Employment
and training services" means programs, activities, and services
related to job training, job placement, and job creation
including job service programs, job training partnership act
programs, wage subsidies, work incentive programs, work
readiness programs, employment search, counseling, community
work experience programs, displaced homemaker programs,
disadvantaged job training programs, grant diversion, employment
experience programs, youth employment programs, conservation
corps, apprenticeship programs, community investment programs,
supported work programs, community development corporations,
economic development programs, and opportunities
industrialization centers.
Subd. 4. [INCOME MAINTENANCE AND SUPPORT SERVICES.]
"Income maintenance and support services" means programs through
which the state or its subdivisions provide direct financial or
in-kind support to unemployed or underemployed persons,
including unemployment compensation, aid to families with
dependent children, general assistance, work readiness
assistance, food stamps, energy assistance, disability
determinations, and child care. "Income maintenance and support
services" does not include medical assistance, aging services,
social services, community social services, mental health
services, or services for the emotionally disturbed, the
mentally retarded, or residents of nursing homes.
Subd. 5. [LOCAL SERVICE UNIT.] "Local service unit" means
a county, counties operating under a joint powers agreement, one
or more counties and one or more cities of the first class
operating under a joint powers agreement, or a city of the first
class.
Subd. 6. [PUBLIC ASSISTANCE.] "Public assistance" means
aid to families with dependent children, general assistance, and
work readiness.
Subd. 7. [SERVICE PROVIDER.] "Service provider" means a
public, private, or nonprofit agency that is capable of
providing one or more of the services or administering one or
more of the programs for which the full productivity and
opportunity coordinator has responsibility under this section.
Subd. 8. [WAGE SUBSIDIES.] "Wage subsidies" means the
issuing of payments to employers to offset the costs of wages,
fringe benefits, and training for eligible employees under the
limitations in sections 268.672 to 268.682, and may be referred
to as Minnesota employment and economic development (MEED) wage
subsidies.
Sec. 34. [267.03] [OFFICE OF FULL PRODUCTIVITY AND
OPPORTUNITY; COORDINATOR.]
Subdivision 1. [FULL PRODUCTIVITY AND OPPORTUNITY
COORDINATOR.] The governor, with the advice and consent of the
senate, shall appoint a full productivity and opportunity
coordinator to serve at the pleasure of the governor in the
unclassified service. The salary of the coordinator is set
under section 15A.081. The coordinator is head of the office of
full productivity and opportunity and chairs the full
productivity and opportunity council. In addition to the powers
granted by this chapter, the coordinator has the powers listed
in section 15.06, subdivision 6. The coordinator shall
administer sections 267.03 to 267.06.
Subd. 2. [POWERS.] The coordinator of full productivity
and opportunity may:
(1) appoint a deputy, a confidential secretary, and up to
two additional employees, in the unclassified service;
(2) appoint other employees under chapter 43A;
(3) make rules under chapter 14;
(4) enter into contracts;
(5) further the objectives of the biennial plan by
recommending to the governor interdepartmental transfer of
employment and training services or income maintenance and
support services, which the commissioner of administration, if
so ordered by the governor, shall carry out as provided in
section 16B.37, subdivisions 1, 2, and 3, and implement so as
not to lead to a reduction of federal money to the state or its
political subdivisions;
(6) further the objectives of the biennial plan by
recommending to the governor transfer of one or more employment
and training services or income maintenance and support services
to a certified service provider other than a state agency;
(7) initiate emergency wage subsidies, consider the
recommendations of the commissioner of jobs and training for the
use of the discretionary portion of wage subsidy appropriations,
and allocate the discretionary portion of wage subsidy
appropriations;
(8) require the commissioners of jobs and training, human
services, energy and economic development, and administration,
and the state planning director, to furnish technical,
administrative, and financial services to the coordinator upon
request;
(9) require agencies to submit to the coordinator for
approval or disapproval within 20 days any rule that relates to
employment and training services or income maintenance and
support services before the publication of the notice of intent
required by section 14.22 or 14.30, and, if it is disapproved,
require that the rule be amended and resubmitted to the
coordinator;
(10) establish the standards by which the commissioner of
jobs and training shall certify service providers;
(11) decertify service providers after consultation with
the commissioner;
(12) contract with another local service unit or certified
service provider for employment and training services in that
local service unit if the coordinator, after consultation with
the commissioner of jobs and training, finds that a local
service unit consistently fails to provide service of sufficient
quantity and quality to satisfy criteria established for the
receipt of state money; and
(13) ratify or disapprove the commissioner of jobs and
training's decisions regarding the approval or disapproval of
local service unit plans and community investment program plans.
Sec. 35. [267.04] [DUTIES AND RESPONSIBILITIES.]
Subdivision 1. [DUTIES.] The coordinator shall:
(1) coordinate the policies and administration of
employment and training programs and income maintenance and
support services among state agencies;
(2) review the delivery, operating performance,
effectiveness, and degree of integration of income maintenance
and support services and employment and training services;
(3) consult with the governor on income maintenance,
employment, and training; provide assistance to the governor
related to income maintenance and employment and training; and
recommend to the governor and the legislature improvements in
delivery of employment and training services and income
maintenance and support services;
(4) confer with and advise state agencies and local service
units that are responsible for income maintenance and support
services and employment and training services;
(5) ensure coordination and cooperation among state and
federal agencies, county and local governments, and private
service providers serving on a contract basis;
(6) prepare and oversee the implementation of the biennial
plan;
(7) review criteria established by state agencies for
receipt of state money designated for employment and training
services and income maintenance and support services;
(8) monitor and evaluate the performance and effectiveness
of local service units' income maintenance and support services
and their employment and training services;
(9) report to the legislature regarding changes needed to
more adequately serve the needs of those who are unemployed,
underemployed, or untrained;
(10) design and monitor the development and administration
of the intake, referral, and inventory system;
(11) enhance the delivery of employment and training
services and income maintenance and support services by working
with the commissioner of administration to coordinate data bases
and information systems among state agencies, including the
departments of energy and economic development, jobs and
training, human services, transportation, natural resources, and
public safety, and the state planning agency;
(12) review and make recommendations concerning plans of
the commissioner of jobs and training and the commissioner of
human services for federally sponsored programs and
demonstration projects;
(13) develop standards for plans required of state agencies;
(14) review and approve standards for the local service
unit plans established by the commissioner of jobs and training;
(15) recommend to individual service units annual
performance objectives that include realistic goals for reducing
or managing unemployment rates and welfare caseloads, for use in
preparing their local service unit plans;
(16) seek input from representatives of local service
units, business, and labor on the delivery and development of
employment and training services and income maintenance and
support services;
(17) monitor the administration of wage subsidies; and
(18) develop a method to identify the county that has
financial responsibility for a client's public assistance.
Subd. 2. [BIENNIAL PLAN.] (a) The coordinator shall submit
a biennial plan to the governor by July 1 of each even-numbered
year. Upon approval by the governor, the plan serves as a basis
for the development of the governor's budget proposal for
employment and training services, income maintenance and support
services. After the legislature has acted, and before July 1 of
each odd-numbered year, the coordinator shall revise the
biennial plan to incorporate legislative action. Upon approval
by the governor, the revised plan governs the administration and
delivery of all employment and training services and income
maintenance and support services.
(b) The plan must provide at least the following:
(1) a strategy for achieving full productivity and
opportunity in Minnesota that specifies priorities among
employment and training services, income maintenance and support
services, and economic development programs;
(2) unemployment reduction goals;
(3) income maintenance caseload reduction goals;
(4) a review and comment on the state's post-secondary
vocational programs as administered by the vocational technical
education system and the community colleges;
(5) a strategy for efficient integration of federal, state,
local, and private resources;
(6) a strategy to encourage local and private involvement
in the full productivity and opportunity program; and
(7) recommendations to maximize the effectiveness of
appropriated money.
Subd. 3. [INTAKE, REFERRAL, AND INVENTORY SYSTEM.] Within
90 days of appointment, the coordinator shall develop guidelines
and a timetable for the development of an intake, referral, and
inventory system and determine which state agency is responsible
for the administration of the system. The goal of the system
must be to provide localized, single-point client intake with
direct access to a statewide data base. The system must include
information on all available public and private programs for
employment and training services and income maintenance and
support services. The system must be designed to match client
needs with employment opportunities, appropriate services,
programs, providers, funding sources, and other sources of
assistance and to provide for client tracking. The system must
be coordinated with other state data bases. Access to the
system, within federal and state data practices requirements,
must be available in each public income maintenance and
employment and training office. The system is not subject to
sections 16B.40 to 16B.45. In developing the system, the
coordinator shall consult with local service units, service
providers, employers, and clients.
Subd. 4. [DUTIES WITH RESPECT TO COMMUNITY INVESTMENT
PROGRAMS.] The coordinator shall:
(1) confer with the commissioners of jobs and training,
energy and economic development, human services, education,
agriculture, public safety, natural resources, and health, the
directors of the state planning agency and of vocational
technical education, and representatives of local governments to
determine the kinds of activities valuable to the state and
local communities and the kinds of jobs that would provide
valuable training, skills, and work experience to part-time
program employees;
(2) review and approve standards governing community
investment programs;
(3) monitor the administration and results of community
investment programs; and
(4) arbitrate disputes among local service units,
employers, exclusive representatives, or state agencies
regarding community investment programs.
Subd. 5. [JOB DISPLACEMENT DISPUTES.] Disputes involving
the displacement of jobs because individuals are placed in
subsidized employment, including community investment programs,
summer youth employment, the youth conservation corps, community
work experience programs, employment experience programs, and
wage subsidies, must be resolved, within ten days of the filing
of a complaint with the coordinator, by a review panel
consisting of the coordinator, a statewide public employee
representative appointed by the governor, and a representative
of the counties appointed by the governor.
Sec. 36. [267.05] [FULL PRODUCTIVITY AND OPPORTUNITY
COUNCIL.]
Subdivision 1. [MEMBERSHIP.] The full productivity and
opportunity council consists of the coordinator; the
commissioners of education, jobs and training, finance, energy
and economic development, and human services; the chancellors of
the community college and state university systems; the
directors of the state planning agency, the job skills
partnership, and the vocational technical education system; the
president of the University of Minnesota or the president's
designee; a representative of organized labor; and a
representative of business. The coordinator shall appoint the
representatives of organized labor and business.
Subd. 2. [DUTIES.] The council shall provide information
to and advise the coordinator in the preparation of the biennial
plan and regarding employment and training services and income
maintenance and support services.
Sec. 37. [267.06] [COOPERATION OF STATE AGENCIES AND
COUNTY AND LOCAL GOVERNMENTS.]
All state agencies, counties, and units of local government
shall cooperate fully with the full productivity and opportunity
coordinator to achieve the goals of the biennial plan.
Sec. 38. [268.0111] [DEFINITIONS.]
Subdivision 1. [APPLICABILITY.] The definitions in this
section apply to chapter 268.
Subd. 2. [COMMISSIONER.] "Commissioner" means the
commissioner of jobs and training.
Subd. 3. [COORDINATOR.] "Coordinator" means the full
productivity and opportunity coordinator.
Subd. 4. [EMPLOYMENT AND TRAINING SERVICES.] "Employment
and training services" means programs, activities, and services
related to job training, job placement, and job creation
including job service programs, job training partnership act
programs, wage subsidies, work incentive programs, work
readiness programs, employment search, counseling, community
work experience programs, displaced homemaker programs,
disadvantaged job training programs, grant diversion, employment
experience programs, youth employment programs, conservation
corps, apprenticeship programs, community investment programs,
supported work programs, community development corporations,
economic development programs, and opportunities
industrialization centers.
Subd. 5. [INCOME MAINTENANCE AND SUPPORT
SERVICES.] "Income maintenance and support services" means
programs through which the state or its subdivisions provide
direct financial or in-kind support to unemployed or
underemployed persons, including unemployment compensation, aid
to families with dependent children, general assistance, work
readiness assistance, food stamps, energy assistance, disability
determinations, and child care. Income maintenance and support
services do not include medical assistance, aging services,
social services, community social services, mental health
services, or services for the emotionally disturbed, the
mentally retarded, or residents of nursing homes.
Subd. 6. [LOCAL SERVICE UNIT.] "Local service unit" means
a county, counties operating under a joint powers agreement, one
or more counties and one or more cities of the first class
operating under a joint powers agreement, or a city of the first
class.
Subd. 7. [PUBLIC ASSISTANCE.] "Public assistance" means
aid to families with dependent children, general assistance, and
work readiness.
Subd. 8. [SERVICE PROVIDER.] "Service provider" means a
public, private, or nonprofit agency that is capable of
providing one or more of the services or administering one or
more of the programs for which the full productivity and
opportunity coordinator has responsibility under this section.
Subd. 9. [WAGE SUBSIDIES.] "Wage subsidies" means issuing
of payments to employers to offset the costs of wages, fringe
benefits, and training for eligible employees under the
limitations established in sections 268.672 to 268.682, and may
be referred to as Minnesota employment and economic development
(MEED) wage subsidies.
Sec. 39. [268.0121] [CREATION.]
Subdivision 1. [PURPOSE.] The department of jobs and
training has broad responsibility to increase the economic
independence of Minnesotans with special effort toward those who
are currently unemployed or who face special disadvantages in
the labor market. The department shall develop employment
policies and link training and employment-related services with
temporary income replacement and income maintenance programs,
veterans' programs, workers' compensation, vocational and
post-secondary education, federal income insurance programs, and
economic development programs.
Subd. 2. [COMMISSIONER.] The governor shall appoint the
commissioner of jobs and training with the advice and consent of
the senate.
Subd. 3. [UNCLASSIFIED POSITIONS.] The commissioner may
establish positions in the unclassified service in accordance
with section 43A.08. The commissioner may appoint and define
the duties of other subordinate officers and employees as the
commissioner deems necessary to discharge the functions of the
department.
Subd. 4. [DELEGATION OF POWERS.] The commissioner may
delegate, in written orders filed with the secretary of state,
any powers or duties subject to the commissioner's control to
officers and employees in the department. Notwithstanding any
other law, the commissioner may delegate the execution of
specific contracts or specific types of contracts to the
commissioner's deputies, an assistant commissioner, or a program
director if the delegation has been approved by the commissioner
of administration and filed with the secretary of state.
Subd. 5. [RECEIPT OF GIFTS, MONEY.] The commissioner may
accept gifts, bequests, grants, payments for services, and other
public and private money to help finance the activities of the
department.
Sec. 40. [268.0122] [POWERS AND DUTIES.]
Subdivision 1. [STATE AGENCY.] The commissioner of jobs
and training is designated the "state agency" as defined by
United States Code, title 29, section 49c, the Wagner-Peyser
Act, as amended through December 31, 1984.
Subd. 2. [SPECIFIC POWERS.] The commissioner of jobs and
training shall:
(1) administer and supervise all forms of unemployment
insurance provided for under federal and state laws that are
vested in the commissioner;
(2) administer and supervise all employment and training
services assigned to the department of jobs and training under
federal or state law;
(3) review and comment on local service unit plans and
community investment program plans and, with the concurrence of
the coordinator, approve or disapprove the plans;
(4) establish and maintain administrative units necessary
to perform administrative functions common to all divisions of
the department;
(5) supervise the county boards of commissioners, local
service units, and any other units of government designated in
federal or state law as responsible for employment and training
programs;
(6) establish administrative standards and payment
conditions for providers of employment and training services;
(7) act as the agent of, and cooperate with, the federal
government in matters of mutual concern, including the
administration of any federal funds granted to the state to aid
in the performance of functions of the commissioner; and
(8) obtain reports from local service units and service
providers for the purpose of evaluating the performance of
employment and training services.
Subd. 3. [DUTIES AS A STATE AGENCY.] The commissioner
shall:
(1) administer the unemployment insurance laws and related
programs;
(2) administer the aspects of aid to families with
dependent children, general assistance, work readiness, and food
stamps that relate to employment and training services, subject
to the limitations of federal regulations;
(3) administer wage subsidies and recommend to the
coordinator the use of the discretionary portion of wage subsidy
appropriations;
(4) administer a national system of public employment
offices as prescribed by United States Code, title 29, chapter
4B, the Wagner-Peyser Act, and other federal employment and
training programs;
(5) cooperate with the federal government and its
employment and training agencies in any reasonable manner as
necessary to qualify for federal aid for employment and training
services and money;
(6) enter into agreements with other departments of the
state and local units of government as necessary;
(7) certify competent service providers and, with the
concurrence of the coordinator, decertify service providers that
fail to comply with performance criteria according to standards
established by the coordinator;
(8) provide consistent, integrated employment and training
services across the state;
(9) establish the standards for all employment and training
services administered under this chapter;
(10) develop standards for the contents and structure of
the county plans;
(11) provide current state and substate labor market
information and forecasts, in cooperation with other agencies;
(12) prepare a plan and submit it to the coordinator in
each even-numbered year, according to standards established by
the coordinator, for use in developing a statewide employment
and training plan;
(13) identify underserved populations, unmet service needs,
and funding requirements;
(14) consult with the council for the blind on matters
pertaining to programs and services for the blind and visually
impaired; and
(15) submit to the governor, the coordinator, the
commissioners of human services and finance, and the chairs of
the senate finance and house appropriations committees a
semiannual report that:
(a) reports, by client classification, an unduplicated
count of the kinds and number of services furnished through each
program administered or supervised by the department or
coordinated with it;
(b) reports on the number of job openings listed,
developed, available, and obtained by clients;
(c) identifies the number of cooperative agreements in
place, the number of individuals being served, and the kinds of
service provided them;
(d) evaluates the performance of services, such as wage
subsidies, community investments, work readiness, and grant
diversions; and
(e) explains the effects of current employment levels,
unemployment rates, and program performance on the unemployment
insurance fund and general assistance, work readiness, and aid
to families with dependent children caseloads and program
expenditures.
Subd. 4. [DEMONSTRATION PROJECTS.] The commissioner may
conduct and administer demonstration projects to test methods
and procedures for providing employment and training services.
The demonstration must provide new methods and procedures of
administration and must not conflict with the basic purposes,
coverage, or benefits provided by law. No demonstration project
authorized by this section is effective until the following
conditions are met:
(a) a comprehensive plan, including the estimated project
costs, is filed with the secretary of the senate and the chief
clerk of the house of representatives at least 60 days before
its effective date;
(b) any required approval by a federal agency is obtained;
and
(c) the comprehensive plan, including the estimated project
costs, is approved by the legislative advisory commission and
filed with the commissioner of administration.
Subd. 5. [RULEMAKING.] The commissioner may make emergency
and permanent rules to carry out this chapter.
Sec. 41. Minnesota Statutes 1984, section 268.31, is
amended to read:
268.31 [DEVELOPMENT OF YOUTH EMPLOYMENT OPPORTUNITIES.]
To the extent of available funding, the commissioner of
economic security jobs and training shall hire establish a
program to employ individuals from the ages of 14 years up to 22
years. Available money must be used to support employment under
this section for a maximum of 12 weeks, not to exceed 40 hours
per week per individual, during the summer for the purpose of
placing such individuals in service with the department of
economic security and with other departments, agencies and
instrumentalities of the state, county, local governments,
school districts and with nonprofit organizations and for job
related support services not to exceed ten percent of the
allocation for eligible youths placed in public or nonprofit
sector summer employment. Priority for employment shall be
given to those young individuals between the ages of 16 years up
to 22 years. The commissioner shall cooperate with the
commissioner of human services in determining and implementing
the most effective means of disregarding a youth's earnings from
family income for purposes of the aid to families with dependent
children program, to the extent permitted by the federal
government.
Sec. 42. Minnesota Statutes 1984, section 268.32, is
amended to read:
268.32 [RATE OF PAY.]
Persons hired employed pursuant to sections 268.31 to
268.36 shall be compensated at the federal minimum wage rate.
Persons hired in a supervisory capacity shall be compensated at
a rate according to criteria established by the commissioner by
rule.
Sec. 43. Minnesota Statutes 1984, section 268.33, is
amended to read:
268.33 [ELIGIBILITY FOR EMPLOYMENT AND PLACEMENT.]
Subdivision 1. The department of economic security
commissioner of jobs and training shall promulgate make rules
determining the priority and eligibility for employment and
placement pursuant to sections 268.31 to 268.36. The department
shall have commissioner has emergency powers and permanent
rulemaking authority to implement rules for carrying out
sections 268.31 to 268.36.
Subd. 2. The department of economic security commissioner
of jobs and training shall, for the purposes of sections 268.31
to 268.36, be exempt from complying with any law relating to
hiring by departments, agencies or instrumentalities of the
state.
Sec. 44. Minnesota Statutes 1984, section 268.34, is
amended to read:
268.34 [EMPLOYMENT CONTRACTS.]
The commissioner may enter into arrangements with existing
public and private nonprofit organizations and agencies with
experience in administering summer youth employment programs for
the purpose of providing employment opportunities in furtherance
of sections 268.31 to 268.36 and to advance up to 20 percent of
a summer youth employment contract to any participating
organization or agency. The department of economic security
jobs and training shall retain ultimate responsibility for the
administration of this employment program, including but not
limited to, approval of summer job opportunities, review
eligibility of job applicants therefor, placement of youth in
jobs, and the disbursement of funds.
Sec. 45. Minnesota Statutes 1984, section 268.36, is
amended to read:
268.36 [REPORT TO THE GOVERNOR COORDINATOR AND THE
LEGISLATURE.]
The commissioner, after consultation with the CETA prime
sponsors local service units and providers of employment and
training services, shall evaluate the effectiveness of the youth
employment program programs, taking into account the extent
of other all programs which are providing summer employment
opportunities for youth covered under sections 268.31 to 268.36,
and shall report to the governor coordinator and the legislature
no later than January 15 of each even even-numbered year with an
evaluation of the program this and other programs and any
recommendations for improvements.
Sec. 46. [268.65] [APPROVED TRAINING.]
Subdivision 1. [CREATION.] The commissioner of jobs and
training shall establish a training program for structurally
unemployed workers under which individuals may be enrolled in an
on-the-job training program, and an additional 1,000 individuals
may be enrolled in classroom training, in accordance with this
section. Nothing in this section limits or adversely affects
the approved training provisions applicable to an individual
under section 268.08, subdivision 1, clause (3). An individual
approved under this section is eligible for tuition aid under
the provisions of chapter 136A. The commissioner shall report
to the legislature annually regarding the status of the training
program.
Subd. 2. [APPROVAL OF TRAINING.] An individual's
enrollment in a training course must be approved for the
purposes of this subdivision if the commissioner finds that:
(1) the individual is not unemployed due to the seasonal
nature of the work or a temporary work shortage;
(2) the individual's separation or notice of layoff from
most recent employment was caused by job obsolescence, plant
shutdown, regional decline in the individual's customary
occupation, or industry slowdown, and the individual is unlikely
to return to work for that employer or in that occupation within
12 months following separation from employment;
(3) reasonable and suitable work opportunities for which
the individual is fitted by training, experience, and physical
capabilities do not exist within the local labor market;
(4) the training course is designed to provide preparation
for available employment within the local labor market or in an
area to which the individual is willing to relocate;
(5) the training is conducted by an agency, educational
institution, or employing unit that is approved by the
commissioner of education or state board for vocational
technical education or higher education coordinating board to
conduct training programs; except that an agency, educational
institution, or employing unit that is not subject to regulation
and approval by one of the agencies in this clause may be
approved by the commissioner if it is determined that the
institution's curriculum, facilities, staff, and other
essentials are adequate to achieve the training objective; and
(6) the training consists of a full course load, as defined
by the training provider, necessary to achieve the approved
training objective, and the individual is making satisfactory
progress in the course. The department may require the training
provider to periodically certify to the individual's attendance
and progress.
Subd. 3. [ON-THE-JOB TRAINING.] An individual who meets
the criteria in subdivision 2 is eligible for participation in a
full-time on-the-job training program if:
(1) the on-the-job training position is in an occupation
for which the commissioner has determined a demand exists or
will exist; in making this determination, the commissioner shall
consider labor market information as contained in state and
national occupational outlook publications, as well as other
generally accepted authoritative sources with verifiable
validity;
(2) the employer pays an hourly wage during training of at
least the state minimum wage;
(3) the employer guarantees to provide at least 12
consecutive months of employment to the trainee after the
completion of training at the prevailing area labor market wage
for a trained individual in that occupation;
(4) the employer will not terminate the trainee during the
period of training or guaranteed employment except for
misconduct or demonstrated substandard performance; and
(5) the employer will not terminate, lay off, or reduce the
hours of any employee for the purpose of hiring an individual
with money available, and will not hire an individual if another
person is on layoff from the same or a substantially equivalent
job.
Subd. 4. [TRAINING ALLOWANCE.] During participation in an
approved on-the-job training program, the trainee shall maintain
satisfactory progress and attendance. During the period of
training specified in the agreement between the commissioner and
the employer, individuals participating in an approved
on-the-job training program must be paid a training allowance
for each week claimed during the benefit year, until benefits
are exhausted, equal to the weekly benefit amount calculated
under section 268.07, subdivision 2, less the part of the
earnings, including holiday pay, in excess of $100. The
training allowance is computed by rounding down to the nearest
dollar amount. Notwithstanding any other provision, an
individual participating in on-the-job training on a full-time
basis is not employed for purposes of benefit eligibility.
Subd. 5. [EMPLOYER PENALTY.] An employer who enters into
an on-the-job training agreement with the commissioner and who
terminates the trainee in a manner other than provided in this
subdivision shall repay 70 percent of the amount of unemployment
insurance benefits paid to the individual while in the training
program with that employer if the termination occurs during the
training period. If the termination occurs during the 12-month
period of guaranteed employment, the employer receives a
proportional reduction in the amount it must repay. The
commissioner shall use any money collected under this paragraph
for job search and relocation expenses of structurally
unemployed workers participating in the training program.
Sec. 47. [268.66] [FIRST SOURCE AGREEMENTS.]
Subdivision 1. [LIST OF VACANCIES.] A business or private
enterprise receiving grants or loans from the state in amounts
over $200,000 a year shall as part of the grant or loan agree to
list any vacant or new positions with the job services of the
commissioner of jobs and training or the local service units.
Subd. 2. [GRANT AND LOAN AGREEMENTS.] The commissioner of
energy and economic development shall incorporate the provisions
of this section into grant and loan agreements and assist the
commissioner of jobs and training and the local service units to
promote private sector listings with job services and to
evaluate their effect on employers and individuals who are
referred.
Sec. 48. Minnesota Statutes 1984, section 268.672,
subdivision 6, is amended to read:
Subd. 6. [ELIGIBLE JOB APPLICANT.] "Eligible job
applicant" means a person who: (1) has been a resident of this
state for at least one month, (2) is unemployed, (3) is not
receiving and is not qualified to receive unemployment
compensation or workers' compensation, and (4) is determined by
the employment administrator to be likely to be available for
employment by an eligible employer for the duration of the job.
In addition For the purposes of this subdivision, a farmer
who resides in a county qualified under Federal Disaster Relief
and or any member of a farm family household who can demonstrate
severe household financial need may must be considered
unemployed under this subdivision.
Sec. 49. Minnesota Statutes 1984, section 268.672,
subdivision 12, is amended to read:
Subd. 12. [ELIGIBLE LOCAL SERVICE DELIVERY AREA UNIT.]
"Eligible local service delivery area unit" means an area
designated as a local service delivery area by the
coordinator unit that is not operating an employment experience
program. After February 15, 1986, an eligible local service
unit means a local service unit with an approved community
investment program and includes a city of the first class in a
county with an approved community investment program.
Sec. 50. Minnesota Statutes 1984, section 268.673,
subdivision 3, is amended to read:
Subd. 3. [DEPARTMENT OF ECONOMIC SECURITY JOBS AND
TRAINING.] The coordinator commissioner shall administer
supervise the program within the department of economic security.
The commissioner of economic security wage subsidies and shall
provide administrative support services technical assistance to
the coordinator eligible local service units for the purposes
purpose of the program delivering wage subsidies.
Sec. 51. Minnesota Statutes 1984, section 268.673,
subdivision 4, is amended to read:
Subd. 4. [ENFORCEMENT.] (a) The coordinator commissioner
shall ensure that all eligible employers and employment
administrators comply compliance with sections 268.671 268.672
to 268.686 and all other applicable state and federal laws,
including those relating to: (1) affirmative action; (2)
occupational health and safety standards; (3) environmental
standards; and (4) fair labor practices 268.682.
(b) The coordinator commissioner may:
(1) make public or private investigations within or without
this state necessary to determine whether any person has
violated or is about to violate sections 268.671 268.672 to
268.686 268.682, a contract entered into under them, or any rule
or order adopted under them, or to aid in the enforcement of
sections 268.671 268.672 to 268.686 268.682 or in rules and
forms adopted under them;
(2) require or permit any person to file a written
statement under oath or otherwise, as the commissioner
determines, as to all the facts and circumstances concerning the
matter being investigated; and
(3) publish information contained in any order issued by
the coordinator;
(4) hold hearings, upon reasonable notice, on any matter
arising out of the administration of sections 268.671 268.672 to
268.686; and
(5) conduct investigations and hold hearings for the
purpose of compiling information with a view to recommending
changes in sections 268.671 to 268.686 to the
legislature 268.682.
(c) The attorney general shall assign from his staff one or
more assistant attorneys general to the coordinator commissioner
and shall conduct all proceedings involving the violation of
sections 268.671 268.672 to 268.686 268.682 and all other
enforcement proceedings.
(d) Whenever it appears to the coordinator commissioner
that any person has violated a provision of sections 268.671
268.672 to 268.686 268.682, a contract entered into under them,
or a rule or order adopted under them:
(1) He may issue and cause to be served upon the person an
order requiring the person to cease and desist from the
violation. The order must be calculated to give reasonable
notice of the right of the person to request a hearing on it and
must state the reasons for the entry of the order. A hearing
must be held not later than seven days after a request for the
hearing is received by the coordinator commissioner, after which
and within 20 days of the date of the hearing the coordinator
commissioner shall issue a further order vacating the cease and
desist order or making it permanent as the facts require. If no
hearing is requested within 30 days of service of the order, the
order becomes final and remains in effect until it is modified
or vacated by the coordinator commissioner. If the person to
whom a cease and desist order is issued fails to appear at the
hearing after being duly notified, the person shall be deemed in
default, and the proceeding may be determined against him upon
consideration of the cease and desist order, the allegations of
which may be deemed to be true;
(2) He may bring an action in the district court of the
appropriate county to enjoin the violation and to enforce
compliance with the provisions of sections 268.671 268.672 to
268.686 268.682, a contract entered into under them, or any rule
or order adopted under them, and he may refer the matter to the
attorney general. Upon a proper showing, a permanent or
temporary injunction, restraining order, or writ of mandamus
shall be granted. The court may not require the coordinator
commissioner to post a bond.
Any injunction proceeding under the provisions of sections
268.671 268.672 to 268.686 268.682 may be brought on for hearing
and disposition upon an order to show cause returnable upon not
more than eight days notice to the defendant. The case has
precedence over other cases upon the court calendar and may not
be continued without the consent of the state, except upon good
cause shown to the court, and then only for a reasonable length
of time necessary in the opinion of the court to protect the
rights of the defendant.
Sec. 52. Minnesota Statutes 1984, section 268.673,
subdivision 5, is amended to read:
Subd. 5. [REPORT.] The coordinator Each eligible local
service unit shall report to the legislative advisory
commission, the chairpersons of the house and senate
governmental operations committees, the chairperson of the
health, welfare, and corrections division of the house
appropriations committee, the chairperson of the health and
human services subcommittee of the senate finance committee, and
the governor commissioner and the coordinator on a quarterly
basis: (1) the number of persons employed; (2) the number and
type of employers under the program; (3) the amount of money
spent in each service delivery area eligible local service unit
for wages for each type of employment and each type of other
expense; (4) the number of persons who have completed
participation in the program and their current employment,
educational, or training status; (5) the specific allocation of
discretionary funds; and (6) (5) any other information requested
by the commission commissioner or the governor or deemed
pertinent by the coordinator. Each report must include
cumulative information, as well as information for each quarter.
Sec. 53. Minnesota Statutes 1984, section 268.673,
subdivision 6, is amended to read:
Subd. 6. [RULES.] The commissioner of economic security
may adopt rules necessary to implement Laws 1983, chapter 312,
article 7. These rules are not subject to chapter 14, the
Administrative Procedure Act sections 268.672 to 268.682.
Sec. 54. [268.6751] [ALLOCATION OF WAGE SUBSIDY MONEY.]
Subdivision 1. [WAGE SUBSIDIES.] Wage subsidy money must
be allocated to eligible local service units in the following
manner:
(a) The commissioner shall allocate 70 percent of the funds
available for allocation to eligible local service units for
wage subsidy programs as follows: the proportion of the wage
subsidy money available to each eligible local service unit must
be based on the number of unemployed persons in the eligible
local service unit for the most recent six-month period and the
number of work readiness assistance cases and aid to families
with dependent children cases in the eligible local service unit
for the most recent six-month period.
(b) Thirty percent of the money available for wage subsidy
programs must be allocated at the direction and discretion of
the coordinator. The commissioner shall distribute the
discretionary portion of wage subsidy appropriations at the
request of the coordinator. For the biennium ending June 30,
1987, up to 25 percent of the discretionary portion of the wage
subsidy appropriation may be used to support the office of full
productivity and opportunity and the development of an intake,
referral, and inventory system. In allocating the remaining
discretionary portion of the wage subsidy appropriation, the
coordinator shall give priority to eligible local service units
that have:
(1) high numbers of farmers who can demonstrate severe
household financial need;
(2) demonstrated success in placing public assistance
applicants in private sector jobs;
(3) demonstrated need beyond the allocation distributed
under paragraph (a);
(4) maximized use of money through coordination with other
programs and state, local, and federal agencies, and through the
use of matching money from private and nonprofit sources;
(5) demonstrated need to provide special assistance in
order to serve unemployed persons who incur unusual costs such
as necessary relocation expenses; or
(6) areas with high unemployment rates.
Subd. 2. [EMERGENCY WAGE SUBSIDIES.] (a) The coordinator
shall monitor local and statewide unemployment rates. Upon
determining that an economic emergency exists in one or more
local service units, the coordinator may implement an emergency
wage subsidy program and recommend to the governor to pursue
ways to increase the wage subsidy money available to local
service units in the affected area or areas from sources other
than the appropriation allocated under subdivision 1.
(b) When the unemployment rate for the state of Minnesota
equals or exceeds nine percent, the coordinator shall implement
a statewide emergency wage subsidy program and shall recommend
to the governor to pursue ways to increase money available for
wage subsidies.
Sec. 55. Minnesota Statutes 1984, section 268.676, is
amended to read:
268.676 [ALLOCATION WITHIN SERVICE DELIVERY AREAS ELIGIBLE
LOCAL SERVICE UNITS; PRIORITIES.]
Subdivision 1. [AMONG JOB APPLICANTS.] Allocation of funds
among eligible job applicants within a service delivery area
shall be determined by the employment administrator in each
service delivery area. The employment administrator eligible
local service unit shall give priority to:
(1) applicants living in households with no other income
source; and
(2) applicants who would otherwise be eligible to receive
whose incomes and resources are less than the standards for
eligibility for general assistance.;
In service delivery areas where the unemployment rate for
the 12-month period ending the most recent March 31 is below the
statewide unemployment rate at that time, the employment
administrator shall give higher priority to applicants described
in clause (2) than to those described in clause (1).
(3) applicants who are eligible for aid to families with
dependent children; and
(4) applicants who live in a farm household who demonstrate
severe household financial need.
Subd. 2. [AMONG EMPLOYERS.] Allocation of funds among
eligible employers within a service area shall be determined by
the employment administrator within each service delivery area
according to the priorities in sections 268.68 and 268.681. The
employment administrator an eligible local service unit shall
give priority to funding private sector jobs to the extent that
eligible businesses apply for funds. If possible, no more
than 40 25 percent of the statewide funds available for wages
may be allocated for temporary jobs with eligible government and
nonprofit agencies during the biennium.
Subd. 3. [AMONG EMPLOYMENT ADMINISTRATORS.] If the
coordinator designates more than one employment administrator in
a service delivery, the coordinator shall determine the
allocation of funds to be distributed by each employment
administrator in the service delivery area.
Sec. 56. Minnesota Statutes 1984, section 268.677, is
amended to read:
268.677 [USE OF FUNDS.]
Funds appropriated for the purposes of sections 268.671 to
268.686 may be used as follows:
(a) To provide a state contribution for wages and fringe
benefits for eligible job applicants for a maximum of 1,040
hours over a maximum period of 26 weeks per job applicant. For
eligible job applicants participating in a job training program,
the state contribution for wages may be used for a maximum
period of 52 weeks per job applicant. The state contribution
for wages shall be up to $4 per hour for each eligible job
applicant employed. The state contribution for fringe benefits
may be up to $1 per hour for each eligible job applicant
employed. However, the employer may use funds from other
sources to provide increased wages to the applicants it
employs. At least 75 percent of the funds appropriated for the
program must be used to pay wages for eligible job applicants;
(b) To reimburse the commissioner of economic security in
an amount not to exceed one percent of the funds appropriated
for the actual cost of administering sections 268.671 to
268.686, and to reimburse the employment administrators in an
amount not to exceed 4-1/2 percent of the funds appropriated for
their actual cost of administering sections 268.671 to 268.686.
The commissioner of economic security and the employment
administrators shall reallocate funds from other sources to
cover the administrative costs of this program whenever possible;
(c) To provide child care services or subsidies to
applicants employed under sections 268.671 to 268.686;
(d) To provide workers' compensation coverage to applicants
employed by government or nonprofit agencies under sections
268.671 to 268.686;
(e) To provide job search assistance, labor market
orientation, job seeking skills, and referral for other services;
(f) To purchase supplies and materials for projects
creating permanent improvements to public property in an amount
not to exceed one percent of the funds appropriated.
The employment administrator of each service delivery area
shall submit to the coordinator a spending plan establishing
that funds allocated to the service delivery area will be used
in the manner required by sections 268.671 to 268.686. Any
funds allocated to the service delivery area for which there is
no spending plan approved by the coordinator shall cancel back
to the Minnesota emergency employment development account and
may be reallocated by the coordinator to other employment
administrators. Subdivision 1. To the extent allowable under
federal and state law, wage subsidy money must be pooled and
used in combination with money from other employment and
training services or income maintenance and support services.
At least 75 percent of the money appropriated for wage subsidies
must be used to pay wages for eligible job applicants. For each
eligible job applicant employed, the maximum state contribution
from any combination of public assistance grant diversion and
employment and training services governed under this chapter,
including wage subsidies, is $4 per hour for wages and $1 per
hour for fringe benefits. In addition, wage subsidies are
limited as follows:
(a) For each eligible job applicant placed in private or
nonprofit employment, the state may subsidize wages for a
maximum of 1,040 hours over a period of 26 weeks. Employers are
encouraged to use money from other sources to provide increased
wages to applicants they employ.
(b) For each eligible job applicant participating in a job
training program and placed in private sector employment, the
state may subsidize wages for a maximum of 1,040 hours over a
period of 52 weeks.
(c) For each eligible job applicant placed in a community
investment program, the state may provide wage subsidies for a
maximum of 780 hours over a maximum of 26 weeks. For an
individual placed in a community investment program, the county
share of the wage subsidy shall be 25 percent. Counties may use
money from sources other than public assistance and wage
subsidies, including private grants, contributions from
nonprofit corporations and other units of government, and other
state money, to increase the wages or hours of persons employed
in community investment programs.
(d) Notwithstanding the limitations of paragraphs (a) and
(b), money may be used to provide a state contribution for wages
and fringe benefits in private sector jobs for eligible
applicants who had previously held temporary jobs with eligible
government and nonprofit agencies or who had previously held
community investment program jobs for which a state contribution
had been made, and who are among the priority groups established
in section 268.676, subdivision 1. The use of money under this
paragraph shall be for a maximum of 1,040 hours over a maximum
period of 26 weeks per job applicant.
Subd. 2. Reimbursement to the commissioner for the costs
of administering wage subsidies must not exceed one-half percent
of the money appropriated. Reimbursement to an eligible local
service unit for the costs of administering wage subsidies must
not exceed five percent and for the purchase of supplies and
materials necessary to create permanent improvements to public
property must not exceed one percent of the money allocated to
that local service unit. The commissioner and the eligible
local service units shall reallocate money from other sources to
cover the costs of administering wage subsidies whenever
possible.
Subd. 3. Eligible local service units may use up to 25
percent of their wage subsidy allocations to provide eligible
applicants with job search assistance, labor market orientation,
job seeking skills, necessary child care services, relocation,
and transportation, and to subsidize fringe benefits.
Sec. 57. Minnesota Statutes 1984, section 268.678,
subdivision 1, is amended to read:
Subdivision 1. [IN GENERAL POWERS.] The employment
administrator for each service delivery area has Eligible local
service units have the powers and duties given in this section
and any additional duties given by the coordinator or the
commissioner.
Sec. 58. Minnesota Statutes 1984, section 268.678,
subdivision 3, is amended to read:
Subd. 3. [OUTREACH.] Each employment administrator
eligible local service unit shall publicize the program
availability of wage subsidies within his service delivery its
area to seek maximum participation by eligible job applicants
and employers.
Sec. 59. Minnesota Statutes 1984, section 268.678,
subdivision 4, is amended to read:
Subd. 4. [CONTRACTS.] Each employment administrator
eligible local service unit shall may enter into contracts with
eligible employers setting forth the terms of their
participation in the program as required by sections 268.671 to
268.686 certified service providers to deliver wage subsidies.
Sec. 60. Minnesota Statutes 1984, section 268.678,
subdivision 5, is amended to read:
Subd. 5. [SCREENING AND COORDINATION.] Each employment
administrator eligible local service unit shall screen provide
for the screening of job applicants and employers to achieve the
best possible placement of eligible job applicants with eligible
employers.
Sec. 61. Minnesota Statutes 1984, section 268.678,
subdivision 6, is amended to read:
Subd. 6. [ELIGIBLE JOB APPLICANT PRIORITY LISTS.] Each
employment administrator eligible local service unit shall
maintain provide for the maintenance of a list of eligible job
applicants unable to secure employment under the program at the
time of application. The list shall prioritize eligible job
applicants and shall be used to fill jobs with eligible
employers as they become available.
Sec. 62. Minnesota Statutes 1984, section 268.679, is
amended to read:
268.679 [DUTIES OF OTHER AGENCIES COMMISSIONER OF HUMAN
SERVICES.]
Subd. 3. [DEPARTMENT OF HUMAN SERVICES.] The commissioner
of human services shall provide to each employment administrator
local service unit lists of currently licensed local day care
facilities, updated quarterly, to be available to all
persons employed under sections 268.671 to 268.686 who receive
wage subsidies.
Sec. 63. Minnesota Statutes 1984, section 268.681, is
amended to read:
268.681 [BUSINESS EMPLOYMENT.]
Subdivision 1. [ELIGIBLE BUSINESSES.] A business employer
is an eligible employer if it enters into a written contract,
signed and subscribed to under oath, with the employment
administrator in its service delivery area an eligible local
service unit or its contractor, containing assurances that:
(a) funds received by a business shall be used only as
permitted under sections 268.671 268.672 to 268.686 268.682;
(b) the business has submitted a plan information to the
employment administrator eligible local service unit or its
contractor (1) describing the duties and proposed compensation
of each employee proposed to be hired under the program; and (2)
demonstrating that, with the funds provided under
sections 268.671 268.672 to 268.686 268.682, the business is
likely to succeed and continue to employ persons hired under the
program using wage subsidies;
(c) the business will use funds exclusively for
compensation and fringe benefits of eligible job applicants and
will provide employees hired with these funds with fringe
benefits and other terms and conditions of employment comparable
to those provided to other employees of the business who do
comparable work;
(d) the funds are necessary to allow the business to begin,
or to employ additional people, but not to fill positions which
would be filled even in the absence of funds from this program
wage subsidies;
(e) the business will cooperate with the coordinator
eligible local service unit and the employment administrator
commissioner in collecting data to assess the result of the
program wage subsidies; and
(f) the business is in compliance with all applicable
affirmative action, fair labor, health, safety, and
environmental standards.
Subd. 2. [PRIORITIES.] In allocating funds among eligible
businesses, the employment administrator eligible local service
unit or its contractor shall give priority to businesses which
best satisfy the following criteria:
(a) have a high potential for growth and long-term job
creation;
(b) are labor intensive;
(c) meet the definition of a small business as defined in
section 645.445;
(d) make high use of local and Minnesota resources;
(e) are under ownership of women and minorities;
(f) make high use of new technology;
(g) produce energy conserving materials or services or are
involved in development of renewable sources of energy; and
(h) have their primary place of business in Minnesota.
Subd. 3. [PAYBACK.] A business receiving funds under this
program wage subsidies shall repay 70 percent of the amount
initially received for each eligible job applicant employed, if
the employee does not continue in the employment of the business
beyond the six-month subsidized period. If the employee
continues in the employment of the business for one year or
longer after the six-month subsidized period, the business need
not repay any of the funds received for that employee's wages.
If the employee continues in the employment of the business for
a period of less than one year after the expiration of the
six-month subsidized period, the business shall receive a
proportional reduction in the amount it must repay. If an
employer dismisses an employee for good cause and works in good
faith with the program administrator eligible local service unit
or its contractor to employ and train another person referred by
the employment administrator eligible local service unit or its
contractor, the payback formula shall apply as if the original
person had continued in employment.
A repayment schedule shall be negotiated and agreed to by
the employment administrator eligible local service unit and the
business prior to the disbursement of the funds and is subject
to renegotiation. The employment administrator eligible local
service unit shall forward payments received under this
subdivision to the coordinator commissioner on a monthly basis.
The coordinator commissioner shall deposit these payments in the
Minnesota emergency employment development wage subsidy account
created by subdivision 4.
Subd. 4. [MINNESOTA EMERGENCY EMPLOYMENT DEVELOPMENT WAGE
SUBSIDY ACCOUNT.] The Minnesota emergency employment development
wage subsidy account is created in the state treasury. All
payments from businesses pursuant to subdivision 3 shall be
deposited in this account, and all funds in the account are
appropriated to the commissioner of economic security for the
purpose of making disbursements pursuant to section
268.675 268.6751.
Sec. 64. Minnesota Statutes 1984, section 268.682, is
amended to read:
268.682 [WORKER DISPLACEMENT PROHIBITED.]
Subdivision 1. [LAYOFFS; WORK REDUCTIONS.] An eligible
employer may not terminate, lay off, or reduce the working hours
of an employee for the purpose of hiring an individual with
funds available under sections 268.671 268.672 to 268.686
268.682.
Subd. 2. [HIRING DURING LAYOFFS.] An eligible employer may
not hire an individual with funds available under sections
268.671 268.672 to 268.686 268.682 if any other person is on
layoff from the same or a substantially equivalent job.
Subd. 3. [EMPLOYER CERTIFICATION.] In order to qualify as
an eligible employer, a government or nonprofit agency or
business must certify to the employment administrator eligible
local service unit that each job created and funded under
sections 268.671 268.672 to 268.686 268.682:
(a) will result in an increase in employment opportunities
over those which would otherwise be available;
(b) will not result in the displacement of currently
employed workers, including partial displacement such as
reduction in hours of nonovertime work, wages, or employment
benefits; and
(c) will not impair existing contracts for service or
result in the substitution of program wage subsidy funds for
other funds in connection with work that would otherwise be
performed.
Sec. 65. [268.85] [SERVICE PRIORITIES.]
Subdivision 1. [GROUPS WITH SEVERE DISADVANTAGES.] To the
extent that the state has the authority to establish priority
groups to be served through employment and training services,
greatest consideration must be given to client groups identified
as experiencing the most severe disadvantages to employment.
Individuals volunteering for employment, regardless of whether
they are required to register, must also be given preference to
avoid the effects of long-term unemployment or dependence on
public assistance.
Subd. 2. [ORDER OF PRIORITY.] (a) The priority for
services to be provided is:
(1) permanent, unsubsidized, full-time private or nonprofit
sector employment and, where possible, in conjunction with
targeted jobs tax credits as defined at 26 United States Code,
section 44B, as amended by Public Law 98-369;
(2) permanent, subsidized, full-time private sector
employment;
(3) permanent, subsidized, full-time nonprofit sector
employment;
(4) training;
(5) relocation; and
(6) part-time, subsidized, nonprofit, or public employment
with continued employment assistance.
(b) Individuals receiving any of the priority services in
paragraph (a) must be provided with child care, transportation,
or other support services as necessary and in relation to their
eligibility and the availability of funds.
(c) In delivering employment and training services, local
service units shall distribute their available resources in a
manner that provides greater incentives to clients in permanent
private or nonprofit sector employment than in public sector
jobs.
Sec. 66. [268.86] [EMPLOYMENT AND TRAINING PROGRAMS.]
Subdivision 1. [DEVELOPMENT.] The commissioner shall
develop and administer employment and training services to
assist appropriate recipients of public assistance and persons
eligible to receive wage subsidies to become economically
independent. The services must have as their objective the
improvement of clients' opportunities for economic independence
through permanent employment. The services must provide
sufficient employment and training options to allow local
service units to effectively meet the support services,
educational, and training needs of their public assistance and
wage subsidy clients.
Subd. 2. [ADMINISTRATION.] Under agreements necessary to
comply with federal regulations, the commissioner, on behalf of
the commissioner of human services, shall administer employment
and training services for applicants for or recipients of aid to
families with dependent children and food stamps. The
commissioner shall administer employment and training services
for general assistance and work readiness recipients in
consultation with the commissioner of human services.
Subd. 3. [REGISTRATION.] The commissioner shall ensure
that public assistance recipients are registered within time
limits necessary to avoid delaying a recipient's receipt of
assistance, denying benefits, or reducing the amount of benefits.
Subd. 4. [EMPLOYABILITY PLANS.] The commissioner shall
require that a public assistance recipient's employment status
is appraised within 30 days and that a written employability
plan is prepared for appropriate public assistance recipients in
consultation with the recipients. The plan must be designed to
help the recipient obtain suitable employment, or training and
work skills necessary to secure suitable employment, and may
include an arrangement with another service provider or agency
for specialized employment, education, training, or support
services. A copy of the plan must be given to the recipient at
the time it is prepared; an additional copy must be given to the
local agency for its files.
Subd. 5. [PARTICIPATION.] The commissioner shall
establish, by rule, the conditions under which individuals
participate in services, their rights and responsibilities while
participating, and the standards by which the services must be
administered, and shall provide fair hearing procedures
governing participation.
Subd. 6. [COORDINATION.] In developing employment and
training services, the commissioner shall identify and
incorporate, to the extent possible, money from both federal and
state income maintenance, employment and training, and
educational programs.
Subd. 7. [WORK INCENTIVE PROGRAM.] In administering the
work incentive program under section 256.736, the commissioner
shall insure that no later than July 1, 1986, at least 25
percent of all state and federal money appropriated to that
program must be spent for direct client services, including
child care, transportation, institutional training, and
on-the-job training. Seventy-five percent or less of the money
must be spent for services provided directly by state or county
staff.
Subd. 8. [GRANT DIVERSION.] The commissioner shall develop
grant diversion processes for recipients of aid to families with
dependent children and work readiness assistance payments and
shall supervise the counties in the administration of the
employment and training services to meet the needs and
circumstances of public assistance recipients.
Subd. 9. [SUPPORTED WORK PROGRAM.] The commissioner shall
establish a supported work program for recipients of aid to
families with dependent children who have received public
assistance for more than three years and who are residents of
counties that have had more than three percent of their aid to
families with dependent children recipients on such assistance
for three years or longer. The goals of the supported work
program are to help individuals who are making a transition from
prolonged economic dependence to independence through employment.
Sec. 67. [268.871] [LOCAL DELIVERY.]
Subdivision 1. [RESPONSIBILITY AND CERTIFICATION.] Unless
prohibited by federal law or otherwise determined by state law
or the coordinator, a local service unit is responsible for the
delivery of employment and training services. After February 1,
1986, employment and training services must be delivered by
public, nonprofit, or private service providers that are
certified to provide the services.
Subd. 2. [CONTRACTING PREFERENCE.] In contracting, a local
service unit must give preference, whenever possible, to
existing employment and training providers including the job
service, opportunities industrialization centers, displaced
homemaker providers, work incentive providers, Minnesota
emergency employment development act providers, post-secondary
educational institutions, and job training partnership act
programs.
Subd. 3. [ENFORCEMENT.] The local service units shall
provide for the enforcement of employment and training
requirements for appropriate recipients of public assistance,
and must include provisions for enforcing the requirements in
any contracts with providers under subdivisions 1 and 2.
Subd. 4. [LOCATION OF STAFF.] (a) In establishing a
contract, the county shall agree to co-locate, where feasible,
income maintenance and social service staff as necessary to
accept applications and determine eligibility, monitor ongoing
client eligibility, and authorize services and grants available
under programs administered by the county or local service unit
that are related to employment and training or the client's
successful participation in employment and training activities.
(b) The commissioner shall co-locate, where feasible,
sufficient staff to make the services provided through the
department of jobs and training and the programs it administers
or supervises available to clients being served by the local
service unit or the contract agency.
(c) The commissioner has emergency and permanent rulemaking
authority to implement this section and shall establish the
circumstances under which the requirements for co-location may
be waived.
Sec. 68. [268.872] [STATE FUNDING OF EMPLOYMENT AND
TRAINING PROGRAMS.]
Subdivision 1. [AVAILABLE MONEY.] The commissioner and
local service units are not required to provide employment and
training services that exceed the levels permitted by available
federal, state, and local funds subject to the requirements or
limitations of each program.
Subd. 2. [MAINTENANCE OF EFFORT.] A local service unit
shall certify to the commissioner that it has not reduced funds
from other federal, state, and county sources which would, in
the absence of this section, have been available for employment
and training services and child care services and related
administrative costs.
Subd. 3. [ALLOCATION.] The commissioner shall pay
administrative aid to local service units for employment and
training services according to the formula established by rule.
Seventy-five percent of the money must be allocated among local
service units based on the number of work readiness assistance
recipients and aid to families with dependent children caseloads
of individuals not exempt from work requirements as forecast by
the commissioner of human services; 25 percent must be allocated
in a way that encourages full-time, private-sector job
placement, program completion by public assistance recipients,
and other performance characteristics. This subdivision does
not apply to the administrative aid for the work readiness
program.
Sec. 69. [268.88] [LOCAL SERVICE UNIT PLANS.]
(a) Local service units shall prepare and submit to the
commissioner by October 15 of each year an annual plan for the
subsequent calendar year. The commissioner shall notify each
local service unit by December 1 of each year if its plan has
been approved or disapproved. The plan must include:
(1) a statement of objectives for the employment and
training services the local service unit administers;
(2) the establishment of public assistance caseload
reduction goals and the strategies that will be used to achieve
these goals;
(3) a statement of whether the goals from the preceding
year were met and an explanation if the local service unit
failed to meet the goals;
(4) the amount proposed to be allocated to each employment
and training service;
(5) the proposed types of employment and training services
the local service unit plans to utilize;
(6) a report on the use of wage subsidies, grant
diversions, community investment programs, sliding fee day care,
and other services administered under this chapter;
(7) an annual update of the community investment program
plan according to standards established by the commissioner; and
(8) a performance review of service providers delivering
employment and training services.
(b) In counties with a city of the first class, the county
and the city shall develop and submit a joint plan. The plan
may not be submitted until agreed to by both the city and the
county. The plan must provide for the direct allocation of
employment and training money to the city and the county unless
waived by either. If the county and the city cannot concur on a
plan, the coordinator shall resolve their dispute.
(c) The commissioner may withhold the distribution of
employment and training money from a local service unit that
does not submit a plan to the commissioner by the date set by
this section, and shall withhold the distribution of employment
and training money from a local service unit whose plan has been
disapproved by the coordinator until an acceptable amended plan
has been submitted.
(d) For 1985, local service unit plans must be submitted by
November 1, 1985 and must include:
(1) a statement of objectives for the employment and
training services the local service unit administers;
(2) the establishment of public assistance caseload
reduction goals and the strategies that will be used to achieve
these goals;
(3) the amount proposed to be allocated to each employment
and training service;
(4) the proposed employment and training services and
service providers the local service unit plans to utilize; and
(5) a statement of intent regarding the establishment of
either a community investment program or an employment
experience program.
If the local service unit provides a statement of intent
for the establishment of a community investment program under
clause (5), the local service unit must submit a preliminary
community investment program plan by February 1, 1986.
Sec. 70. [268.89] [JOBS TRAINING PARTNERSHIP ACT;
ADMINISTRATION.]
Subdivision 1. [COORDINATION OF STATE AND FEDERAL
PROGRAMS.] The commissioner shall act as the governor's agent in
administering the federal jobs training partnership act. To the
extent permitted under federal regulation, this program must be
administered in conjunction with a comprehensive state
employment and training strategy and its resources used in
coordination with state programs and to further state objectives.
Subd. 2. [BIENNIAL PLAN.] The commissioner shall recommend
to the governor the priorities, performance standards, and
special projects that are consistent with the coordinator's
biennial plan.
Subd. 3. [OTHER PLANS.] Strong consideration for income
maintenance recipients must be included in the goals,
objectives, and criteria of the governor's coordination and
special services plan under section 121 of the jobs training
partnership act, United States Code, title 29, section 1531.
Local service delivery area plans and job service plans must
describe methods of complying with the coordination criteria
under the governor's coordination and special services plan as
required under United States Code, title 29, sections 49g and
1514.
Sec. 71. [268.90] [COMMUNITY INVESTMENT PROGRAMS.]
Subdivision 1. Community investment programs provide
temporary employment to people who are experiencing prolonged
unemployment and economic hardship. Community investment
programs consist of one or more projects. Community investment
programs must be beneficial to the state and the communities in
which they are located and must provide program employees with
training and work experience. The projects must include
activities that:
(1) expand or improve services, including education,
health, social services, recreation, and safety;
(2) improve or maintain natural resources, including
rivers, streams and lakes, forest lands and roads, and soil
conservation;
(3) make permanent improvements to lands and buildings; or
(4) weatherize public buildings and private residential
dwellings.
Community investment programs may not include job
placements that replace work that was part or all of the duties
or responsibilities of an authorized public employee position
established as of January 1, 1985.
Community investment programs that include other sources of
money or authorized programs may provide employment for the
groups eligible for the included programs under the terms and
conditions of those programs. These programs include the
Minnesota conservation corps, Minnesota summer youth program,
county emergency jobs program, and the jobs training partnership
act.
Subd. 2. [EMPLOYMENT CONDITIONS.] (a) An eligible
nonprofit or public employer may not terminate, lay off, or
reduce the regular working hours of an employee for the purpose
of hiring an individual with money available under this
program. An eligible employer may not hire an individual with
money available through this program if any other person is on
layoff from the same or a substantially equivalent job.
(b) Community investment program participants are employees
of the project employer within the meaning of workers'
compensation laws, personal income tax, and the federal
insurance contribution act, but not retirement or civil service
laws.
(c) Each project and job must comply with all applicable
affirmative action, fair labor, health, safety, and
environmental standards.
(d) Individuals employed under the community investment
program must be paid a wage at the same wage rates as work site
or employees doing comparable work in that locality, unless
otherwise specified in law.
(e) Recipients of aid to families with dependent children
who are eligible on the basis of an unemployed parent may not
have available more than 100 hours a month. All employees are
limited to 32 hours or four days a week, so that they can
continue to seek full-time private sector employment, unless
otherwise specified in law.
(f) The commissioner shall establish, by rule, the terms
and conditions governing the participation of appropriate public
assistance recipients. The rules must, at a minimum, establish
the procedures by which the minimum and maximum number of work
hours and maximum allowable travel distances are determined, the
amounts and methods by which work expenses will be paid, and the
manner in which support services will be provided. The rules
must also provide for periodic reviews of clients continuing
employment in community investment programs.
(g) Participation in a community investment program by a
recipient of aid to families with dependent children or general
assistance is voluntary; however, work readiness registrants may
be required to participate.
Subd. 3. [COMMISSIONER OF JOBS AND TRAINING.] The
commissioner shall:
(1) make emergency or permanent rules governing plan
content, criteria for approval, and administrative standards;
(2) refer community investment program administrators to
the appropriate state agency for technical assistance in
developing and administering community investment programs;
(3) establish the method by which community investment
programs will be approved or disapproved through the community
investment program plan and the annual update component of the
county plan;
(4) review and comment on community investment program
plans;
(5) institute ongoing methods to monitor and evaluate
community investment programs; and
(6) inform the commissioner of human services of the
counties that do not have an approved plan.
Subd. 4. [COUNTY BOARDS OF COMMISSIONERS.] The county
boards of commissioners shall:
(1) be encouraged to establish community investment
programs that are administered jointly according to section
471.59, or through multicounty human service boards under
chapter 402;
(2) develop community investment programs in consultation
with the exclusive representatives of their employees;
(3) plan community investment programs by involving
nonprofit organizations and other governmental units, community
action agencies, community-based organizations, local union
representatives, and representatives of client groups;
(4) submit to the commissioner a community investment
program plan, before the initiation of a community investment
program, for approval according to standards established by the
commissioner;
(5) plan community investment projects that, whenever
possible, utilize existing programs that are administered under
contract by nonprofit organizations and governmental units,
including departments and agencies of cities, counties, towns,
school districts, state and federal agencies, park reserve
districts, and other special districts;
(6) include in their local service unit plans an annual
update to their community investment program plans for approval
according to standards established by the commissioner;
(7) submit reports and meet administrative standards
established by rule;
(8) monitor the performance of entities under contract to
administer individual community investment projects;
(9) enter into contracts with other governmental and
private bodies to jointly fund or jointly administer approvable
projects when agreements expand the resources available, the
scope of people employed, or further recognized public purposes;
and
(10) be encouraged to enter into contracts with businesses
or individuals for eligible projects under subdivision 1 and
charge a fee for the completion of a project.
Subd. 5. [STATE FINANCIAL PARTICIPATION.] The statutorily
established state rates of financial participation or available
state appropriations or grants are not affected by their
incorporation into a community investment program.
Sec. 72. [268.91] [CHILD CARE SLIDING FEE PROGRAM.]
Subdivision 1. [DEFINITIONS.] For the purposes of this
section the following terms have the meanings given.
(a) "Child care services" means family day care homes,
group day care homes, nursery schools, day nurseries, child day
care centers, play groups, head start, parent cooperatives, and
in-home child care as defined in the Minnesota plan for social
services to families and children.
(b) "Child" means a person 14 years old or younger.
(c) "Commissioner" means the commissioner of jobs and
training.
Subd. 2. [DUTIES OF COMMISSIONER.] The commissioner shall
develop standards for county boards to provide child care
services to enable eligible families to participate in
employment or training programs. The commissioner shall
distribute money to counties to reduce the costs of child care
for eligible families. The commissioner shall adopt rules to
govern the program in accordance with this section. The rules
must establish a sliding schedule of fees for parents receiving
child care services. The commissioner shall require counties to
collect and report data that the commissioner deems necessary to
evaluate the effectiveness of the program in preventing and
reducing participants' dependence on public assistance and in
providing other benefits, including improvement in the care
provided to children. The commissioner shall report to the full
productivity and opportunity coordinator in each even-numbered
year on the effectiveness of the program.
Subd. 3. [ALLOCATION.] (a) By June 1 of each odd-numbered
year, the commissioner shall notify all county boards of the
allocation and the procedures used for the sliding fee program.
Allocations must be made by July 1 of each odd-numbered year.
If the appropriation is insufficient to meet the needs in all
counties, the amount must be prorated among the counties.
(b) For the purposes of this section, the commissioner
shall allocate money appropriated between the metropolitan area,
comprising the counties of Anoka, Carver, Dakota, Hennepin,
Ramsey, Scott, and Washington, and the area outside the
metropolitan area so that no more than 55 percent of the total
appropriation goes to either area after excluding allocations
for statewide administrative costs. The commissioner shall
allocate 50 percent of the money among counties on the basis of
the number of families below the poverty level, as determined
from the most recent special census, and 50 percent on the basis
of caseloads of aid to families with dependent children for the
preceding fiscal year, as determined by the commissioner of
human services.
Subd. 4. [FINANCIAL ELIGIBILITY.] (a) Child care services
must be available to families who need child care to find or
keep employment or to obtain the training or education necessary
to find employment and who:
(1) receive aid to families with dependent children;
(2) have household income below the eligibility levels for
aid to families with dependent children; or
(3) have household income within a range established by the
commissioner.
(b) Child care services for the families receiving aid to
families with dependent children must be made available as
in-kind services, to cover any difference between the actual
cost and the amount disregarded under the aid to families with
dependent children program. Services to families whose incomes
are below the threshold of eligibility for aid to families with
dependent children, but that are not receiving aid to families
with dependent children, must be made available without cost to
the families.
(c) Child care services to families with incomes in the
commissioner's established range must be made available on a
sliding fee basis. The lower limit of the sliding fee range
must be the eligibility limit for aid to families with dependent
children. The upper limit of the range must be neither less
than 70 percent nor more than 90 percent of the state median
income for a family of four, adjusted for family size.
(d) If a disproportionate amount of the available money is
provided to any one of the groups described in subdivision 4,
paragraph (a), of this section, the county board shall document
to the commissioner the reason the group received a
disproportionate share.
Subd. 5. [EMPLOYMENT OR TRAINING ELIGIBILITY.] (a) Persons
who are seeking employment and who are eligible for assistance
under this section are eligible to receive the equivalent of one
month of child care. Employed persons who work at least ten
hours a week and receive at least a minimum wage for all hours
worked are eligible for child care assistance.
(b) Persons eligible under this section for child care
assistance for education or training must receive assistance for
the length of the program or 24 months, whichever is shorter.
An education or training program with demonstrated effectiveness
may be approved by the commissioner of education and accredited
by the appropriate agency as an eligible program including high
school or an equivalent program, an English competency program,
technical or vocational training, or a four-year or associate
degree program.
Subd. 6. [COUNTY CONTRIBUTION.] In addition to payments
from parents, the program must be funded by county contributions.
Counties shall contribute five percent of the cost of the
program in the program's first year and 15 percent in the second
and subsequent years. The commissioner may require by rule that
a county pay the commissioner the portion of sliding fee
allocations paid by the state for which the county is
responsible. The county shall advance its portion of sliding
fee costs, based upon allocations made by the commissioner for
that county for expenditures in the succeeding month.
Adjustments of any overestimate or underestimate based on actual
expenditures must be made by the commissioner by adjusting the
estimate for any succeeding month.
A county shall certify to the commissioner that the county
has not reduced allocations from other federal, state, and
county sources, which, in the absence of child care sliding fee
or wage subsidy money, would have been available for child care
services.
Subd. 7. [SLIDING FEE SCALE.] In setting the sliding fee
schedule, the commissioner shall exclude from the amount of
income used to determine eligibility an amount for federal and
state income and social security taxes attributable to that
income level according to federal and state standardized tax
tables. The fee schedule must be designed to use any available
tax credits and to progress smoothly from appropriated
assistance to assistance through tax credits.
Subd. 8. [MAXIMUM COUNTY RATE.] The county board may limit
the subsidy allowed by setting a maximum on the provider child
care rate that the county shall subsidize. The rate set by any
county shall not be lower than 110 percent of the median rate
for like care arrangements in that county.
Subd. 9. [LIMITS ON USE OF STATE FUNDS.] The state's
payment is limited to the difference between the fee set by the
commissioner and the provider's charge for care. When the
provider of child care services charges more than 125 percent of
the median charge for similar care arrangements in the
geographic area defined by the commissioner of human services
for the purpose of ascertaining the median charge, the state's
payment is limited to the difference between 125 percent of the
median charge for similar care arrangements in the geographic
area and the parents' fee.
Subd. 10. [EXTENSION OF EMPLOYMENT OPPORTUNITIES.] The
county board shall insure that child care services available to
county residents are well advertised and that everyone who
receives or applies for aid to families with dependent children
is informed of training and employment opportunities and
programs, including child care services.
Subd. 11. [ADMINISTRATIVE EXPENSES.] A county must not use
more than seven percent of its allocation for its administrative
expenses under this section.
Sec. 73. [268.95] [INDIVIDUAL ENTERPRISE.]
Subdivision 1. [COORDINATION.] The commissioner may
coordinate state activities related to self-employment
enterprises, including home-based businesses, individual
self-employment initiatives, and collective and cooperative
efforts involving individual entrepreneurs.
Subd. 2. [MARKETING.] The commissioner may undertake
activities to expand the marketing of goods or services produced
by the state's independent entrepreneurs.
Subd. 3. [TECHNICAL ASSISTANCE.] The commissioner may
provide or arrange for the provision of information, technical
assistance, and support as necessary to help individuals
determine whether they wish to become self-employed, to obtain
needed training, to develop business plans and financing, and to
sustain the initiatives.
Subd. 4. [PILOT PROGRAM.] The commissioner shall develop a
pilot program, in cooperation with the commissioners of energy
and economic development and human services, to enable
low-income persons to start or expand self-employment
opportunities or home-based businesses that are designed to make
the individual entrepreneurs economically independent. The
commissioner of human services shall seek necessary waivers from
federal regulations to allow recipients of aid to families with
dependent children to participate and retain eligibility while
establishing a business.
Subd. 5. [STUDY.] The commissioner shall study the needs
of individual entrepreneurs and beginning businesses and
recommend to the governor how state programs and resources can
provide further assistance.
Sec. 74. [POSITIONS ABOLISHED.]
Positions in the unclassified service in the department of
economic security are abolished.
Sec. 75. [REVISOR'S INSTRUCTION.]
The revisor of statutes shall change the references
"commissioner of economic security" and "department of economic
security" wherever they appear in Minnesota Statutes to
"commissioner of jobs and training" and "department of jobs and
training," in subsequent editions of Minnesota Statutes except
as otherwise specified by this article.
Sec. 76. [TRANSFER.]
The commissioner of finance shall transfer, according to
section 15.039, positions and appropriations for existing
programs and agencies as required by this act.
Sec. 77. [TRANSITION.]
Subdivision 1. Except as provided in subdivision 2, wage
subsidies are governed by sections 268.672 to 268.684 until
September 30, 1985. Between July 1, 1985, and September 30,
1985, the Minnesota emergency employment development coordinator
may encumber up to $4,000,000 of the jobs program appropriation
for fiscal year 1986 to pay wage subsidies for eligible
applicants placed in private-sector employment.
Subd. 2. The commissioner of jobs and training may deliver
wage subsidies for a local service unit that is not prepared to
accept responsibility for the delivery of wage subsidies on
October 1, 1985, and may do so until the local service unit is
prepared to accept responsibility for the delivery of wage
subsidies, or until December 31, 1985, whichever comes first.
Subd. 3. In fiscal years 1986 and 1987, money appropriated
to the jobs program, or the Minnesota employment and economic
development program, is the wage subsidy appropriation.
Subd. 4. Rules adopted by the commissioner of economic
security under section 268.673, subdivision 6, remain in effect
notwithstanding the repeal of the authority removing those rules
from the governance of chapter 14.
Sec. 78. [REPEALER.]
Subdivision 1. Minnesota Statutes 1984, sections 129A.02,
subdivision 4; 245.84, subdivision 2; 256.736, subdivisions 1
and 2; 256D.02, subdivision 8a; 256D.111, subdivision 1a;
256D.112; 268.011; 268.012; 268.013; 268.12, subdivisions 1 and
1a; 268.671; 268.685; 268.80; 268.81; 268.82; 268.83; and 268.84
are repealed.
Subd. 2. Minnesota Statutes 1984, sections 268.672,
subdivisions 2, 8, 10, and 11; 268.673, subdivisions 1 and 2;
268.674; 268.675; 268.676, subdivision 3; 268.678, subdivisions
2, 7, and 8; 268.679, subdivisions 1 and 2; 268.68; 268.683;
268.684; and 268.686, are repealed October 1, 1985.
Sec. 79. [EFFECTIVE DATES.]
Subdivision 1. Sections 1 to 47, 65 to 76, and 78,
subdivision 1, are effective August 1, 1985, except that:
(a) departments or agencies whose functions, powers, or
duties are transferred to the department of jobs and training or
are repealed by this article, or in which positions are
abolished by this article, shall exercise those functions,
powers, or duties and retain those positions until the
commissioner of jobs and training notifies the commissioner of
administration that the department of jobs and training is ready
to begin operation; and
(b) a new program established by this article is not
effective until the full productivity and opportunity
coordinator and the commissioner of jobs and training have been
appointed and have taken office.
Subd. 2. Sections 48 to 64 and 78, subdivision 2, are
effective October 1, 1985.
Subd. 3. Notwithstanding subdivision 1, all sections of
this article must be effective by October 1, 1985.
ARTICLE 10
MINING TAXES
Section 1. Minnesota Statutes 1984, section 15A.081,
subdivision 8, is amended to read:
Subd. 8. [EXPENSE ALLOWANCE.] Notwithstanding any law to
the contrary, positions listed in subdivision 1, constitutional
officers, the president of each community college, the
commissioner of iron range resources and rehabilitation, and the
director of vocational-technical education are authorized an
annual expense allowance not to exceed $1,500 for necessary
expenses in the normal performance of their duties for which no
other reimbursement is provided. However, expense allowances
for the chancellor of the state university system and the
president of each state university shall be governed only by
section 136.063. The expenditures under this subdivision are
subject to any laws and rules relating to budgeting, allotment
and encumbrance, preaudit and post-audit. The commissioner of
finance may promulgate rules to assure the proper expenditure of
these funds, and to provide for reimbursement.
Sec. 2. Minnesota Statutes 1984, section 16A.128,
subdivision 2, is amended to read:
Subd. 2. [NO RULEMAKING.] The kinds of fees that need not
be fixed by rule unless specifically required by law are:
(1) fees based on actual direct costs of a service;
(2) one-time fees;
(3) fees that produce insignificant revenues;
(4) fees billed within or between state agencies; or
(5) fees exempt from commissioner approval; or
(6) fees for admissions to or use of facilities operated by
the iron range resources and rehabilitation board, if the fees
are set according to prevailing market conditions to recover
operating costs.
Sec. 3. Minnesota Statutes 1984, section 273.136,
subdivision 1, is amended to read:
Subdivision 1. Payment from the taconite property tax
relief account county shall be made as provided herein for the
purpose of replacing revenue lost as a result of the reduction
of property taxes provided in section 273.135.
Sec. 4. Minnesota Statutes 1984, section 273.136,
subdivision 2, is amended to read:
Subd. 2. The commissioner of revenue shall determine, not
later than May 1 of each year, commencing in 1974, the amount of
reduction resulting from section 273.135 in each county
containing a tax relief area as defined by section 273.134,
basing his determinations on a review of abstracts of tax lists
submitted by the county auditors pursuant to section 275.29. He
may make such changes in the abstracts of tax lists as he deems
necessary. The commissioner of revenue, after such review,
shall submit to the commissioner of finance St. Louis county
auditor, on or before June 1, the amount of the first half
payment payable hereunder and on or before October 15 the amount
of the second half payment.
Sec. 5. Minnesota Statutes 1984, section 273.136,
subdivision 3, is amended to read:
Subd. 3. The commissioner of finance St. Louis county
auditor shall pay out of the taconite property tax relief
account to each county treasurer one-half of the amount
certified under subdivision 2 not later than July June 15 and
the remaining half not later than November 15 of each
year commencing in 1982.
Sec. 6. Minnesota Statutes 1984, section 273.136,
subdivision 4, is amended to read:
Subd. 4. The county treasurer shall distribute the funds
received by him under subdivision 3 as if they had been
collected as a part of the property tax reduced by section
273.135.
Sec. 7. Minnesota Statutes 1984, section 298.01,
subdivision 1, as amended by Laws 1985, chapter 300, section 20,
is amended to read:
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
percent of the valuation of all ores mined or produced before
January 1, 1986, 14.5 percent of the valuation of all ores
produced after December 31, 1985 and before January 1, 1987, and
14 percent of the valuation of all ores produced after December
31, 1986. 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.
Sec. 8. Minnesota Statutes 1984, section 298.03, is
amended to read:
298.03 [VALUE OF ORE; HOW ASCERTAINED.]
The valuation of iron or other ores for the purposes of
determining the amount of tax to be paid under the provisions of
section 298.01 shall be ascertained by subtracting from the
value of such ore, at the place where the same is brought to the
surface of the earth, such value to be determined by the
commissioner of revenue:
(1) The reasonable cost of supplies used and labor
performed at the mine in separating the ore from the ore body,
including hoisting, elevating, or conveying the same to the
surface of the earth;
(2) If the ore is taken from an open pit mine, an amount
for each ton of ore mined or produced during the year equal to
the cost of removing the overburden, divided by the number of
tons of ore uncovered, the number of tons of ore uncovered in
each case to be determined by the commissioner of revenue;
(3) If the ore is taken from an underground mine, an amount
for each ton of ore mined or produced during the year equal to
the cost of sinking and constructing shafts and running drifts,
divided by the number of tons of ore that can be advantageously
taken out through such shafts and drifts, the number of tons of
ore that can be advantageously taken out in each case to be
determined by the commissioner of revenue;
(4) The amount of royalties paid on the ore mined or
produced during the year;
(5) For persons mining or producing iron ore the mining or
production of which is subject to the occupation tax imposed by
section 298.01, subdivision 1, the amount of the ad valorem
taxes levied and paid for the year against the realty in which
the ore is deposited; for all others a percentage of the ad
valorem taxes levied and paid for such year against the realty
in which the ore is deposited equal to the percentage that the
tons mined or produced during such year bears to the total
tonnage in the mine;
(6) In the case of taconite, semi-taconite and iron
sulphide operations, the tax payable under section 298.24, but
not exceeding 25 cents per taxable ton, and that payable under
section 298.35, on the concentrates produced in said year and
any taxes paid under Laws 1955, Chapters 391, 429, 514, 576 or
540, or any other law imposing on such taconite operations a
specific tax for school or other governmental purposes;
(7) The amount or amounts of all the foregoing subtractions
shall be ascertained and determined by the commissioner of
revenue. Deductions for interest on plant investment shall not
exceed the greater of (a) four percent of book value, or (b) the
amount actually paid but not exceeding six percent of book
value. No subtraction shall be allowed for shrinkage of iron
ore.
Sec. 9. Minnesota Statutes 1984, 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 four 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. 10. Minnesota Statutes 1984, section 298.031,
subdivision 3, is amended to read:
Subd. 3. [CREDIT, APPLICATION.] The credit provided by
this section shall not be applicable with respect to any mine
operated by a mining company or an operating agent
(a) if the net marketable tonnage of iron ores, exclusive
of taconite and semi-taconite, produced from all mines operated
by such mining company or operating agent exceeds one and
one-half three percent of the net marketable tonnage of iron
ores or concentrates including taconite and semi-taconite,
produced in this state during the year for which the tax is
being determined, or
(b) if such mining company or operating agent is also
engaged in the manufacture of steel, or
(c) if any company manufacturing steel has an interest,
either directly or indirectly, through stock ownership in such
mining company or operating agent.
The taxpayer shall have the burden of proving its right to
the credit provided by this section.
Sec. 11. Minnesota Statutes 1984, section 298.09,
subdivision 4, is amended to read:
Subd. 4. If the amount of tax determined by the
commissioner is subsequently found to be erroneous, the
commissioner may, at any time within three years from the date
the tax is certified as provided in section 298.10, redetermine
the amount thereof. No such redetermination shall be made
increasing the tax unless the person from whom the additional
amount is due is given ten days written notice thereof and an
opportunity to be heard thereon. If an order is made increasing
the tax, the same proceedings shall be had as provided for
occupation taxes originally determined and certified. Any
person who has paid an occupation tax may apply to the
commissioner within the time herein limited for a
redetermination of the tax, and if the commissioner determines
that the tax has been overpaid, he shall make and file an order
determining the amount of such overpayment, and credit it
against occupation taxes otherwise payable by pay a refund of
that amount to the person who has overpaid the amount as so
determined. If the tax is increased, interest at the rate
specified in section 270.75 from the date payment should have
been made shall be determined and paid; if the tax is reduced,
interest at the rate of six percent per annum from the date of
overpayment shall be allowed.
Sec. 12. [298.2212] [INVESTMENT OF FUNDS.]
All funds credited to the iron range resources and
rehabilitation board account in the special revenue fund for the
purposes of section 298.22 must be invested pursuant to law.
The net interest and dividends from the investments are included
and become part of the funds available for purposes of section
298.22.
Sec. 13. Minnesota Statutes 1984, section 298.223, is
amended to read:
298.223 [TACONITE AREA ENVIRONMENTAL PROTECTION FUND.]
A fund called the taconite environmental protection fund is
created for the purpose of reclaiming, restoring and enhancing
those areas of northeast Minnesota located within a tax relief
area defined in section 273.134 that are adversely affected by
the environmentally damaging operations involved in mining
taconite and iron ore and producing iron ore concentrate and for
the purpose of promoting the economic development of northeast
Minnesota. The taconite environmental protection fund shall be
used for the following purposes:
(a) to initiate investigations into matters the Iron Range
Resources and Rehabilitation Board determines are in need of
study and which will determine the environmental problems
requiring remedial action;
(b) reclamation, restoration or reforestation of minelands
not otherwise provided for by state law;
(c) local economic development projects including
construction of sewer and water systems, and other public works
located within a tax relief area defined in section 273.134;
(d) monitoring of mineral industry related health problems
among mining employees.
The taconite environmental protection fund shall be
administered by the commissioner of the Iron Range Resources and
Rehabilitation Board. The commissioner shall by September 1 of
each year prepare a list of projects to be funded from the
taconite environmental protection fund, with such supporting
information including description of the projects, plans, and
cost estimates as may be necessary. Upon recommendation of the
Iron Range Resources and Rehabilitation Board, this list shall
be submitted to the legislative advisory commission for its
review. This list with the recommendation of the legislative
advisory commission shall then be transmitted to the governor by
November 1 of each year. By December 1 of each year, the
governor shall approve or disapprove, or return for further
consideration, each individual project. Funds for a project may
be expended only upon approval of the project by the governor.
There is hereby annually appropriated to the commissioner
of the Iron Range Resources and Rehabilitation Board such funds
as are necessary to carry out the projects approved and such
funds as are necessary for administration of this section.
Annual administrative costs, not including detailed engineering
expenses for the projects, shall not exceed five percent of the
amount annually expended from the fund.
Funds for the purposes of this section are provided by
section 298.28, subdivision 1, clause (10) (9) relating to the
taconite environmental protection fund.
Sec. 14. Minnesota Statutes 1984, section 298.225, as
amended by Laws 1985, chapter 300, section 22, is amended to
read:
298.225 [APPROPRIATION.]
Subdivision 1. 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), (7) (6), and (8) (7)(a), shall receive 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 proportionately at the
rate of 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.
Subd. 2. There is hereby appropriated to the commissioner
of revenue The money necessary for funding the difference
between the initial distribution made pursuant to section 298.28
and the amount guaranteed in subdivision 1 is appropriated in
equal proportions from the initial current year distributions to
the taconite environmental protection fund and to the northeast
Minnesota economic protection trust pursuant to section 298.28.
If the initial distributions to the taconite environmental
protection fund and the northeast Minnesota economic protection
trust are insufficient to fund the difference, the commissioner
of iron range resources and rehabilitation shall make the
payments of any remaining difference from the corpus of 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 as
directed by the commissioner of revenue.
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 The commissioner of iron range
resources and rehabilitation shall make these school bond
payments from the corpus of the northeast Minnesota economic
protection trust fund to the commissioner of revenue in the
amounts needed to make these school bond payments certified by
the commissioner of revenue.
Sec. 15. Minnesota Statutes 1984, section 298.24,
subdivision 4, is amended 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 commissioner of iron range resources and
rehabilitation shall 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 1984, section 298.27, is
amended to read:
298.27 [COLLECTION AND PAYMENT OF TAX.]
The taxes provided by section 298.24 shall be collected and
paid in the same manner as provided by law for the payment of
the occupation tax, except that directly to each eligible county
and the iron range resources and rehabilitation board. The
commissioner of revenue shall notify each producer of the amount
to be paid each recipient prior to February 8. The report
required by section 298.05 shall be filed on or before
February 15 together with 1. A remittance equal to 90 percent
of the total tax required to be paid hereunder shall be paid on
or before April February 15. On or before February 25,
the commissioner of revenue county auditor shall make
distribution of the payment received by the county in the manner
provided by section 298.28. The commissioner of revenue shall
determine the amount of tax due on or before March 15. The
balance due shall be paid on or before April 15 following the
production year, and shall be distributed by the county auditor
as provided in section 298.28 by May 15. Reports shall be made
and hearings held upon the determination of the tax in
accordance with procedures established by the commissioner of
revenue. The commissioner of revenue shall have authority to
make reasonable regulations as to the form and manner of filing
reports necessary for the determination of the tax hereunder,
and by such regulations may require the production of such
information as may be reasonably necessary or convenient for the
determination and apportionment of the tax. All the provisions
of the occupation tax law with reference to the assessment, and
determination, and collection of the occupation tax, including
all provisions for appeals from or review of the orders of the
commissioner of revenue relative thereto, but not including
provisions for refunds, are hereby made applicable to the taxes
imposed by section 298.24 except in so far as inconsistent
herewith. If any person subject to section 298.24 shall fail to
make the report provided for in this section at the time and in
the manner herein provided, the commissioner of revenue shall in
such case, upon such information as he may possess or obtain,
ascertain the kind and amount of ore mined or produced and
thereon find and determine the amount of the tax due from such
person. There shall be added to the amount of tax due a penalty
for failure to report on or before February 15 1, which penalty
shall equal ten percent of the tax imposed and be treated as a
part thereof.
If any person responsible for making a partial tax payment
at the time and in the manner herein provided fails to do so,
there shall be imposed a penalty equal to ten percent of the
amount so due, which penalty shall be treated as part of the tax
due.
In the case of any underpayment of the partial tax payment
required herein, there may be added and be treated as part of
the tax due a penalty equal to ten percent of the amount so
underpaid.
If any portion of the taxes provided for in section 298.24
is not paid before the fifteenth day of April of the year in
which due and payable, a penalty of ten percent of such unpaid
portion shall immediately accrue, and thereafter one percent per
month shall be added to such tax and penalty while such tax
remains unpaid.
Sec. 17. Minnesota Statutes 1984, section 298.28,
subdivision 1, as amended by Laws 1985, chapter 300, section 23,
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 certification of the commissioner of revenue to the
general fund of the state, be paid by the commissioner of
revenue allocated 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 the county 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) (a) 12.5 cents per taxable ton, less any amount
distributed under clause (8) (7), paragraph (a), to the taconite
municipal aid account in the apportionment fund of the state
treasury and paragraph (b) of this clause, to be distributed as
provided in section 298.282.
(b) An amount annually certified by the county auditor of a
county containing a taconite tax relief area within which there
is an organized township if, as of January 2, 1982, more than 75
percent of the assessed valuation of the township consists of
iron ore. The amount will be the portion of a township's
certified levy equal to the proportion of (1) the difference
between 50 percent of the township's January 2, 1982, assessed
value and its current assessed value to (2) the sum of its
current assessed value plus the difference determined in (1).
The county auditor shall extend the township's levy against the
sum of the township's current assessed value plus the difference
between 50 percent of its January 2, 1982, assessed value and
its current assessed value. If the current assessed value of
the township exceeds 50 percent of the township's January 2,
1982, assessed value, this clause shall not apply.
(3) 29 cents per taxable ton plus the increase provided in
paragraph (c) to qualifying school districts to be distributed,
based upon the certification of the commissioner of revenue, 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 distribution must be based on 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 sections 124A.03, 124A.06, subdivision 3a,
124A.08, subdivision 3a, 124A.10, subdivision 3a, 124A.12,
subdivision 3a, 124A.14, subdivision 5a, and 275.125, comprises
of the sum of certified levies for the prior year for all
qualifying districts, computed pursuant to sections 124A.03,
124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10,
subdivision 3a, 124A.12, subdivision 3a, 124A.14, subdivision
5a, and 275.125. For purposes of distributions pursuant to this
part, certified levies for the prior year computed pursuant to
sections 124A.03, 124A.06, subdivision 3a, 124A.08, subdivision
3a, 124A.10, subdivision 3a, 124A.12, subdivision 3a, 124A.14,
subdivision 5a, and 275.125 shall not include the amount of any
increased levy authorized by referendum pursuant to section
124A.03, subdivision 2.
(c) On July 15, 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 124A.03, subdivision
2, 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
second 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
124A.03, subdivision 2, 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 section 124A.02 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 iron range resources and
rehabilitation 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 (9).
(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, based upon certification by the commissioner of
revenue, 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) is the basis
for the distribution.
(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
paid 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) 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 St. Louis county acting as the counties' fiscal
agent, 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
paid 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 paid 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) (7) (a) .20 cent per taxable ton shall be paid 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) (8) the amounts determined under clauses (4)(a),
(4)(c), (5), and (8) (7)(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) (9) the proceeds of the tax imposed by section 298.24
which remain after the distributions and payments in clauses (1)
to (9) (8), as certified by the commissioner of revenue, and
parts (a) and (b) of this clause have been made, together with
interest earned on all money distributed under this subdivision
prior to distribution, 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: 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) 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) 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 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. The commissioner of revenue shall
annually on or before October 10 report an estimated
distribution amount to each taxing district and 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 or city in the
year in which such estimate is made, and payable in the next
ensuing calendar year, except that one cent per taxable ton of
the amount distributed under clause (4)(c) shall not be deducted
in calculating the permissible levy. In any calendar year in
which a general property tax levy subject to sections 275.50 to
275.59 has been made, if the taxes distributable to any such
county or city are greater than the amount estimated by the
commissioner to be paid to any such county or city in such year,
the excess of such distribution shall be held in a special fund
by the county or city and shall not be expended until the
succeeding calendar year, and shall be included in computing the
permissible levies under sections 275.50 to 275.59, of such
county or city payable in such year. If the amounts
distributable to any such county or city after final
determination by the commissioner of revenue under this section
are less than the amounts by which a taxing district's levies
were reduced pursuant to this section, such county or city 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 275.50 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. 18. Minnesota Statutes 1984, section 298.28,
subdivision 2, is amended to read:
Subd. 2. In distributing determining the distributions and
payments of the proceeds of the tax collected under section
298.24, the commissioner of revenue shall deduct the amount of
any credits authorized under section 298.24, subdivision 3,
against the tax imposed under subdivision 1 of said section,
from the amount which would otherwise have been distributed paid
to the iron range resources and rehabilitation board for credit
to the northeast Minnesota economic protection trust fund in the
apportionment fund in the state treasury under subdivision 1 of
this section.
Sec. 19. Minnesota Statutes 1984, section 298.282,
subdivision 1, is amended to read:
Subdivision 1. The amount deposited to the credit of the
taconite municipal aid account in the apportionment fund of the
state treasury with the county as provided in section 298.28,
subdivision 1, clause (2) shall be distributed as provided by
this section, among the municipalities comprising a tax relief
area under section 273.134, as amended hereby, each being herein
referred to as a qualifying municipality.
Sec. 20. Minnesota Statutes 1984, section 298.282,
subdivision 4, is amended to read:
Subd. 4. On or before August 15, 1972, and On or before
August September 15 of each year thereafter, the commissioner of
finance county auditor shall issue his warrant in favor of the
treasurer of each qualifying municipality in the amount
determined by the commissioner of revenue to be due and payable
to such qualifying municipality in such year. In 1975 and
subsequent years, such payment shall be made by the commissioner
of revenue on or before September 15.
Sec. 21. Minnesota Statutes 1984, section 298.282,
subdivision 5, is amended to read:
Subd. 5. Commencing in 1977, The commissioner of revenue
county auditor shall annually on September 15 make a payment
from the taconite municipal aid fund to cities and towns for the
purpose of replacing the revenue loss to them resulting from
Laws 1975, Chapter 437, Article XI, Section 7. The amount of
aid to be paid annually to each city and town is the amount they
were entitled to receive for 1975 under the provisions of
Minnesota Statutes 1974, Section 298.32.
Sec. 22. Minnesota Statutes 1984, section 298.292, is
amended to read:
298.292 [POLICY.]
The legislature is cognizant of the severe economic
dislocations and widespread unemployment that result when a
single industry on which an area is largely dependent,
experiences a drastic reduction in activity. The northeast
Minnesota economic protection trust fund is hereby created to be
devoted to economic rehabilitation and diversification of
industrial enterprises where these conditions ensue as the
result of the decline of such a single industry. Priority shall
be given to using the northeast Minnesota economic protection
trust fund for the following purposes:
(a) projects and programs that are designed to create and
maintain productive, permanent, skilled employment, including
employment in technologically innovative businesses;
(b) projects and programs to encourage diversification of
the economy and to promote the development of minerals,
alternative energy sources utilizing indigenous fuels, forestry,
small business, and tourism;
(c) projects and programs for which technological and
economic feasibility have been demonstrated;
(d) loans, loan guarantees, interest buy-downs and other
forms of participation with private sources of financing, but a
loan to a private enterprise shall be for a principal amount not
to exceed one-half of the cost of the project for which
financing is sought, and the rate of interest on a loan shall be
no less than eight percent; and
(e) funding reserve accounts established to secure the
payment when due of the principal of and interest on bonds
issued pursuant to section 298.2211; and
(f) to pay in periodic payments or in a lump sum payment
any or all of the interest on bonds issued pursuant to chapter
474 for the purpose of constructing, converting, or retrofitting
heating facilities in connection with district heating systems
or systems utilizing alternative energy sources.
Money from the trust fund shall be expended only in or for
the benefit of the tax relief area defined in section 273.134.
Sec. 23. Minnesota Statutes 1984, section 298.293, is
amended to read:
298.293 [EXPENDING FUNDS.]
The funds provided by section 298.28, subdivision 1, clause
(10) (9), relating to the northeast Minnesota economic
protection trust fund, except money expended pursuant to Laws
1982, Second Special Session, chapter 2, sections 8 to 14, shall
be expended only in an amount that does not exceed the sum of
the net interest, dividends, and earnings arising from the
investment of the trust for the preceding 12 calendar months
from the date of the authorization plus, for fiscal year 1983,
$10,000,000 from the corpus of the fund. The funds may be spent
only in or for the benefit of those areas that are tax relief
areas as defined in section 273.134. If during any year the
taconite property tax account under sections 273.134 to 273.136
does not contain sufficient funds to pay the property tax relief
specified in Laws 1977, chapter 423, article X, section 4, there
is appropriated from this trust fund to the relief account
sufficient funds to pay the relief specified in Laws 1977,
chapter 423, article X, section 4.
Sec. 24. Minnesota Statutes 1984, section 299.01,
subdivision 1, as amended by Laws 1985, chapter 300, section 24,
is amended to read:
Subdivision 1. There shall be levied and collected upon
all royalty received during each calendar year for permission to
explore, mine, take out and remove ore from land in this state,
a tax of 15 percent before January 1, 1986, a tax of 14.5
percent after December 31, 1985, and before January 1, 1987, and
a tax of 14 percent after December 31, 1986.
Sec. 25. [TRANSFER OF FUNDS.]
The unencumbered balance in the taconite property tax
relief account in the apportionment fund in the state treasury
on February 15, 1986, is appropriated to the commissioner of
finance to be paid on that date to the St. Louis county auditor,
to be distributed as provided in sections 273.134 to 273.136.
Sec. 26. Laws 1982, chapter 523, article XXX, section 4,
subdivision 1, as amended by Laws 1982, Second Special Session,
chapter 2, section 15, is amended to read:
Subdivision 1. Commencing with taxes payable in 1983 1986,
the commissioner of revenue iron range resources and
rehabilitation shall deduct and annually pay to Independent
School District 710 an amount equal to four cents per gross ton
of taxable iron concentrate produced but not less than $240,000
annually from the taxes paid pursuant to sections 298.23 to
298.28 by a person, corporation, partnership, operator, joint
venture or other owner of a taconite plant and taconite
properties located within the school district. The deduction
shall be made from the amount which would otherwise have been
distributed to the northeast Minnesota economic protection trust
fund in the apportionment fund in the state treasury under
section 298.28, subdivision 1. A sum is annually appropriated
to the commissioner from the proceeds of the taxes sufficient to
make the payments required by this section.
Sec. 27. [EFFECTIVE DATE.]
Sections 1, 2, 12, and 22 are effective July 1, 1985.
Sections 3 to 6, 13 to 21, and 23 are effective for taxes
payable in 1986 and thereafter. Sections 8 to 10 are effective
for ores produced in 1985 and thereafter. Section 11 is
effective for refunds of overpayments of taxes payable in 1985
and thereafter.
ARTICLE 11
MORTGAGE REGISTRATION AND DEED TAXES
Section 1. Minnesota Statutes 1984, section 287.05,
subdivision 1, is amended to read:
Subdivision 1. A tax of 15 cents is imposed upon each
$100, or fraction thereof, of the principal debt or obligation
which is or may be secured by any mortgage of real property
situated within the state executed, delivered, and recorded or
registered; provided, however, that the tax shall be imposed but
once upon any mortgage and extension thereof. If the mortgage
describes real estate situated outside of this state, the tax
shall be imposed upon that proportion of the whole debt secured
thereby as the value of the real estate therein described
situated in this state bears to the value of the whole of the
real estate described therein, as the value is determined by the
commissioner of revenue upon application of the mortgagee. The
tax imposed by this section shall not apply to a contract for
the conveyance of real estate or any interest in real estate
recorded or registered on or after January 1, 1984.
Sec. 2. Minnesota Statutes 1984, section 287.08, is
amended to read:
287.08 [TAX, HOW PAYABLE; RECEIPTS.]
The tax imposed by sections 287.01 to 287.12 shall be paid
to the treasurer of the county in which the mortgaged land or
some part thereof is situated at or before the time of filing
the mortgage for record or registration. The treasurer shall
endorse his receipt on the mortgage, countersigned by the county
auditor, who shall charge the amount to the treasurer and such
receipt shall be recorded with the mortgage, and such receipt of
the record thereof shall be conclusive proof that the tax has
been paid to the amount therein stated and authorize any county
recorder to record the mortgage. Its form, in substance, shall
be "registration tax hereon of ..................... dollars
paid." If the mortgages be exempt from taxation the endorsement
shall be "exempt from registration tax," to be signed in either
case by the treasurer as such, and in case of payment to be
countersigned by the auditor. In case the treasurer shall be
unable to determine whether a claim of exemption should be
allowed, the tax shall be paid to the clerk of the district
court of the county to abide the order of such court made upon
motion of the county attorney, or of the claimant upon notice as
required by the court. When any such mortgage covers real
property situate in more than one county in this state the whole
of such tax shall be paid to the treasurer of the county where
the mortgage is first presented for record or registration, and
the payment shall be receipted and countersigned as above
provided. When the amount of the tax is $100 or more, The tax
shall be divided and paid over by the county treasurer receiving
the same, on or before the tenth day of each month after receipt
thereof, to the county or counties entitled thereto in the ratio
which the market value of the real property covered by the
mortgage in each county bears to the market value of all the
property described in the mortgage. In making such division and
payment the county treasurer shall send therewith a statement
giving the description of the property described in the mortgage
and the market value of the part thereof situate in each
county. For the purpose aforesaid, the treasurer of any county
may require the treasurer of any other county to certify to him
the market valuation of any tract of land in any such mortgage.
Sec. 3. Minnesota Statutes 1984, section 287.09, is
amended to read:
287.09 [MORTGAGE ON EXEMPT PROPERTY; PROPERTY NOT DIRECTLY
TAXED; RECEIPT; APPORTIONMENT OF TAX.]
When any real estate situate in this state and described in
any such mortgage is exempt from taxation under the Constitution
of the State of Minnesota, Article 10, Section 1, the tax herein
provided shall be paid to the treasurer of the county in which
such real estate is situate in the same manner as if such real
estate was not exempt from taxation. When any real estate
situate in this state and described in such mortgage is not
exempt from taxation under such section, but is not taxed by
direct tax upon the assessed valuation thereof, then the tax
herein provided shall be paid to the commissioner of revenue for
deposit in the state treasury and credited to the general fund.
The receipt thereof shall be endorsed upon the mortgage by the
commissioner of revenue and thereupon such mortgage shall be
recorded or registered, as to such real estate, in any office in
this state. When any such mortgage shall describe any real
estate, part of which is not taxed by direct tax upon the
assessed valuation thereof and part of which is so taxed or is
exempt from taxation, the proportionate amount of the tax to be
paid to the commissioner of revenue and to the county treasurer
shall be determined in accordance with the proportionate value
of the real estate included therein as such valuation shall be
determined by the commissioner of revenue upon application of
the mortgagee. The amount of the tax payable to the
commissioner of revenue shall thereupon be paid to him, who
shall endorse upon such mortgage that the proportionate amount
of the tax payable to him has been paid and the balance of such
tax shall be paid to the treasurer of the county where the
mortgage is first presented for record or registration and shall
be divided and paid to the treasurers of the other counties
entitled thereto, as provided by section 287.08 county. Real
estate taxed under sections 298.23 to 298.28, relating to
taconite and taconite operations or under sections 294.21 to
294.28, relating to railroads transporting taconite or taconite
concentrates other than as a common carrier, shall not be
considered to be real estate not taxed by direct tax upon the
assessed valuation thereof within the meaning of this section.
Sec. 4. Minnesota Statutes 1984, section 287.12, is
amended to read:
287.12 [TAXES, HOW APPORTIONED.]
All taxes paid to the county treasurers treasurer on or
after July 1, 1985, under the provisions of sections 287.01 to
287.12 shall be apportioned, 95 percent to the general fund of
the state, and five percent credited to the county revenue fund.
On or before the tenth day of each month the county
treasurer shall determine and pay to the commissioner of revenue
the state's portion of the receipts from the mortgage
registration tax during the preceding month. The commissioner
shall deposit the receipts in the state treasury to the credit
of the general fund treasurer shall report to the county welfare
agency on or before the tenth day of each month 95 percent of
the receipts attributable to the statutory rate in section
287.05. That amount, in addition to 97 percent of the amount
determined under section 287.29, must be shown as a deduction
from the report filed with the department of human services as
required by section 256.82.
Sec. 5. Minnesota Statutes 1984, section 287.21,
subdivision 2, is amended to read:
Subd. 2. The proceeds of the taxes levied and collected
under sections 287.21 to 287.36 on or after July 1, 1985, shall
be credited to the general county revenue fund.
Sec. 6. Minnesota Statutes 1984, section 287.23, is
amended to read:
287.23 [REAL ESTATE OUTSIDE STATE.]
If any deed, instrument, or writing shall describe any real
estate situate outside of this state, the tax imposed by section
287.21 shall be measured upon such proportion of the
consideration (exclusive of the value of any lien or encumbrance
remaining thereon at the time of sale) as the value of the real
estate therein described situate in this state bears to the
value of the whole of the real estate described therein as
determined by the commissioner of revenue upon application of
any party to the deed, instrument, or writing.
Sec. 7. Minnesota Statutes 1984, section 287.25, is
amended to read:
287.25 [PAYMENT OF TAX; STAMPS.]
The tax imposed by section 287.21 shall be paid by the
affixing of a documentary stamp or stamps in the amount of the
tax to the document or instrument with respect to which the tax
is paid, provided that the commissioner of revenue county board
may, in exceptional cases, permit the payment of the tax without
the affixing of the documentary stamps and in such cases shall,
upon receipt of the tax, direct the treasurer to endorse his a
receipt for such tax upon the face of the document or
instrument. In such case the commissioner of revenue shall
deposit the amount received in payment of the tax with the state
treasurer to the credit of the general fund.
Sec. 8. Minnesota Statutes 1984, section 287.27, is
amended to read:
287.27 [STAMPS; PRINTING AND SALE-METERS.]
Subdivision 1. The commissioner of revenue shall cause The
county board may have documentary stamps to be printed and shall
furnish such stamps as may be necessary them to the county
treasurers of the state without charge treasurer. Documentary
stamps may be purchased only from any the county treasurer and
may be used in payment of a tax imposed by section 287.21 or may
be resold by the owner at any time not be sold for use in any
county other than the county in which the property is located.
Subd. 2. The commissioner may authorize any county
treasurer to utilize a tax meter machine approved by the
commissioner which shall be provided by the county.
The commissioner county board may authorize any person to
utilize such a tax meter machine upon the filing of a corporate
surety bond, in a suitable amount to guarantee the payment of
the tax, such amount to be determined by the commissioner county
board.
The commissioner county board may provide rules for the use
of such a machine, supervise its operation and provide for the
payment of the tax on any deed or document so stamped.
Sec. 9. Minnesota Statutes 1984, section 287.28, is
amended to read:
287.28 [REFUNDMENTS OR REDEMPTION.]
The commissioner of revenue county treasurer may order the
refundment in whole or in part of any tax which has been
erroneously or unjustly paid and may allow for or redeem such of
the stamps, issued under the authority of sections 287.21 to
287.36 as may have been spoiled, destroyed, or rendered useless
or unfit for the purpose intended or for which the owner may
have no use or which through mistake may have been improperly or
unnecessarily used. Such order shall be made only upon written
application of the taxpayer and shall, if the refundment exceeds
$500, be valid only if approved by the attorney general upon
approval of the county board. Refunds therefor shall be paid
out of the general fund of the state and moneys therefor are
hereby annually appropriated from the general fund for such
purpose county.
Sec. 10. Minnesota Statutes 1984, section 287.29,
subdivision 1, is amended to read:
Subdivision 1. On or before the tenth day of August 1985,
and each month thereafter, the county treasurer shall determine
and pay report to the commissioner of revenue county welfare
agency the receipts from the sale of documentary stamps
attributable to the tax imposed during the preceding month. The
report must accompany the report required in section 287.12.
The commissioner receipts shall deposit such receipts be
deposited in the state county treasury and credited to the
credit of the general county revenue fund.
Sec. 11. Minnesota Statutes 1984, section 287.33, is
amended to read:
287.33 [EXPENSES OF ADMINISTRATION.]
Expenses of administration of sections 287.21 to 287.34 to
be paid out of appropriations to the commissioner of revenue
shall county funds include fees and expenses incurred by the
attorney general and any county attorney in connection with
sections 287.21 to 287.34 and all other costs and expenses.
Sec. 12. Minnesota Statutes 1984, section 287.35, is
amended to read:
287.35 [DOCUMENTARY STAMPS DEFINED.]
The term "documentary stamps" means all stamps issued by
the commissioner of revenue county for use in payment of the
taxes imposed by sections 287.21 to 287.36.
Sec. 13. [REPEALER.]
Minnesota Statutes 1984, sections 287.27, 287.29,
subdivision 3, and 287.32 are repealed.
Sec. 14. [EFFECTIVE DATE.]
Sections 1 to 13 are effective July 1, 1985.
ARTICLE 12
RAILROAD ABATEMENTS
Section 1. [APPROPRIATION.]
There is appropriated from the general fund to the
commissioner of revenue the amounts necessary to reimburse local
taxing districts for certain abatements of property taxes
received by railroads for assessment year 1983 as a result of a
change in the assessed valuation of railroad property. For
purposes of this section, the term "property taxes" excludes any
interest which is required to be paid to the railroads; and the
term "abatement" includes only reductions in property tax made
from the original assessment certified by the commissioner of
revenue, as the result of a court order.
The county auditor shall certify to the commissioner of
revenue the dollar amount of the abatements received by the
railroads from 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 $1 per pupil unit for the school
district. The 20 cents per capita and the $1 per pupil unit
shall relate to the combined abatement amount for all railroads
for 1983 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, 1986.
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 1986 equal to the difference between
the amount of tax and interest included in the abatement 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 Minnesota
Statutes, section 124.214, subdivision 2.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective the day after final enactment and
applies to assessment year 1983.
ARTICLE 13
ESTATE TAX
Section 1. Minnesota Statutes 1984, section 290.01,
subdivision 20e, is amended to read:
Subd. 20e. [MODIFICATION IN COMPUTING TAXABLE INCOME OF
THE ESTATE OF A DECEDENT.] Amounts allowable under
section 291.07, subdivision 1, clause (2) 2053 or 2054 of the
Internal Revenue Code of 1954 in computing Minnesota inheritance
or federal estate tax liability shall not be allowed as a
deduction (or as an offset against the sales price of property
in determining gain or loss) in computing the taxable income of
the estate or any person unless there is filed within the time
and in the manner and form prescribed by the commissioner a
statement that the amounts have not been allowed as a deduction
under section 291.07 and a waiver of the right to have the
amounts allowed at any time as deductions under section 291.07.
The provisions of this paragraph shall not apply with respect to
deductions allowed under section 290.077 (relating to income in
respect of decedents) an election is made for federal income tax
purposes under section 642(g) of the Internal Revenue Code of
1954. The election made for federal tax purposes under section
642(g) of the Internal Revenue Code of 1954 is binding for
Minnesota tax purposes.
Sec. 2. Minnesota Statutes 1984, section 291.005,
subdivision 1, is amended to read:
Subdivision 1. Unless the context otherwise clearly
requires, the following terms used in this chapter shall have
the following meanings:
(1) "Federal gross estate" means the gross estate of a
decedent as valued and otherwise determined for federal estate
tax purposes by federal taxing authorities pursuant to the
provisions of the Internal Revenue Code.
(2) "Minnesota gross estate" means the federal gross estate
of a decedent after (a) excluding therefrom any property
included therein which has its situs outside Minnesota and (b)
including therein any property omitted from the federal gross
estate which is includable therein, has its situs in Minnesota,
and was not disclosed to federal taxing authorities. The
Minnesota gross estate shall be valued pursuant to the
provisions of section 291.215, subdivision 1.
(3) "Personal representative" means the executor,
administrator or other person appointed by the court to
administer and dispose of the property of the decedent. If
there is no executor, administrator or other person appointed,
qualified, and acting within this state, then any person in
actual or constructive possession of any property having a situs
in this state which is included in the federal gross estate of
the decedent shall be deemed to be a personal representative to
the extent of the property and the Minnesota estate tax due with
respect to the property.
(4) "Resident decedent" means an individual whose domicile
at the time of his death was in Minnesota.
(5) "Nonresident decedent" means an individual whose
domicile at the time of his death was not in Minnesota.
(6) "Situs of property" means, with respect to real
property, the state or country in which it is located; with
respect to tangible personal property, the state or country in
which it was normally kept or located at the time of the
decedent's death; and with respect to intangible personal
property, the state or country in which the decedent was
domiciled at death.
(7) "Commissioner" means the commissioner of revenue or any
person to whom the commissioner has delegated functions under
this chapter.
(8) "Internal Revenue Code" means the United States
Internal Revenue Code of 1954 as amended through March 12,
1983 December 31, 1984.
Sec. 3. Minnesota Statutes 1984, section 291.03,
subdivision 1, is amended to read:
Subdivision 1. [GENERALLY TAX AMOUNT.] The tax imposed
shall be an amount equal to the greater of:
(1) A tax computed by applying to the Minnesota taxable
estate the following prescribed rates:
10 percent on the first $100,000,
11 percent on the next $500,000 or part thereof,
12 percent on the excess, or
(2) A tax equal to the same proportion of the maximum
credit allowable under section 2011 of the Internal Revenue Code
for state death taxes described herein as the Minnesota gross
estate bears to the value of the federal gross estate. For a
resident decedent, the tax shall be the maximum credit allowable
under section 2011 of the Internal Revenue Code reduced by the
amount of the death tax paid the other state and credited
against the federal estate tax if this results in a larger
amount of tax than the proportionate amount of the credit. The
tax determined under this paragraph shall not be greater than
the maximum credit allowable under section 2011 of the Internal
Revenue Code.
Sec. 4. Minnesota Statutes 1984, section 291.075, is
amended to read:
291.075 [SPECIAL USE VALUATION OF QUALIFIED PROPERTY.]
When property subject to the tax imposed by this chapter
qualifies for valuation based on its use pursuant to section
2032A of the Internal Revenue Code, it shall have the same value
for Minnesota estate tax purposes as it has for federal estate
tax purposes. If, after the final determination of the tax
imposed by this chapter, the property valued pursuant to section
2032A of the Internal Revenue Code is disposed of or fails to
qualify and an additional tax is imposed pursuant to section
2032A(c), any increase in the credit for state death taxes shall
be reported to the commissioner within 90 days after final
determination of the increased credit. Upon notification the
commissioner may assess an additional tax in accordance with
section 291.03, subdivision 1, clause (2). No additional
Minnesota estate tax computed in accordance with section 291.03,
subdivision 1, clause (1) will be imposed nor will an additional
deduction for federal estate taxes paid be allowed under section
291.07 or 291.08.
Sec. 5. Minnesota Statutes 1984, section 291.09,
subdivision 1a, is amended to read:
Subd. 1a. In all instances in which a decedent dies after
December 31, 1979 and before January 1, 1981 leaving a federal
gross estate in excess of $161,000 and in all instances in which
a decedent dies after December 31, 1980 and before January 1,
1982 leaving a federal gross estate in excess of $175,000, and
the decedent has an interest in property with a situs in
Minnesota, the personal representative shall submit to the
commissioner, on a form prescribed by the commissioner, a
Minnesota estate tax return.
In the case of a decedent dying after December 31, 1981
1985 who has an interest in property with a situs in Minnesota,
the personal representative shall submit to the commissioner, on
a form prescribed by the commissioner, a Minnesota estate tax
return in the following all instances:
In the case of a decedent A Minnesota estate
dying in tax return shall be
filed if the federal
gross estate equals
or exceeds
1982 . . . . . . . . . . . . .$225,000
1983 . . . . . . . . . . . . . 275,000
1984 . . . . . . . . . . . . . 325,000
1985 . . . . . . . . . . . . . 400,000
1986 . . . . . . . . . . . . . 500,000
1987 and thereafter. . . . . . 600,000
in which a federal estate tax return is required to be filed.
The return shall be accompanied by a federal estate tax
return, a schedule of all assets in the estate at their date of
death values, and shall contain a computation of the Minnesota
estate tax due. The return shall be signed by the personal
representative.
Sec. 6. Minnesota Statutes 1984, section 291.09,
subdivision 2a, is amended to read:
Subd. 2a. The commissioner may designate on the return the
documents that are required to be filed together with the return
in order to determine the proper valuation of assets and
computation of tax. The commissioner shall not be bound by any
item on the return unless he has received all required documents
and unless all items of information on the return have been
completed.
Sec. 7. Minnesota Statutes 1984, section 291.09,
subdivision 3a, is amended to read:
Subd. 3a. (1) The commissioner may challenge matters of
valuation or taxability of any assets reported on the return, or
any deductions claimed, or the computation of tax, only if
within 180 days from the due date of the return or the receipt
of the return and all documents required to be filed with the
return, whichever is later, the commissioner mails or delivers a
written notice to the personal representative objecting to the
return as filed and specifying the reasons for the objection.
(2) If the personal representative disagrees with the
objection or does not wish to fully comply with the objection,
he may request that the commissioner hold a hearing on the
objection. Within 30 days of receipt of a request, the
commissioner shall set a time and place for hearing. Unless
otherwise agreed upon, the hearing date shall not be earlier
than 30 days nor later than 60 days from the date of the notice
setting the hearing. The notice of hearing shall set forth the
rights available to the personal representative under chapter
14. Not later than 30 days after the commissioner receives the
report and recommendation of the administrative law judge, or a
written waiver of his hearing rights by the personal
representative, the commissioner shall issue an order
determining the tax. Any such determination made by the
commissioner may be appealed to the tax court as provided in
section 271.09.
(3) At any time together with or after the objection, the
commissioner, on his own initiative, may set a time and place
for a hearing in accordance with (2) above.
(4) In his objection, or at any time thereafter, the
commissioner may assess any additional tax as the facts may
warrant, subject to the right of the personal representative to
demand a hearing under chapter 15 14. If the personal
representative does not demand a hearing within 90 days of the
date of the assessment, the tax so assessed shall be legally due
and the commissioner may proceed to collect any the unpaid tax
after one year from the date of death. If the commissioner
later finds the tax assessment to be erroneous, he may adjust
the assessment prior to collection.
(5) The commissioner shall not be required to object to any
subsequent original, amended or supplemental return in order to
preserve his rights. The commissioner shall not be precluded
from objecting to a subsequent original, amended or supplemental
return even though an original return was accepted as filed. If
the commissioner had accepted an original return showing no tax
due and a subsequent original, amended or supplemental return
discloses additional assets not disclosed on the original
return, the commissioner may object to any matter of valuation,
taxability, deduction or computation of tax on the original
return within 180 days of receipt of the subsequent original,
amended or supplemental return.
(6) Subject to the provisions of sections 291.11 and
291.215, the Minnesota estate tax liability shall be considered
as finally determined on the date notification of acceptance is
issued to the personal representative or, if no objection is
filed, on the day following 180 days from the due date of the
return or the receipt of the return, together with all other
documents required to be filed with the return, whichever is
later.
(7) Subject to the time limits imposed elsewhere in this
chapter, the commissioner may refund an overpayment of tax,
penalty or interest even though the personal representative has
not made an application for refund.
Sec. 8. Minnesota Statutes 1984, section 291.11,
subdivision 1, is amended to read:
Subdivision 1. (1) All taxes imposed by this chapter shall
take effect at and upon the death of the person whose estate is
subject to taxation and shall be due and payable at the
expiration of nine months from such death, except as otherwise
provided in this chapter. Where an extension to file the
federal estate tax return has been granted under the provision
of section 6081 of the Internal Revenue Code, the time for
filing the estate tax return or making payment of the tax
without penalty, is extended for the same period. Provided,
that any taxpayer who owes at least $5,000 in taxes may choose
to pay these taxes in five equal installments over a period of
time not to exceed five years from the death of the person whose
estate is subject to taxation or five years from the expiration
of the extension granted by the commissioner pursuant to section
291.132, whichever is later and who, under section 6161 or 6166
of the Internal Revenue Code, has been granted an extension for
payment of the tax shown on the return, may elect to pay the
commissioner the amount of tax due in equal amounts at the same
time as required for federal purposes. When a taxpayer elects
to pay the tax in installments, he shall notify the commissioner
in writing no later than nine months after the death of the
person whose estate is subject to taxation. If the taxpayer
fails to pay an installment on time, unless it is shown that
such failure is due to reasonable cause, the election shall be
revoked and the entire amount of unpaid tax plus accrued
interest shall be due and payable 90 days after the date on
which the installment was payable.
(2) (a) False return - in the case of a false or fraudulent
return with the intent to evade tax, any additional tax
resulting therefrom may be assessed at any time.
(b) No return - in the case of failure to file a return,
the tax may be assessed at any time.
(c) Omissions - in the case where there is omitted from the
estate items subject to tax under this chapter the tax on such
omitted items may be assessed at any time.
In determining the items omitted, there shall not be taken
into account any item which has been disclosed in the return or
in a statement attached to the return in a manner adequate to
apprise the commissioner of the nature and amount of such item.
(3) Where, before the expiration of the time prescribed in
this chapter for the determination or adjustment of the tax, the
commissioner and the taxpayer shall consent in writing to the
extension of time for such determination or adjustment the tax
may be determined at any time prior to the expiration agreed
upon and in the manner agreed upon. The period so agreed upon
may be extended by subsequent agreements in writing made before
the expiration of the period previously agreed upon.
Sec. 9. Minnesota Statutes 1984, section 291.15,
subdivision 1, is amended to read:
Subdivision 1. If the tax is not paid within nine months
from the accruing thereof, the time specified for payment, the
unpaid tax and any penalty imposed under section 291.131 shall
bear interest shall be charged and collected thereon at the rate
specified in section 270.75 from the due date until the date the
tax is paid. Unpaid tax includes the unpaid tax when the
taxpayer elects to pay the tax in installments and the due date
is the date the tax was due without regard to any extension that
is granted or an election to pay the tax in installments. In
the event a person or corporation upon proper authorization
makes a payment to be applied against the tax thereafter, no
interest shall accrue on the amount so paid. All payments shall
be applied first to penalties, next to interest and then upon
principal.
Sec. 10. Minnesota Statutes 1984, section 291.15,
subdivision 3, is amended to read:
Subd. 3. Interest shall be paid on installment payments of
the tax authorized under section 291.11, subdivision 1, or
291.132, subdivision 2, at the rate of interest in effect
pursuant to section 270.75 nine months following the date of
death.
Sec. 11. Minnesota Statutes 1984, section 291.215,
subdivision 1, is amended to read:
Subdivision 1. All property includable in the Minnesota
gross estate of a decedent shall be valued in accordance with
the provisions of sections 2031 or 2032 and, if applicable,
2032A, of the Internal Revenue Code and any elections made in
valuing the federal gross estate shall be applicable in valuing
the Minnesota gross estate. Except as otherwise provided in
section 291.075, the value of all property includable in the
Minnesota gross estate of a decedent may be independently
determined under said sections for Minnesota estate tax purposes.
Values for purposes of the estate tax on both probate and
nonprobate assets shall be the same as those finally determined
for purposes of the federal estate tax on a decedent's estate.
Sec. 12. Minnesota Statutes 1984, section 291.32, is
amended to read:
291.32 [REFUNDING OF TAX.]
Subdivision 1. Whenever, If under the provisions of this
chapter any person or corporation shall be is entitled to a
return of any part of a tax, penalty, or interest previously
paid in excess of the amount legally due, he may make
application apply to the commissioner for a determination of the
amount which he is entitled to have returned, and on such
application shall. The applicant must furnish the commissioner
with affidavits and other evidence showing the facts which
entitled him to such return and the amount he is entitled to
have returned. Upon the filing of such application, The
commissioner shall must examine the same application and shall
make a written order thereon denying or allowing deny or allow,
in a written order, the application in whole or in part and
shall mail. A copy of such order by certified mail the order
must be mailed to the applicant at the address stated on the
application. If such application is allowed in whole or in
part, the commissioner shall cause such pay the refund to be
paid in the manner provided by law. It shall be the duty of the
state treasurer to pay warrants therefor out of any funds in the
state treasury not otherwise appropriated. The amount of taxes,
penalty, and interest in excess of the amount legally due must
be paid with interest at the rate specified in article 15,
section 3, from the date of payment or from the date beginning
nine months after the death of the decedent, whichever is
later. The moneys necessary to pay such warrants the amounts
are hereby appropriated to the commissioner out of any moneys in
the state treasury not otherwise appropriated the general fund.
Subd. 2. All applications for refunds must be made within
two years from the date of final determination or adjustment of
any part of the tax, penalty, or interest by the taxpayer, the
commissioner, or the tax court, as applicable. If the
application is denied in whole or in part the taxpayer may
commence an action against the commissioner to recover any
overpayments of taxes claimed to be refundable but for which the
commissioner has issued no order of refundment. Such action may
be brought in the District Court of the district in which lies
the county of his residence or principal place of business if an
estate or trust, of the principal place of its administration,
or in the district court for Ramsey County. Such action may be
commenced after the expiration of six months after the
application is filed if the commissioner has not taken final
action thereon and shall be commenced within 18 months after the
date of the order denying the application. If the commissioner
has not acted within two years after the application is filed,
it shall be considered denied.
Sec. 13. Minnesota Statutes 1984, section 524.3-1202, is
amended to read:
524.3-1202 [EFFECT OF AFFIDAVIT.]
The person paying, delivering, transferring, or issuing
personal property or the evidence thereof pursuant to affidavit
shall submit a copy of the affidavit to the commissioner of
revenue within five days of its receipt and then is discharged
and released to the same extent as if he dealt with a personal
representative of the decedent. He is not required to see to
the application of the personal property or evidence thereof or
to inquire into the truth of any statement in the affidavit. If
any person to whom an affidavit is delivered refuses to pay,
deliver, transfer, or issue any personal property or evidence
thereof, it may be recovered or its payment, delivery, transfer,
or issuance compelled upon proof of their right in a proceeding
brought for the purpose by or on behalf of the persons entitled
thereto. Any person to whom payment, delivery, transfer or
issuance is made is answerable and accountable therefor to any
personal representative of the estate or to any other person
having a superior right.
Sec. 14. [REPEALER.]
(a) Minnesota Statutes 1984, sections 55.10, subdivision 2;
270.75, subdivision 7; 291.015; 291.03, subdivisions 3, 4, 5, 6,
and 7; 291.05; 291.051; 291.06; 291.065; 291.07; 291.08; 291.09,
subdivision 5; 291.111; 291.131, subdivision 6; 291.132; 291.15,
subdivision 2; 291.18; 291.20; and 385.36 are repealed.
(b) Minnesota Statutes 1984, sections 291.131, subdivision
5; and 291.29, subdivision 5, are repealed.
Sec. 15. [EFFECTIVE DATE.]
Sections 1 to 12 and 14, paragraph (a), are effective for
estates of persons dying after December 31, 1985, except that
the update of the Internal Revenue Code in section 2 is
effective for estates of persons dying after December 31, 1984.
Sections 13 and 14, paragraph (b), are effective the day after
final enactment.
ARTICLE 14
TELEPHONE GROSS EARNINGS
Section 1. Minnesota Statutes 1984, section 295.01,
subdivision 10, is amended to read:
Subd. 10. [TELEPHONE COMPANY.] The term "telephone
company" as used in this chapter means any person, firm,
association or corporation, excluding municipal telephone
companies, owning or operating any telephone line or telephone
exchange for hire wholly or partly within this state, including
radio and other advancements in the art of telephony but
excluding cellular radio.
Sec. 2. Minnesota Statutes 1984, section 295.34,
subdivision 1, is amended to read:
Subdivision 1. Except as provided in subdivision 2 every
telephone company shall file a return with the commissioner of
revenue on or before April 15 of each year, and submit payment
therewith, of the following percentages of its gross earnings of
the preceding calendar year derived from business within this
state:
(a) 4 percent of its for gross earnings from service to
rural subscribers; (b) 4 percent of its gross earnings and from
exchange business of all cities of the fourth class and
statutory cities having a population of 10,000 or less
for calendar years beginning before December 31, 1986, 4
percent,
for calendar year 1987, 3 percent,
for calendar year 1988, 1.5 percent,
for calendar year 1989, 1 percent, and
for calendar years beginning after December 31, 1989,
exempt; and (c) 7 percent of its
(b) for gross earnings derived from all other business;
which shall be
for calendar years beginning before December 31, 1986, 7
percent,
for calendar year 1987, 5.5 percent,
for calendar year 1988, 3 percent,
for calendar year 1989, 2.5 percent, and
for calendar years beginning after December 31, 1989,
exempt.
Beginning January 1, 1986, a tax shall not be imposed on
the gross earnings of a telephone company from business
originating or terminating outside of Minnesota.
The tax imposed is in lieu of all other taxes, except the
taxes imposed by chapter 290, property taxes assessed beginning
in 1987, payable in 1988, and sales and use taxes imposed as a
result of article 2, section 5. All moneys paid by a company
for connecting fees and switching charges to any other company
shall be reported as earnings by the company to which they are
paid, but shall not be deemed earnings of the collecting and
paying company. For the purposes of this section, the
population of any statutory city shall be considered as that
stated in the latest federal census.
Sec. 3. [REPEALER]
Minnesota Statutes 1984, section 295.34, is repealed.
Sec. 4. [EFFECTIVE DATE.]
Section 1 is effective for tax years after December 31,
1985. Section 3 is effective beginning for calendar year 1990.
ARTICLE 15
INTEREST ON OVERPAYMENTS
Section 1. Minnesota Statutes 1984, section 60A.15,
subdivision 12, is amended to read:
Subd. 12. [OVERPAYMENTS, CLAIMS FOR REFUND.] (1)
[PROCEDURE, TIME LIMIT, APPROPRIATION.] A company who has paid,
voluntarily or otherwise, or from whom there has been collected
an amount of tax for any year in excess of the amount legally
due for that year, may file with the commissioner of revenue a
claim for a refund of the excess. Except as provided in
subdivision 11, no claim or refund shall be allowed or made
after 3-1/2 years from the date prescribed for filing the return
(plus any extension of time granted for filing the return but
only if filed within the extended time) or after two years from
the date of overpayment, whichever period is longer, unless
before the expiration of the period a claim is filed by the
company. For this purpose, a return or amended return claiming
an overpayment constitutes a claim for refund.
Upon the filing of a claim, the commissioner shall examine
it and shall make and file written findings denying or allowing
the claim in whole or in part. He shall mail a notice thereof
to the company at the address stated upon the return. If the
claim is allowed in whole or in part, the commissioner shall
issue his certificate for the refundment of the excess paid by
the company, with interest at the rate of six percent per annum
specified in section 3 computed from the date of the payment of
the tax until the date the refund is paid or the credit is made
to the company. The commissioner of finance shall pay the
refund out of the proceeds of the taxes imposed by this section,
as other state moneys are expended. As much of the proceeds of
the taxes as necessary are appropriated for that purpose.
(2) [DENIAL OF CLAIM, COURT PROCEEDINGS.] If the claim is
denied in whole or in part, the commissioner shall mail an order
of denial to the company in the manner prescribed in subdivision
8. An appeal from this order may be taken to the Minnesota tax
court in the manner prescribed in section 271.06, or the company
may commence an action against the commissioner to recover the
denied overpayment. The action may be brought in the district
court of the district in the county of its principal place of
business, or in the district court for Ramsey county. The
action in the district court must be commenced within 18 months
following the mailing of the order of denial to the company. If
a claim for refund is filed by a company and no order of denial
is issued within six months of the filing, the company may
commence an action in the district court as in the case of a
denial, but the action must be commenced within two years of the
date that the claim for refund was filed.
(3) [CONSENT TO EXTEND TIME.] If the commissioner and the
company have, within the periods prescribed in clause (1),
consented in writing to any extension of time for the assessment
of the tax, the period within which a claim for refund may be
filed, or a refund may be made or allowed, if no claim is filed,
shall be the period within which the commissioner and the
company have consented to an extension for the assessment of the
tax and six months thereafter. The period within which a claim
for refund may be filed shall not expire prior to two years
after the tax was paid.
(4) [OVERPAYMENTS; REFUNDS.] If the amount determined to be
an overpayment exceeds the taxes imposed by this section, the
amount of excess shall be considered an overpayment. An amount
paid as tax constitutes an overpayment even if in fact there was
no tax liability with respect to which the amount was paid.
Notwithstanding any other provision of law to the contrary,
in the case of any overpayment, the commissioner, within the
applicable period of limitations, shall refund any balance of
more than one dollar to the company if the company requests the
refund.
Sec. 2. Minnesota Statutes 1984, section 60A.199,
subdivision 8, is amended to read:
Subd. 8. [REFUND PROCEDURE; TIME LIMIT; APPROPRIATION.] A
company which has paid, voluntarily or otherwise, or from which
there was collected an amount of tax for any year in excess of
the amount legally due for that year, may file with the
commissioner of revenue a claim for a refund of the excess.
Except as provided in subdivision 3, no claim or refund shall be
allowed or made after 3-1/2 years from the date prescribed for
filing the return (plus any extension of time granted for filing
the return but only if filed within the extended time) or after
two years from the date of overpayment, whichever period is
longer, unless before the expiration of the period a claim is
filed by the company. For this purpose, a return or amended
return claiming an overpayment constitutes a claim for refund.
Upon the filing of a claim the commissioner shall examine
the same and shall make and file written findings thereon
denying or allowing the claim in whole or in part. He shall
mail a notice thereof to the company at the address stated upon
the return. If the claim is allowed in whole or in part, the
commissioner shall issue his certificate for a refund of the
excess paid by the company, with interest at the rate of six
percent per annum specified in section 3 computed from the date
of the payment of the tax until the date the refund is paid or
credit is made to the company. The commissioner of finance
shall cause the refund to be paid as other state moneys are
expended. So much of the proceeds of the taxes as is necessary
are appropriated for that purpose.
Sec. 3. [270.76] [INTEREST ON REFUNDS.]
When any tax payable to the commissioner of revenue or to
the department of revenue is overpaid and an amount is due the
taxpayer as a refund of the overpayment, the overpayment shall
bear interest from the date of payment of the tax until the date
the refund is paid or credit is made, unless another period for
computing interest is provided by law. The interest rate per
annum on overpayments shall be 80 percent of the interest rate
contained in section 270.75, subdivision 5; the rate shall be
adjusted annually and become effective as provided in section
270.75, subdivision 5; and the result of the adjustment in the
rate shall be rounded to the nearest full percent. The
determination of the commissioner pursuant to this subdivision
is not a "rule" and is not subject to the administrative
procedure act contained in chapter 14.
Sec. 4. Minnesota Statutes 1984, section 270A.07,
subdivision 5, is amended to read:
Subd. 5. [INTEREST ON REFUNDS.] Any refund wrongfully or
incorrectly applied to a debt and transferred to a claimant
agency shall be paid by the agency to the debtor. The sum
wrongfully or incorrectly withheld shall bear interest at six
percent per year the rate specified in section 3, computed from
the date when the refund would begin to bear interest under
section 290.92, subdivision 13, clause (1), regardless of
whether the refund is payable under chapter 290 or 290A. If the
claimant agency is a state agency, the payment shall be made out
of the agency's appropriation.
Sec. 5. Minnesota Statutes 1984, section 271.12, is
amended to read:
271.12 [WHEN ORDER EFFECTIVE.]
No order for refundment by the commissioner of revenue, the
appropriate unit of government, or the tax court shall take
effect until the time for appeal therefrom or review thereof by
all parties entitled thereto has expired. Otherwise every order
of the commissioner, the appropriate unit of government, or the
tax court shall take effect immediately upon the filing thereof,
and no appeal therefrom or review thereof shall stay the
execution thereof or extend the time for payment of any tax or
other obligation unless otherwise expressly provided by law;
provided, that in case an order which has been acted upon, in
whole or in part, shall thereafter be set aside or modified upon
appeal, the determination upon appeal or review shall supersede
the order appealed from and be binding upon all parties affected
thereby, and such adjustments as may be necessary to give effect
thereto shall be made accordingly. If it be finally determined
upon such appeal or review that any person is entitled to
refundment of any amount which has been paid for a tax or other
obligation, such amount, unless otherwise provided by law, shall
be paid to him by the state treasurer, or other proper officer,
out of funds derived from taxes of the same kind, if available
for the purpose, or out of other available funds, if any, with
interest at six percent the rate specified in section 3 from the
date of payment of the tax, unless a different rate of interest
is otherwise provided by law, in which case such other rate
shall apply, upon certification by the commissioner of revenue,
the appropriate unit of government, the tax court or the supreme
court. If any tax, assessment, or other obligation be increased
upon such appeal or review, the increase shall be added to the
original amount, and may be enforced and collected therewith.
Sec. 6. Minnesota Statutes 1984, section 290.50,
subdivision 1, is amended to read:
Subdivision 1. [PROCEDURE, TIME LIMIT.] (a) A taxpayer who
has paid or from whom there has been collected an amount of tax
for any year in excess of the amount legally due for that year,
may file with the commissioner a claim for a refund of such
excess. Except as otherwise provided in this section, no claim
or refund shall be allowed or made after three and one-half
years from the date prescribed for filing the return (plus any
extension of time granted for filing the return, but only if
filed within the extended time) or after two years from the date
of overpayment, whichever period is longer, unless before the
expiration of the period a claim is filed by the taxpayer. For
this purpose an income tax return or amended return claiming an
overpayment shall constitute a claim for refund.
(b) If no claim was filed, the credit or refund shall not
exceed the amount which would be allowable if a claim was filed
on the date the credit or refund is allowed.
(c) If a claim relates to an overpayment on account of a
failure to deduct a loss due to a bad debt or to a security
becoming worthless, the claim shall be allowed if filed within
seven years from the date prescribed in section 290.42 for the
filing of the return, and the refund or credit shall be limited
to the amount of overpayment attributable to the loss.
(d) For purposes of this section, the prepayment of tax
made through the withholding of tax at the source, or payment of
estimated tax, prior to the due date of the tax are considered
as having been paid on the last day prescribed by law for the
payment of the tax by the taxpayer. A return filed before the
due date shall be considered as filed on the due date.
(e) Except as provided in sections 290.92, subdivision 13,
290.93, subdivision 9, and 290.936, interest on the overpayment
refunded or credited to the taxpayer shall be allowed at the
rate of six percent per annum specified in section 3 computed
from the date of payment of the tax until the date the refund is
paid or credit is made to the taxpayer. However, to the extent
that the basis for the refund is a net operating loss carryback
or a capital loss carryback, interest shall be computed only
from the end of the taxable year in which the loss occurs.
(f) If a taxpayer reports a change in his federal gross
income, items of tax preference, deductions, credits, or a
renegotiation, or files a copy of his amended federal return,
within 90 days as provided by section 290.56, subdivision 2, a
refund may be made of any overpayment within one year after such
report or amended return is filed except as provided in
subdivision 2.
(g) There is hereby appropriated from the general fund to
the commissioner of revenue the amounts necessary to make
payments of refunds allowed pursuant to this section.
Sec. 7. Minnesota Statutes 1984, section 290.92,
subdivision 11, is amended to read:
Subd. 11. [REFUNDS.] Where there has been an overpayment
of tax imposed by this section, refund of such overpayment or
credit shall be made to the employer in accordance with
regulations rules prescribed by the commissioner, but only to
the extent that the amount of such overpayment was not deducted
and withheld under subdivision 2a or subdivision 3 by the
employer. Any overpayment which is refunded shall bear interest
at the rate of six percent per annum specified in section 3,
computed from the date of payment until the date the refund is
paid to the employer. The commissioner of finance shall cause
any such refund of tax and interest to be paid out of the
general fund in accordance with the provisions of section 290.62
and so much of said fund as may be necessary is hereby
appropriated for that purpose. Notwithstanding the provisions
of section 290.50, written findings by the commissioner, notice
by mail to the taxpayer, and certificate for refundment by the
commissioner, shall not be necessary. The provisions of section
270.10, shall not be applicable.
Sec. 8. Minnesota Statutes 1984, section 290.92,
subdivision 13, is amended to read:
Subd. 13. [REFUNDS.] (1) Where the amount of the tax
withheld at the source under subdivision 2a or subdivision 3
exceeds by $1 or more the taxes (and any added penalties and
interest) reported in the return of the employee taxpayer or
imposed upon him by this chapter, the amount of such excess
shall be refunded to the employee taxpayer. If the amount of
such excess is less than $1 the commissioner shall not be
required to refund that amount. Where any amount of such excess
to be refunded exceeds $10, such amount on the original return
shall bear interest at the rate of six percent per annum
specified in section 3, computed from 90 days after (a) the due
date of the return of the employee taxpayer or (b) the date on
which his return is filed, whichever is later, to the date the
refund is paid to the taxpayer. A return shall not be treated
as filed until it is in processible form. A return is in
processible form when it is filed on a permitted form containing
the taxpayer's name, address, social security account number,
the required signature, and sufficient required information
(whether on the return or on required attachments) to permit the
mathematical verification of tax liability shown on the return.
Notwithstanding the provisions of section 290.50, written
findings by the commissioner, notice by mail to the taxpayer,
and certificate for refundment by the commissioner, shall not be
necessary. The provisions of section 270.10, shall not be
applicable.
(2) Any action of the commissioner in refunding the amount
of such excess shall not constitute a determination of the
correctness of the return of the employee taxpayer within the
purview of section 290.46.
(3) The commissioner of finance shall cause any such refund
of tax and interest, to be paid out of the general fund in
accordance with the provisions of section 290.62, and so much of
said fund as may be necessary is hereby appropriated for that
purpose.
Sec. 9. Minnesota Statutes 1984, section 290.93,
subdivision 9, is amended to read:
Subd. 9. [OVERPAYMENT OF ESTIMATED TAX.] (1) Where the
amount of an installment payment of estimated tax exceeds the
amount determined to be the correct amount of such installment
payment, the overpayment shall be credited against the unpaid
installments, if any. Where the total amount of the estimated
tax payments plus (a) the total amount of tax withheld at the
source under section 290.92, subdivision 2a or subdivision 3 (if
any) and (b) and other payments (if any) exceeds by $1 or more
the taxes (and any added penalties and interest) reported in the
return of the taxpayer or imposed upon him by this chapter, the
amount of such excess shall be refunded to the taxpayer. If the
amount of such excess is less than $1 the commissioner shall not
be required to refund that amount. Where any amount of such
excess to be refunded exceeds $10, such amount on the original
return shall bear interest at the rate of six percent per
annum specified in section 3, computed from 90 days after (a)
the due date of the return of the taxpayer or (b) the date on
which his return is filed, whichever is later, until the date
the refund is paid to the taxpayer. A return shall not be
treated as filed until it is in processible form. A return is
in processible form when the return is filed on a permitted
form, and the return contains the taxpayer's name, address,
social security account number, the required signature, and
sufficient required information (whether on the return or on
required attachments) to permit the mathematical verification of
tax liability shown on the return. Notwithstanding the
provisions of section 290.50, written findings by the
commissioner, notice by mail to the taxpayer, and certificate
for refundment by the commissioner, shall not be necessary. The
provisions of section 270.10, shall not be applicable.
(2) Any action of the commissioner in refunding the amount
of such excess shall not constitute a determination of the
correctness of the return of the taxpayer within the purview of
section 290.46.
(3) The commissioner of finance shall cause any such refund
of tax and interest to be paid out of the general fund in
accordance with the provisions of section 290.62, and so much of
said fund as may be necessary is hereby appropriated for that
purpose.
Sec. 10. Minnesota Statutes 1984, section 290.936, is
amended to read:
290.936 [OVERPAYMENT OF ESTIMATED TAX.]
(1) Where the amount of an installment payment of estimated
tax exceeds the amount determined to be the correct amount of
such installment payment, the overpayment shall be credited
against the unpaid installments, if any. Where the total amount
of the estimated tax payments and other payments, if any,
exceeds by $1 or more the taxes (and any added penalties and
interest) reported in the return of the taxpayer or imposed upon
him by this chapter, the amount of such excess shall be refunded
to the taxpayer. If the amount of such excess is less than $1,
the commissioner shall not be required to refund. Where any
amount of such excess to be refunded exceeds $10, such amount on
the original return shall bear interest at the rate of six
percent per annum specified in section 3, computed from 90 days
after (a) the due date of the return of the taxpayer or (b) the
date on which his return is filed, whichever is later, until the
date the refund is paid to the taxpayer. Notwithstanding the
provisions of section 290.50, written findings by the
commissioner, notice by mail to the taxpayer, and certificate
for refundment by the commissioner, shall not be necessary. The
provisions of section 270.10, shall not be applicable.
(2) Any action of the commissioner in refunding the amount
of such excess shall not constitute a determination of the
correctness of the return of the taxpayer within the purview of
section 290.46.
(3) The commissioner of finance shall cause any such refund
of tax and interest to be paid out of the general fund in
accordance with the provisions of section 290.62, and so much of
said fund as may be necessary is hereby appropriated for that
purpose.
Sec. 11. Minnesota Statutes 1984, section 290A.07,
subdivision 2a, is amended to read:
Subd. 2a. A claimant who is a renter shall receive full
payment after August 1 and prior to August 15 or 60 days after
receipt of the application, whichever is later. Interest shall
be added at six percent per annum the rate specified in section
3 from August 15 or 60 days after receipt of the application
whichever is later.
Sec. 12. Minnesota Statutes 1984, section 290A.07,
subdivision 3, is amended to read:
Subd. 3. Any claimant not included in subdivision 2a shall
receive full payment after September 15 and prior to September
30. Interest shall be added at six percent per annum the rate
specified in section 3 from September 30 or 60 days after
receipt of the application, whichever is later. Interest will
be computed until the date the claim is paid.
Sec. 13. Minnesota Statutes 1984, section 294.09,
subdivision 1, is amended to read:
Subdivision 1. [PROCEDURES; TIME LIMIT.] A company, joint
stock association, copartnership, corporation, or individual who
has paid, voluntarily or otherwise, or from whom there has been
collected (other than by proceedings instituted by the attorney
general under sections 294.06 and 294.08, subdivision 3) an
amount of gross earnings tax for any year in excess of the
amount legally due for that year, may file with the commissioner
of revenue a claim for a refund of such excess. Except as
provided in subdivision 4, no such claim shall be entertained
unless filed within two years after such tax was paid or
collected, or within three and one-half years from the filing of
the return, whichever period is the longer. Upon the filing of
a claim the commissioner shall examine the same and shall make
and file written findings thereon denying or allowing the claim
in whole or in part and shall mail a notice thereof to such
company, joint stock association, copartnership, corporation, or
individual at the address stated upon the return. If such claim
is allowed in whole or in part, the commissioner shall credit
the amount of the allowance against any tax due the state from
the claimant and for the balance of said allowance, if any, the
commissioner shall issue his certificate for the refundment of
the excess paid. The commissioner of finance shall cause such
refund to be paid out of the proceeds of the gross earnings
taxes imposed by Minnesota Statutes 1967, Chapters 294 and 295
as other state moneys are expended. So much of the proceeds as
may be necessary are hereby appropriated for that purpose. Any
allowance so made by the commissioner shall include interest at
the rate of six percent specified in section 3 computed from the
date of payment or collection of the tax until the date the
refund is paid to the claimant.
Sec. 14. Minnesota Statutes 1984, section 297A.35,
subdivision 1, is amended to read:
Subdivision 1. A person who has, pursuant to the
provisions of this chapter, paid to the commissioner an amount
of tax for any period in excess of the amount legally due for
that period, may file with the commissioner a claim for a refund
of such excess subject to the conditions specified in
subdivision 5. Except as provided in subdivision 4 no such
claim shall be entertained unless filed within two years after
such tax was paid, or within three years from the filing of the
return, whichever period is the longer. The commissioner shall
examine the claim and make and file written findings thereon
denying or allowing the claim in whole or in part and shall mail
a notice thereof to such person at the address stated upon the
claim. Any allowance shall include interest on the excess
determined at a rate of six percent per annum specified in
section 3 from the date such excess was paid or collected until
the date it is refunded or credited. If such claim is allowed
in whole or in part, the commissioner shall credit the amount of
the allowance against any taxes under sections 297A.01 to
297A.44 due from the claimant and for the balance of said
allowance, if any, the commissioner shall issue his certificate
for the refundment of the excess paid, and the commissioner of
finance shall cause such refund to be paid out of the proceeds
of the taxes imposed by sections 297A.01 to 297A.44, as other
state moneys are expended. So much of the proceeds of such
taxes as may be necessary are hereby appropriated for that
purpose.
Sec. 15. Minnesota Statutes 1984, section 298.09,
subdivision 4, is amended to read:
Subd. 4. If the amount of tax determined by the
commissioner is subsequently found to be erroneous, the
commissioner may, at any time within three years from the date
the tax is certified as provided in section 298.10, redetermine
the amount thereof. No such redetermination shall be made
increasing the tax unless the person from whom the additional
amount is due is given ten days written notice thereof and an
opportunity to be heard thereon. If an order is made increasing
the tax, the same proceedings shall be had as provided for
occupation taxes originally determined and certified. Any
person who has paid an occupation tax may apply to the
commissioner within the time herein limited for a
redetermination of the tax, and if the commissioner determines
that the tax has been overpaid, he shall make and file an order
determining the amount of such overpayment, and credit it
against occupation taxes otherwise payable by the person who has
overpaid the amount as so determined. If the tax is increased,
interest at the rate specified in section 270.75 from the date
payment should have been made shall be determined and paid; if
the tax is reduced, interest at the rate of six percent per
annum specified in section 3 from the date of overpayment shall
be allowed.
Sec. 16. Minnesota Statutes 1984, section 299.05, is
amended to read:
299.05 [ASSESSMENT BY COMMISSIONER.]
Upon receipt of the report provided for in section 299.03,
the commissioner of revenue shall determine, from information as
may be possessed, or obtained, whether the report is correct, or
incorrect; and, if found correct, the commissioner shall
determine the amount of tax due from the person, enter the
amount of the tax in department records, make assessment of
taxes due from the person, and the amount that has been paid;
and, on or before June 30, of each year, demand payment from the
person. The commissioner of revenue shall have power, in case
he shall deem the report incorrect, or in case the report is not
made and filed with the commissioner as provided in section
299.03, to make findings as to the amount of taxes due after
hearing upon notice to the person interested, and the findings
shall have the same effect as the determination of the amount of
such taxes upon a report made as hereinbefore provided.
A person subletting land for the use of which is received
royalty shall be required to pay taxes only on the difference
between the amount of royalty paid by him or her and the amount
received.
If the amount of tax determined by the commissioner is
subsequently found to be erroneous, the commissioner may, at any
time within three years from the date allowed above for the
original assessment, redetermine the amount of the tax. No
redetermination shall be made increasing the tax unless the
person from whom the additional amount is due is given ten days
written notice of the proposed increase and the person's right
to a hearing pursuant to chapter 14. Any person who has paid a
royalty tax may apply to the commissioner within three years
from the date allowed above for the original assessment for a
redetermination of the tax and if the commissioner determines
that the tax has been overpaid, he or she shall make and file an
order determining the amount of the overpayment and credit the
overpayment against the royalty taxes otherwise payable by the
person who overpaid the tax. If the tax is increased, interest
at the rate specified in section 270.75 from the date payment
should have been made shall be determined and added to the tax.
If the tax is reduced, interest at the rate of six percent per
annum specified in section 3 from the date of the overpayment
shall be allowed.
Sec. 17. Minnesota Statutes 1984, section 299F.26,
subdivision 1, is amended to read:
Subdivision 1. [PROCEDURE, TIME LIMIT, APPROPRIATION.] A
company which has paid, voluntarily or otherwise, or from which
there was collected an amount of tax for any year in excess of
the amount legally due for that year, may file with the
commissioner of revenue a claim for a refund of the excess.
Except as provided in subdivision 4, no claim or refund shall be
allowed or made after 3-1/2 years from the date prescribed for
filing the return (plus any extension of time granted for filing
the return but only if filed within the extended time) or after
two years from the date of overpayment, whichever period is
longer, unless before the expiration of the period a claim is
filed by the company. For this purpose a return or amended
return claiming an overpayment constitutes a claim for refund.
Upon the filing of a claim the commissioner shall examine
the same and shall make and file written findings thereon
denying or allowing the claim in whole or in part and shall mail
a notice thereof to the company at the address stated upon the
return. If such claim is allowed in whole or in part, the
commissioner shall issue his certificate for the refundment of
the excess paid by the company, with interest at the rate of six
percent per annum specified in section 3 computed from the date
of the payment of the tax until the date the refund is paid or
the credit is made to the company, and the commissioner of
finance shall cause the refund to be paid as other state moneys
are expended. So much of the proceeds of the taxes as is
necessary are appropriated for that purpose.
Sec. 18. [EFFECTIVE DATE.]
Sections 1 to 17 are effective for interest earned on
overpayments after December 31, 1985.
ARTICLE 16
REVENUE DEPARTMENT ENFORCEMENT
Section 1. [270.062] [ACCESS TO CRIMINAL JUSTICE DATA.]
The commissioner of revenue may enter into an agreement
with the commissioner of public safety allowing designated
employees of the revenue department to have access to the
criminal justice datacommunications network provided in section
299C.46. For purposes of that section, the special
investigation unit of the revenue department is considered a
criminal justice agency.
Sec. 2. [270.064] [REQUESTING ASSISTANCE IN CRIMINAL TAX
INVESTIGATIONS.]
If the commissioner of revenue has reason to believe that a
criminal violation of the state tax laws has occurred, the
commissioner may request the attorney general or the prosecuting
authority of any county to assist in a criminal tax
investigation and may disclose return information to the
prosecuting authority relevant to the investigation
notwithstanding the provisions of section 290.61, 291.48,
297A.43, or 297B.12.
Sec. 3. Minnesota Statutes 1984, section 290.53,
subdivision 11, is amended to read:
Subd. 11. [ASSISTING IN FRAUD AND FALSE STATEMENTS;
CRIMINAL PROVISIONS.] Any person who willfully aids or assists
in, or procures, counsels, or advises the preparation or
presentation under, or in connection with any matter arising
under this chapter, of a return, affidavit, claim, or other
document, which is fraudulent or false as to any material
matter, where whether or not the falsity or fraud is with the
knowledge or consent of the person authorized or required to
present the return, affidavit, claim, or document, is guilty of
a gross misdemeanor unless the tax involved exceeds $300, in
which event he is guilty of a felony. Any criminal offense
under this subdivision may be prosecuted in the same manner and
within the same period of limitations provided in subdivision 4.
Sec. 4. Minnesota Statutes 1984, section 290.92,
subdivision 15, is amended to read:
Subd. 15. [PENALTIES.] (1) In the case of any failure to
withhold a tax on wages, make and file quarterly returns or make
payments to or deposits with the commissioner of amounts
withheld, as required by this section, within the time
prescribed by law, there shall be added to the tax a penalty
equal to ten percent of the amount of tax that should have been
properly withheld and paid over to or deposited with the
commissioner if the failure is for not more than 30 days with an
additional five percent for each additional 30 days or fraction
thereof during which the failure continues, not exceeding 25
percent in the aggregate. The amount of the tax together with
this amount shall bear interest at the rate specified in section
270.75 from the time the tax should have been paid until paid.
The amount added to the tax shall be collected at the same time
and in the same manner and as a part of the tax unless the tax
has been paid before the discovery of the negligence, in which
case the amount added shall be collected in the same manner as
the tax.
(2) If any employer required to withhold a tax on wages,
make deposits, make and file quarterly returns and make payments
to the commissioner of amounts withheld, as required by sections
290.92 to 290.97, willfully fails to withhold the tax or make
the deposits, files a false or fraudulent return, willfully
fails to make the payment or deposit, or willfully attempts in
any manner to evade or defeat the tax or the payment or deposit
of it, there shall also be imposed on the employer as a penalty
an amount equal to 50 percent of the amount of tax, less any
amount paid or deposited by the employer on the basis of the
false or fraudulent return or deposit, that should have been
properly withheld and paid over or deposited with the
commissioner. The amount of the tax together with this amount
shall bear interest at the rate specified in section 270.75 from
the time the tax should have been paid until paid. The penalty
imposed by this paragraph shall be collected as a part of the
tax, and shall be in addition to any other penalties civil and
criminal, prescribed by this subdivision.
(3) If any person required under the provisions of
subdivision 7 to furnish a statement to an employee or payee and
a duplicate statement to the commissioner, or to furnish a
reconciliation of the statements, and quarterly returns, to the
commissioner, willfully furnishes a false or fraudulent
statement to an employee or payee or a false or fraudulent
duplicate statement or reconciliation of statements, and
quarterly returns, to the commissioner, or willfully fails to
furnish a statement or the reconciliation in the manner, at the
time, and showing the information required by the provisions of
subdivision 7, or rules prescribed by the commissioner
thereunder, there shall be imposed on the person a penalty of
$50 for each act or failure to act, but the total amount imposed
on the delinquent person for all such failures during any
calendar year shall not exceed $25,000. The penalty imposed by
this paragraph is due and payable within ten days after the
mailing of a written demand therefor, and may be collected in
the manner prescribed in subdivision 6, paragraph (8).
(4) In addition to any other penalties prescribed, any
person required to withhold a tax on wages, make and file
quarterly returns and make payments or deposits to the
commissioner of amounts withheld, as required by this section,
who willfully fails to withhold the tax or truthfully make and
file the quarterly return or make the payment or deposit, or
attempts to evade or defeat the tax is guilty of a gross
misdemeanor unless the tax involved exceeds $300, in which event
he is guilty of a felony.
(5) In lieu of any other penalty provided by law, except
the penalty provided by paragraph (3), any person required under
the provisions of subdivision 7 to furnish a statement of wages
to an employee and a duplicate statement to the commissioner,
who willfully furnishes a false or fraudulent statement of wages
to an employee or a false or fraudulent duplicate statement of
wages to the commissioner, or who willfully fails to furnish a
statement in the manner, at the time, and showing the
information required by the provisions of subdivision 7, or
rules prescribed by the commissioner thereunder, is guilty of a
gross misdemeanor.
(6) Any employee required to supply information to his
employer under the provisions of subdivision 5, who willfully
fails to supply information or willfully supplies false or
fraudulent information thereunder which would require an
increase in the tax to be deducted and withheld under
subdivision 2a or subdivision 3, is guilty of a gross
misdemeanor.
(7) The term "person," as used in this section, includes an
officer or employee of a corporation, or a member or employee of
a partnership, who as an officer, employee, or member is under a
duty to perform the act in respect of which the violation occurs.
(8) All payments received may, in the discretion of the
commissioner of revenue, be credited first to the oldest
liability not secured by a judgment or lien, but in all cases
shall be credited first to penalties, next to interest, and then
to the tax due.
(9) In addition to any other penalty provided by law, any
employee who furnishes a withholding exemption certificate to
his employer which the employee has reason to know contains a
materially incorrect statement is liable to the commissioner of
revenue for a penalty of $500 for each instance. The penalty is
immediately due and payable and may be collected in the same
manner as any delinquent income tax.
(10) In addition to any other penalty provided by law, any
employer who fails to submit a copy of a withholding exemption
certificate required by subdivision 5a, clause (1)(a), (1)(b),
or (2) is liable to the commissioner of revenue for a penalty of
$50 for each instance. The penalty is immediately due and
payable and may be collected in the manner provided in
subdivision 6, paragraph (8).
(11) Any person who willfully aids or assists in, or
procures, counsels, or advises the preparation or presentation
under, or in connection with any matter arising under this
section, of a return, affidavit, claim, or other document, which
is fraudulent or false as to any material matter, where whether
or not the falsity or fraud is with the knowledge or consent of
the person authorized or required to present the return,
affidavit, claim, or document, is guilty of a gross misdemeanor,
unless the tax involved exceeds $300, in which event he is
guilty of a felony.
(12) Notwithstanding the provisions of section 628.26, or
any other provision of the criminal laws of this state, an
indictment may be found and filed, upon any criminal offense
specified in this subdivision, in the proper court within six
years after the commission of the offense.
Sec. 5. Minnesota Statutes 1984, section 297A.39,
subdivision 8, is amended to read:
Subd. 8. [PENALTY; FALSE CLAIM.] Any person who willfully
aids or assists in, or procures, counsels, or advises the
preparation or presentation under, or in connection with any
matter arising under this section, of a return, affidavit,
claim, or other document, which is fraudulent or false as to any
material matter, where whether or not the falsity or fraud is
with the knowledge or consent of the person authorized or
required to present the return, affidavit, claim, or document,
is guilty of a gross misdemeanor unless the tax involved exceeds
$300, in which event he is guilty of a felony. Any criminal
offense under this subdivision may be prosecuted in the same
manner and within the same period of limitations provided in
subdivision 4.
Sec. 6. [EFFECTIVE DATE.]
Sections 1 to 5 are effective the day after final enactment.
ARTICLE 17
LEASED LANDS
Section 1. Minnesota Statutes 1984, section 92.46,
subdivision 1, is amended to read:
Subdivision 1. [PUBLIC CAMP GROUNDS.] (a) The director may
designate suitable portions of the state lands so withdrawn from
sale and not reserved, as provided in section 92.45, as
permanent state public camp grounds and cause the same to be
surveyed and platted into lots of convenient size, and may lease
and let such lots for cottage and camp purposes under such terms
and conditions as he may prescribe, subject to the provisions of
this section.
(b) No A lease shall may not be made for a term longer
term than ten 20 years, with the privilege of renewal, from time
to time, for additional terms of not to exceed ten 20 years
each. The lease may be canceled by the commissioner 90 days
after giving the person leasing the land written notice of
violation of lease conditions. The lease rate shall be based on
the appraised value of leased land as determined by the
commissioner of natural resources. The appraised value shall be
the value of the leased land without any private improvements
and must be comparable to similar land without any improvements
within the same county.
(c) By July 1, 1986, the commissioner of natural resources
shall adopt rules under chapter 14 to establish procedures for
leasing land under this section. The rules shall be subject to
review and approval by the commissioners of revenue and
administration prior to the initial publication pursuant to
chapter 14 and prior to their final adoption. The rules must
address at least the following:
(1) method of appraising the property;
(2) determination of lease rates; and
(3) an appeal procedure for both the appraised values and
lease rates.
(d) All moneys received from these leases of state lands so
withdrawn from sale shall be credited to the fund to which the
proceeds of the land belong. Notwithstanding section 16A.125 or
any other law to the contrary, 50 percent of the money received
from the lease of permanent school fund lands leased pursuant to
this subdivision shall be deposited into the permanent school
trust fund.
Sec. 2. Minnesota Statutes 1984, section 272.02,
subdivision 1, is amended to read:
Subdivision 1. 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) Except for the taxable personal property enumerated
below, all personal property and the property described in
section 272.03, subdivision 1, clause (c) shall be exempt.
The following personal property shall be taxable:
(a) 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;
(b) railroad docks and wharves which are part of the
operating property of a railroad company as defined in section
270.80;
(c) personal property defined in section 272.03,
subdivision 2, clause (3);
(d) leasehold or other personal property interests which
are taxed pursuant to section 272.01, subdivision 2; 273.13,
subdivision 7b or 7d; or 273.19, subdivision 1; or any other law
providing the property is taxable as if the lessee or user were
the fee owner;
(e) property classified as class 2a property; and
(f) flight property as defined in section 270.071.
(9) 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.
(10) 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, provided it is
preserved in its natural condition and drainage of 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.
(11) 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.
(12) 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.
(13) 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.
(14) 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.
(15) If approved by the governing body of the municipality
in which the property is located, and if construction is
commenced after June 30, 1983:
(a) a "direct satellite broadcasting 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;
(b) a "fixed satellite regional or national program service
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; and
(c) a facility 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.
An exemption provided by paragraph (15) shall apply 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.
The exemptions granted by this subdivision shall be subject
to the limits contained in the other subdivisions of this
section, section 272.025, or section 273.13, subdivisions 17,
17b, 17c, or 17d.
(16) Real and personal property owned and operated by a
private, nonprofit corporation exempt from federal income
taxation pursuant to United States Code, title 26, section
501(c)(3), primarily used in the generation and distribution of
hot water for heating buildings and structures.
(17) Notwithstanding section 273.19, state lands that are
leased from the department of natural resources under section
92.46.
Sec. 3. [92.46] [Subd. 3.] [LEASE RATE INCREASES.]
State land leased under Minnesota Statutes, section 92.46,
subdivision 1, that have increased lease rates effective on or
after January 1, 1986, shall phase in the increased lease rates
by three equal annual increments, except that the lease rates
shall be adjusted to reflect changes in the lease rates
resulting from rules adopted under section 1.
Sec. 4. [REPORT.]
The commissioner of natural resources shall inventory the
lakeshore leases and prepare a report on any leased land that
should be sold. The report must be submitted by January 1,
1987, to the senate agriculture and natural resources and house
of representatives environment and natural resources committees.
Sec. 5. [92.46] [Subd. 4.] [ROAD EXPENDITURES.]
A county where state lands are leased under Minnesota
Statutes, section 92.46, may spend money raised from the levy of
property taxes for the maintenance and upgrading of roads
serving the leased property regardless of whether the roads are
part of the county highway system.
Sec. 6. [EFFECTIVE DATE.]
Section 1 is effective January 1, 1986, except section 1,
subdivision 1, paragraph (c), is effective the day following
final enactment. Sections 2 and 5 are effective for property
taxes levied in 1985 and thereafter, payable in 1986 and
thereafter.
ARTICLE 18
BUDGET RESERVE
Section 1. Minnesota Statutes 1984, section 16A.15,
subdivision 1, is amended to read:
Subdivision 1. [REDUCTION.] (a) If the commissioner
determines that probable receipts for an appropriation, the
general fund, or item will be less than anticipated, and that
the amount available for the remainder of the biennium will be
less than needed, the commissioner shall, with the approval of
the governor, and after consulting the legislative advisory
commission, transfer from the budget and cash flow reserve
account established in subdivision 6 to the general fund the
money needed to balance expenditures with revenue. An
additional deficit shall, with the approval of the governor, and
after consulting the legislative advisory commission, be made up
by reducing allotments.
(b) If the commissioner determines that probable receipts
for any other fund, appropriation, or item will be less than
anticipated, and that the amount available for the remainder of
the term of the appropriation or for any allotment period will
be less than needed, the commissioner shall notify the agency
concerned and then reduce the amount allotted or to be allotted
so as to prevent a deficit.
(c) In reducing allotments, the commissioner may consider
other sources of revenue available to recipients of state
appropriations and may apply allotment reductions based on all
sources of revenue available.
(d) In like manner, the commissioner shall reduce
allotments to an agency by the amount of any saving that can be
made over previous spending plans through a reduction in prices
or other cause.
Sec. 2. Minnesota Statutes 1984, section 16A.15,
subdivision 6, is amended to read:
Subd. 6. [BUDGET AND CASH FLOW RESERVE ACCOUNT.] A budget
and cash flow 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 the budget reserve
account. 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 commissioner on July 1, 1985,
shall transfer an additional $75,000,000 to the account. The
amounts transferred shall remain in the budget reserve account
until expended under subdivision 1. When an amount has been
expended under subdivision 1, but the commissioner later
determines during the same biennium that there will probably be
a positive undesignated balance in the general fund at the end
of the biennium, the commissioner shall transfer from the
undesignated fund balance to the budget and cash flow reserve
account the amount needed to restore the balance in the account
to $450,000,000.
Sec. 3. [16A.154] [AID PAYMENT DEFERRAL.]
If in any calendar year the commissioner determines that it
is necessary to avoid cash flow borrowing by the state, the
commissioner may order that the November 15 payment to taxing
districts of property tax reduction aids and local government
aids will be paid by December 15. The order applies only to aid
payments made during that calendar year. The commissioner of
revenue shall make payments in accordance with the order of the
commissioner, notwithstanding the provisions of sections 273.13,
subdivision 15a, and 477A.015. If aid payments are to be
deferred pursuant to this section, the commissioner of revenue
must notify the affected taxing districts by the immediately
preceding October 15. This section does not apply to aid
payments made to school districts.
Sec. 4. [16A.1541] [ADDITIONAL REVENUES; PRIORITY.]
If a forecast of general fund revenues and expenditures
indicates that there will be an unobligated general fund balance
at the close of the biennium, money must be allocated in the
following order of priority:
(1) allocate an amount, if any, necessary to restore the
budget and cash flow reserve account as provided by section
16A.15, subdivision 6;
(2) pay the refund of occupation taxes under section 7;
(3) reduce property tax levy recognition percent under
section 121.904, subdivision 4c; and
(4) increase the school aids payment current year
percentage under section 121.904, subdivision 4d.
Sec. 5. Minnesota Statutes 1984, section 121.904,
subdivision 4c, is amended to read:
Subd. 4c. [PROPERTY TAX SHIFT REDUCTION.] (a) For the
purpose of this subdivision, "combined fund balance" means the
sum of the fund balance determined by the commissioner of
finance pursuant to section 9 of this article, after transfers
to the education aids increase account, plus the balance in the
education aids increase account.
(b) If the combined fund balance exceeds $58,000,000, If
the most recent forecast of general fund revenues and
expenditures prepared by the commissioner of finance as of
December 1 indicates a projected unobligated general fund
balance at the close of the biennium in excess of $10,000,000,
the levy recognition percent specified in subdivision 4a,
clauses (b)(2) and (b)(3), shall be reduced for taxes payable in
1985 and thereafter the succeeding calendar year, according to
the provisions of this subdivision and section 4.
(c) (b) The levy recognition percent shall equal the result
of the following computation: 32 24 percent, times the ratio of
(1) the statewide total amount of levy recognized in June
1985 of the year in which the taxes are payable pursuant to
subdivision 4a, clause (b), reduced by the amount of
the combined projected general fund balance in excess of
$50,000,000, to
(2) the statewide total amount of the levy recognized in
June 1985 of the year in which the taxes are payable pursuant to
subdivision 4a, clause (b).
The result shall be rounded up to the nearest whole percent.
However, in no case shall the levy recognition percent be
reduced below 24 percent zero.
(c) The commissioner of finance must certify to the
commissioner of education the levy recognition percent computed
under this subdivision by January 5 of each year. The
commissioner of education must notify school districts of a
change in the levy recognition percent by January 15.
(d) The commissioner of finance shall transfer from the
general fund to the education aids appropriations specified by
the commissioner of education, the amounts needed to finance the
additional payments required because of the reduction pursuant
to this subdivision of the levy recognition percent. Payments
to a school district of additional state aids resulting from a
reduction in the levy recognition percent must be included in
the cash metering of payments made according to section 124.195
after January 15, and must be paid in a manner consistent with
the percent specified in that section.
Sec. 6. Minnesota Statutes 1984, section 121.904, is
amended by adding a subdivision to read:
Subd. 4d. [AID PAYMENT PERCENTAGE INCREASE.] (a) Subject
to the provisions of section 4, if the most recent forecast of
general fund revenues and expenditures prepared by the
commissioner of finance indicates a projected unobligated
general fund balance at the close of the biennium, the fund
balance must be used to increase the aid payment percentage
specified in section 124.195, subdivisions 7 and 10. The
increased aid payment percentage shall be rounded to the nearest
whole percent above 85 percent but shall not exceed 90 percent.
(b) The commissioner of finance must certify to the
commissioner of education the amount available for computing the
aid payment percentage. The commissioner of education must
determine the method for increasing the aid payment percentage.
The commissioner of finance must transfer from the general fund
to the education aids, grants, and credits appropriations
specified by the commissioner of education the amounts needed to
make the additional payments required by this subdivision. The
additional payments must be included in the cash metering of
payments made according to section 124.195. The commissioner of
education must notify school districts of an increase in the
percentage payment of current year school aids under this
subdivision within 30 days.
Sec. 7. [CONTINGENT APPROPRIATION; OCCUPATION TAX
REFUNDS.]
(a) Subject to the conditions of section 4, there is
appropriated effective July 1, 1986, to the commissioner of
revenue from the general fund an amount equal to one-half of any
credits due as a result of a recomputation of occupation taxes
for production year 1984 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 May 1, 1985. The commissioner shall refund to the
taxpayers the amount computed plus interest at the rate
established in Minnesota Statutes, section 298.09, subdivision
4, from the date of the overpayment.
(b) Subject to the conditions of section 4, there is
appropriated effective July 1, 1987, to the commissioner of
revenue from the general fund the remainder of the amount
computed pursuant to paragraph (a). The commissioner shall
refund to the taxpayers the amount computed plus interest at the
rate established in Minnesota Statutes, section 298.09,
subdivision 4, from the date of the overpayment.
Sec. 8. [APPROPRIATION; OCCUPATION TAX REFUNDS.]
(a) There is appropriated effective July 1, 1988, to the
commissioner of revenue from the general fund an amount equal to
one-half of any credits due as a result of a recomputation of
occupation taxes for production year 1984 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 May 1, 1985, to the extent the refunds were
not paid pursuant to section 7. The commissioner shall refund
to the taxpayers the amount computed plus interest at the rate
established in Minnesota Statutes, section 298.09, subdivision
4, from the date of the overpayment.
(b) There is appropriated effective July 1, 1989, to the
commissioner of revenue from the general fund the remainder of
the amount computed pursuant to paragraph (a). The commissioner
shall refund to the taxpayers the amount computed plus interest
at the rate established in Minnesota Statutes, section 298.09,
subdivision 4, from the date of the overpayment.
ARTICLE 19
CIGARETTE TAX
Section 1. Minnesota St