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1989 Minnesota Session Laws

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

 

                         Laws of Minnesota 1989 

                          CHAPTER 1-H.F.No. 1 
           An act relating to the financing and operation of 
          government in Minnesota; changing tax rates and bases; 
          modifying the administration, collection, and 
          enforcement of taxes; imposing taxes; creating tax 
          exemptions; changing the computation, administration, 
          and payment of aids, credits, and refunds; providing 
          new aids and credits; making technical corrections and 
          clarifications; changing proposed property tax notice 
          provisions; changing levy limits and other local 
          government powers and duties; allowing certain units 
          of local governments to impose taxes; changing tax 
          increment financing provisions; providing that the 
          state will be supplier of gambling equipment; 
          authorizing establishment of an economic development 
          authority in the city of Otsego and in Kandiyohi 
          county; exempting Itasca county from a levy limit 
          penalty and authorizing a special levy; modifying the 
          levy authority of the Red River watershed management 
          district; authorizing an appropriation by Aitkin 
          county; providing for payment of certain aid to the 
          cities of Falcon Heights and Lauderdale; extending the 
          duration of tax increment financing districts in the 
          cities of Moorhead and Chanhassen; exempting a 
          redevelopment district in the city of Minneapolis from 
          certain requirements; allowing certain cities or towns 
          in Pine county to become part of the North Pine area 
          hospital district; granting certain powers to towns; 
          modifying certain bond allocation procedures; 
          requiring studies of state and local finance issues; 
          requiring the governor to recommend spending 
          reductions; setting the amount of the budget reserve; 
          establishing plans and programs to reduce waste 
          generated, recycle waste, develop markets for 
          recyclables, address materials that cause special 
          problems in the waste stream, prevent, control, and 
          abate litter, inform and educate the public on proper 
          waste management; requiring a mechanism to fund 
          certain mental health services; providing procedures 
          for allocating costs of certain human services between 
          the state and county agencies; imposing penalties; 
          appropriating money; amending Minnesota Statutes 1988, 
          sections 3.885, subdivisions 3, 5, and by adding 
          subdivisions; 3.982; 6.62, subdivision 1; 10A.31, 
          subdivision 5; 16A.15, subdivision 6; 18.023, 
          subdivision 8; 60A.14, subdivision 1; 60A.15, 
          subdivision 1; 60A.19, subdivision 6; 110B.15, 
          subdivision 4; 115.34, subdivision 1; 115A.03, 
          subdivision 25a, and by adding subdivisions; 115A.072; 
          115A.15, subdivision 5, and by adding subdivisions; 
          115A.46, by adding a subdivision; 115A.48, subdivision 
          3, and by adding a subdivision; 115A.915; 115A.96, 
          subdivision 2, and by adding a subdivision; 116.07, by 
          adding a subdivision; 116K.04, by adding a 
          subdivision; 124.42, subdivisions 1 and 4; 124.83, 
          subdivision 1; 124A.26, subdivision 1; 129A.06, 
          subdivision 2; 145A.08, subdivision 3; 164.041; 
          256.736, subdivision 13; 256B.091, subdivision 8; 
          256B.19, subdivision 1, and by adding a subdivision; 
          256D.03, subdivision 6; 256G.01, subdivision 3; 
          256G.05; 256G.07; 256G.10; 256G.11; 270.067, 
          subdivisions 1 and 2; 270.11, subdivision 2; 270.12, 
          subdivision 3, and by adding a subdivision; 270.13; 
          270.18; 270.77; 270.82; 270.84; 270.85; 270.87; 
          272.02, subdivision 4, and by adding subdivisions; 
          272.025, subdivision 1; 272.115, subdivision 1; 
          273.064; 273.065; 273.111, subdivision 4; 273.123, 
          subdivisions 4, 5, and 7; 273.13, subdivisions 21a, 
          24, 25, 31, and by adding subdivisions; 273.1392; 
          273.1398, subdivisions 2, 3, and by adding 
          subdivisions; 273.33, subdivision 2; 273.37, 
          subdivision 2; 274.14; 275.065, subdivisions 1, 3, 4, 
          6, 7, and by adding subdivisions; 275.07, subdivision 
          1, and by adding a subdivision; 275.08, subdivisions 2 
          and 3; 275.124; 275.125, subdivision 18; 275.15; 
          275.16; 275.29; 275.50, subdivision 5; 275.51, 
          subdivisions 3f, 3h, 3i, 3j, 4, 6, and by adding a 
          subdivision; 275.58, subdivisions 2 and 3; 276.01; 
          276.04, subdivisions 2 and 3; 276.09; 276.10; 276.11, 
          subdivision 1; 277.01, subdivision 1; 277.02; 277.05; 
          277.06; 277.13; 284.28, subdivisions 4 and 7; 287.29; 
          290.01, subdivision 29; 290.02; 290.05, subdivisions 1 
          and 2; 290.06, subdivisions 1, 21, and by adding a 
          subdivision; 290.067, subdivision 2, and by adding a 
          subdivision; 290.091, subdivision 2, and by adding a 
          subdivision; 290.095, subdivision 2, and by adding a 
          subdivision; 290.17, by adding a subdivision; 290.21, 
          subdivision 4; 290.35, subdivisions 1, 4, and by 
          adding a subdivision; 290.37, subdivision 1; 290.38; 
          290.92, subdivision 21, and by adding a subdivision; 
          290.934, subdivision 3a; 290A.04, subdivisions 2, 2h, 
          3, and by adding subdivisions; 290A.07, subdivision 
          2a; 295.34, subdivision 1; 297A.01, subdivision 3; 
          297A.02, subdivision 2; 297A.15, subdivision 5, and by 
          adding a subdivision; 297A.25, subdivision 3, and by 
          adding subdivisions; 297A.257, subdivision 1; 297A.39, 
          by adding a subdivision; 298.01, by adding 
          subdivisions; 298.28, subdivisions 6 and 12; 298.282, 
          subdivision 3; 298.39; 298.396; 325E.115, subdivision 
          1; 349.12, subdivision 19, and by adding subdivisions; 
          349.16, by adding a subdivision; 349.212, subdivisions 
          1, 2, 4, and by adding a subdivision; 349.2127, 
          subdivision 4, and by adding a subdivision; 353A.10, 
          subdivision 3; 360.037, subdivision 2; 368.01, 
          subdivision 14; 373.40, subdivisions 1 and 2; 375.18, 
          by adding a subdivision; 386.015, subdivision 5; 
          400.08, by adding a subdivision; 412.221, subdivision 
          22; 414.01, subdivision 15; 444.075, subdivisions 1 
          and 4; 444.16; 444.17; 444.18; 444.19; 444.20; 447.34, 
          subdivision 1; 447.35; 465.73; 469.167, subdivision 2; 
          469.171, subdivision 7, and by adding a subdivision; 
          469.174, subdivisions 10, 16, 17, and by adding a 
          subdivision; 469.175, by adding a subdivision; 
          469.176, by adding a subdivision; 469.177, 
          subdivisions 6 and 10; 469.190, subdivisions 2 and 3; 
          471.572, subdivision 2; 471.74, subdivision 2; 
          471A.03, subdivision 4; 473.149, subdivision 1; 
          473.167, subdivision 4; 473.249, subdivision 2; 
          473.446, subdivision 8; 473.711, subdivision 5; 
          473.803, subdivision 1; 473.87; 473F.05; 473F.06; 
          473F.07, subdivisions 1, 2, and 5; 473F.08, 
          subdivisions 3, 3a, 5, and by adding a subdivision; 
          473F.09; 473H.10, subdivision 3; 474A.061, 
          subdivisions 1, 2, and 4; 474A.091, subdivisions 2 and 
          3; 475.74; 475.754; 477A.011, subdivisions 1a, 3, 3a, 
          20, and by adding subdivisions; 477A.012, by adding 
          subdivisions; 477A.013, subdivision 3, and by adding 
          subdivisions; 477A.014, subdivision 1; 508.75; 508.76; 
          508.77; 508.78; 508.79; 508.82; 508A.76; 508A.77; 
          508A.78; 508A.79; 508A.82; Minnesota Statutes 1989 
          Supplement, sections 16A.1541; 115A.12, subdivision 1; 
          115A.46, subdivision 2; 121.904, subdivisions 4a and 
          4e; 124.2131, subdivision 1; 124.243, subdivision 3; 
          124.244, subdivision 2; 124.83, subdivision 4; 
          124A.03, subdivision 2; 124A.23, subdivision 1; 
          256.82, subdivision 1; 256.871, subdivision 6; 
          256.935, subdivision 1; 256B.041, subdivision 5; 
          256D.03, subdivision 2; 256D.051, subdivision 6; 
          256D.36, subdivision 1; 256G.02, subdivision 4; 
          270.12, subdivision 2; 272.02, subdivision 1; 273.061, 
          subdivision 1; 273.1104, subdivision 2; 273.119, 
          subdivision 2; 273.124, subdivision 6; 273.13, 
          subdivisions 22 and 23; 273.135, subdivision 2; 
          273.1391, subdivision 2; 273.1398, subdivisions 1, 5, 
          and 6; 275.07, subdivision 3; 275.125, subdivisions 5, 
          5b, and 9; 275.14; 275.28, subdivision 1; 275.58, 
          subdivision 1; 287.12; 290.01, subdivision 19c; 
          290.015, subdivisions 3 and 4; 290.05, subdivision 3; 
          290.06, subdivision 2c; 290.0802, subdivision 1; 
          290.17, subdivision 2; 290.191, subdivision 6; 290.92, 
          subdivision 4b; 297A.25, subdivisions 11 and 16; 
          297A.44, subdivision 1; 298.282, subdivision 2; 
          349.12, subdivision 11; 349.15; 349.161, subdivision 
          1; 349.163, subdivision 3; 349.19, subdivision 6; 
          349.214, subdivision 2; 357.021, subdivision 1a; 
          373.40, subdivision 6; 412.251; 426.04; 469.033, 
          subdivision 6; 469.174, subdivision 7; 469.175, 
          subdivisions 3 and 7; 469.176, subdivisions 1 and 6; 
          469.190, subdivision 1; 471.1921; 473.882, subdivision 
          3; and 477A.013, subdivision 1; Laws 1976, chapter 
          162, section 1, as amended; Laws 1986, chapter 399, 
          article 1, section 1; Laws 1987, chapter 268, article 
          6, section 54, as amended; 1988, chapter 719, article 
          1, section 22; and article 12, section 29, as amended; 
          Laws 1989, chapter 282, article 5, section 133; 
          chapter 329, article 1, section 17, subdivision 2; 
          article 2, section 8, subdivision 2; and article 5, 
          section 21, subdivisions 2 and 3; and chapter 335, 
          article 3, sections 54, subdivision 8; and 58, as 
          amended; proposing coding for new law in Minnesota 
          Statutes, chapters 3; 16B; 115A; 124; 173; 256; 273; 
          274; 290; 290A; 297A; 325E; 349; 469; and 473; 
          reenacting Minnesota Statutes 1988, section 256D.051, 
          subdivision 6a; repealing Minnesota Statutes 1988, 
          sections 3.981; 3.983, as amended; 134.34, subdivision 
          6; 245.775; 270.81, subdivision 5; 273.135, 
          subdivision 2a; 273.1391, subdivision 2a; 275.065, 
          subdivisions 2 and 5; 275.11; 275.50; 275.51; 275.54; 
          275.55; 275.56; 275.561; 275.58; 290.092, subdivision 
          5; 290A.04, subdivision 2h; 349.2121, subdivision 4; 
          471A.04; 477A.011, subdivision 24; 477A.013, 
          subdivision 4; Laws 1989, chapter 282, article 5, 
          section 133, subdivision 1. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                ARTICLE 1

                       STATE-LOCAL FINANCE REFORM
    Section 1.  [STATEMENT OF POLICY.] 
    The legislature finds that Minnesota's system of state 
government support of local government operations has helped 
local governments to provide needed local services and to hold 
down property taxes but that substantial reform of Minnesota's 
state-local finance system is now needed.  
    The legislature further finds that a system of state-local 
finance that properly allocates funding between the state and 
political subdivisions will distribute state assistance more 
efficiently and fairly, will contribute to a more equitable 
distribution of tax burden among individuals based upon ability 
to pay, will encourage cost-efficient operations by both state 
government and political subdivisions, will hold state 
government and political subdivisions accountable for the 
services they provide and finance, will provide stability to the 
property tax and local aids systems and help to ensure the 
financial stability of state and local governments, will have 
more understandable state aids and mandates, and will serve to 
reduce overall state and local costs for program delivery. 
    Sec. 2.  [3.881] [DEFINITIONS.] 
    Subdivision 1.  [GENERALLY.] For purposes of this article, 
the following terms have the meanings given them. 
    Subd. 2.  [POLITICAL SUBDIVISIONS.] "Political subdivisions"
are counties, cities, towns, school districts, and other local 
government jurisdictions to which the state provides state aids 
or on which the state imposes state mandates. 
    Subd. 3.  [STATE AIDS.] "State aids" are programs by which 
state government provides financial assistance to political 
subdivisions to assist them in delivering public services, to 
finance public facilities, or to reduce property taxes.  These 
programs include both state funding provided in connection with 
state mandates and other state financial assistance programs 
that do not involve state mandates. 
    Subd. 4.  [STATE MANDATES.] "State mandates" are those 
programs and procedures required by state law or rule to be 
financed, delivered, or performed by political subdivisions.  
State mandates include federal programs to the extent the state 
elects to impose them as mandates on political subdivisions but 
does not include federal mandates for which there is no 
substantial state discretion.  
    Subd. 5.  [NONPROGRAM MANDATES.] "Nonprogram mandates" are 
those state mandates which apply equally to private entities and 
political subdivisions or which relate to the basic organization 
and institutional operation of political subdivisions.  
Nonprogram mandates include, but are not limited to, 
requirements relating to: 
    (1) the provision of constitutionally prescribed rights and 
privileges; 
    (2) the implementation of generally applicable health and 
safety standards, provided that nonprogram mandates do not 
include requirements relating to recycling, wastewater 
treatment, and hazardous and solid waste disposal; 
    (3) the provision of services by licensed or credentialed 
persons or institutions; 
    (4) the holding of elections for offices other than 
national and state offices; 
    (5) the holding of public meetings and the giving of 
notices to the public in connection with those meetings; 
    (6) the collection of taxes and other revenues; 
    (7) the preparation of financial audits and other reports 
required by the state; 
    (8) the collection, creation, reception, maintenance, or 
dissemination of public data; 
    (9) collective bargaining, binding arbitration with public 
employees, pay equity, comparable worth, and other provisions 
affecting terms and conditions of public employment; 
    (10) competitive bidding and other provisions relating to 
the execution of public contracts; 
    (11) the protection of the public from illegal or unethical 
actions by local public officials; and 
    (12) the enforcement and administration of discretionary 
local ordinances and rules. 
    Subd. 6.  [PROGRAM MANDATES.] "Program mandates" are those 
state mandates other than nonprogram mandates. 
    Subd. 7.  [STATE PROGRAMS.] "State programs" are programs 
operated by state agencies or authorities that are not state 
mandates or state aids. 
    Sec. 3.  [3.882] [POLICIES FOR REVIEWING THE FUNDING OF STATE AIDS 
AND MANDATES.] 
    Subdivision 1.  [GENERAL PRINCIPLES.] The following general 
principles shall guide state-local finance reform in Minnesota. 
    (a) State resources should finance all or most of the cost 
of program mandates. 
    (b) Political subdivision resources should finance all or 
most of the cost of nonprogram mandates and those local programs 
that are not state mandates. 
    (c) A combination of state and political subdivision 
resources should finance certain programs that, because of their 
purpose, extent, or cost, are shared responsibilities of the 
state and the political subdivisions.  
    (d) In order to accommodate wealth disparities among 
Minnesota's political subdivisions and income disparities among 
individuals, the state should assist political subdivisions in 
providing a basic level of local services at levels of local 
taxation that are not excessive. 
    Subd. 2.  [POLICY FOR FUNDING PROGRAM MANDATES.] Preference 
for higher proportions of state funding should be given to those 
program mandates having the most specific and extensive 
requirements, that permit the least amount of discretion by 
local public officials, and that relate primarily to services to 
individuals rather than services to real property.  Preference 
for lesser proportions of state funding shall be given to those 
program mandates which tend not to meet the preceding criteria 
and for which program effectiveness, fairness, and 
cost-efficiency will likely be greater with financial 
participation by political subdivisions. 
    Sec. 4.  Minnesota Statutes 1988, section 3.885, is amended 
by adding a subdivision to read: 
    Subd. 1a.  [TASK FORCE.] For the purpose of implementing 
the review of state aids and state mandates required under 
subdivision 6, paragraph (d), the commission must designate a 
joint legislative task force to advise and make recommendations 
to the commission regarding the review of state aid programs. 
    Sec. 5.  Minnesota Statutes 1988, section 3.885, 
subdivision 3, is amended to read:  
    Subd. 3.  [STAFF.] (a) The commission may: 
    (1) employ and fix the salaries of professional, technical, 
clerical, and other staff of the commission; 
    (2) employ and discharge staff solely on the basis of their 
fitness to perform their duties and without regard to political 
affiliation; 
    (3) buy necessary furniture, equipment, and supplies; 
    (4) enter into contracts for necessary services, equipment, 
office, and supplies; 
    (5) provide its staff with computer capability necessary to 
carry out assigned duties.  The computer should be capable of 
receiving data and transmitting data to computers maintained by 
the executive and judicial departments of state government that 
are used for budgetary and revenue purposes; and 
    (6) use other legislative staff. 
    (b) The commission may hire an executive director and 
delegate any of its authority under paragraph (a) to that 
person.  The executive director shall be appointed by the chair 
and vice-chair to a four-year term, shall serve in the 
unclassified service, and is subject to removal by a majority 
vote of the members of either the senate or the house of 
representatives. 
     (c) The legislative coordinating commission shall provide 
office space and administrative support to the committee.  The 
state planning agency shall report to the committee, and the 
committee may make recommendations to the state planning agency. 
    Sec. 6.  Minnesota Statutes 1988, section 3.885, 
subdivision 5, is amended to read: 
    Subd. 5.  [DUTIES.] (a) The commission shall: 
    (1) provide the legislature with research and analysis of 
current and projected state revenue, state expenditures, and 
state tax expenditures; 
    (2) provide the legislature with a report analyzing the 
governor's proposed levels of revenue and expenditures for 
biennial budgets submitted under section 16A.11 as well as other 
supplemental budget submittals to the legislature by the 
governor; 
    (3) provide an analysis of the impact of the governor's 
proposed revenue and expenditure plans for the next biennium; 
     (4) conduct research on matters of economic and fiscal 
policy and report to the legislature on the result of the 
research; 
     (5) provide economic reports and studies on the state of 
the state's economy, including trends and forecasts for 
consideration by the legislature; 
     (6) conduct budget and tax studies and provide general 
fiscal and budgetary information; 
     (7) review and make recommendations on the operation of 
state programs in order to appraise the implementation of state 
laws regarding the expenditure of funds and to recommend means 
of improving their efficiency; 
     (8) recommend to the legislature changes in the mix of 
revenue sources for programs, in the percentage of state 
expenditures devoted to major programs, and in the role of the 
legislature in overseeing state government expenditures and 
revenue projections; and 
    (9) make a continuing study and investigation of the 
building needs of the government of the state of Minnesota, 
including, but not limited to the following:  the current and 
future requirements of new buildings, the maintenance of 
existing buildings, rehabilitating and remodeling of old 
buildings, the planning for administrative offices, and the 
exploring of methods of financing building and related costs; 
and 
     (10) conduct a continuing study of state-local finance, 
analyzing and making recommendations to the legislature on 
issues including levels of state support for political 
subdivisions, basic levels of local need, balances of local 
revenues and options, relationship of local taxes to 
individuals' ability to pay, and financial reporting by 
political subdivisions.  In conducting this study, the 
commission shall consult with the governor, the staff of 
executive branch agencies, and the governor's advisory 
commission on state-local relations. 
    (b) In performing its duties under paragraph (a), the 
commission shall consider, among other things: 
    (1) the relative dependence on state tax revenues, federal 
funds, and user fees to support state-funded programs, and 
whether the existing mix of revenue sources is appropriate, 
given the purposes of the programs; 
    (2) the relative percentages of state expenditures that are 
devoted to major programs such as education, assistance to local 
government, aid to individuals, state agencies and institutions, 
and debt service; and 
    (3) the role of the legislature in overseeing state 
government expenditures, including legislative appropriation of 
money from the general fund, legislative appropriation of money 
from funds other than the general fund, state agency receipt of 
money into revolving and other dedicated funds and expenditure 
of money from these funds, and state agency expenditure of 
federal funds. 
     (c) The commission's recommendations must consider the 
long-term needs of the state.  The recommendations must not 
duplicate work done by standing committees of the senate and 
house of representatives. 
     The commission shall report to the legislature on its 
activities and recommendations by January 15 of each 
odd-numbered year. 
     The commission shall provide the public with printed and 
electronic copies of reports and information for the legislature.
Copies must be provided at the actual cost of furnishing each 
copy. 
    Sec. 7.  Minnesota Statutes 1988, section 3.885, is amended 
by adding a subdivision to read: 
    Subd. 6.  [MANDATE, STATE AID, AND STATE PROGRAM 
REVIEWS.] (a) The commission shall, after consultation with the 
governor and with the chairs of the standing committees of the 
legislature, select mandates and state programs for review.  
When selecting mandates, state aids, or state programs to be 
reviewed, the commission shall give priority to those that 
involve state payments to local units of government.  
    (b) The governor is responsible for the performance of the 
reviews.  Staff from affected agencies, staff from the 
department of finance and the state planning agency, and 
legislative staff shall participate in the reviews.  
    (c) At the direction of the commission, reviews of state 
programs shall include:  
    (1) a precise and complete description of the program; 
    (2) the need the program is intended to address; 
    (3) the recommended goals and measurable objectives of the 
program to meet those needs; 
    (4) program outcomes and measures which identify:  
    (i) results in meeting stated needs, goals, and objectives; 
    (ii) administrative efficiency, which, when appropriate, 
shall include number of program staff and clients served, 
timeliness in processing clients and rates and administrative 
cost as a percent of total program expenditures; 
    (iii) unanticipated program outcomes; 
    (iv) program expenditures compared with program 
appropriations; 
    (v) historical cost trends and projected program growth, 
including reasons for fiscal and program growth, for all levels 
of government involved in the program; 
    (vi) if rules or guidelines or instructions have been 
promulgated for a program, a review of their efficacy in helping 
to meet program goals and objectives and in administering the 
program in a cost-effective way; and 
    (vii) quality control monitoring and sanctions including a 
review of the level of training, experience, skill, and 
standards of staff; 
    (5) recommended changes in the program that would lead to 
its policy objectives being achieved more efficiently or 
effectively, or at lower cost; and 
    (6) additional issues requested by the commission.  
    (d) The following state aids and associated state mandates 
shall be reviewed:  
    (1) local aids and credits including local government aid, 
homestead and agricultural credit aid, disparity reduction aid, 
taconite homestead credit and aids, tax increment financing, and 
fiscal disparities; 
    (2) human services aids including community health services 
aids, correctional program aids, and social service program and 
administrative aids; 
    (3) elementary and secondary education aids including 
school district general fund aids and levies, school district 
capital expenditure fund aids and levies, school district debt 
service fund aids and levies, and school district community 
service fund aids and levies; and 
    (4) general government aids including natural resource 
aids, environmental protection aids, transportation aids, 
economic development aids, and general infrastructure aids.  
    (e) At the direction of the commission, the reviews of 
state aids and state mandates involving state financing of local 
government activities listed in paragraph (d) shall include:  
    (1) the employment status, wages, and benefits of persons 
employed in administering the programs; 
    (2) the desirable applicability of state procedural laws 
and rules; 
    (3) methods for increasing political subdivision options in 
providing their share, if any, of program costs; 
    (4) desirable redistributions of funding responsibilities 
for the program and the time period during which any recommended 
funding distribution should occur; 
    (5) opportunities for reducing program mandates and giving 
political subdivisions more flexibility in meeting program 
needs; 
    (6) comparability of treatment of similar units of 
government; 
     (7) the effect of the state aid or mandate on the 
distribution of tax burdens among individuals, based upon 
ability to pay; 
    (8) coordination of the payment or allocation formula with 
other state aid programs; 
    (9) incentives that have been created for local spending 
decisions, and whether the incentives should be changed; 
    (10) ways in which political subdivisions have changed 
their revenue-raising behavior since receiving these grants; and 
    (11) consideration of the program's consistency with the 
policies set forth in section 3.  
    (f) Each review shall also include an assessment of the 
accountability of all government agencies that participate in 
administration of the program.  
    (g) Each review that is intended to be considered in the 
development of the governor's budget recommendations for the 
following year shall be completed and submitted to the 
commission no later than November 15.  
    Sec. 8.  Minnesota Statutes 1988, section 3.885, is amended 
by adding a subdivision to read: 
     Subd. 7.  [FUNDS FOR STATE AID RESTRUCTURING.] If, upon 
completion of a review of a state aid or state mandate under 
subdivision 6, the governor determines that the program should 
be abolished or changed in a manner that would increase, 
decrease, or redirect the aid that is paid under the program, 
the governor may recommend that change to the commission.  If 
the commission agrees with that recommendation, the governor 
shall include the change in the next budget presented to the 
legislature under section 16A.11.  If the agreed upon 
recommendation is to abolish the state aid program or to reduce 
the amount that would otherwise be recommended for expenditure 
for the program, the budget must designate the amount that would 
have been recommended for expenditure, and reserve that amount 
in a state aid account.  The governor may make specific 
recommendations for expenditure from the account only for other 
state aid programs or general property tax relief.  If the 
recommendation by the governor and the commission on a state aid 
program is to increase the amount to be expended, that amount 
must be financed within the budget submitted to the legislature 
in accordance with section 16A.11.  
    Sec. 9.  Minnesota Statutes 1988, section 3.885, is amended 
by adding a subdivision to read: 
    Subd. 8.  [POLITICAL SUBDIVISION REPORTING.] No later than 
November 15, 1990, the commission shall make recommendations to 
appropriate standing committees of the legislature on any 
changes in uniform accounting and financial reporting methods 
necessary to assure public and legislative oversight of 
expenditures by cities, counties, towns, and special service 
districts.  The recommendations shall consider opportunities for 
on-line access by appropriate state officers to political 
subdivision accounts.  In preparing these recommendations, the 
commission shall consult with the state auditor, the legislative 
auditor, and the commissioners of finance and revenue.  
    Sec. 10.  Minnesota Statutes 1988, section 3.982, is 
amended to read: 
    3.982 [FISCAL NOTES FOR STATE-MANDATED ACTIONS.] 
    When the state proposes to mandate that a local agency or 
school district take an action, and when reasonable compliance 
with that action would force the local agency or school district 
to incur costs mandated by the state, a fiscal note shall be 
prepared as provided in section 3.98, subdivision 2, and made 
available to the public upon request.  If the action is among 
the exceptions listed in section 3.983, a fiscal note need not 
be prepared. 
    When a bill proposing a new or expanded mandate on a 
political subdivision is introduced and referred to a standing 
committee, the chair of the standing committee to which the bill 
is referred shall request the appropriate state agency or 
department to prepare a fiscal note before the bill is heard in 
the committee.  Before a proposed mandate is issued in an 
executive order, the governor or appropriate agency head 
assigned by the governor shall prepare the fiscal note and make 
it available to the public. the head of each affected department 
or agency of the state government shall prepare a fiscal note 
identifying the projected fiscal impact of the bill on state 
government and on the affected political subdivisions.  The 
commissioner of finance shall be responsible for coordinating 
the fiscal note process, for assuring the accuracy and 
completeness of the note, and for ensuring that fiscal notes are 
prepared, delivered, and updated as provided in this section.  
The fiscal note shall categorize mandates as program or 
nonprogram mandates and shall include estimates of the levy 
impacts of the mandates.  To the extent that the bill would 
impose new fiscal obligations on political subdivisions, the 
note shall indicate the efforts made to reduce those 
obligations, including consultations made with representatives 
of the political subdivisions.  Chairs of legislative committees 
receiving bills on rereferrals from other legislative committees 
may request that fiscal notes be amended to reflect amendments 
made to the bills by prior committee action.  Preparation of the 
fiscal notes required in this section shall be consistent with 
section 3.98.  The commissioner of finance shall periodically 
report to and consult with the legislative commission on 
planning and fiscal policy on the issuance of the notes.  
     Sec. 11.  [STATE AIDS TO LOCAL GOVERNMENTS.] 
    The commissioner of revenue shall submit to the governor, 
the legislative commission on planning and fiscal policy, the 
taxes committee of the house of representatives, and the taxes 
and tax laws committee of the senate by January 15, 1991, 
recommendations for amendments to the formulas by which state 
government provides local government aid to cities.  The 
legislative commission on planning and fiscal policy shall 
provide for a representative expenditure study of alternative 
means to assess the relative service needs of cities, counties, 
towns, and school districts by November 15, 1990.  The results 
of this study may be used by the commissioner of revenue in 
preparing recommendations on state aids to local governments. 
    Sec. 12.  [APPROPRIATION.] 
    There is appropriated to the legislative commission on 
planning and fiscal policy the sum of $600,000 for the period 
ending June 30, 1991, to be used to perform the duties imposed 
under this article. 
    There is appropriated to the commissioner of finance the 
sum of $100,000 for the period ending June 30, 1991 for the 
purpose of implementing the provisions of section 10.  The 
approved complement of the department of finance is increased by 
two positions. 
    Sec. 13.  [REPEALER.] 
    Minnesota Statutes 1988, sections 3.981 and 3.983, as 
amended, are repealed. 
    Sec. 14.  [EFFECTIVE DATE.] 
    This article is effective the day following final enactment.

                               ARTICLE 2 

                      PROPERTY TAX CLASSIFICATION 
    Section 1.  Minnesota Statutes 1988, section 273.13, 
subdivision 21a, is amended to read: 
    Subd. 21a.  [TAX CAPACITY CLASS RATE.] In this section, 
wherever the "tax capacity class rate" of a class of property is 
specified without qualification as to whether it is the 
property's "net tax capacity class rate" or its "gross tax 
capacity class rate," the "net tax capacity class rate" and 
"gross tax capacity class rate" of that property are the same as 
its "tax capacity class rate." 
     Sec. 2.  Minnesota Statutes 1988, section 273.13, is 
amended by adding a subdivision to read: 
     Subd. 21b.  [TAX CAPACITY.] (a) Gross tax capacity means 
the product of the appropriate gross class rates in this section 
and market values. 
     (b) Net tax capacity means the product of the appropriate 
net class rates in this section and market values. 
    Sec. 3.  Minnesota Statutes 1989 Supplement, section 
273.13, subdivision 22, is amended 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 $68,000 of market value of class 1a property has 
a net tax capacity class rate of one percent of its market value 
and a gross tax capacity class rate of 2.17 percent of its 
market value.  The market value of class 1a property that 
exceeds $68,000 but does not exceed $100,000 has a tax capacity 
class rate of 2.5 two percent of its market value.  The market 
value of class 1a property that exceeds $100,000 has a tax 
capacity class rate of 3.3 three percent of its market 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 the blind person's 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 a homestead; or 
     (3) any person who: 
     (i) is permanently and totally disabled and 
     (ii) receives 90 percent or more of 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; or 
    (iii) whose household income as defined in section 290A.03, 
subdivision 5, is 150 percent or less of the federal poverty 
level. 
    Property is classified and assessed pursuant to clause (1) 
only if the commissioner of jobs and training certifies to the 
assessor that the owner of the property satisfies the 
requirements of this subdivision.  
    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 the person an income.  The first $32,000 market 
value of class 1b property has a net tax capacity class rate of 
.4 percent of its market value and a gross tax capacity class 
rate of .87 percent of its market value.  The remaining market 
value of class 1b property has a gross or net tax capacity class 
rate using the rates for class 1 or class 2a property, whichever 
is appropriate, of similar market value.  
    (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 200 225 days in the year 
preceding the year of assessment, and that includes a portion 
used as a homestead by the owner, which includes a dwelling 
occupied as a homestead by a shareholder of a corporation that 
owns the resort or a partner in a partnership that owns the 
resort, even if the title to the homestead is held by the 
corporation or partnership.  Class 1c property has a tax 
capacity class rate of .9 .4 percent of the first $32,000 of 
market value for taxes payable in 1990, .6 percent of the first 
$32,000 of market value for taxes payable in 1991, .8 percent of 
the first $32,000 of market value for taxes payable in 1992, and 
one percent of market value in excess of $32,000 for taxes 
payable in 1990, 1991, and 1992, and one percent of total market 
value for taxes payable in 1993 and thereafter 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) For taxes levied in 1988, payable in 1989 only, the tax 
to be paid on class 1a or class 1b property 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 $725. 
    Sec. 4.  Minnesota Statutes 1989 Supplement, section 
273.13, subdivision 23, is amended to read: 
    Subd. 23.  [Class 2.] (a) Class 2a property is agricultural 
land including any improvements that is homesteaded.  The market 
value of the house and garage and immediately surrounding one 
acre of land that does not exceed $65,000 has a net tax capacity 
of .805 percent of market value and a gross tax capacity of 1.75 
percent of market value.  The excess market value over $65,000 
has a tax capacity of 2.2 percent has the same class rates as 
class 1a property under subdivision 22.  If the market value of 
the house, garage, and surrounding one acre of land is less 
than $65,000 $100,000, the value of the remaining land including 
improvements equal to the difference between $65,000 $100,000 
and the market value of the house, garage, and surrounding one 
acre of land has a net tax capacity class rate of 1.12 .4 
percent of market value and a gross tax capacity of 1.75 percent 
of market value for the first 320 acres of land and the 
remaining value over 320 acres has a net tax capacity of 1.295 
percent of market value and a gross tax capacity class rate of 
1.75 percent of market value.  The remaining value of class 2a 
property over the $65,000 $100,000 of market value that does not 
exceed 320 acres has a net tax capacity class rate of 1.44 1.3 
percent of market value for taxes payable in 1990, 1.4 percent 
of market value for taxes payable in 1991, and 1.5 percent of 
market value for taxes payable in 1992 and thereafter, and a 
gross tax capacity class rate of 2.25 percent of market value.  
The remaining property over the $65,000 $100,000 market value in 
excess of 320 acres has a net tax capacity class rate of 1.665 
1.7 percent of market value for taxes payable in 1990, 1.6 
percent of market value for taxes payable in 1991, and 1.5 
percent of market value for taxes payable in 1992 and 
thereafter, and a gross tax capacity of 2.25 percent of market 
value.  
    (b) Class 2b property is (1) real estate, rural in 
character and used exclusively for growing trees for timber, 
lumber, and wood and wood products; and (2) real estate that is 
nonhomestead agricultural land.  Class 2b property has a net tax 
capacity class rate of 1.665 1.7 percent of market value for 
taxes payable in 1990, 1.6 percent of market value for taxes 
payable in 1991, and 1.5 percent of market value for taxes 
payable in 1992 and thereafter, and a gross tax capacity class 
rate of 2.25 percent of market value. 
    (c) Agricultural land as used in this section means 
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. 
    (d) Real estate of less than ten acres used principally for 
raising poultry, livestock, fruit, vegetables or other 
agricultural products, including the breeding of fish for sale 
and consumption if the fish breeding occurs on land zoned for 
agricultural use, shall be considered as agricultural land, if 
it is not used primarily for residential purposes.  The term 
"agricultural products" as used in the preceding sentence means 
any of the products identified in section 273.111, subdivision 
6, clause (2).  "Agricultural purposes" as used in this section 
means the raising or cultivation of agricultural products.  
    (e) If a parcel used for agricultural purposes is also used 
for commercial or industrial purposes, including but not limited 
to: 
    (1) wholesale and retail sales; 
    (2) processing of raw agricultural products or other goods; 
    (3) warehousing or storage of processed goods; and 
    (4) office facilities for the support of the activities 
enumerated in clauses (1), (2), and (3), 
the assessor shall classify the part of the parcel used for 
agricultural purposes as class 1b, 2a, or 2b, whichever is 
appropriate, and the remainder in the class appropriate to its 
use.  The grading, sorting, and packaging of raw agricultural 
products for first sale is considered an agricultural purpose.  
A greenhouse or other building where horticultural or nursery 
products are grown that is also used for the conduct of retail 
sales must be classified as agricultural if it is primarily used 
for the growing of horticultural or nursery products from seed, 
cuttings, or roots and occasionally as a showroom for the retail 
sale of those products.  Use of a greenhouse or building only 
for the display of already grown horticultural or nursery 
products does not qualify as an agricultural purpose.  
    The assessor shall determine and list separately on the 
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. 5.  Minnesota Statutes 1988, section 273.13, 
subdivision 24, is amended to read: 
    Subd. 24.  [CLASS 3.] (a) Commercial, and industrial, 
property and utility real and personal property, except class 5 
property as identified in subdivision 31, clause (1), is class 
3a.  It has a tax capacity class rate of 3.3 percent of the 
first $100,000 of market value for taxes payable in 1990, 3.2 
percent for taxes payable in 1991, 3.1 percent for taxes payable 
in 1992, and three percent for taxes payable in 1993 and 
thereafter, and 5.25 5.06 percent of the market value over 
$100,000.  For taxes payable in 1991, the 5.25 percent rate 
shall be 5.2 percent and for taxes payable in 1992 and 
subsequent years the rate shall be 5.15 percent.  In the case of 
state-assessed commercial, industrial, and utility property 
owned by one person or entity, only one parcel has a tax 
capacity 3.3 percent reduced class rate on the first $100,000 of 
market value.  In the case of other commercial, industrial, and 
utility property owned by one person or entity, only one parcel 
in each county has a tax capacity of 3.3 percent reduced class 
rate on the first $100,000 of market value. 
    (b) Employment property defined in section 469.166, during 
the period provided in section 469.170, shall constitute class 
3b and has a tax capacity class rate of 2.5 2.4 percent of the 
first $50,000 of market value and 3.5 3.6 percent of the 
remainder, except that for employment property located in a 
border city enterprise zone designated pursuant to section 
469.168, subdivision 4, paragraph (c), the tax capacity class 
rate of the first $100,000 of market value is 3.3 percent and 
the tax capacity class rate of the remainder is 4.8 percent 
determined under paragraph (a), 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 469.171, subdivision 1. 
    Sec. 6.  Minnesota Statutes 1988, section 273.13, 
subdivision 25, is amended 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 
has a tax capacity class rate of 4.1 3.6 percent of market 
value. 
    (b) Class 4b includes: 
    (1) residential real estate containing less than four 
units, other than seasonal residential, and recreational, and a 
structure having five or more stories that is constructed with 
materials meeting the requirements for type I or II construction 
as defined in the state building code, 90 percent or more of 
which is used or is to be used as apartment housing for a period 
of 40 years from the date of completion of original 
construction, or the date of initial though partial use, 
whichever is the earlier date; 
    (2) 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; 
    (3) manufactured homes not classified under any other 
provision; 
    (4) a dwelling, garage, and surrounding one acre of 
property on a nonhomestead farm classified under subdivision 23, 
paragraph (b), which has a tax capacity of 2.7 percent of market 
value.  
    Class 4b property has a tax capacity class rate of 3.5 3.0 
percent of market value, except as provided in clause (4). 
    (c) Class 4c property includes: 
    (1) 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 rules 
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.  This 
clause applies only to property of a nonprofit or limited 
dividend entity.  Property is classified as class 4c under this 
clause for 15 years from the date of the completion of the 
original construction or substantial rehabilitation, or for the 
original term of the loan; 
    (2) a structure that is: 
    (i) 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 
    (ii) 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.  Property is classified as class 4c under 
this clause for the term of the housing assistance payments 
contract, including all renewals, or for the term of its 
permanent financing, whichever is shorter; and 
    (3) a qualified low-income building that (i) receives a 
low-income housing credit under section 42 of the Internal 
Revenue Code of 1986, as amended through December 31, 1987 1988; 
or (ii) meets the requirements of that section.  Classification 
pursuant to this clause is limited to buildings the construction 
or rehabilitation of which began after May 1, 1988, and to a 
term of 15 years. 
    For all properties described in clauses (1), (2), and (3) 
and in paragraph (d), the market value determined by the 
assessor must be based on the normal approach to value using 
normal unrestricted rents.  The land on which these structures 
are situated has a tax capacity of 3.5 percent of market 
value the class rate given in paragraph (b) if the structure 
contains fewer than four units, and 4.1 percent of market value 
the class rate given in paragraph (a) if the structure contains 
four or more units.  
    (4) 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 or individuals.  This clause does not apply to any 
portion of the land or improvements used for nonresidential 
purposes.  For purposes of this clause, a lower income family is 
a family with an income that does not exceed 65 percent of the 
median family income for the area, and a lower income individual 
is an individual whose income does not exceed 65 percent of the 
median individual income for the area, as determined by the 
United States Secretary of Housing and Urban Development.  For 
purposes of this clause, "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:  (a) it is a nonprofit corporation organized 
under chapter 317; (b) it has as its principal purpose providing 
housing for lower income families in a specific geographic 
community designated in its articles or bylaws; (c) it limits 
membership with voting rights to residents of the designated 
community; and (d) 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; 
and 
    (5) except as provided in subdivision 22, paragraph (c), 
real property devoted to temporary and seasonal residential 
occupancy for recreation purposes, including real property 
devoted to temporary and seasonal residential occupancy for 
recreation purposes and not devoted to commercial purposes for 
more than 200 225 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 4c also includes commercial 
use real property used exclusively for recreational purposes in 
conjunction with class 4c 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 200 225 days in the 
year preceding the year of assessment and is located within two 
miles of the class 4c property with which it is used.  Class 4c 
property classified in clauses (5) and (6) also includes the 
remainder of class 1c resorts and has a tax capacity of 2.6 
percent of market value, except that noncommercial seasonal 
recreational property has a tax capacity of 2.3 percent of 
market value; and 
    (6) 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 clause, 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 1986, as amended through December 31, 1986 1988. 
For purposes of this clause, "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; and 
    Class 4c property classified under clauses (1), (2), (3), 
and (4) has a tax capacity class rate of 2.5 2.4 percent of 
market value. 
    (d) Class 4d property includes any structure: 
    (i) 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; 
    (ii) located in a municipality of less than 10,000 
population; and 
     (iii) financed by a direct loan or insured loan from the 
farmers home administration.  Property is classified under this 
clause for 15 years from the date of the completion of the 
original construction or for the original term of the loan.  
    The 1.5 percent and 2.5 percent tax capacity assignments 
apply to the properties described class rates in paragraph (c), 
clauses (1), (2), and (3) and this clause apply to the 
properties described in them, 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.  
Classification under this clause is only available to property 
of a nonprofit or limited dividend entity. 
    Class 4d property has a tax capacity class rate of 1.5 1.7 
percent of market value for taxes payable in 1990, and two 
percent of market value for taxes payable thereafter. 
    (e) Residential rental property that would otherwise be 
assessed as class 4 property under paragraph (a); paragraph (b), 
clauses (1) and (2); paragraph (c), clauses (1), (2), (3), or 
(4); or paragraph (d), is assessed at the class rate applicable 
to it under Minnesota Statutes 1988, section 273.13, if it is 
found to be a substandard building under section 273.1316. 
    Sec. 7.  Minnesota Statutes 1988, section 273.13, 
subdivision 31, is amended to read: 
    Subd. 31.  [CLASS 5.] All property not included in any 
other class is class 5 property.  
    (a) Class 5 property includes:  
    (1) 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, have a tax capacity of 4.6 
percent of market value.; 
    (b) (2) unmined iron ore and low-grade iron-bearing 
formations as defined in section 273.14 have a tax capacity of 
5.25 percent of market value.; 
    (c) (3) vacant land has a tax capacity of 5.25 percent of 
market value.; and 
    (d) (4) all other property not otherwise classified has a 
tax capacity of 5.25 percent of market value. 
    Class 5 property has a class rate of 5.06 percent of market 
value. 
    Sec. 8.  Minnesota Statutes 1988, section 273.13, is 
amended by adding a subdivision to read: 
    Subd. 32.  [TARGET CLASS RATE.] All classes of property 
with a class rate of 5.06 percent have a target class rate of 
four percent.  At the time of submission of the biennial budget 
under section 16A.11, the governor shall recommend the effective 
class rate for taxes payable in the following two calendar years 
by designating a "phase-in percentage," equal to the proportion 
of the effective class rate that will be based on the target 
class rate of four percent, with the remaining proportion based 
on the class rate of 5.06 percent.  The governor shall identify 
and include within the budget funding for the increased 
expenditures for homestead and agricultural credit aid over the 
amount of expenditures for homestead and agricultural credit aid 
provided in this act that are estimated to result from the 
recommendation.  At that time, the governor may propose 
alternative programs other than homestead and agricultural 
credit aid to prevent other taxpayers' taxes from increasing as 
a result of the governor's recommended increase in the phase-in 
percentage.  The effective net class rate is the sum of the 
products of: 
    (1) the phase-in percentage adopted by the legislature 
multiplied by four percent; and 
    (2) 100 percent minus the phase-in percentage multiplied by 
5.06 percent. 
    The phase-in percentage in any year cannot be less than it 
was in the prior year.  The phase-in percentage for taxes 
payable in 1991 is ten percent provided that the governor may 
recommend an alternative phase-in percentage for taxes payable 
in 1991. 
    Beginning in 1991, the commissioner of revenue shall 
annually set the effective class rate to use for taxes payable 
in the following year as provided in this subdivision and 
announce it by June 1.  For purposes of any aid, levy 
limitation, debt limit, or salary limitation, and property tax 
administration, net tax capacity must be computed with reference 
to the effective class rate for the properties affected by this 
subdivision. 
    Sec. 9.  [273.1316] [CLASSIFICATION OF SUBSTANDARD 
RESIDENTIAL RENTAL PROPERTY.] 
    Subdivision 1.  [DENIAL OF RENTAL CLASSIFICATION.] A 
building that is classified as residential rental property under 
section 273.13, subdivision 25, and that is determined to be 
substandard under this section is assessed as provided in 
section 273.13, subdivision 25, paragraph (e). 
    Subd. 2.  [DEFINITION.] "Substandard building" means a 
building that:  
    (1) has been determined by a state, county, or city agency 
that is charged by the governing body of the appropriate 
political subdivision with the responsibility for enforcing 
health, housing, building, fire prevention, or housing 
maintenance codes: 
    (i) to materially endanger the health and safety of the 
occupants; or 
    (ii) if unoccupied, to be a hazardous building within the 
meaning of section 463.15, subdivision 3; or 
    (iii) to be substantially out of compliance with the basic 
provisions of the housing and maintenance code of that county or 
city; and 
    (2) has not been repaired or brought to a condition of 
compliance within three months after the date of the violation 
notice to the owner as provided in subdivision 3, or within the 
time prescribed by the agency in the notice in accordance with 
applicable state law or local ordinance, whichever period is 
longer.  
    A building is not substandard under this subdivision if it 
was rendered substandard solely by reason of a tornado, flood, 
or other natural disaster.  
    Subd. 3.  [VIOLATION NOTICE.] The initial notice of 
violation by the agency to the owner must be written and must 
contain: 
     (1) the details of the violation; 
     (2) the date by which repairs must be completed or 
compliance with other requirements must be achieved; 
    (3) a general description of the tax consequences if the 
violations are not corrected; and 
    (4) information on where and how an appeal may be filed.  
    The agency may extend the compliance date prescribed in the 
violation notice, for good cause shown, or may determine that 
good faith efforts at compliance are sufficient to prevent 
designation as a substandard building.  
    Subd. 4.  [NOTICE OF NONCOMPLIANCE.] When the period 
specified in subdivision 3 has expired without compliance and 
the building has been determined to be substandard as defined in 
subdivision 2, the agency shall mail to the owner a notice of 
noncompliance.  The notice of noncompliance must be mailed by 
certified mail, return receipt requested, to the owner of the 
property at the owner's last known address.  The notice must 
contain:  
    (1) the details of the noncompliance; 
    (2) a statement that the local assessor has been notified 
of the noncompliance and that the property will be reclassified 
unless compliance is achieved within 30 days of the mailing of 
the notice; 
    (3) a general description of the tax consequences resulting 
from the denial of a residential rental property tax 
classification; and 
    (4) information on where and how an appeal may be filed.  
    Subd. 5.  [APPEALS TO BOARD.] Appeals shall be made to the 
board created under this subdivision.  Each county and city, 
prior to issuance of a violation notice under subdivision 3, 
must establish a board to hear appeals under this subdivision.  
The board shall have five members appointed by the governing 
body.  A decision of the appeal board may be appealed to the 
district court of the county in which the building is located, 
concerning the violation and determination of material 
endangerment, hazard, or lack of substantial compliance with the 
basic provisions of the housing and maintenance code under 
subdivision 2, and concerning a determination of noncompliance 
under subdivision 4.  An appeal must be made no later than 30 
days after receipt of the notice of the action or determination 
being appealed.  If the board determines that the substandard 
building has been brought to a condition of compliance, the 
board shall require the agency to mail to the taxpayer a notice 
of compliance, which shall be in the form and include the 
information prescribed by the local assessor.  
    Subd. 6.  [TIMING OF PROCESS.] If a notice of noncompliance 
is mailed before July 1 of any year, and the property owner has 
neither (1) successfully appealed the determination, nor (2) 
brought the property into compliance by October 15 of that year, 
the property will be assessed under section 273.13, subdivision 
25, paragraph (e), for taxes levied in that year and all 
subsequent years until the agency determines that the property 
is no longer a substandard building, or the property owner 
prevails on an appeal of the matter.  If a notice of 
noncompliance is mailed after June 30 of any year, the 
disqualification would initially be effective for taxes levied 
in the following year. 
    Subd. 7.  [REFUND UPON APPEAL.] If the property owner 
prevails on an appeal at any time after taxes have been paid 
based on assessment of the property as provided in section 
273.13, subdivision 25, paragraph (e), the agency shall notify 
the property owner concerning the procedures for the filing for 
a refund.  The notice shall be in the form and include the 
information prescribed by the local tax assessor.  The taxpayer 
may then file for a refund of the difference between the amount 
of the tax paid and the tax that would have been payable if the 
property had not been incorrectly assessed under this section, 
and each governmental subdivision that levied the tax on the 
property shall refund to the property owner its proportionate 
share of the refund.  
    Subd. 8.  [SPECIFICATION OF VIOLATIONS.] A notice of 
noncompliance shall not be mailed by the agency to the taxpayer 
until the state or the governing body of the appropriate 
political subdivision has prescribed by statute or ordinance the 
nature and types of violations of codes referred to in 
subdivision 2, that would constitute substantial noncompliance 
with the basic provisions of the code or material endangerment 
to the health and safety of occupants of buildings, or that 
would constitute a hazardous building within the meaning of 
section 463.15, subdivision 3. 
     Sec. 10.  [STUDY OF FARM CLASS RATES.] 
    The department of revenue shall study the effect of the 
changes in class rates that apply to farm homesteads for taxes 
payable in 1990, 1991, 1992, and thereafter that are enacted in 
this act.  
    The commissioner of revenue shall report the findings of 
the study by February 12, 1990, to the chairs of the house of 
representatives committee on taxes, the senate committee on 
taxes and tax laws, the house of representatives committee on 
agriculture, and the senate committee on agriculture and rural 
development. 
    Sec. 11.  [INSTRUCTION TO REVISOR.] 
    In the next edition of Minnesota Statutes, the revisor 
shall substitute the term "class rate" for "tax capacity," "tax 
capacity percentage," "tax capacity percent," or similar term or 
phrase, wherever it refers only to the percentage of market 
value applied to property under Minnesota Statutes, section 
273.13, and the term "local tax rate" for "tax capacity rate," 
or similar term or phrase wherever it refers to the rate of tax 
applied to the tax capacity of property within a local unit of 
government or to the sum of the rates of tax of local 
governments.  
    The revisor of statutes shall notify the commissioner of 
revenue of the proposed text changes.  The commissioner of 
revenue shall assist the revisor in making the appropriate 
changes.  
    Sec. 12.  [EFFECTIVE DATE.] 
    Sections 1 to 7 are effective for taxes payable in 1990 and 
thereafter.  
    Sections 8 and 9 are effective for taxes levied in 1990 and 
thereafter, payable in 1991 and thereafter. 
    Section 10 is effective the day following final enactment. 

                               ARTICLE 3 

                              PROPERTY TAX 
    Section 1.  Minnesota Statutes 1988, section 270.12, is 
amended by adding a subdivision to read: 
    Subd. 4.  For purposes of equalization only, public utility 
personal property shall be treated as a separate class of 
property notwithstanding the fact that its tax capacity 
percentage is the same as commercial-industrial property. 
    Sec. 2.  Minnesota Statutes 1989 Supplement, 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 described in 
section 273.13, subdivision 25, paragraph (c), clauses (1), (2), 
and (3), or paragraph (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, 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; 273.124, 
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) 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., and real property 
which is used primarily for abatement and control of air, water, 
or land pollution as part of an agricultural operation or as 
part of an electric generation system.  For purposes of this 
clause, personal property includes ponderous machinery and 
equipment used in a business or production activity that at 
common law is considered real property. 
    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, rules, 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.  On determining that property qualifies for 
exemption, the commissioner 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.  Upon receipt of an 
application for the exemption provided in this clause 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 the 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 1986, as amended through December 31, 
1986, 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; and 
      (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. 
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. 
      (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. 
      (18) Electric power distribution lines and their 
attachments and appurtenances, that are used primarily for 
supplying electricity to farmers at retail.  
     (19) Transitional housing facilities.  "Transitional 
housing facility" means a facility that meets the following 
requirements.  (i) It provides temporary housing to parents and 
children who are receiving AFDC or parents of children who are 
temporarily in foster care.  (ii) It has the purpose of 
reuniting families and enabling parents to obtain 
self-sufficiency, advance their education, get job training, or 
become employed in jobs that provide a living wage.  (iii) It 
provides support services such as child care, work readiness 
training, and career development counseling; and a 
self-sufficiency program with periodic monitoring of each 
resident's progress in completing the program's goals.  (iv) It 
provides services to a resident of the facility for at least six 
months but no longer than three years, except residents enrolled 
in an educational or vocational institution or job training 
program.  These residents may receive services during the time 
they are enrolled but in no event longer than four years.  (v) 
It is sponsored by an organization that has received a grant 
under either section 256.7365 for the biennium ending June 30, 
1989, or section 462A.07, subdivision 15, for the biennium 
ending June 30, 1991, for the purposes of providing the services 
in items (i) to (iv).  (vi) It is sponsored by an organization 
that is exempt from federal income tax under section 501(c)(3) 
of the Internal Revenue Code of 1986, as amended through 
December 31, 1987.  This exemption applies notwithstanding the 
fact that the sponsoring organization receives financing by a 
direct federal loan or federally insured loan or a loan made by 
the Minnesota housing finance agency under the provisions of 
either Title II of the National Housing Act or the Minnesota 
housing finance agency law of 1971 or rules promulgated by the 
agency pursuant to it, and notwithstanding the fact that the 
sponsoring organization receives funding under Section 8 of the 
United States Housing Act of 1937, as amended. 
    Sec. 3.  Minnesota Statutes 1988, section 272.02, is 
amended by adding a subdivision to read: 
    Subd. 7.  [POLLUTION ABATEMENT PROPERTY.] Property, 
including real property, qualifies as exempt pollution abatement 
property under subdivision 1, clause (9), if the following 
conditions are satisfied. 
    (a)(1) The property is part of a refuse derived fuel 
facility converted from a coal burning electric generation 
facility and the property consists of:  
    (i) boiler modifications necessary to efficient handling 
and burning of refuse derived fuel and transfer of the heat 
produced by combustion of the fuel; 
    (ii) ash handling and storage systems, such as 
vacuum-pneumatic equipment, conveyors, crushers, and storage 
buildings to remove, convey, process, and temporarily store 
bottom and fly ash from the burning of refuse derived fuel; 
    (iii) control systems, such as computers, to control the 
operation of equipment described in clauses (i) to (iv) and 
other pollution abatement equipment; and 
    (iv) equipment to monitor emissions into the air and 
combustion efficiency; or 
    (2) the property is a solid waste resource recovery mass 
burn facility. 
    (b) The facility was constructed and will be operated under 
a contractual arrangement providing for payment, in whole or 
part, of the property tax on the property by a political 
subdivision of the state. 
    Sec. 4.  Minnesota Statutes 1988, section 272.02, is 
amended by adding a subdivision to read: 
    Subd. 8.  [PROPERTY LEASED TO SCHOOL DISTRICTS.] Property 
that is leased or rented to a school district is exempt from 
taxation if it meets the following requirements: 
    (1) the lease must be for a period of at least 12 
consecutive months; 
    (2) the terms of the lease must require the school district 
to pay a nominal consideration for use of the building; 
    (3) the school district must use the property to provide 
direct instruction in any grade from kindergarten through grade 
12 or special education for handicapped children or adult basic 
and continuing education as described in section 124.26, 
including provision of administrative services directly related 
to the educational program at that site; and 
    (4) the lease must provide that the school district has the 
exclusive use of the property during the lease period. 
    If the property that is leased to the school district is 
less than a complete parcel for assessment purposes, the value 
of that portion of the parcel that is leased is exempt under 
this subdivision. 
    Sec. 5.  Minnesota Statutes 1988, section 272.025, 
subdivision 1, is amended to read: 
    Subdivision 1.  Except as provided in subdivision 3, a 
taxpayer claiming an exemption from taxation on property 
described in section 272.02, subdivision 1, clauses (1) to (7), 
except churches and houses of worship and property solely used 
for educational purposes by academies, colleges, universities or 
seminaries of learning and property owned by the state of 
Minnesota or any political subdivision thereof, shall file a 
statement of exemption with the assessor of the assessment 
district in which the property is located, or, in the case of a 
taxpayer claiming an exemption from taxation on property 
described in section 272.02, subdivision 1, clause (9), shall 
file a statement of exemption with the commissioner or revenue, 
on or before February 15 of each year for which the taxpayer 
claims an exemption.  In case of sickness, absence or other 
disability or for good cause, the assessor may extend the time 
for filing the statement of exemption for a period not to exceed 
60 days.  The commissioner of revenue shall prescribe the form 
and contents of the statement of exemption. 
    Sec. 6.  Minnesota Statutes 1989 Supplement, section 
273.061, subdivision 1, is amended to read: 
    Subdivision 1.  [OFFICE CREATED; APPOINTMENT, 
QUALIFICATIONS.] Every county in this state shall have a county 
assessor.  The county assessor shall be appointed by the board 
of county commissioners and shall be a resident of this state.  
The assessor shall be selected and appointed because of 
knowledge and training in the field of property taxation and 
appointment shall be approved by the commissioner of revenue 
before the same shall become effective.  Upon receipt by the 
county commissioners of the commissioner of revenue's refusal to 
approve an appointment, the term of the appointee shall 
terminate at the end of that day.  Notwithstanding any law to 
the contrary, a county assessor must have senior accreditation 
from the state board of assessors by January 1, 1992, or within 
two years of the assessor's first appointment under this 
section, whichever is later. 
    Sec. 7.  Minnesota Statutes 1988, section 273.111, 
subdivision 4, is amended to read:  
    Subd. 4.  The value of any real estate described in 
subdivision 3 shall upon timely application by the owner, in the 
manner provided in subdivision 8, be determined solely with 
reference to its appropriate agricultural classification and 
value notwithstanding sections 272.03, subdivision 8 and 
273.11.  In determining such the value for ad valorem tax 
purposes, the assessor shall use sales data obtained from 
agricultural lands located outside the seven metropolitan 
counties but within the region used for computing the range of 
values under section 273.11, subdivision 10.  The sales shall 
have similar soil types, number of degree days, and other 
similar agricultural characteristics as contained in section 
273.11, subdivision 10.  Furthermore, the assessor shall not 
consider any added values resulting from nonagricultural factors.
    Sec. 8.  Minnesota Statutes 1988, section 273.123, 
subdivision 7, is amended to read: 
    Subd. 7.  [LOCAL OPTION; OTHER PROPERTY.] The owner of 
homestead property not qualifying for an adjustment in valuation 
pursuant to subdivisions 1 to 5 or of nonhomestead property may 
receive a reduction in the amount of taxes payable on the 
property for the year in which the destruction occurs on the 
property and in the following year if:  
    (a) 50 percent or more of the homestead dwelling or other 
structure, as established by the county assessor, is 
unintentionally or accidentally destroyed and the homestead is 
uninhabitable or the other structure is not usable; 
    (b) the owner of the property makes written application to 
the county assessor as soon as practical after the damage has 
occurred; and 
    (c) the owner of the property makes written application to 
the county board.  
    The county board may grant a reduction in the amount of 
property tax which the owner must pay on the qualifying property 
in the year of destruction and in the following year.  Any 
reduction in the amount of tax payable which is authorized by 
county board action shall be calculated based upon the number of 
months that the home is uninhabitable or the other structure is 
unusable.  The amount of net tax due from the taxpayer shall be 
multiplied by a fraction, the numerator of which is the number 
of months the dwelling was occupied by that taxpayer, or the 
number of months the other structure was used by the taxpayer, 
and the denominator of which is 12.  For purposes of this 
subdivision, if a structure is occupied or used for a fraction 
of a month, it is considered a month.  "Net tax" is defined as 
the amount of tax after the subtraction of all of the state paid 
property tax credits.  If application is made following payment 
of all property taxes due for the year of destruction, the 
amount of the reduction granted by the county board shall be 
refunded to the taxpayer by the county treasurer as soon as 
practical.  
     Any reductions or refunds approved by the county board 
shall not be subject to approval by the commissioner of revenue. 
     The county board may levy in the following year the amount 
of tax dollars lost to the county government as a result of the 
reductions granted pursuant to this subdivision.  Any amount 
levied for this purpose shall be exempt from the levy limit 
provisions of sections 275.50 to 275.56.  
    Sec. 9.  Laws 1987, chapter 268, article 6, section 54, as 
amended by Laws 1988, chapter 719, article 6, section 20, is 
amended to read: 
    Sec. 54.  [EFFECTIVE DATE.] 
    Except where provided otherwise, sections 1 to 13, and 15 
to 53 are effective for taxes levied in 1988, payable in 1989, 
and thereafter.  Section 14 is effective for taxes payable 
in 1987 1986 and thereafter. 
    Sec. 10.  Minnesota Statutes 1989 Supplement, section 
273.124, subdivision 6, is amended to read: 
    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 and qualifying under section 
501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as 
amended through December 31, 1988, or a limited partnership 
which corporation or partnership operates the property in 
conjunction with a cooperative association, homestead treatment 
may be claimed by the cooperative association on behalf of the 
members of the cooperative for each dwelling unit occupied by a 
member of the cooperative.  The cooperative association must 
provide the assessor with the social security numbers of those 
members.  To qualify for the treatment provided by this 
subdivision, the following conditions must be met:  
    (a) the cooperative association must be organized under 
chapter 308A and all voting members of the board of directors 
must be resident tenants of the cooperative and must be elected 
by the resident tenants of the cooperative; 
    (b) the cooperative association must have a lease for 
occupancy of the property for a term of at least 20 years, which 
permits the cooperative association, while not in default on the 
lease, to participate materially in the management of the 
property, including material participation in establishing 
budgets, setting rent levels, and hiring and supervising a 
management agent; 
    (c) to the extent permitted under state or federal law, 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 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; 
    (d) the cooperative must meet one of the following criteria 
with respect to the income of its members:  (1) a minimum of 75 
percent of members must have incomes at or less than 90 80 
percent of area median income, (2) a minimum of 40 percent of 
members must have incomes at or less than 60 percent of area 
median income, or (3) a minimum of 20 percent of members must 
have incomes at or less than 50 percent of area median income.  
For purposes of this clause, "member income" shall mean means 
the income of a member existing at the time the member acquires 
his or her cooperative membership, and "median income" shall 
mean means the St. Paul-Minneapolis metropolitan area median 
income as determined by the United States Department of Housing 
and Urban Development; and 
    (e) 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. and qualifying under section 
501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as 
amended through December 31, 1988, and the limited partnership 
agreement must provide that the managing general partner have 
sufficient powers so that it materially participates in the 
management and control of the limited partnership; 
    (f) prior to becoming a member of a leasehold cooperative 
described in this subdivision, a person must have received 
notice that (1) describes leasehold cooperative property in 
plain language, including but not limited to the effects of 
classification under this subdivision on rents, property taxes 
and tax credits or refunds, and operating expenses, and (2) 
states that copies of the articles of incorporation and bylaws 
of the cooperative association, the lease between the owner and 
the cooperative association, a sample sublease between the 
cooperative association and a tenant, and, if the owner is a 
partnership, a copy of the limited partnership agreement, can be 
obtained upon written request at no charge from the owner, and 
the owner must send or deliver the materials within seven days 
after receiving any request; 
    (g) if a dwelling unit of a building was occupied on the 
60th day prior to the date on which the unit became leasehold 
cooperative property described in this subdivision, then (1) the 
notice described in paragraph (f) must have been sent by first 
class mail to the occupant of the unit at least 60 days prior to 
the date on which the unit became leasehold cooperative 
property, and (2) prior to the mailing of the notice, copies of 
the documents identified in the notice must have been filed with 
the secretary of state; and 
    (h) the county attorney of the county in which the property 
is located must certify to the assessor that the property meets 
the requirements of this subdivision.  
     Homestead treatment must be afforded to units occupied by 
members of the cooperative association and the units must be 
assessed as provided in subdivision 3, 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. 
    Sec. 11.  Minnesota Statutes 1989 Supplement, section 
273.135, subdivision 2, is amended to read: 
    Subd. 2.  For taxes payable in 1989 only 1990 and 
subsequent years, 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), and shall not exceed an 
amount sufficient to reduce the effective tax rate on each 
parcel of property to the product of 95 percent of the base year 
effective tax rate multiplied by the ratio of the current year's 
tax rate to the payable 1989 tax rate.  In no case will the 
reduction for each homestead resulting from this credit be less 
than $10.  
    (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), and shall not exceed an amount sufficient to reduce 
the effective tax rate on each parcel of property to the product 
of 95 percent of the base year effective tax rate multiplied by 
the ratio of the current year's tax rate to the payable 1989 tax 
rate.  In no case will the reduction for each homestead 
resulting from this credit be less than $10.  
    (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 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 22, 
rounded to the nearest whole dollar, "homestead credit 
equivalency percentage" means a percentage equal to the 
percentage reduction authorized in section 273.13, subdivision 
22 one minus the ratio of the net tax capacity percentage to the 
gross tax capacity percentage applicable to the first $68,000 of 
the market value of residential homesteads, "effective tax rate" 
means tax divided by the market value of the a property, and the 
"base year effective tax rate" means the payable 1988 tax on the 
a property with an identical market value to that of the 
property receiving the credit in the current year after the 
application of the credits payable under Minnesota Statutes 
1988, section 273.13, subdivisions 22 and 23, and this 
section for taxes payable in 1988, divided by the market value 
of the property.  A new parcel of property or a parcel with a 
current year classification that is different from its base year 
classification has the same base year effective tax rate as an 
equivalent homesteaded parcel. 
    Sec. 12.  Minnesota Statutes 1989 Supplement, section 
273.1391, subdivision 2, is amended to read: 
    Subd. 2.  For taxes payable in 1989 only 1990 and 
subsequent years, 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), and shall not exceed an 
amount sufficient to reduce the effective tax rate on each 
parcel of property to the product of 95 percent of the base year 
effective tax rate multiplied by the ratio of the current year's 
tax rate to the payable 1989 tax rate.  In no case will the 
reduction for each homestead resulting from this credit be less 
than $10.  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), and shall not exceed an amount 
sufficient to reduce the effective tax rate on each parcel of 
property to the product of 95 percent of the base year effective 
tax rate multiplied by the ratio of the current year's tax rate 
to the payable 1989 tax rate.  In no case will the reduction for 
each homestead resulting from this credit be less than $10. 
    (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 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 22, 
rounded to the nearest whole dollar, "homestead credit 
equivalency percentage" means a percentage equal to the 
percentage reduction authorized in section 273.13, subdivision 
22 one minus the ratio of the net tax capacity percentage to the 
gross tax capacity percentage applicable to the first $68,000 of 
the market value of residential homesteads, and "effective tax 
rate" means tax divided by the market value of the a property, 
and the "base year effective tax rate" means the payable 1988 
tax on the a property with an identical market value to that of 
the property receiving the credit in the current year after 
application of the credits payable under Minnesota Statutes 
1988, section 273.13, subdivisions 22 and 23, and this 
section for taxes payable in 1988, divided by the market value 
of the property.  A new parcel with a current year 
classification that is different from its base year 
classification has the same base year effective tax rate as an 
equivalent homesteaded parcel.  
    Sec. 13.  Minnesota Statutes 1988, section 273.1392, is 
amended to read: 
    273.1392 [PAYMENT; AIDS TO SCHOOL DISTRICTS.] 
    (1) [AIDS TO SCHOOL DISTRICTS.] The amounts of disaster or 
emergency reimbursement under section 273.123; attached 
machinery aid under section 273.138; homestead credit under 
section 273.13; agricultural credit under section 273.132; aids 
and credits under section 273.1398; 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 
section 124.195, subdivisions 6 and 10. 
    (2) [AIDS TO COUNTIES.] The amounts of human services aid 
increase determined under section 273.1398, subdivision 5b, 
shall be deposited in a human services aid account hereby 
created as an account within the state's general fund.  The 
amount within the account shall annually be transferred to the 
department of human services by the department of revenue.  The 
amounts so transferred shall be paid according to article 16, 
section 1. 
    Sec. 14.  Minnesota Statutes 1989 Supplement, section 
273.1398, subdivision 1, is amended to read: 
    Subdivision 1.  [DEFINITIONS.] (a) In this section, the 
terms defined in this subdivision have the meanings given them. 
    (b) "Unique taxing jurisdiction" means the geographic area 
subject to the same set of tax capacity rates. 
    (c) "Gross tax capacity" means the product of the 
appropriate percentages of market value listed as gross tax 
capacities in section 273.13 class rates and equalized estimated 
market values.  "Total gross tax capacity" means the gross tax 
capacities for all property within the unique taxing 
jurisdiction.  The total gross tax capacity used shall be 
reduced by the sum of (1) the unique taxing jurisdiction's gross 
tax capacity of commercial industrial property as defined in 
section 473F.02, subdivision 3, multiplied by the ratio 
determined pursuant to section 473F.08, subdivision 6, for the 
municipality, as defined in section 473F.02, subdivision 8, in 
which the unique taxing jurisdiction is located and, (2) the 
gross tax capacity of the captured value of tax increment 
financing districts as defined in section 469.177, subdivision 
2, and (3) the gross tax capacity of transmission lines deducted 
from a local government's total gross tax capacity under section 
273.425.  For purposes of determining the gross tax capacity of 
property referred to in clauses (1) and (2) for disparity 
reduction aid payable in 1989, the gross tax capacity before 
equalization shall equal the property's 1987 assessed value 
multiplied by 12 percent.  Gross tax capacity cannot be less 
than zero. 
    (d) "Net tax capacity" means the product of the appropriate 
percentages of market value listed as net tax capacities in 
section 273.13 net class rates for the year in which the aid is 
payable, except that for class 3 utility real and personal 
property the class rate applied shall be 5.38 percent and 
equalized estimated market values for the assessment two years 
prior to that in which aid is payable.  "Total net tax capacity" 
means the net tax capacities for all property within the unique 
taxing jurisdiction.  The total net tax capacity used shall be 
reduced by the sum of (1) the unique taxing jurisdiction's net 
tax capacity of commercial industrial property as defined in 
section 473F.02, subdivision 3, multiplied by the ratio 
determined pursuant to section 473F.08, subdivision 6, for the 
municipality, as defined in section 473F.02, subdivision 8, in 
which the unique taxing jurisdiction is located and, (2) the net 
tax capacity of the captured value of tax increment financing 
districts as defined in section 469.177, subdivision 2, and (3) 
the net tax capacity of transmission lines deducted from a local 
government's total net tax capacity under section 273.425.  For 
purposes of determining the net tax capacity of property 
referred to in clauses (1) and (2), the net tax capacity before 
equalization shall equal the property's 1987 assessed value be 
multiplied by 12 percent the ratio of the highest class rate for 
class 3a property for taxes payable in the year in which the aid 
is payable to the highest class rate for class 3a property in 
the prior year.  Net tax capacity cannot be less than zero. 
    (e) "Equalized market values" are market values that have 
been equalized by dividing the assessor's estimated market value 
for the second year prior to that in which the aid is payable by 
the assessment sales ratios determined by class in the 
assessment sales ratio study conducted by the department of 
revenue pursuant to section 124.2131 in the second year prior to 
that in which the aid is payable.  For computation of aids 
payable in 1989 only, if the aggregate assessment sales ratio is 
less than or equal to 92 percent, the assessment sales ratios by 
class shall be adjusted proportionally so that the aggregate 
ratio of the unequalized market values to the equalized market 
values equals 92 percent; otherwise The equalized market values 
shall equal the unequalized market values divided by the 
assessment sales ratio. 
    (f) "Homestead effective Local tax rate" means the product 
of (i) 46 percent; (ii) 2.17 percent; and (iii) the total tax 
capacity rate for taxes payable in 1989 within a unique taxing 
jurisdiction multiplied by the 1988 aggregate assessment sales 
ratio.  A sales ratio of .92 is used if the actual sales ratio 
is less than .92 the quotient derived by dividing the gross 
taxes levied within a unique taxing jurisdiction for taxes 
payable in 1989 by the gross tax capacity of the unique taxing 
jurisdiction for taxes payable in 1989.  For computation of the 
local tax rate for aid payable in 1991 and subsequent years, 
gross taxes for taxes payable in 1989 exclude equalized levies 
as defined in article 6, section 8.  For purposes of computation 
of the local tax rate only, gross taxes shall not be adjusted by 
inflation or household growth. 
    (g) For purposes of calculating the homestead and 
agricultural credit aid authorized pursuant to subdivision 2, 
the "subtraction factor" is the product of (i) a unique taxing 
jurisdiction's homestead effective local tax rate; (ii) 
its total net tax capacity; and (iii) 103 .9767. 
    (h) For purposes of calculating and allocating homestead 
and agricultural credit aid authorized pursuant to subdivision 2 
and the disparity reduction aid authorized in subdivision 3, 
"gross taxes levied on all properties" or "gross taxes" means 
the total gross taxes levied on all properties except that 
levied on the captured value of tax increment districts as 
defined in section 469.177, subdivision 2, and that levied on 
the portion of commercial industrial properties' assessed value 
or gross tax capacity, as defined in section 473F.02, 
subdivision 3, subject to the areawide tax as provided in 
section 473F.08, subdivision 6, in a unique taxing jurisdiction 
before reduction by any credits for taxes payable in the year 
prior to that in which the aids are payable 1989.  For purposes 
of disparity reduction aid only, total gross taxes shall be 
reduced by the taxes levied for any school district referendum 
levies authorized pursuant to section 124A.03, subdivision 2, 
and any school district debt levies authorized pursuant to 
section 475.61 Gross taxes are before any reduction for 
disparity reduction aid.  Gross taxes levied cannot be less than 
zero.  
    For homestead and agricultural credit aid payable in 1991 
and subsequent years, "gross taxes" or "gross taxes levied on 
all properties" shall mean gross taxes payable in 1989, 
excluding taxes defined as "equalized levies" in article 6, 
section 8, multiplied by the cost-of-living adjustment factor 
and the household adjustment factor.  
    (i) "Income maintenance Human services aids" means: 
    (1) medical assistance under sections 256B.041, subdivision 
5, and 256B.19, subdivision 1; 
    (2) preadmission screening and alternative care grants 
under section 256B.091, subdivision 8; 
    (3) general assistance, and work readiness under section 
256D.03, subdivision 2; 
    (4) general assistance medical care under section 256D.03, 
subdivision 6; 
    (5) aid to families with dependent children under section 
256.82, subdivision 1, including emergency assistance under 
section 256.871, subdivision 6; and funeral expense payments 
under section 256.935, subdivision 1; and 
    (6) supplemental aid under section 256D.36, subdivision 1. 
    (1) Aid to Families with Dependent Children under sections 
256.82, subdivision 1, and 256.935, subdivision 1; 
    (2) medical assistance under sections 256B.041, subdivision 
5, and 256B.19, subdivision 1; 
    (3) general assistance medical care under section 256D.03, 
subdivision 6; 
    (4) general assistance under section 256D.03, subdivision 
2; 
    (5) work readiness under section 256D.03, subdivision 2; 
    (6) emergency assistance under section 256.871, subdivision 
6; 
    (7) Minnesota supplemental aid under section 256D.36, 
subdivision 1; 
    (8) preadmission screening and alternative care grants 
under section 256B.091; 
    (9) work readiness services under section 256D.051; 
    (10) case management services under section 256.736, 
subdivision 13; 
    (11) general assistance claims processing, medical 
transportation and related costs; and 
    (12) medical assistance, medical transportation and related 
costs. 
    (j) "Adjustment factor" means one plus the percentage 
change in (1) the ratio of estimated market value of residential 
homesteads to the estimated market value of all taxable property 
within the city or township containing the unique taxing 
jurisdiction based on the assessment one year prior to the year 
in which the aid is payable when compared to the same ratio 
based on the assessment two years prior to the year in which the 
aid is payable.  If the market value of farm homesteads exceeds 
the market value of residential homesteads in the city or 
township containing the unique taxing jurisdiction, "adjusted 
factor" means one plus the percentage change in the ratio of the 
estimated market value of farm homesteads to the estimated 
market value of all taxable property within the city or township 
containing the unique taxing jurisdiction based on the 
assessment one year prior to the year in which the aid is 
payable when compared to the same ratio based on the assessment 
two years prior to the year in which the aid is payable.  The 
adjustment factor cannot be less than one.  Estimates of market 
value for the assessment one year prior to the year in which the 
aid is paid will be made on the basis of the abstract submitted 
pursuant to section 270.11.  Discrepancies between the estimate 
and actual market values will not result in increased or 
decreased aid in the year in which the estimates are used to 
compute aid. 
    (k) "Cost-of-living adjustment factor" means one plus the 
percentage, if any, by which: 
    (1) the consumer price index for the calendar year 
preceding that in which aid is payable, exceeds 
    (2) the consumer price index for calendar year 1989.  
    (l) "Consumer price index for any calendar year" means the 
average of the consumer price index as of the close of the 
12-month period ending on May 31 of such calendar year.  
    (m) "Consumer price index" means the last consumer price 
index for all-urban consumers published by the department of 
labor.  For purposes of the preceding sentence, the revision of 
the consumer price index which is most consistent with the 
consumer price index for calendar year 1989 shall be used. 
    (n) "Household adjustment factor" means the number of 
households for the most recent year preceding that in which the 
aids are payable divided by the 1988 number of households.  The 
household adjustment factor cannot be less than one. 
    Sec. 15.  Minnesota Statutes 1988, section 273.1398, 
subdivision 2, is amended to read: 
    Subd. 2.  [TRANSITION HOMESTEAD AND AGRICULTURAL CREDIT 
AID.] (a) Transition Initial homestead and agricultural credit 
aid for each unique taxing jurisdiction for taxes payable in 
1990 equals the total gross taxes levied on all properties, 
minus the unique taxing jurisdiction's subtraction 
factor.  Transition The commissioner of revenue may, in 
computing the amount of the homestead and agricultural credit 
aid paid in 1990, adjust the gross tax capacity, net tax 
capacity, and gross taxes of a taxing jurisdiction for taxes 
payable in 1989 to reflect auditor's errors in computing taxes 
payable for 1989 in unique taxing jurisdictions within 
independent school district Nos. 720 and 792.  Homestead and 
agricultural credit aid cannot be less than zero.  The 
transition aid so determined for school districts for purposes 
of general education and transportation levies shall be 
multiplied by the ratio of the adjusted gross tax capacity based 
upon the 1988 adjusted gross tax capacity to the estimated 1987 
adjusted gross tax capacity based upon the 1987 adjusted 
assessed value.  Each county assessor and the city assessors of 
Minneapolis, Duluth, and St. Cloud shall furnish the 
commissioner of revenue with the 1988 market values for taxes 
payable in 1989 for any new classes of property established in 
this article.  The commissioner shall use those values, and 
estimate values where needed, in developing the 1988 tax 
capacity for each unique taxing jurisdiction under this section. 
    (b)(1) The transition homestead and agricultural credit aid 
is allocated to each local government levying taxes in the 
unique taxing jurisdiction in the proportion that the local 
government's gross taxes bears to the total gross taxes levied 
within the unique taxing jurisdiction.  
    (2) The 1990 homestead and agricultural credit aid so 
determined for school districts for purposes of general 
education levies pursuant to section 124A.23, subdivisions 2 and 
2a, and transportation levies pursuant to section 275.125, 
subdivisions 5 and 5c, shall be multiplied by the ratio of the 
adjusted gross tax capacity based upon the 1988 adjusted gross 
tax capacity to the estimated 1987 adjusted gross tax capacity 
based upon the 1987 adjusted assessed value. 
    (3) If a local government's total tax capacity rate for all 
funds for taxes payable in 1989 varies within the area in which 
it exercises taxing authority, the local government's allocated 
transition homestead and agricultural credit aid must be further 
allocated between the part of its levy in respect to which the 
tax capacity rate is constant throughout the area in which it 
exercises taxing authority and the part of its levy in respect 
to which the tax capacity rate varies throughout the area in 
which it exercises taxing authority.  
    (c) In 1991 and subsequent years, a local government shall 
receive transition aid equal to that it received in 1990 subject 
to the requirement of the last sentence of subdivision 6. 
    (d) The difference between (1) the income maintenance aids 
payable to a county and (2) the income maintenance aids that 
would be payable to the county pursuant to the rates in effect 
for calendar year 1989 shall be reduced by the sum of the amount 
of transition aid a county receives under this subdivision for 
all unique taxing jurisdictions located within its borders.  The 
reduction must not reduce the difference to less than zero.  The 
reduction shall be prorated among all payments of the increased 
income maintenance aids so that each payment is reduced by an 
equal percentage amount.  The commissioner of revenue shall 
certify each county's transition aid to the commissioner of 
human services for purposes of this adjustment.  The calendar 
year 1990 homestead and agricultural credit aid shall be 
adjusted by the adjustment factor. 
    (d) Payments under this subdivision to counties in 1990 and 
subsequent years shall be reduced by the amount provided in 
section 477A.012, subdivision 3, paragraph (d), and subdivision 
4, paragraph (d). 
     (e) Payments under this subdivision to cities and towns 
shall be annually reduced by the amount of the homestead and 
agricultural credit aid adjustment, if any, determined for 1990 
under section 477A.013, subdivision 6. 
    Sec. 16.  Minnesota Statutes 1988, section 273.1398, is 
amended by adding a subdivision to read: 
    Subd. 2b.  [FISCAL DISPARITY HOMESTEAD AND AGRICULTURAL 
CREDIT AID.] For aids payable in 1991 and subsequent years, each 
local government subject to the provisions of chapter 473F shall 
receive fiscal disparity homestead and agricultural credit aid.  
The aid shall be computed for each affected local government in 
a manner consistent with that computed under subdivision 2 
except that:  
    (1) "total gross taxes" shall mean the local government's 
levy on its distribution value pursuant to section 473F.08 for 
taxes payable in 1990, excluding a school district's equalized 
levies as defined in article 6, section 8, and adjusted for 
inflation and household growth subsequent to 1990; 
    (2) "total net tax capacity" shall mean its distribution 
value for taxes payable in the year prior to that in which the 
aid is payable times the ratio of the class rate applicable to 
class 3a property in excess of $100,000 of estimated market 
value for taxes payable in the year preceding that in which the 
aid is payable to 5.25 percent; and 
    (3) "local tax rate" shall mean the rate used to determine 
its areawide portion of the levy pursuant to section 473F.08, 
subdivisions 3, paragraph (a), and 8a, for taxes payable in 
1990, excluding that portion of the rate attributable to a 
school district's equalized levies as defined in article 6 
section 8. 
    Sec. 17.  Minnesota Statutes 1988, section 273.1398, 
subdivision 3, is amended to read: 
    Subd. 3.  [DISPARITY REDUCTION AID.] (a) For taxes payable 
in 1989, a disparity reduction aid shall be calculated for each 
unique taxing jurisdiction.  The aid is the greater of: 
    (1) the difference between (i) the total 1988 gross tax 
payable on all taxable property within the unique taxing 
jurisdiction, and (ii) the gross tax capacity of the unique 
taxing jurisdiction; or 
    (2) 20 percent of the difference between (i) the 1988 gross 
tax of the city or township, and (ii) 23 percent of the city's 
or township's gross tax capacity.  
In no case can the aid be less than $0.  For taxes payable in 
1990, and subsequent years, the amount of disparity aid 
originally certified for each unique taxing jurisdiction for 
taxes payable in the prior year shall be multiplied by the ratio 
of (1) the jurisdiction's tax capacity using the class rates for 
taxes payable in the year for which aid is being computed, to 
(2) its tax capacity using the class rates for taxes payable in 
the year prior to that for which aid is being computed, both 
based upon market values for taxes payable in the year prior to 
that for which aid is being computed. 
    (b) The disparity reduction aid is allocated to each local 
government levying taxes in the unique taxing jurisdiction in 
the proportion that the local government's payable gross taxes 
bears to the total payable gross taxes levied within the unique 
taxing jurisdiction. 
    (c) In 1990 and subsequent years, a local government shall 
receive disparity reduction aid equal to that it received in 
1989. 
    Sec. 18.  Minnesota Statutes 1989 Supplement, section 
273.1398, subdivision 5, is amended to read: 
    Subd. 5.  [ADDITIONAL HOMESTEAD AND AGRICULTURAL CREDIT 
GUARANTEE.] Beginning with taxes payable in 1990, each unique 
taxing jurisdiction may receive additional homestead and 
agricultural credit guarantee payments.  
    (1) Each year, the commissioner shall certify to the county 
auditor determine the total education aids paid under chapters 
124 and 124A, homestead and agricultural credit aid and 
disparity reduction aid paid under section 273.1398, local 
government aid to cities, counties, and towns paid under chapter 
477A, and income maintenance aid paid to counties for each 
taxing jurisdiction.  The county auditor commissioner shall 
apportion each local government's aids to the unique taxing 
jurisdiction based upon the proportion that the unique taxing 
jurisdiction's tax capacity bears to the total tax capacity of 
the local government. 
    (2) Each year, the county auditor commissioner will compute 
a gross tax capacity rate for each taxing jurisdiction equal to 
its total levy divided by its gross tax capacity under Minnesota 
Statutes 1988, section 273.13.  For each unique taxing 
jurisdiction, a total gross tax capacity rate will be 
determined.  This total gross tax capacity rate will be applied 
against the gross tax capacity of each property that would have 
been eligible for the homestead credit or the agricultural 
credit for taxes payable in 1989.  A An estimated credit amount 
will be determined for each parcel all qualifying parcels based 
upon the credit rate structure in effect for taxes payable in 
1989.  The resulting credit amounts will be summed for all 
parcels in the unique taxing jurisdiction. 
    If the amount determined in clause (2) is greater than the 
amount determined in clause (1), the difference will be 
additional homestead and agricultural credit guarantee payments 
for the unique taxing jurisdiction.  The additional credit 
amount shall proportionately reduce the tax capacity rates of 
all local governments levying taxes within the unique taxing 
jurisdiction in the following year.  The county auditor 
commissioner shall certify the amounts of additional credits 
determined under this subdivision in a form prescribed by the 
commissioner to the county auditor at the time provided in 
subdivision 6.  
    Sec. 19.  Minnesota Statutes 1988, section 273.1398, is 
amended by adding a subdivision to read: 
    Subd. 5a.  [AID ADJUSTMENT FOR COUNTY HUMAN SERVICES 
AID.] (a) There shall be transferred to the human services aid 
account from the payment to a county under subdivision 2 an 
amount representing a county's human services aid increase as 
calculated in subdivision 5b, paragraphs (a) to (c).  The amount 
calculated for each county shall be deducted from the first 
payment to the county under this section in 1991 and subsequent 
years.  If the deduction exceeds the amount of the first 
payment, the balance shall be subtracted from the second 
payment.  The amount of the payments under subdivision 2 shall 
not be less than zero as a result of this adjustment. 
    Sec. 20.  Minnesota Statutes 1988, section 273.1398, is 
amended by adding a subdivision to read: 
    Subd. 5b.  [STATE AID FOR COUNTY HUMAN SERVICES COSTS.] (a) 
Human services aid increase for each county equals an amount 
representing the county's costs for human services programs 
cited in subdivision 1, paragraph (i).  The amount of the aid 
increase is calculated as provided in this section.  The aid 
increase shall be deposited in the human services account 
created pursuant to section 273.1392. 
    (b) On July 15, 1990, each county shall certify to the 
department of revenue the estimated difference between the 
county's base amount costs as defined in section 256.025 for 
human services programs cited in subdivision 1, paragraph (i), 
for calendar year 1990 and human services program revenues from 
all nonproperty tax sources excluding revenue from state and 
federal payments for the programs listed in section 273.1398, 
subdivision 1, paragraph (i), and revenue from incentive 
programs pursuant to sections 256.019, 256.98, subdivision 7, 
256D.06, subdivision 5, 256D.15, and 256D.54, subdivision 3, 
used at the time the levy was certified in 1989.  At that time 
each county may revise its estimate for taxes payable in 1990 
for purposes of this subdivision.  The human services program 
estimates provided pursuant to this clause shall only include 
those costs and related revenues up to the extent the county 
provides benefits within statutory mandated standards.  This 
amount shall be the county's human services aid amount under 
this section. 
    (c) On July 15, 1991, each county shall certify to the 
department of revenue the actual difference between the county's 
human services program costs and nonproperty tax revenues as 
provided in paragraph (b) for calendar year 1990.  If the actual 
difference is larger than the estimated difference as calculated 
in paragraph (b), the aid amount for the county shall be 
increased by that amount.  If the actual difference is smaller 
than the estimated difference as calculated in paragraph (b), 
the aid amount to the county shall be reduced by that amount. 
    (d) On January 1, 1991, the department of finance shall 
certify to the department of revenue the estimated amount of 
county receipts deducted from county human services expenditures 
pursuant to Minnesota Statutes 1988, section 287.12, in calendar 
year 1990.  This amount shall be added to the human services aid 
increase amount under this section. 
    Sec. 21.  Minnesota Statutes 1989 Supplement, section 
273.1398, subdivision 6, is amended to read: 
    Subd. 6.  [PAYMENT.] The commissioner shall certify the 
aids provided in subdivisions 2 and, 2a, 3, and 5 before 
September 30 December 1, 1989, and October 1 thereafter of the 
year preceding the distribution year to the county auditor of 
the affected local government and pay them and the credit 
reimbursements to local governments other than school districts 
at the times provided in section 477A.015 for payment of local 
government aid to taxing jurisdictions.  Aids and credit 
reimbursements to school districts must be certified to the 
commissioner of education and paid under section 273.1392.  
Except for education districts and secondary cooperatives that 
receive revenue according to section 124.2721 or 124.575, 
payment shall not be made to any taxing jurisdiction that has 
ceased to levy a property tax nor shall homestead and 
agricultural credit aid be payable on the part of a levy to 
which homestead and agricultural credit aid was separately 
allocated under subdivision 2, paragraph (b), clause (2), which 
is no longer levied. 
    Sec. 22.  [274.20] [MANUFACTURED HOME HOMESTEAD AND 
AGRICULTURAL CREDIT AID.] 
    Subdivision 1.  [DEFINITIONS.] (a) The term "total gross 
taxes" means the total gross taxes levied on manufactured homes 
assessed pursuant to section 274.19 in a unique taxing 
jurisdiction as defined in section 273.1398 before reduction by 
any credits for taxes in 1989.  For aid payable in 1991 and 
subsequent years total gross taxes for 1989 shall be multiplied 
by the cost of living adjustment factor as defined in section 
273.1398. 
    (b) "Local tax rate" means the total tax capacity tax rate 
for taxes payable in 1989 within a unique taxing jurisdiction. 
    (c) "Total net tax capacity" means the net tax capacities 
as defined in section 273.1398 of all manufactured homes 
assessed pursuant to section 274.19 except the market value used 
shall be for the assessment one year prior to that in which aid 
is payable. 
    (d) "Subtraction factor" means the product of (i) a unique 
taxing jurisdictions local tax rate; (ii) its total net tax 
capacity; and (iii) 0.9767. 
    Subd. 2.  [MANUFACTURED HOME HOMESTEAD AND AGRICULTURAL 
CREDIT AID.] Manufactured home homestead and agricultural credit 
aid for each unique taxing jurisdiction equals total gross taxes 
minus the unique taxing jurisdiction's subtraction factor.  The 
aid shall be allocated to each local government levying taxes in 
the unique taxing jurisdiction in the proportion that the local 
government's gross taxes bear to the total gross taxes. 
    Subd. 3.  [AID CALCULATION.] The commissioner of revenue 
shall make the calculation required in subdivision 2 and 
annually pay manufactured home homestead and agricultural credit 
aid to the local governments at the times provided in section 
477A.015 for local governments other than school districts.  Aid 
payments to the school districts must be certified to the 
commissioner of education and paid under section 273.1392. 
     Subd. 4.  [APPROPRIATION.] There is annually appropriated 
from the general fund to the commissioner of revenue a sum 
sufficient to pay the aids provided under this section. 
     Sec. 23.  Minnesota Statutes 1989 Supplement, section 
275.07, subdivision 3, is amended to read: 
    Subd. 3.  The county auditor shall adjust each local 
government's levy certified under subdivision 1 by the amount of 
homestead and agricultural credit aid certified by section 
273.1398, subdivision 2, reduced by the amount under section 
273.1398, subdivision 5a.  If a local government's homestead and 
agricultural credit aid was further allocated between portions 
of its levy pursuant to section 273.1398, subdivision 2, 
paragraph (b)(2), the levy or fund to which the homestead and 
agricultural credit aid was allocated is the levy or fund which 
must be adjusted. 
    Sec. 24.  Minnesota Statutes 1989 Supplement, section 
287.12, is amended to read:  
   287.12 [TAXES, HOW APPORTIONED.] 
    All taxes paid to the county treasurer under the provisions 
of sections 287.01 to 287.12 shall be credited to the county 
revenue fund apportioned, 97 percent to the general fund of the 
state, and three percent to the county revenue fund. 
    On or before the tenth day of each month the county 
treasurer shall determine the receipts from the mortgage 
registration tax during the preceding month.  The treasurer 
shall report to the county welfare agency on or before the tenth 
day of each month 97 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.  The 
net receipts from the preceding month must be credited to the 
county welfare fund by the tenth day of each month.  If a 
county's mortgage and deed tax receipts exceed the state share 
of AFDC grants for the county, the excess amount must be offset 
against state payments to the county for the state share of the 
income maintenance programs.  Any excess remaining after 
offsetting all state payments for income maintenance programs 
must be paid to the commissioner of human services and credited 
to the AFDC account and pay to the commissioner of revenue for 
deposit in the state treasury and credit to the general fund the 
state's portion of the receipts from the mortgage registration 
tax during the preceding month.  The county treasurer shall 
provide any related reports requested by the commissioner of 
revenue. 
    Sec. 25.  Minnesota Statutes 1988, section 287.29, is 
amended to read: 
    287.29 [PAYMENT OF RECEIPTS TO COUNTY STATE GENERAL 
FUND; REPORT; RECORD REPORTS.] 
    Subdivision 1.  On or before the tenth day of each month, 
the county treasurer shall determine and report pay to the 
county welfare agency the receipts attributable to the tax 
imposed during the preceding month.  The report must accompany 
the report required in section 287.12.  The receipts shall be 
deposited in the county treasury and credited to the county 
revenue fund.  The net receipts from the preceding month must be 
credited to the county welfare fund by the tenth day of each 
month commissioner of revenue for deposit in the state treasury 
and credit to the general fund the receipts from the sale of 
documentary stamps during the preceding month.  The county 
treasurer shall provide any related reports requested by the 
commissioner of revenue. 
    Sec. 26.  [290A.045] [COMMERCIAL/INDUSTRIAL EQUALIZATION 
REFUND.] 
    Subdivision 1.  [DEFINITIONS.] (a) "Eligible property" 
means that portion of property classified as commercial or 
industrial property under section 273.13, subdivision 24, 
paragraph (a), which is subject to the highest class rate within 
class 3a. 
    (b) "Eligible property market value" means the assessor's 
estimated market value of eligible property. 
    (c) "Eligible tax" means the net property tax payable on 
eligible property market value that is in excess of the tax 
capacity of the eligible property market value. 
    (d) "Net property tax payable" means the property tax 
payable on eligible property value, less 
    (1) special assessments, penalties, and interest payable on 
the property; and 
    (2) any state-paid credits other than the refund provided 
under this section.  The taxes are considered payable in the 
year prescribed by law for payment of the taxes. 
    Subd. 2.  [NOTIFICATION BY COUNTY AUDITOR.] For taxes 
payable in 1990 and 1991 only, the county auditor shall notify 
the owners of commercial and industrial properties with eligible 
tax amounts that they are eligible for a state-paid refund.  
This notification shall be provided to taxpayers either along 
with the tax statements mailed under section 276.04, subdivision 
3, or in a separate mailing to the taxpayer during the same time 
period.  The notification shall include the amount of the 
eligible tax, eligible property market value, and instructions 
for submitting a claim for the commercial/industrial 
equalization refund under this section. 
    Subd. 3.  [FILING OF CLAIM.] A claim for a 
commercial/industrial equalization refund under this section 
must be filed with the commissioner of revenue on or before June 
1 of the year the property taxes are payable.  Claims under this 
section must be made in the form and contain the information 
required by the commissioner of revenue.  Eligible property 
consisting of contiguous parcels owned by the same person or 
entity are considered a single parcel for the purposes of this 
section and must be filed on a single claim. 
    Subd. 4.  [CALCULATION OF REFUND AMOUNT.] The refund amount 
under this section for each eligible property is equal to 75 
percent of the eligible tax up to a maximum of $4,000 for each 
claim.  If the amount appropriated under subdivision 7 is 
insufficient to pay the refund amounts calculated under this 
subdivision, the commissioner of revenue shall proportionately 
reduce the refund amount for each eligible property so that the 
sum of the refund amounts paid under this section equals the 
amount appropriated in subdivision 7. 
    Subd. 5.  [PAYMENT OF CLAIM.] Allowable claims filed under 
this section shall be paid by the commissioner prior to October 
1.  If the initial refund amounts were proportionately reduced 
under subdivision 4, the commissioner shall attach an 
explanation of the calculation of the refund amount. 
    Subd. 6.  [ADMINISTRATION.] Sections 290A.11, 290A.111, 
290A.112, 290A.12, 290A.14, 290A.15, 290A.17, 290A.18, and 
290A.20, including the penalties imposed on the claimants and 
tax return preparers in those sections, apply to claims allowed 
under this section.  The commissioner of revenue has the powers 
granted in those sections to administer the refund under this 
section. 
    Subd. 7.  [APPROPRIATION.] $10,000,000 is appropriated for 
fiscal year 1991 from the general fund to the commissioner of 
revenue to pay the refund under this section for taxes payable 
in 1990.  $10,000,000 is appropriated for fiscal year 1992 from 
the general fund to the commissioner of revenue to pay the 
refund under this section for taxes payable in 1991. 
    Sec. 27.  Minnesota Statutes 1988, section 298.28, 
subdivision 6, is amended to read: 
    Subd. 6.  [PROPERTY TAX RELIEF.] (a) Twelve Fifteen cents 
per taxable ton, less any amount required to be distributed 
under paragraphs (b) and (c), must be allocated to 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, .1875 
cent per taxable ton of the tax imposed and collected from such 
taxpayer shall be paid to the county. 
    (c) 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 school district other than a school 
district in which the mining and concentrating processes are 
conducted, .5625 cent per taxable ton of the tax imposed and 
collected from the taxpayer shall be paid to the school district.
    Sec. 28.  Minnesota Statutes 1988, section 473F.08, is 
amended by adding a subdivision to read: 
    Subd. 8a.  [FISCAL DISPARITIES ADJUSTMENT.] In any year in 
which the highest class rate for class 3a property changes from 
the rate in the previous year, the following adjustments shall 
be made to the procedures described in sections 473F.06 to 
473F.08. 
    (1) An initial contribution tax capacity shall be 
determined for each municipality based on the previous year's 
class rates. 
    (2) Each jurisdiction's distribution tax capacity shall be 
determined based upon the areawide tax base determined by 
summing the tax capacities computed under clause (1) for all 
municipalities and apportioning the resulting sum pursuant to 
section 473F.07, subdivision 5. 
    (3) Each jurisdiction's distribution levy shall be 
determined by applying the procedures described in subdivision 
3, clause (a), to the distribution tax capacity determined 
pursuant to clause (2). 
    (4) Each municipality's final contribution tax capacity 
shall be determined equal to its initial contribution tax 
capacity multiplied by the ratio of the new highest class rate 
for class 3a property to the previous year's highest class rate 
for class 3a property. 
    (5) The areawide tax capacity rate shall be determined by 
dividing the sum of the amounts determined in clause (3) by the 
sum of the values determined in clause (4). 
    (6) The final contribution tax capacity determined in 
clause (4) shall also be used to determined the portion of each 
commercial/industrial property's tax capacity subject to the 
areawide tax capacity rate pursuant to subdivision 6. 
    Sec. 29.  [NOTIFICATION OF ADMINISTRATIVE DIRECTIVES.] 
    The commissioner of revenue shall notify the chairs of the 
senate committee on taxes and tax laws and the house committee 
on taxes of administrative directives or interpretations of the 
provisions of this article.  The notice must be given at least 
five days before a directive or interpretation is released to 
the public or provided to a local government to allow time for 
the chairs to provide advice or to comment on the commissioner's 
directive or interpretation of the law.  An administrative 
directive or interpretation includes an explanation of a 
provision, a clarification of its application to a particular 
circumstance, a directive on how to apply or administer a 
provision, and other similar communications that are intended to 
direct or guide local government officials in administering the 
law.  This section applies only to written materials that are 
either released to the public or mailed, sent, or provided to a 
local government or a local government official. 
    Sec. 30.  [6.76] [LOCAL GOVERNMENTAL EXPENDITURES FOR LOBBYISTS.] 
    On or before January 31, 1990, and each year thereafter, 
all counties, cities, school districts, metropolitan agencies, 
regional railroad authorities, and the regional transit board 
shall report to the state auditor, on forms prescribed by the 
auditor, their estimated expenditures paid for the previous 
calendar year to a lobbyist as defined in section 10A.01, 
subdivision 11, and to any staff person not registered as a 
lobbyist but who spends over 25 percent of his or her time 
during the legislative session on legislative matters. 
    Sec. 31.  [PROPERTY TAX REFUNDS FOR TENANTS OF DISQUALIFIED 
LEASEHOLD COOPERATIVES.] 
    Property tax refunds payable under Minnesota Statutes, 
chapter 290A, for rent paid in 1988 and property taxes payable 
in 1989 to residents of a leasehold cooperative that is 
disqualified from classification as a leasehold cooperative 
under Minnesota Statutes, section 273.124, subdivision 6, 
effective for assessment year 1989 shall not be reduced by the 
commissioner of revenue because of the disqualification. 
    Sec. 32.  [ASSESSMENT OF MANUFACTURED HOME PARKS.] 
    Subdivision 1.  [NO VALUATION INCREASE.] (a) 
Notwithstanding Minnesota Statutes, section 273.11, or any other 
law to the contrary, the estimated market value of manufactured 
home parks as defined in section 327.14, subdivision 3, and 
assessed under section 273.13, subdivision 25, paragraph (a) or 
(b), for taxes levied in 1989, may not exceed its estimated 
market value for taxes levied in 1988.  
    (b) This subdivision does not apply to increases in value 
attributable to improvements made to the real estate since the 
January 2, 1988, assessment.  It does not apply to property 
becoming subject to taxation since the January 2, 1988, 
assessment.  The limitation in this subdivision applies to any 
increase in valuation imposed by the local boards of review 
under section 274.01, the county boards of equalization under 
section 274.13, and the state board of equalization and the 
commissioner of revenue under sections 270.11, 270.12, and 
270.16. 
    Subd. 2.  [NOTICE TO PROPERTY OWNER.] If an assessor has 
increased the estimated market value of property over that 
allowed in subdivision 1, the assessor must reduce the estimated 
market value to the amount allowed under subdivision 1.  On or 
before November 1, 1989, the assessor must mail notices to all 
owners of property subject to subdivision 1.  The notice must 
state that any increase in the estimated market value of 
manufactured home park land for taxes levied in 1989 over that 
for taxes levied in 1988 has been limited by this act. 
    Subd. 3.  [STUDY.] The department of revenue shall study 
the valuation and assessment of manufactured home parks.  It 
shall compile information on valuation and assessment practices, 
evaluate alternative valuation and assessment methods, and 
report its findings, along with recommendations and proposals 
for legislation in the 1990 session, to the chair of the house 
of representatives tax committee and to the chair of the senate 
committee on taxes and tax laws.  The report must be submitted 
by February 12, 1990. 
    Sec. 33.  [273.1398] [Subd. 5c.] [APPROPRIATION.] 
    Pursuant to section 273.1398, subdivision 5b, paragraph 
(d), there shall be appropriated on January 1 and July 1, 1991, 
and each year thereafter, from the general fund to the county 
human services aid account under Minnesota Statutes, section 
273.1392, subdivision 2, an amount equal to the amount certified 
by the department of human services to the department of revenue 
under Minnesota Statutes, section 273.1398, subdivision 5b, 
clause (d).  Each of the two appropriations shall equal one-half 
of the certified amount.  
    Sec. 34.  [REPEALER.] 
    Minnesota Statutes 1988, sections 273.135, subdivision 2a; 
and 273.1391, subdivision 2a, are repealed. 
    Sec. 35.  [EFFECTIVE DATE.] 
    Section 1 is effective the day following final enactment 
and is intended to confirm and clarify the original intent of 
the legislature in the taxation and equalization of 
state-assessed public utility property.  
    Sections 2 and 7 are effective for taxes payable in 1991 
and thereafter. 
    Sections 3, 5, 8, 11, 12, 23, 26, and 28 are effective for 
taxes payable in 1990 and thereafter. 
    Section 4 is effective January 1, 1989.  
    Sections 6, 9, 21, 29 to 32, and 34 are effective the day 
following final enactment. 
    Section 10 is effective for taxes levied in 1989, payable 
in 1990 and thereafter, provided that cooperatives that 
qualified under Minnesota Statutes, section 273.124, subdivision 
6, on January 2, 1989, shall meet the board membership 
requirements of paragraph (a) by December 1, 1989, and shall 
meet the requirements of section 501(c)(3) or 501(c)(4) status 
under the Internal Revenue Code in the first paragraph and in 
paragraph (e) by January 1, 1990, and that the notice and filing 
requirements of paragraphs (f) and (g) shall apply only to 
leasehold cooperatives created later than 60 days after the date 
of enactment of this act. 
    Sections 13, 19, and 20 are effective January 1, 1991. 
    Section 14, paragraph (i), clauses (1) to (12), are 
effective for aids paid in 1991 and thereafter.  The rest of 
section 14 and sections 15, 17, 18, and 22 are effective for 
aids paid in 1990 and thereafter, except as otherwise provided 
in those sections. 
    Section 16 is effective for aids payable in 1991 and 
thereafter. 
    Sections 24 and 25 are effective for mortgage registration 
and deed taxes collected after November 30, 1990. 
    Section 27 is effective for taconite produced in 1989, 
proceeds distributed in 1990, and thereafter.  
    Section 33 is effective July 1, 1991. 

                                ARTICLE 4

                         LOCAL GOVERNMENT AIDS
    Section 1.  Minnesota Statutes 1988, section 275.07, 
subdivision 1, is amended to read: 
    Subdivision 1.  The taxes voted by cities, towns, counties, 
school districts, and special districts shall be certified by 
the proper authorities to the county auditor on or before 
October 25 in each year.  The taxes certified shall not be 
adjusted by the aid received under section 273.1398, 
subdivisions 2 and 3 and section 477A.013, subdivision 5.  If a 
city, town, county, school district, or special district fails 
to certify its levy by that date, its levy shall be the amount 
levied by it for the preceding year.  If the local unit notifies 
the commissioner of revenue before October 25 of its inability 
to certify its levy by that date, and the commissioner is 
satisfied that the delay is unavoidable and is not due to the 
negligence of the local unit's officials or staff, the 
commissioner shall extend the time within which the local unit 
shall certify its levy up to 15 calendar days beyond the date of 
request for extension.  
    Sec. 2.  Minnesota Statutes 1989 Supplement, section 
275.07, subdivision 3, is amended to read: 
    Subd. 3.  The county auditor shall adjust each local 
government's levy certified under subdivision 1 by the amount of 
homestead and agricultural credit aid certified by section 
273.1398, subdivision 2 and equalization aid certified by 
section 477A.013, subdivision 5.  If a local government's 
homestead and agricultural credit aid was further allocated 
between portions of its levy pursuant to section 273.1398, 
subdivision 2, paragraph (b)(2), the levy or fund to which the 
homestead and agricultural credit aid was allocated is the levy 
or fund which must be adjusted. 
    Sec. 3.  Minnesota Statutes 1988, section 477A.011, 
subdivision 1a, is amended to read: 
    Subd. 1a.  [CITY.] City means a statutory or home rule 
charter city.  City also means a town having a population of 
5,000 or more for purposes of the aid payable under section 
477A.013, subdivision 3.  Towns and cities of the first class 
are not eligible to be treated as cities for purposes of aid 
payable under section 477A.013, subdivision 5. 
    Sec. 4.  Minnesota Statutes 1988, section 477A.011, is 
amended by adding a subdivision to read: 
    Subd. 1b.  [TOWN.] "Town" means a township with a 
population of less than 5,000. 
    Sec. 5.  Minnesota Statutes 1988, section 477A.011, 
subdivision 20, is amended to read: 
    Subd. 20.  [CITY TAX CAPACITY.] "City tax capacity" means 
(1) 23 percent of the net tax capacity computed using the net 
tax capacity rates listed in Minnesota Statutes 1988, section 
273.13, for aids payable in 1990 and the net tax capacity rates 
listed in Minnesota Statutes 1989, section 273.13, for aids 
payable in 1991 and subsequent years for all taxable property 
within the city based on the assessment two years prior to that 
for which aids are being calculated, plus (2) a city's levy on 
the fiscal disparities distribution under section 473F.08, 
subdivision 3, paragraph (a), for taxes payable in the year 
prior to that for which aids are being calculated.  The market 
value utilized in computing net tax capacity shall be reduced by 
the sum of (1) a city's market value of commercial industrial 
property as defined in section 473F.02, subdivision 3, 
multiplied by the ratio determined pursuant to section 473F.08, 
subdivision 2, paragraph (a), and (2) the market value of the 
captured value of tax increment financing districts as defined 
in section 469.177, subdivision 2, and (3) the market value of 
transmission lines deducted from a city's total net tax capacity 
under section 273.425.  The net tax capacity will be computed 
using equalized market values.  
    Sec. 6.  Minnesota Statutes 1988, section 477A.011, is 
amended by adding a subdivision to read: 
    Subd. 25.  [NET TAX CAPACITY.] "Net tax capacity" means for 
aids payable under section 477A.013, subdivision 5, (1) the net 
tax capacity of a city computed using the net tax capacity rates 
in Minnesota Statutes 1988, section 273.13, and based on 1988 
estimated market values plus (2) a city's fiscal disparities 
distribution tax capacity under section 473F.08, subdivision 2, 
paragraph (b), for taxes payable in 1989.  The market value 
utilized in computing net tax capacity shall be reduced by the 
sum of (1) a city's market value of commercial industrial 
property as defined in section 473F.02, subdivision 3, 
multiplied by the ratio determined pursuant to section 473F.08, 
subdivision 2, paragraph (a), (2) the market value of the 
captured value of tax increment financing districts as defined 
in section 469.177, subdivision 2, and (3) the market value of 
transmission lines deducted from a city's total net tax capacity 
under section 273.425.  The net tax capacity will be computed 
using equalized market values.  
    Sec. 7.  Minnesota Statutes 1988, section 477A.012, is 
amended by adding a subdivision to read: 
    Subd. 3.  [AID OFFSET FOR COURT COSTS.] (a) There shall be 
deducted from the payment to a county under this section an 
amount representing the cost to the state for assumption of the 
cost of district court administration and operation of the trial 
court information system in the county and, in the case of 
Hennepin and Ramsey counties, of public defense services in 
juvenile and misdemeanor cases in the county.  The amount of the 
deduction shall be computed as provided in this subdivision.  
    (b) By October 15, 1989, the board of public defense shall 
determine and certify to the department of revenue the cost of 
the state-financed public defense services in juvenile and 
misdemeanor cases for Hennepin and Ramsey counties during the 
fiscal year beginning the following July 1.  By October 15, 
1989, the supreme court shall determine and certify to the 
department of revenue for each county, except counties located 
in the eighth judicial district, the pro rata estimated share 
for each county of district court administration and trial court 
information system costs during the fiscal year beginning on the 
following July 1.  
    (c) One-half of the amount computed under paragraph (b) for 
each county shall be deducted from each payment to the county 
under section 477A.015 in 1990 and each subsequent year.  
    (d) If the amount computed under paragraph (b) plus, if 
applicable, the amount deducted under paragraph (e), exceeds the 
amount payable to a county under subdivision 1, the excess shall 
be deducted from the aid payable to the county under section 
273.1398, subdivision 2.  
    (e) By July 15, 1990, the board of public defense and the 
supreme court shall determine and certify to the department of 
revenue the final actual budgeted amounts for the activities 
described in paragraph (b).  If the amount certified under 
paragraph (b) is greater than the amount certified under this 
paragraph, the excess shall be deducted from the aid payable to 
the county in 1991 and each subsequent year under this section.  
If the amount certified under paragraph (b) is less than the 
amount certified under this paragraph, the difference shall be 
added to the aid payable to the county in 1991 and each 
subsequent year under this section. 
    Sec. 8.  Minnesota Statutes 1988, section 477A.012, is 
amended by adding a subdivision to read: 
    Subd. 4.  [AID OFFSET FOR 1992 COURT COSTS.] (a) There 
shall be deducted from the payment to a county under this 
section an amount representing the cost to the state for 
assumption of the cost of court reporters, judicial officers, 
and district court referees and the expenses of law clerks and 
court reporters as authorized in Laws 1989, chapter 335, article 
3, sections 17 and 26.  The amount of the deduction is computed 
as provided in this subdivision.  
    (b) By June 30, 1991, the supreme court shall determine and 
certify to the department of revenue for each county, except 
counties located in the eighth judicial district, the pro rata 
share for each county of court reporter, judicial officer, and 
district court referee costs and law clerk and court reporter 
expenses during the calendar year beginning on January 1, 1992.  
    (c) One-half of the amount computed under paragraph (b) for 
each county shall be deducted from each aid payment to the 
county under section 477A.015 in 1992 and each subsequent year.  
    (d) If the amount computed under paragraph (b) exceeds the 
amount payable to a county under subdivision 1, the excess shall 
be deducted from the aid payable to the county under section 
273.1398, subdivision 2. 
    Sec. 9.  Minnesota Statutes 1989 Supplement, section 
477A.013, subdivision 1, is amended to read: 
    Subdivision 1.  [TOWNS.] In calendar year 1988, 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 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; or (b) 
the amount certified in 1987 pursuant to sections 477A.011 to 
477A.03.  In calendar year 1989, each town that had levied for 
taxes payable in 1988 at least one mill on the dollar of the 
assessed value of the town shall receive a distribution equal to 
106 percent of the distribution received under Minnesota 
Statutes 1987 Supplement, section 477A.013, subdivision 1, in 
1988.  In calendar year 1990 and subsequent years, each town 
that had levied for taxes payable in the prior year a tax 
capacity rate of at least .008 shall receive a distribution 
equal to 106 percent of the amount received in 1989 under this 
subdivision.  In calendar year 1991 and subsequent years, each 
town that had levied for taxes payable in the prior year a tax 
capacity rate of at least .008 shall receive a distribution 
equal to the amount it received in 1990 under this subdivision 
less the amount deducted in 1989 under section 477A.013, 
subdivision 6. 
    Sec. 10.  Minnesota Statutes 1988, section 477A.013, 
subdivision 3, is amended to read: 
    Subd. 3.  [CITY AID DISTRIBUTION.] In 1989, a city whose 
initial aid is greater than $0 will receive the following aid 
increases in addition to an amount equal to the local government 
aid it received in 1988 under Minnesota Statutes 1987 
Supplement, section 477A.013: 
    (1) for a city whose expenditure/unlimited aid ratio is at 
least 1.5, two percent of city revenue; 
    (2) for a city whose expenditure/unlimited aid ratio is at 
least 1.4 but less than 1.5, 2.5 percent of city revenue; 
    (3) for a city whose expenditure/unlimited aid ratio is at 
least 1.3 but less than 1.4, three percent of city revenue; 
    (4) for a city whose expenditure/unlimited aid ratio is at 
least 1.2 but less than 1.3, four percent of city revenue; 
    (5) for a city whose expenditure/unlimited aid ratio is at 
least 1.1 but less than 1.2, five percent of city revenue; 
     (6) for a city whose expenditure/unlimited aid ratio is at 
least 1.05 but less than 1.1, six percent of city revenue; 
     (7) for a city whose expenditure/unlimited aid ratio is at 
least 1.0 but less than 1.05, seven percent of city revenue; 
     (8) for a city whose expenditure/unlimited aid ratio is at 
least .95 but less than 1.0, 7.5 percent of city revenue; 
     (9) for a city whose expenditure/unlimited aid ratio is at 
least .75 but less than .95, 8.5 percent of city revenue; and 
     (10) for a city whose expenditure/unlimited aid ratio is 
less than .75, nine percent of city revenue.  
    In 1990 and subsequent years, a city whose initial aid is 
greater than $0 will receive an amount equal to the aid it 
received under this subdivision and subdivision 4 section in the 
year prior to that for which aids are being calculated plus an 
aid increase equal to 50 percent of the rates listed in clauses 
(1) to (10) multiplied by city revenue. 
    In 1991 and subsequent years, a city whose initial aid is 
greater than $0 will receive an amount equal to the aid it 
received under this section in the year prior to that for which 
aids are being calculated plus an aid increase equal to 25 
percent of the rates listed in clauses (1) to (10) multiplied by 
city revenue.  
    A city's aid increase under this subdivision is limited to 
the lesser of (1) 20 percent of its levy for taxes payable in 
the year prior to that for which aids are being calculated after 
the adjustments provided in section 273.1398, subdivision 2, or 
(2) its initial aid amount, or (3) 15 percent of the total 
amount received under this section in the previous year, 
provided that no city will receive an increase that is less than 
two percent of its 1988 1989 local government aid for aids 
payable in 1989 1990. 
    A city whose initial aid is $0 will receive in 1989 1990 an 
amount equal to 102 percent of the local government aid it 
received in 1988 1989 under Minnesota Statutes 1987 Supplement 
1988, section 477A.013.  A city whose initial aid is $0 will 
receive in 1990 1991 and subsequent years an amount equal to the 
aid it received in the previous year under this subdivision and 
subdivision 4 section.  For purposes of this subdivision the 
term "local government aid" includes equalization aid for aids 
payable in 1991 and thereafter.  
    Sec. 11.  Minnesota Statutes 1988, section 477A.013, is 
amended by adding a subdivision to read: 
    Subd. 5.  [EQUALIZATION AID.] A city is eligible for 
equalization aid in 1990 only.  The amount of the aid is equal 
to (1) the product of (i) a city's average levy for the three 
immediately preceding years less the disparity reduction aids 
allocated to the city pursuant to Minnesota Statutes 1988, 
section 273.1398, subdivision 3, (ii) .36, and (iii) one minus 
the ratio of the net tax capacity per capita to 900; less (2) 
the local government aid increase for the city under subdivision 
3.  The aid under this section is limited to 15 percent of the 
total local government aid the city received in 1989.  The aid 
under this section cannot be less than zero.  For the purposes 
of this subdivision "levy" includes a city's levy on fiscal 
disparities distribution under section 473F.08, subdivision 3, 
paragraph (a). 
    Sec. 12.  Minnesota Statutes 1988, section 477A.013, is 
amended by adding a subdivision to read: 
    Subd. 6.  [AID ADJUSTMENT.] For calendar year 1990, there 
shall be an amount equal to 3.4 percent of the town's or city's 
adjusted net tax capacity computed using the net class rates for 
taxes payable in 1990 and equalized market values as defined in 
section 273.1398, subtracted from the aid amounts computed under 
subdivision 1, in the case of towns, and under subdivisions 3 
and 5 in the case of cities.  For cities, the subtraction will 
be made first from the aid computed under subdivision 3.  If the 
subtraction amount under this section is greater than the aid 
amount computed under subdivision 3, the remaining amount will 
be subtracted from the aid computed under subdivision 5.  The 
resulting amounts shall be the town's local government aid or 
the city's local government aid and equalization aid for 
calendar year 1990.  The local government aid and equalization 
aid amount for any city or town cannot be less than zero.  If 
the subtraction amount under this section is greater than the 
amount for any town or city computed under subdivisions 1, 3, 
and 5, the remaining amount shall be subtracted from the town's 
or city's homestead and agricultural credit aid under section 
273.1398, subdivision 2. 
     For purposes of this subdivision, "adjusted net tax 
capacity" means the city's total net tax capacity using the net 
class rates for taxes payable in 1990 and equalized market 
values as defined in section 273.1398, as adjusted for the 
contributions and distributions required by chapter 473F in the 
case of a city or town located within the metropolitan area and 
less the captured value in any tax increment district. 
     An increase in a city's property tax levy for taxes payable 
in 1990 attributable to the amount deducted from the city's aids 
under this subdivision is exempt from the city's per capita levy 
limit under section 275.11 and from the city's percentage of 
market value levy limit under section 412.251 or 426.04. 
     Sec. 13.  Minnesota Statutes 1988, section 477A.014, 
subdivision 1, is amended to read: 
    Subdivision 1.  [CALCULATIONS AND PAYMENTS.] The 
commissioner of revenue shall make all necessary calculations 
and make payments pursuant to sections 477A.012, 477A.013 and 
477A.03 directly to the affected taxing authorities annually.  
In addition, the commissioner shall notify the authorities of 
their aid amounts, as well as the computational factors used in 
making the calculations for their authority, and those statewide 
total figures that are pertinent, before August 15 of the year 
preceding the aid distribution year, except that for aid payable 
in 1990 the commissioner of revenue must notify the authorities 
of their aid amounts as well as the computational factors used 
in the calculation before October 23, 1989. 
    Sec.  14.  [1990 TOWN LEVY ADJUSTMENT.] 
    For 1990 only, for all towns, except towns subject to levy 
limits under Minnesota Statutes, sections 275.50 and 275.51, the 
commissioner of revenue will certify to the county auditor an 
amount equal to the reduction in local government aid under 
section 12 at the same time that the homestead and agricultural 
credit aid is certified.  The county auditor shall add this 
amount to the town's certified levy before subtraction of the 
homestead and agricultural credit aid under section 275.07, 
subdivision 3, unless otherwise directed by the town clerk.  
    Sec.  15.  [REPEALER.] 
    Minnesota Statutes 1988, sections 477A.011, subdivision 24, 
and 477A.013, subdivision 4, are repealed. 
    Sec.  16.  [EFFECTIVE DATE.] 
    Sections 1 and 2 are effective for taxes levied in 1989 and 
thereafter, payable in 1990, and thereafter.  Sections 3 to 7 
and 9 to 12 and 14 are effective for local government aid paid 
in 1990.  Section 8 is effective for local government aid paid 
in 1992.  Section 13 is effective the day following final 
enactment.  Section 15 is effective January 1, 1991. 

                               ARTICLE 5 

                              LEVY LIMITS 
    Section 1.  Minnesota Statutes 1988, section 6.62, 
subdivision 1, is amended to read: 
    Subdivision 1.  [LEVY OF TAX.] Counties, cities and towns 
are authorized, if necessary, to levy, over and above tax levy 
limitations for other governmental purposes, an amount 
sufficient to pay the expense of a postaudit by the state 
auditor. 
    A school district is authorized to levy an amount 
sufficient to pay for the expense of a postaudit by the state 
auditor if the audit is performed at the discretion of the state 
auditor pursuant to section 6.51 or if the audit has been 
requested through a petition by eligible voters pursuant to 
section 6.54.  A school district is not authorized to levy these 
amounts if the postaudit by the state auditor is requested by 
the school board pursuant to section 6.55. 
    Sec. 2.  Minnesota Statutes 1988, section 18.023, 
subdivision 8, is amended to read: 
    Subd. 8.  [DEPOSIT OF PROCEEDS IN SEPARATE FUND.] The 
proceeds of any tax levied, assessments and interest collected, 
or any bonds or certificates of indebtedness issued under 
subdivision 7 and section 275.50, subdivision 6, and any grants 
received under subdivision 3a, shall be deposited in the 
municipal treasury in a separate fund and expended only for the 
purposes authorized by this section. 
    Sec. 3.  Minnesota Statutes 1988, section 110B.15, 
subdivision 4, is amended to read: 
    Subd. 4.  [SPECIAL TAXING DISTRICT.] (a) A tax district 
authorized under subdivision 3, clause (4), must be established 
by resolution adopted by the county board after a hearing.  
Notice of the time, place, and purpose of the hearing must be 
published for two successive weeks in the official newspaper of 
the county, ending at least seven days before the day of the 
hearing.  The resolution must describe with particularity the 
territory or area to be included in the tax district.  After 
adoption, the resolution must be filed with the county auditor 
and county recorder.  The district may be dissolved by following 
the procedures prescribed for the establishment of the district. 
    (b) After adoption of the resolution under paragraph (a), a 
county may annually levy a tax on all taxable property in the 
district for the purposes for which the tax district was 
established.  The proceeds of the tax must be paid into a fund 
reserved for these purposes.  Any proceeds remaining in the 
reserve fund at the time the tax is terminated or the district 
is dissolved must be transferred and irrevocably pledged to the 
debt service fund of the county to be used only to reduce tax 
levies for bonded indebtedness of taxable property in the 
district.  A tax levied in accordance with this subdivision for 
paying capital costs is a levy for the payment of principal and 
interest on bonded indebtedness within the meaning of section 
275.50, subdivision 5, clause (e).  
    (c) After adoption of the resolution under paragraph (a), 
and after a contract for the construction of all or part of an 
improvement has been entered into or the work has been ordered 
to be done by hired labor, the county may issue obligations in 
the amount determined by the county board to be necessary to pay 
in whole or in part the capital cost incurred and estimated to 
be incurred in making the improvement.  The obligations are 
payable out of the proceeds of the tax levied under this 
subdivision.  The county board may, by resolution adopted prior 
to the sale of obligations, pledge the full faith, credit, and 
taxing power of the county to assure payment of the principal 
and interest in the event the proceeds of the tax levy in the 
district are insufficient to pay principal and interest.  The 
amount of any taxes that are required to be levied outside of 
the territory of the tax district or taken from the general 
funds of the county to pay principal and interest on the 
obligations must be reimbursed to the county from taxes levied 
within the territory of the tax district.  Obligations must be 
issued in accordance with chapter 475, except that an election 
is not required and the amount of any obligations must not be 
included in determining the net indebtedness of the county under 
the provisions of any law or charter limiting indebtedness. 
    Sec. 4.  Minnesota Statutes 1988, section 115.34, 
subdivision 1, is amended to read: 
    Subdivision 1.  The board may authorize the borrowing of 
money for any district purpose and provide for the repayment 
thereof, subject to chapter 475.  The taxes initially levied by 
any district in accordance with section 475.61 for the payment 
of its bonds, upon property within each municipality included in 
the district, shall be included in computing the limitations 
upon the levy of such municipality under section 275.11.  If the 
tax required by section 475.61 to be levied for any year of the 
term of a bond issue upon property within any municipality 
included in the district would, when added to the taxes levied 
by such municipality for all purposes in the year preceding such 
issue, exceed the limitations prescribed in section 275.11, the 
bonds shall not be issued without the consent by resolution of 
the governing body of such municipality. 
    Sec. 5.  Minnesota Statutes 1988, section 129A.06, 
subdivision 2, is amended to read: 
    Subd. 2.  In order to provide the necessary funds for 
extended employment programs offered by a rehabilitation 
facility, the governing body of any city, town, or county may 
expend money which may be available for such purposes in the 
general fund, and may levy a tax which, except when levied by a 
county, shall not exceed in any one year the following amounts 
per capita of the population, based upon the last federal 
census:  Cities of the first class, not to exceed ten cents per 
capita; cities of other than the first class, and towns, not to 
exceed 30 cents per capita.  A tax levied pursuant to this 
subdivision is not a special levy as defined in section 275.50, 
subdivision 5, and shall be subject to the limitation provided 
in sections 275.51 to 275.56.  Any city, town, county, or 
nonprofit corporation may accept gifts or grants from any source 
for the rehabilitation facility.  Any money appropriated, taxed, 
or received as a gift or grant may be used to match funds 
available on a matching basis. 
    Sec. 6.  Minnesota Statutes 1988, section 145A.08, 
subdivision 3, is amended to read: 
    Subd. 3.  [TAX LEVY AUTHORIZED.] A city council or county 
board that has formed or is a member of a board of health may 
levy taxes under sections 275.50 to 275.56 on all taxable 
property in its jurisdiction to pay the cost of performing its 
duties under this chapter. 
    Sec. 7.  Minnesota Statutes 1988, section 164.041, is 
amended to read: 
    164.041 [REMOVAL OF LEVY LIMIT; ROAD AND BRIDGE PURPOSES.] 
    It is the intent of this legislation to remove all 
limitations relating specifically to the authority of a town to 
levy taxes for road and bridge purposes and any act for a single 
town or for a group of towns relating specifically to a 
limitation on the authority of a town to levy taxes for road and 
bridge purposes, however stated in mills, dollars, or a per 
capita amount is hereby superseded; provided that nothing in 
Laws 1975, chapter 268, shall be construed to permit a levy in 
excess of the limitations imposed by sections 275.50 to 275.58. 
    Sec. 8.  Minnesota Statutes 1988, section 273.123, 
subdivision 7, is amended to read: 
    Subd. 7.  [LOCAL OPTION; OTHER PROPERTY.] The owner of 
homestead property not qualifying for an adjustment in valuation 
pursuant to subdivisions 1 to 5 or of nonhomestead property may 
receive a reduction in the amount of taxes payable for the year 
in which the destruction occurs on the property if:  
     (a) 50 percent or more of the homestead dwelling or other 
structure, as established by the county assessor, is 
unintentionally or accidentally destroyed and the homestead is 
uninhabitable or the other structure is not usable; 
     (b) the owner of the property makes written application to 
the county assessor as soon as practical after the damage has 
occurred; and 
     (c) the owner of the property makes written application to 
the county board.  
     The county board may grant a reduction in the amount of 
property tax which the owner must pay on the qualifying property 
in the year of destruction.  Any reduction in the amount of tax 
payable which is authorized by county board action shall be 
calculated based upon the number of months that the home is 
uninhabitable or the other structure is unusable.  The amount of 
net tax due from the taxpayer shall be multiplied by a fraction, 
the numerator of which is the number of months the dwelling was 
occupied by that taxpayer, or the number of months the other 
structure was used by the taxpayer, and the denominator of which 
is 12.  For purposes of this subdivision, if a structure is 
occupied or used for a fraction of a month, it is considered a 
month.  "Net tax" is defined as the amount of tax after the 
subtraction of all of the state paid property tax credits.  If 
application is made following payment of all property taxes due 
for the year of destruction, the amount of the reduction granted 
by the county board shall be refunded to the taxpayer by the 
county treasurer as soon as practical.  
    Any reductions or refunds approved by the county board 
shall not be subject to approval by the commissioner of revenue. 
    The county board may levy in the following year the amount 
of tax dollars lost to the county government as a result of the 
reductions granted pursuant to this subdivision.  Any amount 
levied for this purpose shall be exempt from the levy limit 
provisions of sections 275.50 to 275.56.  
    Sec. 9.  Minnesota Statutes 1989 Supplement, section 
275.14, is amended to read: 
   275.14 [CENSUS.] 
    For the purposes of sections 124.2713 and 275.11 275.124 to 
275.16, the population of a city shall be that established by 
the last federal census, by a special census taken by the United 
States Bureau of the Census, by an estimate made by the 
metropolitan council, or by the state demographer made according 
to section 116K.04, subdivision 4, whichever has the latest 
stated date of count or estimate, before July 2 of the current 
levy year.  The population of a school district must be as 
certified by the department of education from the most recent 
federal census. 
    In any year in which no federal census is taken pursuant to 
law in any school district affected by sections 275.11 275.124 
to 275.16 a population estimate may be made and submitted to the 
state demographer for approval as hereinafter provided.  The 
school board of a school district, in case it desires a 
population estimate, shall pass a resolution by September 1 
containing a current estimate of the population of the school 
district and shall submit the resolution to the state 
demographer.  The resolution shall describe the criteria on 
which the estimate is based and shall be in a form and 
accompanied by the data prescribed by the state demographer.  
The state demographer shall determine whether or not the 
criteria and process described in the resolution provide a 
reasonable basis for the population estimate and shall inform 
the school district of that determination within 30 days of 
receipt of the resolution.  If the state demographer determines 
that the criteria and process described in the resolution do not 
provide a reasonable basis for the population estimate, the 
resolution shall be of no effect.  If the state demographer 
determines that the criteria and process do provide a reasonable 
basis for the population estimate, the estimate shall be treated 
as the population of the school district for the purposes of 
sections 275.11 275.124 to 275.16 until the population of the 
school district has been established by the next federal census 
or until a more current population estimate is prepared and 
approved as provided herein, whichever occurs first.  The state 
demographer shall establish guidelines for acceptable population 
estimation criteria and processes.  The state demographer shall 
issue advisory opinions upon request in writing to cities or 
school districts as to proposed criteria and processes prior to 
their implementation in an estimation.  The advisory opinion 
shall be final and binding upon the demographer unless the 
demographer can show cause why it should not be final and 
binding.  
    In the event that a census tract employed in taking a 
federal or local census overlaps two or more school districts, 
the county auditor shall, on the basis of the best information 
available, allocate the population of said census tract to the 
school districts involved.  
    The term "council," as used in sections 275.11 275.124 to 
275.16, means any board or body, whether composed of one or more 
branches, authorized to make ordinances for the government of a 
city within this state.  
    Sec. 10.  Minnesota Statutes 1988, section 275.15, is 
amended to read: 
    275.15 [NOT TO INCREASE LEVIES.] 
    Sections 275.11 275.124 to 275.16 shall not authorize, nor 
be construed as, in any instance, authorizing the levy of total 
amounts of taxes in any year in excess of the amount allowed by 
law at the time of the passage of these sections, but shall be 
considered an additional limitation.  
    Sec. 11.  Minnesota Statutes 1988, section 275.16, is 
amended to read: 
    275.16 [COUNTY AUDITOR TO FIX AMOUNT OF LEVY.] 
    If any such municipality shall return to the county auditor 
a levy greater than permitted by sections 275.11 275.124 to 
275.16, such county auditor shall extend only such amount of 
taxes as the limitations herein prescribed will permit; 
provided, if such levy shall include any levy for the payment of 
bonded indebtedness or judgments, such levies for bonded 
indebtedness or judgments shall be extended in full, and the 
remainder of the levies shall be reduced so that the total 
thereof, including levies for bonds and judgments, shall not 
exceed such amount as the limitations herein prescribed will 
permit.  
    Sec. 12.  Minnesota Statutes 1988, section 275.50, 
subdivision 5, is amended to read: 
    Subd. 5.  Notwithstanding any other law to the contrary for 
taxes levied in 1988 1989 payable in 1989 1990 and subsequent 
years, "special levies" means those portions of ad valorem taxes 
levied by governmental subdivisions to: 
    (a) for taxes levied in 1990, payable in 1991 and 
subsequent years, 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 under this clause for the costs of purchase or 
delivery of social services and income maintenance programs, 
other than those identified in section 273.1398, subdivision 1, 
paragraph (i) are subject to a maximum increase over the amount 
levied for the previous year of 18 12 percent over the amount 
levied for these purposes in the previous year for counties 
within the metropolitan area as defined in section 473.121, 
subdivision 2, or counties outside the metropolitan area but 
containing a city of the first class, and 15 percent for other 
counties.  For purposes of this clause, "income maintenance 
programs" include income maintenance programs in section 
273.1398, subdivision 1, paragraph (i), to the extent the county 
provides benefits under those programs over the statutory 
mandated standards.  Effective with taxes levied in 1989 1990, 
the portion of this special levy for income maintenance programs 
human service programs identified in section 273.1398, 
subdivision 1, paragraph (i), is eliminated; 
    (b) pay the costs of principal and interest on bonded 
indebtedness except on bonded indebtedness issued under section 
471.981, subdivisions 4 to 4c 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; 
    (c) 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; 
    (d) 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; 
    (e) provide for the bonded indebtedness portion of payments 
made to another political subdivision of the state of Minnesota; 
    (f) 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; 
    (g) 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; 
    (h) 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; 
    (i) to compensate the state for the cost of a reassessment 
ordered by the commissioner of revenue pursuant to section 
270.16; and 
    (j) pay the debt service on tax increment financing revenue 
bonds to the extent that revenue to pay the bonds or to maintain 
reserves for the bonds is insufficient as a result of the 
provisions of Laws 1988, chapter 719, article 5.; 
    (k) pay the cost of hospital care under section 261.21; 
    (l) pay the unreimbursed costs incurred in the previous 
year to 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, 
provided that an appeal for the unreimbursed costs under this 
clause was approved by the commissioner of revenue under section 
16; 
    (m) pay the expenses reasonably and necessarily incurred in 
preparing for or repairing the effects of natural disaster 
including the occurrence or threat of widespread or severe 
damage, injury, or loss of life or property resulting from 
natural causes such as earthquake, fire, flood, wind storm, wave 
action, oil spill, water contamination, air contamination, or 
drought in accordance with standards formulated by the emergency 
services division of the state department of public safety, 
provided that an appeal for the expenses incurred under this 
clause were approved by the commissioner of revenue under 
section 16; 
    (n) pay a portion of the losses in tax receipts to a city 
due to tax abatements or court actions in the year preceding the 
current levy year, provided that an appeal for the tax losses 
was approved by the commissioner of revenue under section 16.  
This special levy is limited to the amount of the losses times 
the ratio of the nonspecial levies to total levies for taxes 
payable in the year the abatements were granted.  County 
governments are not authorized to claim this special levy; 
    (o) pay the operating cost of regional library services 
authorized under section 134.34, subject to a maximum increase 
over the previous year of the greater of (1) 103 percent 
multiplied by one plus the percentage increase determined for 
the governmental subdivision under section 275.51, subdivision 
3h, clause (b), or (2) six percent.  If a governmental 
subdivision elected to include some or all of its levy for 
libraries within its adjusted levy limit base in the prior year, 
but elects to claim the levy as a special levy in the current 
levy year, the allowable increase is determined by applying the 
greater percentage determined under clause (1) or (2) to the 
total amount levied for libraries in the prior levy year.  After 
levy year 1989, the increase must not be determined using a base 
amount other than the amount that could have been levied as a 
special levy in the prior year.  In no event shall the special 
levy be less than the minimum levy required under sections 
134.33 and 134.34, subdivisions 1 and 2; 
    (p) pay the amount of the county building fund levy 
permitted under section 373.40, subdivision 6; 
    (q) pay the county's share of the costs levied in 1989, 
1990, and 1991 for the Minnesota cooperative soil survey under 
Minnesota Statutes 1988, section 40.07, subdivision 15; 
    (r) for taxes levied in 1989, payable in 1990 only, pay the 
cost incurred for the minimum share required by counties levying 
for the first time under section 134.34 as required under 
section 134.341.  For taxes levied in 1990, and thereafter, 
counties levying under this provision must levy under clause 
(o), and their allowable increase must be determined with 
reference to the amount levied in 1989 under this paragraph; 
    (s) for taxes levied in 1989, payable in 1990 only, provide 
an amount equal to 50 percent of the estimated amount of the 
reduction in aids to a county under sections 273.1398, 
subdivision 2, paragraph (d), and 477A.012, subdivision 3, for 
aids payable in 1990; 
    (t) for taxes levied in 1990 only by a county in the eighth 
judicial district, provide an amount equal to the amount of the 
levy, if any, that is required under Laws 1989, chapter 335, 
article 3, section 54, subdivision 8; and 
    (u) for taxes levied in 1989, payable in 1990 only, pay the 
costs not reimbursed by the state or federal government: 
    (i) for the costs of purchase or delivery of social 
services.  The aggregate amounts levied under this item are 
subject to a maximum increase over the amount levied in the 
previous year of 12 percent for counties within the metropolitan 
area as defined in section 473.121, subdivision 2, or counties 
outside the metropolitan area but containing a city of the first 
class, and 15 percent for other counties. 
    (ii) for payments made to or on behalf of recipients of aid 
under any public assistance program authorized by law.  The 
aggregate amounts levied under this item are subject to a 
maximum increase over the amount levied in the previous year of 
12 percent and must be used only for the public assistance 
programs.  
    If the amount levied in 1989 is less than the actual 
expenditures needed for these programs for 1990, the difference 
between the actual expenditures and the amount levied may be 
levied in 1990 as a special levy.  If the amount levied in 1989 
is greater than the actual expenditures needed for these 
programs for 1990, the difference between the amount levied and 
the actual expenditures shall be deducted from the 1990 levy 
limit, payable in 1991.  
    Sec. 13.  Minnesota Statutes 1988, section 275.51, 
subdivision 3f, is amended to read: 
    Subd. 3f.  [LEVY LIMIT BASE.] (a) The property tax levy 
limit base for governmental subdivisions for taxes levied in 
1988 shall be equal to the total actual levy for taxes payable 
in 1988 plus the amount of any payments the governmental 
subdivision was certified to receive in 1988 under sections 
477A.011 to 477A.014 and minus any special levies claimed for 
taxes payable in 1988 pursuant to Laws 1987, chapter 268, 
article 5, section 12, subdivision 4, clauses (1), (2), (3), and 
(4).  A county's levy limit base will be increased by the amount 
of any increase in its levy under section 134.07 over that 
levied under section 134.07 for taxes payable in 1988 which is 
required under section 134.341.  For governmental subdivisions 
located in the seven-county metropolitan area, the total actual 
levy for taxes payable in 1988 shall include the fiscal 
disparities distribution levy pursuant to Minnesota Statutes 
1986, section 473F.08, subdivision 7a with additions and 
subtractions as specified in paragraphs (b) and (c).  
    (b) The amounts to be added to the actual 1988 levy are (1) 
the amount of local government aid the governmental subdivision 
was certified to receive in 1988 under sections 477A.011 to 
477A.014, (2) its 1988 taconite aids under sections 298.28 and 
298.282, and (3) its 1988 wetlands and native prairie 
reimbursements under Minnesota Statutes 1986, sections 273.115, 
subdivision 3, and 273.116, subdivision 3. 
    (c) The amounts to be subtracted from the actual 1988 levy 
are (1) any special levies claimed for taxes payable in 1988 
pursuant to Laws 1987, chapter 268, article 5, section 12, 
subdivision 4, clauses (1), (2), (3), and (4); and (2) for a 
governmental subdivision participating in a regional library 
system receiving grants from the department of education under 
section 134.34, the amount levied for taxes payable in 1988 for 
the operating costs of a public library service.  
    (b) (d) For taxes levied in 1989 and subsequent years, a 
governmental subdivision's levy limit base is equal to its 
adjusted levy limit base for the preceding year not including 
the adjustment made under subdivision 3h, paragraph (c), plus, 
provided that for taxes levied in 1989, the amount of the 
administrative reimbursement aid received in 1988 shall be added 
to the base. 
    (e) For taxes levied by a county in 1989, the levy limit 
base determined under paragraph (d) shall be reduced by an 
amount equal to 90 percent of the cost of public defender 
services for felonies and gross misdemeanors and the costs of 
law clerks in the county that are assumed by the state during 
calendar year 1990, less 103 percent of one-half the amount of 
fees collected by the courts in the county during calendar year 
1988.  For taxes levied in 1990, the levy limit base determined 
under paragraph (d) shall be reduced by an amount equal to the 
cost of public defender services for felonies and gross 
misdemeanors and the cost of law clerks in the county that are 
assumed by the state during calendar year 1991, less the amount 
of fees collected by the courts in the county during calendar 
year 1989, computed at the rate of $30 for civil and probate 
filings and $20 for marriage dissolutions. 
    (f) For taxes levied in 1989 only, by a county that is 
located in the eighth judicial district, the levy limit base 
determined under paragraphs (d) and (e) shall be further reduced 
by an amount equal to 90 percent of the cost of operation of the 
trial courts in the county during calendar year 1990 that are 
assumed by the state and for which an appropriation is provided, 
less 103 percent of the sum of (1) the remaining one-half of the 
amount of fees and (2) 100 percent of the amount of fines 
collected by the courts in the county during calendar year 
1988.  For taxes levied in 1990 only by those counties, the levy 
limit base determined under paragraphs (d) and (e) shall be 
further reduced by an amount equal to the cost of operation of 
the trial courts in the county during the first six months of 
calendar year 1991 that are assumed by the state less 50 percent 
of the amount of fines collected by the courts during calendar 
year 1989. 
    (g) By October 15, 1989, the board of public defense shall 
determine and certify to the commissioner of revenue the pro 
rata share for each county of the state-financed public defense 
services described in paragraph (e) during the six-month period 
beginning July 1, 1990.  By October 15, 1989, the supreme court 
shall determine and certify to the department of revenue for 
each county the pro rata share for each county of the cost of 
providing law clerks during the three-month period beginning 
October 1, 1990, plus, for each county located in the eighth 
judicial district, the cost of operation of the trial courts 
during calendar year 1990. 
    By July 15, 1990, the board of public defense shall 
determine and certify to the department of revenue the pro rata 
share for each county of the state-financed public defense 
services described in paragraph (e) during calendar year 1991.  
By July 15, 1990, the supreme court shall determine and certify 
to the department of revenue for each county the pro rata share 
for each county of the cost of providing law clerks during 
calendar year 1991 plus, for each county located in the eighth 
judicial district, the cost of operation of the trial courts 
during the first six months of 1991. 
    (h) For taxes levied in a county in 1991, the levy limit 
base shall be reduced by an amount equal to the cost in the 
county of court reporters, judicial officers, and district court 
referees and the expenses of law clerks and court reporters as 
authorized in Laws 1989, chapter 335, article 3, sections 17 and 
26 as certified by the supreme court pursuant to section 
477A.012, subdivision 4. 
    (i) If a governmental subdivision received an adjustment to 
its levy limit base for taxes levied in 1988 under section 
275.51, subdivision 3j, its levy limit base for taxes levied in 
1989 must be reduced by the lesser of (1) the adjustment under 
section 275.51, subdivision 3j, or (2) the difference between 
its (i) levy limit for taxes levied in 1988 and its (ii) total 
actual levy for taxes levied in 1988 minus any special levies 
claimed for taxes levied in 1988 under section 275.50, 
subdivision 5. 
    Sec. 14.  Minnesota Statutes 1988, section 275.51, 
subdivision 3h, is amended to read: 
    Subd. 3h.  [ADJUSTED LEVY LIMIT BASE.] For taxes levied 
in 1988 1989 and thereafter, the adjusted levy limit base is 
equal to the levy limit base computed pursuant to subdivision 
3f, increased by:  
    (a) a percentage equal to four percent for taxes levied in 
1988 and three percent for taxes levied in 1989 and subsequent 
years; and 
    (b) a percentage equal to (1) one-half of the greater of 
the percentage increases in population or in number of 
households, if any, for the most recent 12-month period for 
which data is available, for cities and towns and (2) the lesser 
of the percentage increase in population or the number of 
households, if any, for counties, using figures derived pursuant 
to subdivision 6.; 
    For taxes levied in 1989 and subsequent years, to the 
resulting product must be added the estimated reduction in a 
county's income maintenance aids as defined in section 273.1398, 
subdivision 1, pursuant to section 273.1398, subdivision 2, 
paragraph (d).  The department of human services shall annually 
estimate the increase in income maintenance aids referred to in 
section 273.1398, subdivision 2, paragraph (d), and certify it 
by county to the department of revenue by July 15 of the levy 
year preceding that in which the aids are payable.  If the 
actual increase in a county's income maintenance aid referred to 
in section 273.1398, subdivision 2, paragraph (d), is less than 
or greater than the amount added to a county's adjusted levy 
limit base in the prior year, its adjusted levy limit base for 
the subsequent year will be increased or decreased by the 
appropriate amount.  
    (c) the amount of a permanent increase in the levy limit 
base approved at a general or special election held during the 
12-month period ending September 30 of the levy year under 
section 275.58, subdivisions 1 and 2; 
    (d) for levy year 1989, for a county which incurred costs 
since October 1978, for the litigation of federal land claims 
under United States Code, title 18, section 1162; United States 
Code, title 25, section 331; and United States Code, title 28, 
section 1360; an amount of up to the actual costs incurred by 
the county for this purpose.  This adjustment shall not exceed 
$250,000; 
    (e) for levy year 1989, an amount of $1,724,000 for Ramsey 
county for implementing the local government pay equity act 
under sections 471.991 to 471.999.  Furthermore, in levy years 
1990 and 1991, an additional amount of $862,000 shall be added 
to Ramsey county's adjusted levy limit base under this clause 
for each of the two years; and 
    (f) for levy year 1989, an amount equal to the decrease in 
a county's 50 percent share of the powerline taxes extended 
between taxes payable years 1988 and 1989 under section 273.42, 
subdivision 1.  The adjustment shall be determined by the 
department of revenue. 
     For taxes levied in 1989, the adjusted levy limit base is 
reduced by an amount equal to the estimated amount of the 
reduction in aids to a county under sections 273.1398, 
subdivision 2, paragraph (d), and 477A.012, subdivision 3, for 
aids payable in 1990. 
    Sec. 15.  Minnesota Statutes 1988, section 275.51, 
subdivision 3i, is amended to read: 
    Subd. 3i.  [LEVY LIMITATION.] The levy limitation for a 
governmental subdivision shall be equal to the adjusted levy 
limit base determined pursuant to subdivision 3h, reduced by:  
    (1) the local government aid that the governmental 
subdivision has been certified to receive pursuant to sections 
477A.011 to 477A.014., excluding the aid received pursuant to 
section 477A.013, subdivision 5; and 
    (2) taconite aids under sections 298.28 and 298.282 
including any aid received in the levy year that was required to 
be placed in a special fund for expenditure in the next 
succeeding year.  
    As provided in section 298.28, one cent per taxable ton of 
the amount distributed under section 298.28, subdivision 5, 
paragraph (d), must not be deducted from the levy limit base of 
a county that receives the aid.  
    This amount is the amount of property taxes which a 
governmental subdivision may levy for all purposes other than 
those for which special levies and special assessments are made. 
    For taxes levied in 1989 and later years, the levy limit 
for a county calculated under clause (1) must be decreased by an 
additional amount equal to the difference between what would 
have been a county's production year 1986 payable 1987 
distribution under Minnesota Statutes 1984, section 298.28, 
based on 1986 production and its actual distribution for 
production year 1986, payable 1987.  
    Sec. 16.  Minnesota Statutes 1988, section 275.51, 
subdivision 3j, is amended to read: 
    Subd. 3j.  [APPEALS.] (a) A governmental subdivision 
subject to the limitations in this section county may appeal to 
the commissioner of revenue for an adjustment in its levy limit 
base under this section.  If the governmental subdivision county 
can provide evidence satisfactory to the commissioner that its 
levy for taxes payable in 1988 had been reduced because it had 
made expenditures from reserve funds 1989 under Minnesota 
Statutes 1988, section 275.50, subdivision 5, paragraph (a), 
included a levy for the cost of administration of the programs 
listed in that paragraph, the commissioner may permit 
the governmental subdivision county to increase its levy limit 
base under this section by the amount determined by the 
commissioner to have been levied for that purpose, provided that 
the total adjustment shall not be in excess of three percent of 
the total expense for income maintenance programs within the 
county.  The commissioner's decision is final.  
    (b) A governmental subdivision subject to the limitations 
in this section may appeal to the commissioner of revenue for 
authorization to levy for the special levies as contained in 
section 275.50, subdivision 5, clauses (l), (m), and (n).  If 
the governmental subdivision can provide evidence satisfactory 
to the commissioner that it incurred costs for the specified 
purposes of those levies, the commissioner may allow the 
governmental subdivision to levy under section 275.50, 
subdivision 5, clause (l), (m), or (n), by the amount determined 
by the commissioner.  The commissioner's decision is final.  
    (c) A county may appeal to the commissioner of revenue for 
an adjustment to its levy limit base for taxes levied in 1989.  
If the county can provide evidence satisfactory to the 
commissioner that the percentage adjustments to the costs, fees, 
or fines described in subdivision 3f, paragraph (e) or (f), do 
not provide accurate adjustments for that county, the 
commissioner may permit the county to increase its levy limit 
base by the amount determined by the commissioner.  The 
commissioner's decision is final. 
     (d) A county may appeal to the commissioner of revenue for 
an increase in its levy base for the 12 or 15 percent limit 
under section 275.50, subdivision 5, clause (u), item (i) for 
the portion of the amount of its payable 1989 special levy under 
Minnesota Statutes 1988, section 275.50, subdivision 5, clause 
(a) for the income maintenance programs that was actually used 
to finance social services and social services administration 
subject to the 18 percent limit under Minnesota Statutes 1988, 
section 275.50, subdivision 5, clause (a) for payable 1989.  If 
the county can provide evidence satisfactory to the commissioner 
in support of this claim, the commissioner may permit the county 
to increase its levy base for the 12 or 15 percent limit under 
section 275.50, subdivision 5, clause (u), item (i) in the 
amount determined by the commissioner.  The commissioner's 
decision is final. 
    (e) A county may appeal to the commissioner of revenue for 
an adjustment in its special levy for 1990 under section 275.50, 
subdivision 5, clause (u), item (ii), if the difference between 
the county share of costs not reimbursed by the state or federal 
government of payments made in 1989 to or on behalf of 
recipients of aid under any public assistance program authorized 
by law and the amount levied in 1988 to pay those costs is 
greater than 30 percent of the 1989 costs.  The adjustment may 
not exceed the amount of the difference between the county share 
of these costs and the amount levied in 1988 to pay these costs. 
    Sec. 17.  Minnesota Statutes 1988, section 275.51, 
subdivision 4, is amended to read: 
    Subd. 4.  If the levy made by a governmental subdivision 
exceeds the limitation provided in sections 275.50 to 275.56, 
except when such excess levy is due to the rounding of the tax 
capacity rates of the governmental subdivision in accordance 
with section 275.28, subsequent distributions required to be 
made by the commissioner of finance from any formula aids 
pursuant to sections 477A.011 to 477A.014 or homestead and 
agricultural credit aid under section 273.1398, shall be reduced 
33 cents for each full dollar the levy exceeds the limitation.  
    Sec. 18.  Minnesota Statutes 1988, section 275.51, 
subdivision 6, is amended to read: 
    Subd. 6.  [POPULATION AND HOUSEHOLD ESTIMATES.] For the 
purpose of determining the amount of tax that a governmental 
subdivision may levy in accordance with limitation established 
by this chapter, the population or the number of households of 
the governmental subdivision shall be that established by the 
last federal census, by a census taken pursuant to section 
275.14, or by an estimate made by the metropolitan council, or 
by the state demographer made pursuant to section 116K.04, 
subdivision 4, whichever is the most recent as to the stated 
date of count or estimate, up to and including July 1 of for the 
calendar year preceding the current levy year.  
    Sec. 19.  Minnesota Statutes 1989 Supplement, section 
275.58, subdivision 1, is amended to read: 
    Subdivision 1.  Notwithstanding Subject to the provisions 
of sections 275.50 to 275.56, but subject and to other law or 
charter provisions establishing per capita, mill, tax capacity 
rate, or other limitations on the amount of taxes that may be 
levied, the levy of a governmental subdivision, as defined by 
section 275.50, subdivision 1, may be increased above the 
limitation imposed by sections 275.50 to 275.56 in any per 
capita or dollar amount which is approved by the majority of 
voters of the governmental subdivision voting on the question at 
a general or special election.  When the governing body of the 
governmental subdivision resolves to increase the levy of the 
governmental subdivision pursuant to this section, it shall 
provide for submission of the proposition of an increase in the 
levy limit base per capita or the proposition of an additional 
levy, as the case may be, at a general or special election.  
Notice of the election shall be given in the manner required by 
law.  If the proposition is for an adjustment to the 
governmental subdivision's levy limit base per capita, 
increasing the levy limit base per capita over the per capita 
amount established pursuant to section 275.51, subdivision 3, 
the notice shall state the purpose of the per capita adjustment 
and the per capita amount of the adjustment.  If the proposition 
is for an additional levy, the notice shall state the purpose 
and maximum yearly amount of the additional levy.  
    Sec. 20.  Minnesota Statutes 1988, section 298.28, 
subdivision 12, is amended to read: 
    Subd. 12.  [ESTIMATES.] 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 provided in subdivision 13.  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 subdivision 5, paragraph (d) 
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 275.58 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 275.58, 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 275.58 an amount sufficient to 
pay such certificates of indebtedness and interest thereon, or, 
if no certificates were issued, an amount equal to such shortage.
    Sec. 21.  Minnesota Statutes 1989 Supplement, section 
298.282, subdivision 2, is amended to read: 
    Subd. 2.  (a) Each year following the final determination 
of the amount of taxes payable under section 298.24, the 
commissioner of revenue shall determine the amount in the 
taconite municipal aid account as of July 1 of that year and the 
amount to be distributed to each qualifying municipality during 
the year.  The amount to be distributed to each qualifying 
municipality shall be determined by determining an index for 
each qualifying municipality by subtracting its local effort tax 
capacity rate, multiplied by its equalized gross tax capacity, 
from its fiscal need factor.  For the purposes of this 
subdivision, the following terms have the meanings given them 
herein.  A municipality's "local effort tax capacity rate" means 
its fiscal need factor per capita divided by $21 per capita for 
each one percent of the gross tax capacity rate or $17 per 
capita for each one percent of the net tax capacity rate for the 
first $350 of its fiscal need factor per capita; plus its fiscal 
need factor per capita divided by $18 per capita for each one 
percent of the gross tax capacity rate or $15 per capita for 
each one percent of the net tax capacity rate on that part of 
its fiscal need factor per capita, if any, in excess of $350.  
In no case shall a municipality's local effort tax capacity rate 
be less than a gross tax capacity rate of 6.56 percent or a net 
tax capacity rate of 8.16 percent.  A municipality's "equalized 
gross tax capacity" means its previous year tax capacity, less 
the tax capacity in any tax increment district, divided by the 
municipality's aggregate sales ratio covering the period ending 
two years prior to the year of aid distribution.  A 
municipality's "fiscal need factor" means the three-year average 
of the sum of its municipal levy, taconite aids received under 
section 298.28, subdivisions 2, 11, paragraph (b), and this 
section 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 ratio of the resulting index for each qualifying 
municipality to the sum of all qualifying municipalities' 
indexes shall be multiplied by the total amount in the taconite 
municipal aid account less the amount distributed pursuant to 
subdivision 5.  
    (b) If the distribution under this section, sections 
273.138, 298.26 and 298.28, and chapter 477A, to any 
municipality would exceed that municipality's levy limit base 
for that year, computed pursuant to sections 275.50 to 275.58, 
the amount in excess of the levy limit base for that year shall 
reduce the amount distributed to the municipality under this 
section and this excess amount shall be distributed to the other 
qualifying municipalities in the same manner as the distribution 
made pursuant to subdivision 2, except that the qualifying 
municipality receiving an initial distribution when added to 
that received pursuant to sections 273.138, 298.26, 298.28, and 
chapter 477A in excess of the qualifying municipality's levy 
limit base, shall not receive a distribution nor shall its index 
be used in computing the distribution pursuant to this clause.  
The distributions to be received in the year in which the taxes 
are payable shall be compared to the levy limit base for that 
same year.  Upon completion of the determination, the 
commissioner of revenue shall certify to the chief clerical 
officer of each qualifying municipality the amount which will be 
distributed to the municipality from the taconite municipal aid 
account that year. 
    Sec. 22.  Minnesota Statutes 1988, section 298.282, 
subdivision 3, is amended to read: 
    Subd. 3.  If the amount certified by the commissioner of 
revenue as distributable to any qualifying municipality is 
greater than the amount previously estimated to have been 
distributable to such qualifying municipality in such year, the 
excess distributed to such municipality shall be held in a 
separate fund by the qualifying municipality and shall not be 
expended until the succeeding calendar year.  If the amount 
distributable to any qualifying municipality, after final 
determination by the commissioner of revenue is less than the 
amount estimated to have been distributable to such qualifying 
municipality, such municipality may issue certificates of 
indebtedness in the amount of the shortage and may include in 
its next tax levy in excess of the limitations under sections 
275.50 to 275.56, an amount sufficient to pay such certificates 
of indebtedness and interest thereon or, if no certificates were 
issued, an amount equal to such shortage. 
    Sec. 23.  Minnesota Statutes 1988, section 298.39, is 
amended to read: 
     298.39 [DISTRIBUTION OF PROCEEDS.] 
     The proceeds of the tax collected under section 298.35 
shall be distributed by the state treasurer, upon certificate of 
the commissioner of revenue to the general fund of the state and 
to the various taxing districts in which the lands from which 
the semitaconite was mined or quarried were located in the 
following proportions:  22 percent thereof to the city or town; 
50 percent thereof to the school district; 22 percent thereof to 
the county; six percent thereof to the state.  If the mining 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 or towns among such subdivisions, and the part going to 
school districts among such districts, and the part going to 
counties among such counties, upon the basis of attributing 40 
percent of the proceeds of the tax to the operation of mining or 
quarrying the semitaconite, 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.  The commissioner's 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.  The amount so distributed 
shall be divided among the various funds of the state, or of the 
taxing districts in the same proportion as the general ad 
valorem tax thereof.  If in any year the state shall not spread 
any general ad valorem tax levy against real property, the 
state's proportion of the tax shall be paid into the general 
fund.  The amount distributed to any city shall be included in 
computing the permissible levies of such city under section 
275.11, but shall not be included in computing tax capacity rate 
limitations, including cost of living adjustments thereof, so 
long as the levies do not exceed the limitations provided by 
section 275.11.  On or before October 10 of each calendar year 
each producer of semitaconite subject to taxation under section 
298.35, hereinafter called "taxpayer," shall file with the 
commissioner of revenue and with the county auditor of each 
county in which such taxpayer operates, and with the chief 
clerical officer of each school district or city which is 
entitled to participate in the distribution of the tax, an 
estimate of the amount of tax which would be payable by such 
taxpayer under said law for such calendar year; provided such 
estimate shall be in an amount not less than the amount due on 
the mining and production of concentrates up to September 30 of 
said year plus the amount becoming due because of probable 
production between September 30 and December 31 of said year, 
less any credit allowable as hereinafter provided.  Such 
estimate shall list the taxing districts entitled to participate 
in the distribution of such tax, and the amount of the estimated 
tax which would be distributable to each such district in such 
next ensuing calendar year on the basis of the last percentage 
distribution certified by the commissioner of revenue.  If there 
be no such prior certification, the taxpayer shall set forth its 
estimate of the proper distribution of such tax under the law, 
which estimate may be corrected by the commissioner on deeming 
it improper, notice of such correction being given by the 
commissioner to the taxpayer and the public officers receiving 
such estimate.  The officers with whom such report is so filed 
shall use the amount so indicated as being distributable to each 
taxing district in computing, pursuant to section 275.11, the 
permissible tax levy of such city in the year in which such 
estimate is made, and payable in the next ensuing calendar 
year.  Such taxpayer shall then pay, at the times payments are 
required to be made pursuant to section 298.36, as the amount of 
tax payable under section 298.35, the greater of (a) the amount 
shown by such estimate, or (b) the amount due under said section 
as finally determined by the commissioner of revenue pursuant to 
law.  If, as a result of the payment of the amount of such 
estimate, the taxpayer has paid in any calendar year an amount 
of tax in excess of the amount due in such year under section 
298.35, after application of credits for any excess payments 
made in previous years, all as determined by the commissioner of 
revenue, the taxpayer shall be given credit for such excess 
amount against any taxes which, under said section, may become 
due from the taxpayer in subsequent years.  In any calendar year 
in which a general property tax levy subject to chapter 124 or 
124A or section 275.11 or 275.125 has been made, if the taxes 
distributable to any such city or school district are greater 
than the amount estimated to be paid to any such city or school 
district in such year, the excess of such distribution shall be 
held in a special fund by the city or school district and shall 
not be expended until the succeeding calendar year, and shall be 
included in computing the permissible levies under chapter 124 
or 124A or section 275.11 or 275.125 of such city or school 
district payable in such year.  If the amounts distributable to 
any such city or school district, after final determination by 
the commissioner of revenue under this section are less than the 
amounts indicated by such estimates, such city or school 
district may issue certificates of indebtedness in the amount of 
the shortage, and may include in its next tax levy, in excess of 
the limitations of chapters 124 and 124A and sections 275.11 and 
section 275.125 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 appropriated to such taxing districts as 
are stated herein, from any fund or account in the state 
treasury to which the money was credited, an amount sufficient 
to make the payment or transfer. 
    Sec. 24.  Minnesota Statutes 1988, section 298.396, is 
amended to read: 
    298.396 [DISTRIBUTION OF PROCEEDS.] 
    The proceeds of the tax collected under section 298.393 
shall be distributed by the state treasurer, upon certificate of 
the commissioner to the general fund of the state and to the 
various taxing districts in which the agglomerating facility is 
located in the following proportions:  22 percent thereof to the 
city or town; 50 percent thereof to the school district; 22 
percent thereof to the county; 6 percent thereof to the state.  
If the agglomerating facility is located in more than one tax 
district, the commissioner shall apportion equitably the 
proceeds of the part of the tax going to cities or towns among 
such subdivisions, and the part going to school districts among 
such districts, and the part going to counties among such 
counties, giving due consideration to the relative extent of the 
facilities located in each such taxing district.  The 
commissioner's 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.  The amount to be distributed among the 
several taxing districts of the state shall be divided by such 
districts among the funds of such districts in the same 
proportion as the general ad valorem tax thereof.  The amount 
distributed to any city shall be included in computing the 
permissible amount of the levies of such city under section 
275.11, but shall not be included in computing tax capacity rate 
limitations, including cost of living adjustments thereof, so 
long as the levies do not exceed the limitations provided by 
section 275.11. 
    Sec. 25.  Minnesota Statutes 1988, section 353A.10, 
subdivision 3, is amended to read: 
    Subd. 3.  [LEVY AND BONDING AUTHORITY.] A municipality in 
which was located a local police or firefighters relief 
association that has consolidated with the fund may issue 
general obligation bonds of the municipality to defray all or a 
portion of the principal amounts specified in section 353A.09, 
subdivisions 2 to 6, or certify to the county auditor an 
additional special a levy in the amount necessary to defray all 
or a portion of the principal amount specified in section 
353A.09, subdivisions 2 to 6, or the annual amount specified in 
section 353A.09, subdivisions 2 to 6.  The municipality may 
pledge the full faith, credit, and taxing power of the 
municipality for the payment of the principal of and interest on 
the general obligation bonds.  Notwithstanding any law to the 
contrary, any additional special levy may not be included in any 
limitation concerning rate or amount established by charter or 
law and must be a special levy for the purposes of section 
275.50, subdivision 5, clause (o), and Any municipal bond may be 
issued without an election under section 475.58 and may not be 
included in the net debt of the municipality for purposes of any 
charter or statutory debt limitation, nor may any tax levy for 
the payment of bond principal or interest be subject to any 
limitation concerning rate or amount established by charter or 
law.  
    Sec. 26.  Minnesota Statutes 1988, section 360.037, 
subdivision 2, is amended to read: 
    Subd. 2.  [IN EXCESS OF TAX LIMITATION.] Irrespective of 
any limitation, by general or special law or charter, as to the 
amount or total of taxes that may be levied, A municipality may 
levy taxes for the purposes authorized by sections 360.011 to 
360.076, in excess of such limitations, in such amount as may be 
authorized by an ordinance or resolution referred to and 
approved by the voters of such municipality by popular vote; 
provided, such levies shall be within the limits fixed by 
section 275.11. 
    Sec. 27.  Minnesota Statutes 1989 Supplement, section 
373.40, subdivision 6, is amended to read: 
    Subd. 6.  [BUILDING FUND LEVY.] (a) If a county other than 
Hennepin or Ramsey has an approved capital improvement plan, the 
county board may annually levy 0.05367 percent of taxable market 
value, less the amount levied to pay principal and interest on 
bonds issued under this section.  If the Hennepin county board 
has an approved capital improvement plan, the county board may 
annually levy 0.02684 percent of taxable market value, less the 
amount levied to pay principal and interest on bonds issued 
under this section.  If the Ramsey county board has an approved 
capital improvement plan, the county board may annually levy 
0.06455 percent of taxable market value, less the amount levied 
to pay principal and interest on bonds issued under this 
section.  The proceeds of this levy must be deposited in the 
county building fund under section 373.25 and may only be 
expended for capital improvements as provided in the approved 
capital improvement plan. 
    (b) The maximum amount of the levy, when added to the 
unexpended balance in the building fund, must not exceed the 
projected cost of the remaining improvements in the capital 
improvement plan.  A levy made under this section is not subject 
to any other levy limitation, nor may the levy be included in 
the computation of any other levy limitation. 
    (c) This subdivision and the exercise of levy authority 
under it does not supersede or preempt the authority to levy 
under section 373.25 or any other law. 
    Sec. 28.  Minnesota Statutes 1989 Supplement, section 
412.251, is amended to read: 
   412.251 [ANNUAL TAX LEVY.] 
    The council shall make its annual tax levy by resolution 
within the per capita limits established by statute.  The amount 
of taxes levied for general city purposes shall not exceed 
0.28207 percent of taxable market value in cities having a 
taxable market value of less than $6,200,000 and 0.24177 percent 
of taxable market value in cities having a taxable market value 
of more than $6,200,000.  The following taxes may be levied in 
addition to the levies above as authorized: 
    (1) a tax for the payment of principal and interest on 
outstanding obligations of the city as provided by sections 
475.61, 475.73, and 475.74; 
    (2) a tax for the payment of judgments as authorized by 
section 465.14; 
    (3) a maximum of 0.00805 percent of taxable market value 
but not to exceed $500 to provide musical entertainment to the 
public in public buildings or on public grounds; 
    (4) a tax for band purposes as authorized by section 
449.09; 
    (5) a tax for the support of a municipal forest, as 
authorized by section 459.06; 
    (6) a tax for advertising purposes, as authorized by 
section 469.189; 
    (7) a tax for forest fire protection in any city in a 
forest area, as authorized by section 88.04; 
    (8) a maximum of 0.04030 percent of taxable market value 
for the utilities fund in any city whose utilities are under the 
jurisdiction of a public utilities commission.  The tax shall be 
levied for the purpose of paying the cost of the utility service 
or other services supplied to the city; 
    (9) a tax for the support of a public library, as 
authorized by section 134.07; 
    (10) a tax for firefighters' relief association purposes as 
authorized by sections 69.772, subdivision 4, 69.773, 
subdivision 5, or other statutes; and 
    (11) other special taxes authorized by law. 
    Nothing in this section shall be construed to reduce levies 
of any municipality below the per capita levy spread in 1970. 
    Sec. 29.  Minnesota Statutes 1988, section 414.01, 
subdivision 15, is amended to read: 
    Subd. 15.  When a board order enlarges an existing 
municipality or creates a new municipality, the board may 
indicate in its order the estimated increased costs to the 
municipality as the result of the boundary adjustment, and the 
time period that the municipality would be allowed a special 
levy for these increased costs pursuant to section 275.50, 
subdivision 5. 
    Sec. 30.  Minnesota Statutes 1989 Supplement, section 
426.04, is amended to read: 
    426.04 [TAXES FOR GENERAL PURPOSES.] 
    The governing body of any home rule charter city of the 
third or fourth class in this state may levy taxes for all 
general fund purposes, not exceeding 0.32237 percent of taxable 
market value unless the charter of the city authorizes it to 
levy taxes for general fund purposes in excess of that amount.  
This section does not apply to a third class city which is 
contiguous to a city of the first class located in a different 
county or to a fourth class city in a county containing a first 
class city.  
    Sec. 31.  Minnesota Statutes 1988, section 444.075, 
subdivision 4, is amended to read: 
    Subd. 4.  [LEVY ASSESSMENTS.] The governing body of a 
municipality or county may also levy assessments against 
property within the municipal or county limits benefited by the 
facilities under the procedure authorized by law or charter with 
reference to other assessments for benefits of local 
improvements, may transfer and use for the purposes hereof 
surplus funds of the municipality or county not specifically 
dedicated to another purpose, and may levy taxes on property 
within the municipal or county limits for the purposes within 
the limitations of section 275.11; except that of the taxes 
levied, including taxes initially levied under section 475.61 
for the payment of the principal and interest on the bonds 
issued, an amount equal to 35 percent of the total cost of the 
construction, reconstruction, repair, enlargement, improvement, 
or other obtainment of the facilities, plus an amount sufficient 
to pay the interest on the bonds issued in an amount equal to 35 
percent of the total cost of the construction, reconstruction, 
repair, enlargement, improvement, or other obtainment of any the 
facilities, shall not be included in computing the levies 
subject to the limitations of section 275.11.  A municipality or 
county may contract with any person, company or corporation for 
the purposes and under the restrictions set forth in subdivision 
5.  The contract shall be binding upon the parties to it for the 
full term agreed upon but in no event more than 30 years, and 
shall not be changed by either party without the consent of the 
other party.  
    Sec. 32.  Minnesota Statutes 1988, section 447.34, 
subdivision 1, is amended to read: 
    Subdivision 1.  [EXPENSES PAID FROM REVENUE, TAXES, AND 
APPROPRIATIONS; TAX LIMITS.] Expenses of acquiring, improving, 
and running hospital and nursing home facilities operated by a 
hospital district, expenses incurred under section 447.331, 
subdivision 1, and expenses of organization and administration 
of the district and of planning and financing the facilities, 
must be paid from the revenues derived from them, and to the 
extent necessary, from ad valorem taxes levied by the hospital 
board on all taxable property within the district, and, to the 
extent determined from time to time by the board of county 
commissioners of any county containing territory of the 
district, from appropriations made by the county board in 
accordance with section 376.08.  Money appropriated by the board 
of county commissioners to acquire or improve facilities of the 
hospital district may be transferred in the discretion of the 
hospital board to a sinking fund for bonds issued for that 
purpose.  The hospital board may agree to repay to the county 
any sums appropriated by the board of county commissioners for 
this purpose, out of the net revenues to be derived from 
operation of its facilities, and subject to the terms agreed on. 
    Taxes levied by a hospital district in any year, other than 
taxes levied for payment of bonded indebtedness, must not exceed 
$1.50 per capita of the population of the district according to 
the last federal census, if the amount proposed to be levied in 
excess of that amount, when added to the levy subject to the 
limitations of section 275.11, of any of the municipalities 
within the district, would cause the municipal levy to exceed 
the limitations of that section. 
    Sec. 33.  Minnesota Statutes 1988, section 447.35, is 
amended to read: 
    447.35 [BONDS.] 
    A hospital district may borrow money by the issuance of its 
general obligation bonds: 
    (1) to acquire and better hospital and nursing home 
facilities including the provision of an adequate working 
capital for a new hospital or nursing home; 
    (2) for ambulances and related equipment; 
    (3) for refunding its outstanding bonds; and 
    (4) for funding valid outstanding orders. 
Bonds must be issued by the procedure and subject to the 
limitations and conditions in chapter 475 for the issuance of 
bonds by municipalities.  Except for revenue bonds issued under 
sections 447.45 to 447.50, no bonds of a hospital district are 
excluded from its net debt by virtue of section 475.51, 
subdivision 4, clause (5).  Except as authorized by special law, 
the taxes initially levied by any district in accordance with 
section 475.61, for the payment of its bonds, upon property 
within each municipality included in the hospital district, must 
be included in computing the limitations upon the levy of the 
municipality under section 275.11, as the case may be; but 
nothing here limits the taxes required by section 475.74, to be 
levied by the district for payment of any deficiency in its bond 
sinking funds.  If the tax required by section 475.61 to be 
levied for any year of the term of a bond issue upon property 
within any municipality included in the district would, when 
added to the taxes levied by the municipality for all purposes 
in the year before the issue, exceed the limitations prescribed 
in section 275.11, the bonds must not be issued without the 
consent by resolution of the governing body.  An election is 
required before the issuance of all bonds except funding or 
refunding bonds.  The proposition submitted at the election must 
be whether the hospital board shall be authorized to issue bonds 
of the district in a specified maximum amount, for the purpose 
of financing the acquisition and betterment of hospital and 
nursing home facilities, or of facilities of other stated types 
if it is not proposed to use the bond proceeds for hospital and 
nursing home facilities.  Bonds issued by a hospital district do 
not constitute indebtedness for any purpose of any county, city, 
or town whose territory is included in the district.  
    Sec. 34.  Minnesota Statutes 1988, section 465.73, is 
amended to read: 
    465.73 [TOWN HALLS; FIRE HALLS OR EQUIPMENT; DIRECT LOANS 
TO POLITICAL SUBDIVISIONS.] 
    For purposes of constructing or acquiring town halls, fire 
halls or fire equipment any city, county or town may borrow up 
to $100,000 directly from the Farmers Home Administration on a 
note secured by a mortgage on the real or personal property 
purchased with the borrowed funds.  The city, county or town may 
assign revenues from the town halls, fire department or fire 
hall or any other available funds to the Farmers Home 
Administration to repay the loan.  When the full faith and 
credit of the city, county or town is irrevocably pledged for 
the redemption of the note and mortgage, the taxes levied to pay 
principal and interest thereon shall be considered special 
levies within the meaning of section 275.50, subdivision 5, 
clause (j).  The amount of the obligation shall be included when 
computing the net debt of the city or county but not the town.  
Unless expressly provided otherwise in the mortgage instrument, 
when a city, county or town borrows on a mortgage and fails to 
repay all or a part of the mortgage, the agency is confined to 
the remedy of recovery of the property purchased with the 
borrowed funds.  An election shall be required to authorize the 
note and mortgage unless the agency is confined to the remedy of 
recovery of the property. 
    Sec. 35.  Minnesota Statutes 1989 Supplement, section 
469.033, subdivision 6, is amended to read: 
    Subd. 6.  [OPERATION AREA AS TAXING DISTRICT, SPECIAL TAX.] 
All of the territory included within the area of operation of 
any authority shall constitute a taxing district for the purpose 
of levying and collecting special benefit taxes as provided in 
this subdivision.  All of the taxable property, both real and 
personal, within that taxing district shall be deemed to be 
benefited by projects to the extent of the special taxes levied 
under this subdivision.  Subject to the consent by resolution of 
the governing body of the city in and for which it was created, 
an authority may levy each year a tax upon all taxable property 
within that taxing district.  The authority shall certify the 
tax to the auditor of the county in which the taxing district is 
located on or before October 10 each year.  The tax shall be 
extended, spread, and included with and as a part of the general 
taxes for state, county, and municipal purposes by the county 
auditor, to be collected and enforced therewith, together with 
the penalty, interest, and costs.  As the tax, including any 
penalties, interest, and costs, is collected by the county 
treasurer it shall be accumulated and kept in a separate fund to 
be known as the "housing and redevelopment project fund."  The 
money in the fund shall be turned over to the authority at the 
same time and in the same manner that the tax collections for 
the city are turned over to the city, and shall be expended only 
for the purposes of sections 469.001 to 469.047.  It shall be 
paid out upon vouchers signed by the chair of the authority or 
an authorized representative.  The amount of the levy shall be 
an amount approved by the governing body of the city, but shall 
not exceed .0081 .0131 percent of taxable market value except 
that in cities of the first class having a population of less 
than 200,000, the levy shall not exceed .00403 .0065 percent of 
taxable market value.  The authority may levy an additional 
levy, not to exceed .0008 .0013 percent of taxable market value, 
to be used to defray costs of providing informational service 
and relocation assistance as set forth in section 462.445, 
subdivision 4.  The authority shall each year formulate and file 
a budget in accordance with the budget procedure of the city in 
the same manner as required of executive departments of the city 
or, if no budgets are required to be filed, by August 1.  The 
amount of the tax levy for the following year shall be based on 
that budget and shall be approved by the governing body. 
    Sec. 36.  Minnesota Statutes 1989 Supplement, section 
471.1921, is amended to read: 
   471.1921 [CITIES AND TOWNS; PLAYGROUNDS AND RECREATION; TAX 
LEVY.] 
    Whenever any city or town in which the net tax capacity 
consists in part of iron ore or lands containing taconite or 
semitaconite operates a program of public recreation and 
playgrounds or other recreational facilities and expends funds 
for the operation of the program pursuant to sections 471.15 to 
471.19, in addition to funds otherwise provided therefor, the 
governing body of the city or town may levy a tax in excess of 
any charter or statutory limitation, except the limitation 
imposed in sections 275.50 to 275.58, for the support of this 
program of public recreation and playgrounds as follows: 
    (1) in cities the council or governing body may levy a tax 
not exceeding the lesser of (i) 0.00537 percent of taxable 
market value; (ii) $3 per capita; or (iii) $15,000; and 
    (2) in towns the governing body may levy a tax not 
exceeding the lesser of (i) 0.00537 percent of taxable market 
value; or (ii) $10,000.  
    Sec. 37.  Minnesota Statutes 1988, section 471.572, 
subdivision 2, is amended to read: 
    Subd. 2.  [TAX LEVY.] The governing body of a city may 
establish, by a two-thirds vote of all its members, by ordinance 
or resolution a reserve fund and may annually levy a property 
tax for the support of the fund.  The proceeds of taxes levied 
for its support must be paid into the reserve fund.  Any other 
revenue from a source not required by law to be paid into 
another fund for purposes other than those provided for the use 
of the reserve fund may be paid into the fund.  A tax levied by 
the city in accordance with this section is a special levy 
within the meaning of section 275.50, subdivision 5.  Before a 
tax is levied under this section, the city must publish in the 
official newspaper of the city an initial resolution authorizing 
the tax levy.  If within ten days after the publication a 
petition is filed with the city clerk requesting an election on 
the tax levy signed by a number of qualified voters greater than 
ten percent of the number who voted in the city at the last 
general election, the tax may not be levied until the levy has 
been approved by a majority of the votes cast on it at a regular 
or special election.  
    Sec. 38.  Minnesota Statutes 1988, section 471.74, 
subdivision 2, is amended to read: 
    Subd. 2.  The governing body of any municipality issuing 
bonds under sections 471.71 to 471.83 shall, at the time of the 
issuance thereof, by resolution, provide for a levy of taxes for 
the payment thereof, such levy to be in accordance with the 
provisions of chapter 475.  Levies for the payment of these 
bonds shall be within the limitations upon tax levies for the 
payment of funding bonds in the particular municipality issuing 
the bonds.  Such levies shall be subject to the provisions of 
sections 275.11 and section 275.125, to the extent that these 
sections are applicable this section applies to the municipality 
issuing such bonds.  In all cases the levies for these bonds 
shall be spread by the county auditor in full and the levy of 
the municipality for other purposes shall be reduced, if 
necessary, so that the total amount levied for the municipality 
does not exceed said limitations. 
    Sec. 39.  Minnesota Statutes 1988, section 471A.03, 
subdivision 4, is amended to read: 
    Subd. 4.  [SOURCES OF PAYMENT; COLLECTION PROCEDURE.] (a) 
For the payment of a service fee or other monetary obligation 
under an existing service contract or in anticipation of need 
under a future service contract, the municipality may: 
    (1) levy property taxes, impose rates and charges, levy 
special assessments, and exercise any other revenue producing 
authority granted to it and apply public funds for the payment 
of the service fee and any other monetary obligations under the 
service contract in the same manner, and subject to the same 
conditions and limitations, except as provided in section 
471A.04, that would apply if the related facilities were 
acquired, constructed, owned, and operated exclusively by the 
municipality; and 
    (2) establish by ordinance, revise when considered 
advisable, and collect just and reasonable rates and charges for 
the capital intensive public services provided under the service 
contract.  The ordinance may obligate the owners, lessees, or 
occupants of property, or any or all of them, to pay charges for 
the capital intensive public services available for their 
properties and may obligate the user of a related facility to 
pay a reasonable charge for the use of the related facility.  
Rates and charges may take into account the character, kind, and 
quality of the capital intensive public service and all other 
factors that enter into the cost of the capital intensive public 
service, including but not limited to the service fee payable 
with respect to it, depreciation, and payment of principal and 
interest on money borrowed for the acquisition or betterment of 
related facilities.  
    (b) The rates and charges may be billed and collected in a 
manner the municipality shall determine consistent with this 
paragraph and other applicable law.  On or before October 15 in 
each year, the municipality shall certify to the county auditor 
all unpaid outstanding charges for services provided under the 
service contract and a statement of the description of the lands 
against which the charges arose.  It is the duty of the county 
auditor, upon order of the governing body of the municipality, 
to extend the rates and charges with interest as provided for by 
ordinance upon the tax rolls of the county for the taxes of the 
year in which the rate or charge is filed.  For each year ending 
October 15 the rates and charges with interest shall be carried 
into the tax becoming due and payable in January of the 
following year, and shall be enforced and collected in the 
manner provided for the enforcement and collection of real 
property taxes in accordance with the provisions of the laws of 
the state.  The rates and charges, if not paid, shall become 
delinquent and be subject to the same penalties and the same 
rate of interest as the taxes under the general laws of the 
state.  All rates and charges shall be uniform in their 
application to use and service of the same character or quantity.
     (c) An ordinance establishing rates and charges shall also 
establish a procedure by which a person obligated to pay the 
rates and charges may, each year at a public hearing held before 
August 1 of each year, protest the payment of the rates and 
charges on the grounds that services to be provided under the 
service contract are not available to the person.  The services 
shall be deemed available for the property of the person if the 
vendor agrees, and the related facilities have the capacity, to 
provide the services to the person as soon as the municipality 
or any other entity provides the property of the person with 
access to the services.  Notice of the hearing shall be 
published at least 30 days prior to the hearing in an official 
newspaper in general circulation in the municipality.  A person 
protesting the assessment of rates and charges under this 
paragraph shall file the objection in writing with the 
municipality at least five days prior to the hearing.  Within 
ten days after the hearing, the municipality shall determine 
whether the rates and charges were properly assessed.  A person 
protesting the assessment of rates and charges may appeal the 
assessment, and a private vendor may appeal a reduction in rates 
and charges for any person, to the district court in the same 
manner as appeal of other civil cases.  Rates and charges 
erroneously collected shall be refunded with the same rate of 
interest as taxes refunded with interest under the general laws 
of this state. 
     (d) A public hearing on the proposed ordinance shall be 
held prior to the meeting at which it is to be considered by the 
governing body of the municipality and after notice of the 
hearing has been published in the official newspaper of the 
municipality not less than ten days prior to the hearing.  The 
notice shall state the subject matter and the general purpose of 
the proposed ordinance. 
    Sec. 40.  Minnesota Statutes 1988, section 473.87, is 
amended to read: 
    473.87 [EXEMPTION FROM LEVY LIMIT FOR INCREASED COSTS.] 
    Subdivision 1.  The increased costs to a municipality of 
implementing sections 473.175; 473.858, subdivisions 1 to 3; 
473.859 to 473.862; and 473.866 shall be deemed a special levy 
under section 275.50, subdivision 5. 
    Subd. 2. and the proceeds of any tax levied under this 
section shall be deposited in the municipal treasury in a 
separate fund and expended only for the purposes authorized by 
this section. 
    Sec. 41.  Minnesota Statutes 1989 Supplement, section 
473.882, subdivision 3, is amended to read:  
    Subd. 3.  [TAX.] After adoption of the ordinance under 
subdivision 2, a local government unit may annually levy a tax 
on all taxable property in the district for the purposes for 
which the tax district is established.  The tax may not exceed 
0.02418 percent of market value on taxable property located in 
rural towns other than urban towns, unless allowed by resolution 
of the town electors.  The proceeds of the tax shall be paid 
into a fund reserved for these purposes.  Any proceeds remaining 
in the reserve fund at the time the tax is terminated or the 
district is dissolved shall be transferred and irrevocably 
pledged to the debt service fund of the local unit to be used 
solely to reduce tax levies for bonded indebtedness of taxable 
property in the district.  A tax levied in accordance with this 
subdivision for paying capital costs is a levy for the payment 
of principal and interest on bonded indebtedness within the 
meaning of section 275.50, subdivision 5, clause (e).  
    Sec. 42.  Minnesota Statutes 1988, section 473F.08, 
subdivision 3a, is amended to read: 
    Subd. 3a.  Beginning in 1987 and each subsequent year 
through 1998, the city of Bloomington shall determine the 
interest payments for that year for the bonds which have been 
sold for the highway improvements pursuant to Laws 1986, chapter 
391, section 2, paragraph (g).  Effective for property taxes 
payable in 1988 through property taxes payable in 1999, after 
the Hennepin county auditor has computed the areawide portion of 
the levy for the city of Bloomington pursuant to subdivision 3, 
clause (a), the auditor shall annually add a dollar amount to 
the city of Bloomington's areawide portion of the levy equal to 
the amount which has been certified to the auditor by the city 
of Bloomington for the interest payments for that year for the 
bonds which were sold for highway improvements.  The total 
areawide portion of the levy for the city of Bloomington 
including the additional amount for interest repayment certified 
pursuant to this subdivision shall be certified by the Hennepin 
county auditor to the administrative auditor pursuant to 
subdivision 5.  The Hennepin county auditor shall distribute to 
the city of Bloomington the additional areawide portion of the 
levy computed pursuant to this subdivision at the same time that 
payments are made to the other counties pursuant to subdivision 
7a.  This additional areawide portion of the levy which is 
distributed to the city of Bloomington shall be exempt from the 
city's levy limit provisions contained in sections 275.50 to 
275.56.  For property taxes payable from the year 2000 through 
2009, the Hennepin county auditor shall adjust Bloomington's 
contribution to the areawide gross tax capacity upward each year 
by a value equal to ten percent of the total additional areawide 
levy distributed to Bloomington under this subdivision from 1988 
to 1999, divided by the areawide tax capacity rate for taxes 
payable in the previous year.  
    Sec. 43.  Minnesota Statutes 1988, section 475.74, is 
amended to read: 
    475.74 [PER CAPITA LIMITATION NOT APPLICABLE.] 
    The provisions of any law limiting taxes on a per capita 
basis or otherwise shall not limit the power of any city of the 
first or second class or any independent school district in any 
city of the first class, or any special school district in a 
city of the second class having a population of not less than 
28,000 nor more than 32,000 according to the 1950 federal 
census, to levy taxes to pay its general obligation bonds nor 
shall such provisions limit the power of any municipality to 
levy taxes to make good any deficiency in any prior levies made 
pursuant to section 475.61.  The governing body shall levy such 
taxes without limitation as to rate or amount.  
    Sec. 44.  Minnesota Statutes 1988, 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 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. 45.  Laws 1976, chapter 162, section 1, as amended by 
Laws 1982, chapter 474, section 1, and Laws 1983, chapter 338, 
section 1, is amended to read:  
    Section 1.  [RED RIVER WATERSHED; TAX BY WATERSHED 
DISTRICTS.] 
    Each watershed district located within the counties of 
Kittson, Marshall, Polk, Pennington, Red Lake, Norman, Clay, 
Mahnomen, Clearwater, Roseau, Wilkin, Otter Tail, Becker, 
Koochiching, Beltrami, and Itasca, which district is a member of 
the lower Red River watershed management board, established by a 
joint powers agreement in accordance with Minnesota Statutes, 
Section 471.59, may levy an ad valorem tax not to exceed two 
mills on each dollar of assessed valuation of all 
taxable 0.04836 percent of the taxable market value of all 
property within the district.  This levy shall be in excess of 
any levy authorized by Minnesota Statutes, Section 112.61.  The 
proceeds of one-half of this levy shall be credited to the 
district's administrative fund and shall be used for the 
construction and maintenance of projects of common benefit to 
the district.  The proceeds of the remaining one-half of this 
levy shall be credited to the construction fund of the lower Red 
River watershed management board and shall be used for the 
construction and maintenance of projects of common benefit.  
    Sec. 46.  Laws 1986, chapter 399, article 1, section 1, is 
amended to read: 
    Section 1.  [AITKIN COUNTY; DEVELOPMENT LEVY.] 
    The Aitkin county board may annually levy a tax of not more 
than one and one third mills 0.03224 percent of market value on 
taxable property in the county, to provide funds to be used by 
the county for tourist, agricultural, industrial, and economic 
development.  A levy under this section is in addition to any 
other permitted by law and shall be disregarded in the 
calculation of any other levies or limits on levies provided by 
Minnesota Statutes, sections 275.50 to 275.56 or other law. 
    For 1989 and 1990 only, the annual appropriation limitation 
in Minnesota Statutes, section 375.83 is increased to $100,000 
for Aitkin county only. 
    Sec. 47.  Laws 1989, chapter 335, article 3, section 54, 
subdivision 8, is amended to read: 
    Subd. 8.  [LEVY.] During the pilot project the counties 
that make up the eighth judicial district shall continue to levy 
for and pay the costs to operate the eighth judicial district 
and public defense services that the state does not fund during 
the eighth district project.  The supreme court shall certify to 
the counties on or before October 1 of each year the amount 
necessary in excess of the state-funded eighth district project 
costs.  The counties are responsible on a per capita prorated 
basis for the costs that the state is not assuming.  These 
include but are not limited to capital costs, rent, and other 
associated costs.  The county administrator of each of the 
counties shall consult with the supreme court and the eighth 
judicial district administrator regarding these costs before 
setting county budgets and levies for calendar year 1990. 
    Sec. 48.  Laws 1989, chapter 335, article 3, section 58, as 
amended by Laws 1989, chapter 356, section 67, is amended to 
read:  
    Sec. 58.  [EFFECTIVE DATES.] 
    Subdivision 1.  [JANUARY 1, 1992; EXCEPTIONS.] (a) In all 
judicial districts except the eighth, sections 1, 2, 3, 4, 5, 
14, 17, 18, 19, 20, 21, and 26, are effective January 1, 1992; 
except that these sections are effective to make affected 
district administration staff, other than district 
administration staff in the second and fourth judicial 
districts, state employees on July 1, 1990, and law clerks state 
employees October 1, 1990.  
    (b) The sections listed in paragraph (a) are effective 
January 1, 1990, for all court employees in the eighth judicial 
district including court administrators and staff.  
    (c) Section 1 is effective July 1, 1989, for guardians ad 
litem.  
    Subd. 2.  [JULY 1, 1990, OUTSIDE 8TH.] (a) Except as 
provided in paragraph (b) and subdivision 3, in all judicial 
districts except the eighth, sections 6, 8, 13, 15, 22, 23, 30, 
31, 32, 33, 34, 35, 36, 37, 38, and 56, are effective July 1, 
1990. 
    (b) For all judicial districts, section 6 is effective July 
1, 1989, with respect to the increase in fees under section 7.  
For all judicial districts, sections 7 and 11 are effective July 
1, 1989. 
    (c) Except as otherwise provided in this section, section 6 
is effective for counties in the eighth judicial district on 
January 1, 1990. 
    Subd. 3.  [JANUARY 1, 1991; ALL DISTRICTS.] That portion of 
section 6 which amends the first sentence of Minnesota Statutes 
1989 Supplement, section 357.021, subdivision 1a, requiring 
counties to pay filing fees in district court actions is 
effective January 1, 1991, for counties in all judicial 
districts. 
    Sec. 49.  [ITASCA COUNTY; LEVY LIMIT PENALTY EXEMPTION.] 
    The amount of any tax levied by Itasca county under Laws 
1988, chapter 517, is not subject to a penalty imposed under 
Minnesota Statutes, section 275.51, subdivision 4, for exceeding 
levy limits under Minnesota Statutes, sections 275.50 to 275.56. 
    Sec. 50.  [LEVY LIMIT EXCEPTION.] 
    For taxes levied in 1989 and 1990 only, payable in 1990 and 
1991 only, a levy by the Itasca county board under Laws 1988, 
chapter 517, is not subject to the levy limitations of Minnesota 
Statutes, sections 275.50 to 275.56, or other law. 
    Sec. 51.  [REPEALER.] 
    Minnesota Statutes 1988, sections 134.34, subdivision 6; 
275.11; 275.50; 275.51; 275.54; 275.55; 275.56; 275.561; 275.58; 
and 471A.04, are repealed. 
    Sec. 52.  [EFFECTIVE DATE.] 
    Except as otherwise provided, sections 12 to 19, 27, 35, 
45, and 47 are effective for taxes levied in 1989, payable in 
1990 and subsequent years.  Section 49 is effective upon 
approval by the Itasca county board for taxes levied in 1988, 
payable in 1989 only.  Sections 1, 5, 6, 20, 31, 34, 41, 44, and 
51 are effective for taxes levied by cities and towns in 1991, 
payable in 1992 and thereafter, and for taxes levied by counties 
in 1992, payable in 1993 and thereafter.  Sections 2, 4, 7, 9 to 
11, 21 to 26, 28 to 30, 32, 33, 36 to 40, 42, and 43 are 
effective for taxes levied in 1991, payable in 1992 and 
thereafter.  Sections 3 and 8 are effective for taxes levied in 
1992, payable in 1993 and thereafter.  Section 50 is effective 
for taxes payable in 1989 and 1990 only. 

                               ARTICLE 6 

                               EDUCATION 
    Section 1.  Minnesota Statutes 1989 Supplement, section 
121.904, subdivision 4a, is amended to read: 
    Subd. 4a.  [LEVY RECOGNITION.] (a) "School district tax 
settlement revenue" means the current, delinquent, and 
manufactured home property tax receipts collected by the county 
and distributed to the school district, including distributions 
made pursuant to section 279.37, subdivision 7, and excluding 
the amount levied pursuant to sections 124.2721, subdivision 3; 
124.575, subdivision 3; and 275.125, subdivision 9a; and Laws 
1976, chapter 20, section 4.  
    (b) In June of each year, the school district shall 
recognize as revenue, in the fund for which the levy was made, 
the lesser of:  
    (1) the June and July school district tax settlement 
revenue received in that calendar year; or 
    (2) the sum of the state aids and credits enumerated in 
section 124.155, subdivision 2, which are for the fiscal year 
payable in that fiscal year plus 27.8 31.0 percent of the amount 
of the levy certified in the prior calendar year according to 
section 124A.03, subdivision 2, plus or minus auditor's 
adjustments, not including levy portions that are assumed by the 
state; or 
    (3) 27.8 31 percent of the amount of the levy certified in 
the prior calendar year, plus or minus auditor's adjustments, 
not including levy portions that are assumed by the state, which 
remains after subtracting, by fund, the amounts levied for the 
following purposes:  
    (i) reducing or eliminating projected deficits in the 
reserved fund balance accounts for unemployment insurance and 
bus purchases; 
    (ii) statutory operating debt pursuant to section 275.125, 
subdivision 9a, and Laws 1976, chapter 20, section 4; and 
    (iii) retirement and severance pay pursuant to sections 
124.4945 and 275.125, subdivision 6a, and Laws 1975, chapter 
261, section 4; and 
    (iv) amounts levied for bonds issued and interest thereon, 
amounts levied for debt service loans and capital loans, amounts 
levied for down payments under section 124.82, subdivision 3, 
amounts levied for education district bonds under section 
122.96, subdivision 5, and amounts levied pursuant to section 
275.125, subdivision 14a. 
    (c) In July of each year, the school district shall 
recognize as revenue that portion of the school district tax 
settlement revenue received in that calendar year and not 
recognized as revenue for the previous fiscal year pursuant to 
clause (b).  
    (d) All other school district tax settlement revenue shall 
be recognized as revenue in the fiscal year of the settlement. 
Portions of the school district levy assumed by the state, 
including prior year adjustments and the amount to fund the 
school portion of the reimbursement made pursuant to section 
273.425, shall be recognized as revenue in the fiscal year 
beginning in the calendar year for which the levy is payable. 
    Sec. 2.  Minnesota Statutes 1989 Supplement, section 
121.904, subdivision 4e, is amended to read: 
    Subd. 4e.  [COOPERATION LEVY RECOGNITION.] (a) A 
cooperative district is a district or cooperative that receives 
revenue according to section 124.2721 or 124.575.  
    (b) In June of each year, the cooperative district shall 
recognize as revenue, in the fund for which the levy was made, 
the lesser of:  
    (1) the sum of the state aids and credits enumerated in 
section 124.155, subdivision 2, that are for the fiscal year 
payable in that fiscal year; or 
    (2) 27.8 31.0 percent of the difference between 
    (i) the sum of the amount of levies certified in the prior 
year according to sections 124.2721, subdivision 3, and 124.575, 
subdivision 3; and 
    (ii) the amount of transition aid paid to the cooperative 
unit according to section 273.1392 for the fiscal year to which 
the levy is attributable.  
    Sec. 3.  Minnesota Statutes 1989 Supplement, section 
124.243, subdivision 3, is amended to read: 
    Subd. 3.  [CAPITAL EXPENDITURE FACILITIES LEVY.] To obtain 
capital expenditure facilities revenue, a district may levy an 
amount not to exceed the capital expenditure facilities revenue 
determined in subdivision 2 multiplied by the lesser of one, or 
the ratio of: 
    (1) the quotient derived by dividing the adjusted gross net 
tax capacity of the district for the year preceding the year the 
levy is certified by the actual pupil units in the district for 
the school year to which the levy is attributable, to 
    (2) 70 100 percent of the equalizing factor for the school 
year to which the levy is attributable. 
    Sec. 4.  Minnesota Statutes 1989 Supplement, section 
124.244, subdivision 2, is amended to read:  
    Subd. 2.  [CAPITAL EXPENDITURE EQUIPMENT LEVY.] To obtain 
capital expenditure equipment revenue, a district may levy an 
amount not to exceed the district's capital expenditure 
equipment revenue as determined in subdivision 1 multiplied by 
the lesser of one, or the ratio of: 
    (1) the quotient derived by dividing the adjusted gross net 
tax capacity of the district for the year preceding the year the 
levy is certified by the actual pupil units in the district for 
the school year to which the levy is attributable, to 
    (2) 70 100 percent of the equalizing factor for the school 
year to which the levy is attributable.  
     Sec. 5.  [124.2442] [CAPITAL EXPENDITURE PRORATION.] 
     Subdivision 1.  [INSUFFICIENT FUNDS.] If the total 
appropriation for capital expenditure equipment aid or capital 
expenditure facilities aid for any fiscal year is insufficient 
to pay all districts the full amount of aid earned, the 
department of education shall reduce each district's capital 
expenditure facilities and equipment revenue according to the 
calculations in subdivisions 2 to 4. 
    Subd. 2.  [ALLOWANCE REDUCTION.] If there are insufficient 
capital expenditure equipment and facility aid funds, the 
department must recompute the capital expenditure equipment and 
facility revenue by reducing the formula allowances to the 
levels that eliminate the deficiencies.  The levy amounts must 
not be recomputed. 
     Subd. 3.  [AID REDUCTION.] A district's proration aid 
reduction is equal to the lesser of zero, or the difference of 
the existing aid calculation minus the aid amount computed under 
subdivision 2. 
     Subd. 4.  [LEVY REDUCTION.] If a district's proration aid 
reduction is less than its revenue reduction, its capital 
expenditure levy authority for the following year must be 
reduced by the amount of the difference between its revenue 
reduction and its aid reduction. 
    Sec. 6.  Minnesota Statutes 1989 Supplement, section 
124.83, subdivision 4, is amended to read: 
    Subd. 4.  [HEALTH AND SAFETY LEVY.] To receive health and 
safety revenue, a district may levy an amount equal to the 
district's health and safety revenue as defined in subdivision 3 
multiplied by the lessor of one, or the ratio of: 
    (1) the quotient derived by dividing the adjusted gross tax 
capacity of the district for the year preceding the year the 
levy is certified by the actual pupil units in the district for 
the school year to which the levy is attributable, to 
    (2) 70 percent of the equalizing factor for the school year 
to which the levy is attributable $7,128.10. 
    Sec. 7.  Minnesota Statutes 1989 Supplement, section 
124A.23, subdivision 1, is amended to read: 
    Subdivision 1.  [GENERAL EDUCATION TAX CAPACITY RATE.] The 
general education tax capacity rate for fiscal year 1991 is 26.3 
percent.  Beginning in 1990, the commissioner of revenue shall 
establish the general education tax capacity rate and certify it 
to the commissioner of education by September July 1 of each 
year for levies payable in the following year.  The general 
education tax capacity rate shall be a rate, rounded up to the 
nearest tenth of a percent, that, when applied to the 
adjusted gross net tax capacity for all districts, raises the 
amount specified in this subdivision.  The general education tax 
capacity rate shall be the rate that raises 
$1,156,000,000 $845,000,000 for fiscal year 1991 1992 
and $1,213,800,000 for subsequent fiscal years.  The general 
education tax capacity rate certified by the commissioner of 
revenue may not be changed due to changes or corrections made to 
a district's adjusted gross net tax capacity after the tax 
capacity rate has been certified.  
    Sec. 8.  Minnesota Statutes 1988, section 273.1398, is 
amended by adding a subdivision to read: 
    Subd. 2a.  [EDUCATION LEVY REDUCTION.] (a) As used in this 
subdivision, "equalized levies" means the sum of the maximum 
amounts that may be levied for: 
    (1) general education under section 124A.23, subdivision 2; 
    (2) supplemental revenue under section 124A.23, subdivision 
2a; 
    (3) capital expenditure facilities revenue under section 
124.243, subdivision 3; 
    (4) capital expenditure equipment revenue under section 
124.44, subdivision 2; and 
    (5) basic transportation under section 275.125, subdivision 
5.  
    (b) By December 1, the commissioner of education shall 
determine and certify to the commissioner of revenue the amount 
of the education levy reduction.  The reduction shall be equal 
to the amount by which: 
    (1) the amount that would have been computed as the 
district's total maximum levy for property taxes payable in 
1990, if the equalized levies had been based upon the district's 
adjusted gross tax capacity, the general education tax capacity 
rate had been 29.1 percent, the taconite levy reduction limit 
according to section 275.125, subdivision 9, had been 10.22 
percent of adjusted gross tax capacity, and the capital 
expenditure equipment and facilities levies had been calculated 
using 70 percent of the equalizing factor, exceeds 
    (2) the amount that would have been computed as the 
district's total maximum levy for property taxes payable in 
1990, if the equalized levies had been based upon the district's 
adjusted net tax capacity, the general education tax capacity 
rate had been 29.1 percent, the taconite levy reduction limit 
according to section 275.125, subdivision 9, had been 10.22 
percent of adjusted net tax capacity, and the capital 
expenditure equipment and facilities levies had been calculated 
using 70 percent of the equalizing factor. 
    (c) For property taxes payable in 1990, the amount of the 
education levy reduction shall be deducted from the homestead 
and agricultural credit aid payable to each school district 
under subdivision 2. 
    Homestead and agricultural credit aid shall not be reduced 
below zero. 
    Sec. 9.  Minnesota Statutes 1989 Supplement, section 
275.125, subdivision 5, is amended to read: 
    Subd. 5.  [BASIC TRANSPORTATION LEVY.] Each year, a school 
district may levy for school transportation services an amount 
not to exceed the amount raised by the basic transportation tax 
capacity rate times the adjusted gross net tax capacity of the 
district for the preceding year.  The basic transportation tax 
capacity rate for fiscal year 1991 is 2.04 percent.  Beginning 
in 1990, the commissioner of revenue shall establish the basic 
transportation tax capacity rate and certify it to the 
commissioner of education by September July 1 of each year for 
levies payable in the following year.  The basic transportation 
tax capacity rate shall be a rate, rounded up to the nearest 
hundredth of a percent, that, when applied to the adjusted gross 
net tax capacity of taxable property for all districts, raises 
the amount specified in this subdivision.  The basic 
transportation tax capacity rate for transportation shall be the 
rate that raises $82,063,200 for fiscal year 1991 and 
$86,166,400 $66,700,000 for fiscal year 1992 and subsequent 
fiscal years.  The basic transportation tax capacity rate 
certified by the commissioner of revenue must not be changed due 
to changes or corrections made to a district's adjusted gross 
net tax capacity after the tax capacity rate has been certified. 
    Sec. 10.  Minnesota Statutes 1989 Supplement, section 
275.125, subdivision 9, is amended to read: 
    Subd. 9.  [LEVY REDUCTIONS; TACONITE.] (1) Reductions in 
levies pursuant to subdivision 10, and section 273.138, shall be 
made prior to the reductions in clause (2). 
      (2) Notwithstanding any other law to the contrary, 
districts which received payments pursuant to sections 298.018; 
298.23 to 298.28, except an amount distributed under section 
298.28, subdivision 4, paragraph (c), clause (ii); 298.34 to 
298.39; 298.391 to 298.396; 298.405; and any law imposing a tax 
upon severed mineral values, or recognized revenue pursuant to 
section 477A.15; shall not include a portion of these aids in 
their permissible levies pursuant to those sections, but instead 
shall reduce the permissible levies authorized by this section 
and chapters 124 and 124A by the greater of the following: 
      (a) an amount equal to 50 percent of the total dollar 
amount of the payments received pursuant to those sections or 
revenue recognized pursuant to section 477A.15 in the previous 
fiscal year; or 
      (b) an amount equal to the total dollar amount of the 
payments received pursuant to those sections or revenue 
recognized pursuant to section 477A.15 in the previous fiscal 
year less the product of the same dollar amount of payments or 
revenue times the ratio of the maximum levy allowed the district 
under Minnesota Statutes 1986, sections 124A.03, subdivision 2, 
124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 
subdivision 3a, 124A.12, subdivision 3a, and 124A.14, 
subdivision 5a, to the total levy allowed the district under 
this section and Minnesota Statutes 1986, sections 124A.03, 
124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 
subdivision 3a, 124A.12, subdivision 3a, 124A.14, subdivision 
5a, and 124A.20, subdivision 2, for levies certified in 1986. 
    (3) No reduction pursuant to this subdivision shall reduce 
the levy made by the district pursuant to section 124A.23, to an 
amount less than the amount raised by a levy of a gross tax 
capacity rate of 10.22 percent times the adjusted gross tax 
capacity for taxes payable in 1990 or a net tax capacity rate of 
12.71 6.82 percent times the adjusted net tax capacity for taxes 
payable in 1991 1990 and thereafter of that district for the 
preceding year as determined by the commissioner.  The amount of 
any increased levy authorized by referendum pursuant to section 
124A.03, subdivision 2, shall not be reduced pursuant to this 
subdivision.  The amount of any levy authorized by subdivision 
4, to make payments for bonds issued and for interest thereon, 
shall not be reduced pursuant to this subdivision.  
    (4) Before computing the reduction pursuant to this 
subdivision of the capital expenditure facilities levy 
authorized by section 124.243, the capital expenditure equipment 
levy authorized by section 124.244, the health and safety levy 
authorized by section 124.83, and subdivision 12a, and the 
community education levy authorized by subdivisions 8 and 8b, 
the commissioner shall ascertain from each affected school 
district the amount it proposes to levy under each section or 
subdivision.  The reduction shall be computed on the basis of 
the amount so ascertained. 
    (5) Notwithstanding any law to the contrary, any amounts 
received by districts in any fiscal year pursuant to sections 
298.018; 298.23 to 298.28; 298.34 to 298.39; 298.391 to 298.396; 
298.405; or any law imposing a tax on severed mineral values; 
and not deducted from general education aid pursuant to section 
124A.035, subdivision 5, clause (2), and not applied to reduce 
levies pursuant to this subdivision shall be paid by the 
district to the St. Louis county auditor in the following amount 
by March 15 of each year, the amount required to be subtracted 
from the previous fiscal year's general education aid pursuant 
to section 124A.035, subdivision 5, which is in excess of the 
general education aid earned for that fiscal year.  The county 
auditor shall deposit any amounts received pursuant to this 
clause in the St. Louis county treasury for purposes of paying 
the taconite homestead credit as provided in section 273.135. 
     Sec. 11.  Minnesota Statutes 1988, section 275.125, 
subdivision 18, is amended to read: 
    Subd. 18.  [NOTICE OF CERTIFIED LEVIES.] By November 1 
September 15 of each year each district shall notify the 
commissioner of education of the proposed levies certified in 
compliance with the levy limitations of this section and chapter 
chapters 124 and 124A.  By January 15 of each year each district 
shall notify the commissioner of education of the final levies 
certified.  The commissioner of education shall prescribe the 
form of this notification these notifications. 
    Sec. 12.  Laws 1989, chapter 329, article 1, section 17, 
subdivision 2, is amended to read: 
    Subd. 2.  [GENERAL AND SUPPLEMENTAL EDUCATION AID.] For 
general and supplemental education aid: 
    $1,222,815,000 $1,237,064,000 ..... 1990 
    $1,293,366,000 $1,600,994,000 ..... 1991 
    The 1990 appropriation includes $174,824,000 for 1989 and 
$1,047,991,000 $1,062,240,000 for 1990. 
    The 1991 appropriation includes $177,889,000 for 1990 and 
$1,115,477,000 $1,423,105,000 for 1991. 
    The 1991 appropriation recognizes an entitlement of 
$285,744,000 attributable to homestead and agricultural credit 
aid. 
    Sec. 13.  Laws 1989, chapter 329, article 2, section 8, 
subdivision 2, is amended to read: 
    Subd. 2.  [TRANSPORTATION AID.] For transportation aid 
under Minnesota Statutes, section 124.225: 
     $91,979,000 ..... 1990 
     $99,265,000 $114,157,000 ..... 1991 
    The 1990 appropriation includes $12,773,000 for 1989 and 
$79,206,000 for 1990. 
    The 1991 appropriation includes $13,978,000 for 1990 and 
$85,287,000 $100,179,000 for 1991. 
    The 1991 appropriation recognizes an entitlement of 
$20,452,000 attributable to homestead and agricultural credit 
aid. 
    Sec. 14.  Laws 1989, chapter 329, article 5, section 21, 
subdivision 2, is amended to read: 
    Subd. 2.  [CAPITAL EXPENDITURE FACILITIES AID.] For capital 
expenditure facilities aid according to Minnesota Statutes, 
section 124.243, subdivision 5: 
     $33,800,000 ..... 1990 
     $41,039,000 $67,844,000 ..... 1991 
    The 1990 appropriation includes $33,800,000 for 1990. 
    The 1991 appropriation includes $5,965,000 for 1990 and 
$35,074,000 $61,879,000 for 1991. 
    The 1991 appropriation recognizes an entitlement of 
$13,957,000 attributable to homestead and agricultural credit 
aid. 
    Sec. 15.  Laws 1989, chapter 329, article 5, section 21, 
subdivision 3, is amended to read: 
    Subd. 3.  [CAPITAL EXPENDITURE EQUIPMENT AID.] For capital 
expenditure equipment aid according to Minnesota Statutes, 
section 124.244, subdivision 3: 
     $16,900,000 ..... 1990 
     $20,520,000 $33,922,000 ..... 1991 
    The 1990 appropriation includes $16,900,000 for 1990. 
    The 1991 appropriation includes $2,983,000 for 1990 and 
$17,537,000 $30,939,000 for 1991. 
    The 1991 appropriation recognizes an entitlement of 
$6,978,000 attributable to homestead and agricultural credit aid.
    Sec. 16.  [CONVERSION OF REFERENDUM LEVIES.] 
    For a referendum levy authorized under Minnesota Statutes, 
section 124A.03, on November 7, 1989, the department of 
education shall convert the net tax capacity rate specified on 
the ballot to a revised net tax capacity rate by dividing the 
approved levy amount by the 1988 net tax capacity of the school 
district, as determined by the provisions of this act. 
    Sec. 17.  [NOVEMBER 1989 REFERENDUM LEVY ELECTIONS.] 
    In 1989, a school board in a district holding a referendum 
levy election may not represent to the voters that education 
property taxes will be lowered because of the transfer of state 
appropriations from cities and townships to education funding.  
If this representation is made by the school board, the election 
shall be subject to contest under Minnesota Statutes, chapter 
209, and the court may invalidate the election results. 
    Sec. 18.  [ADJUSTED GROSS TAX CAPACITY.] 
    For purposes of computing 1989 payable 1990 school district 
levies under Minnesota Statutes, chapters 124 and 124A and 
section 275.125, adjusted gross tax capacity means adjusted 
gross tax capacity as defined in Minnesota Statutes 1988, 
section 273.13. 
    Sec. 19.  [EFFECTIVE DATE.] 
    Sections 1 to 18 are effective the day following final 
enactment. 

                               ARTICLE 7
PROPERTY TAX REFUND AND TARGETING
    Section 1.  Minnesota Statutes 1988, section 290A.04, 
subdivision 2, is amended to read: 
    Subd. 2.  [HOMEOWNERS.] 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 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 equals the amount of property taxes payable or rent 
constituting property taxes that remain, up to the state refund 
amount shown below.  
                        Percent           Percent    Maximum
Household Income       of Income          Paid by     State
                                          Claimant    Refund
    $0 to 999         1.0 percent        10 percent  $1,100
 1,000 to 1,999       1.1 percent        11 percent  $1,100
 2,000 to 2,999       1.2 percent        12 percent  $1,100
 3,000 to 3,499       1.3 percent        13 percent  $1,100
 3,500 to 3,999       1.3 percent        13 percent  $1,100
 4,000 to 4,499       1.4 percent        14 percent  $1,100
 4,500 to 4,999       1.4 percent        14 percent  $1,100
 5,000 to 5,999       1.5 percent        15 percent  $1,100
 6,000 to 6,999       1.5 percent        16 percent  $1,100
 7,000 to 7,999       1.6 percent        17 percent  $1,100
 8,000 to 8,999       1.6 percent        18 percent  $1,100
 9,000 to 9,999       1.7 percent        19 percent  $1,100
10,000 to 10,999      1.7 percent        20 percent  $1,075
11,000 to 11,999      1.8 percent        22 percent  $1,075
12,000 to 12,999      1.8 percent        24 percent  $1,075
13,000 to 13,999      1.9 percent        26 percent  $1,075
14,000 to 14,999      2.0 percent        28 percent  $1,075
15,000 to 15,999      2.1 percent        30 percent  $1,075
16,000 to 16,999      2.2 percent        32 percent  $1,075
17,000 to 17,999      2.3 percent        34 percent  $1,050
18,000 to 18,999      2.4 percent        36 percent  $1,050
19,000 to 19,999      2.6 percent        38 percent  $1,050
20,000 to 20,999      2.8 percent        40 percent  $1,050
21,000 to 21,999      3.0 percent        42 percent  $1,050
22,000 to 22,999      3.2 percent        44 percent  $1,050
23,000 to 23,999      3.3 percent        46 percent  $1,025
24,000 to 24,999      3.4 percent        48 percent  $1,025
25,000 to 25,999      3.5 percent        50 percent  $1,025
26,000 to 26,999      3.6 percent        52 percent  $1,025
27,000 to 27,999      3.7 percent        54 percent  $1,000
28,000 to 28,999      3.8 percent        56 percent  $  900
29,000 to 29,999      3.9 percent        58 percent  $  800
30,000 to 30,999      4.0 percent        60 percent  $  700
31,000 to 31,999      4.0 percent        60 percent  $  600
32,000 to 32,999      4.0 percent        60 percent  $  500
33,000 to 33,999      4.0 percent        60 percent  $  300
34,000 to 34,999      4.0 percent        60 percent  $  100
    $0 to 999         1.2 percent        22 percent  $400
 1,000 to 1,999       1.3 percent        24 percent  $400
 2,000 to 2,999       1.4 percent        26 percent  $400
 3,000 to 3,999       1.6 percent        28 percent  $400
 4,000 to 4,999       1.7 percent        30 percent  $400
 5,000 to 5,999       1.9 percent        33 percent  $400
 6,000 to 6,999       1.9 percent        35 percent  $400
 7,000 to 7,999       2.1 percent        38 percent  $400
 8,000 to 8,999       2.2 percent        40 percent  $400
 9,000 to 9,999       2.3 percent        42 percent  $400
10,000 to 10,999      2.4 percent        45 percent  $400
11,000 to 11,999      2.5 percent        48 percent  $400
12,000 to 13,999      2.6 percent        48 percent  $400
14,000 to 14,999      2.8 percent        48 percent  $400
15,000 to 15,999      3.0 percent        50 percent  $400
16,000 to 16,999      3.2 percent        50 percent  $400
17,000 to 20,999      3.3 percent        50 percent  $400
21,000 to 23,999      3.4 percent        50 percent  $400
24,000 to 24,999      3.5 percent        50 percent  $400
25,000 to 27,999      3.5 percent        50 percent  $400
28,000 to 29,999      3.5 percent        50 percent  $400
30,000 to 34,999      3.5 percent        55 percent  $400
35,000 to 39,999      3.7 percent        55 percent  $400
40,000 to 56,999      4.0 percent        55 percent  $400
57,000 to 57,999      4.0 percent        55 percent  $300
58,000 to 58,999      4.0 percent        55 percent  $200
59,000 to 59,999      4.0 percent        55 percent  $100
    The payment made to a claimant shall be the amount of the 
state refund calculated pursuant to under this subdivision.  For 
taxes payable in 1989, the amount of the refund must be reduced 
by the homestead credit.  No payment is allowed if the 
claimant's household income is $35,000 $60,000 or more. 
    Sec. 2.  Minnesota Statutes 1988, section 290A.04, is 
amended by adding a subdivision to read: 
    Subd. 2a.  [RENTERS.] A claimant whose rent constituting 
property taxes exceeds the percentage of the household income 
stated below must pay an amount equal to the percent of income 
shown for the appropriate household income level along with the 
percent to be paid by the claimant of the remaining amount of 
rent constituting property taxes.  The state refund equals the 
amount of rent constituting property taxes that remain, up to 
the maximum state refund amount shown below.  
                        Percent           Percent    Maximum
Household Income       of Income          Paid by     State
                                          Claimant    Refund
    $0 to 999         1.0 percent         9 percent  $1,000
 1,000 to 1,999       1.1 percent         9 percent  $1,000
 2,000 to 2,999       1.2 percent        10 percent  $1,000
 3,000 to 3,999       1.3 percent        10 percent  $1,000
 4,000 to 4,999       1.4 percent        11 percent  $1,000
 5,000 to 5,999       1.5 percent        12 percent  $1,000
 6,000 to 6,999       1.5 percent        13 percent  $1,000
 7,000 to 7,999       1.6 percent        14 percent  $1,000
 8,000 to 8,999       1.6 percent        15 percent  $1,000
 9,000 to 9,999       1.7 percent        16 percent  $1,000
10,000 to 10,999      1.7 percent        17 percent  $1,000
11,000 to 11,999      1.8 percent        19 percent  $1,000
12,000 to 12,999      1.8 percent        21 percent  $1,000
13,000 to 13,999      1.9 percent        23 percent  $1,000
14,000 to 14,999      2.0 percent        24 percent  $1,000
15,000 to 15,999      2.0 percent        26 percent  $1,000
16,000 to 16,999      2.1 percent        27 percent  $1,000
17,000 to 17,999      2.2 percent        28 percent  $1,000
18,000 to 18,999      2.3 percent        30 percent  $1,000
19,000 to 19,999      2.5 percent        32 percent  $1,000
20,000 to 20,999      2.7 percent        34 percent  $1,000
21,000 to 21,999      2.9 percent        36 percent  $1,000
22,000 to 22,999      3.0 percent        37 percent  $1,000
23,000 to 23,999      3.1 percent        38 percent  $1,000
24,000 to 24,999      3.2 percent        40 percent  $1,000
25,000 to 25,999      3.3 percent        43 percent  $1,000
26,000 to 26,999      3.4 percent        43 percent  $1,000
27,000 to 27,999      3.5 percent        45 percent  $1,000
28,000 to 28,999      3.6 percent        47 percent  $  900
29,000 to 29,999      3.7 percent        47 percent  $  800
30,000 to 30,999      3.8 percent        48 percent  $  700
31,000 to 31,999      3.9 percent        48 percent  $  600
32,000 to 32,999      4.0 percent        50 percent  $  500
33,000 to 33,999      4.0 percent        50 percent  $  300
34,000 to 34,999      4.0 percent        50 percent  $  100
    The payment made to a claimant is the amount of the state 
refund calculated under this subdivision.  No payment is allowed 
if the claimant's household income is $35,000 or more. 
    Sec. 3.  Minnesota Statutes 1988, section 290A.04, 
subdivision 2h, is amended to read: 
    Subd. 2h.  (a) If the net gross property taxes payable in 
1989 on a homestead increase more than ten percent over the net 
property taxes payable in 1988 the prior year on the same 
property that is owned by the same owner in both years, and the 
amount of that increase is $40 or more for taxes payable in 1990 
and 1991, $60 or more for taxes payable in 1992, $80 or more for 
taxes payable in 1993, and $100 or more for taxes payable in 
1994, a claimant who is a homeowner shall be allowed an 
additional refund equal to 75 percent of the amount by which the 
increase exceeds ten percent the sum of (1) 75 percent of the 
first $250 of the amount of the increase over ten percent for 
taxes payable in 1990 and 1991, 75 percent of the first $275 of 
the amount of the increase over ten percent for taxes payable in 
1992, 75 percent of the first $300 of the amount of the increase 
over ten percent for taxes payable in 1993, and 75 percent of 
the first $325 of the amount of the increase over ten percent 
for taxes payable in 1994, and (2) 90 percent of the amount of 
the increase over ten percent plus $250 for taxes payable in 
1990 and 1991, 90 percent of the amount of the increase over ten 
percent plus $275 for taxes payable in 1992, 90 percent of the 
amount of the increase over ten percent plus $300 for taxes 
payable in 1993, and 90 percent of the amount of the increase 
over ten percent plus $325 for taxes payable in 1994.  This 
subdivision shall not apply to any increase in the net property 
taxes payable attributable to improvements made to the homestead.
    A refund under this subdivision shall not exceed $250. 
    (b) For purposes of this subdivision, the following terms 
have the meanings given: 
     (1) "Net property taxes payable" means property taxes 
payable after reductions made pursuant to under sections 273.13, 
subdivisions 22 and 23; 273.132; 273.135; 273.1391; and 273.42, 
subdivision 2, and any other state paid property tax credits and 
after the deduction of tax refund amounts for which the claimant 
qualifies pursuant to subdivision 2 and this subdivision.  
    (2) "Gross property taxes" means net property taxes payable 
determined without regard to the refund allowed under this 
subdivision. 
    (c) In addition to the other proofs required by this 
chapter, each claimant under this subdivision shall file with 
the property tax refund return a copy of the property tax 
statement for taxes payable in the preceding year or other 
documents required by the commissioner. 
    On or before December 1, 1990, and December 1 of each of 
the following three years, the commissioner shall estimate the 
cost of making the payments provided by this subdivision for 
taxes payable in the following year.  Notwithstanding the open 
appropriation provision of section 290A.23, if the estimated 
total refund claims exceed the following amounts for the taxes 
payable year designated, the commissioner shall decrease the 
percentages of the excess taxes the state will pay and increase 
the dollar amount of tax increase which must occur before a 
taxpayer qualifies for a refund. 
     Taxes payable in:         Appropriation limit
       1991                      $7,000,000
       1992                      $6,500,000
       1993                      $6,000,000
       1994                      $5,500,000
    The commissioner shall make the adjustments so that half of 
the estimated savings come from decreasing the percentages of 
the excess taxes the state will pay and half of the estimated 
savings come from increasing the dollar amount of the tax 
increase which must occur before a taxpayer qualifies for a 
refund.  The determinations of the revised percentages and 
thresholds by the commissioner are not rules subject to chapter 
14. 
    Sec. 4.  Minnesota Statutes 1988, section 290A.04, is 
amended by adding a subdivision to read: 
    Subd. 2i.  If the net property taxes payable in 1990 on a 
seasonal residential and recreational property, not devoted to 
commercial use, increase more than ten percent over the net 
property taxes payable in 1989 and if the amount is $40 or more, 
one claimant who is an owner of the property in both years is 
allowed a refund equal to 75 percent of the first $250 of the 
excess of the increase over ten percent.  This subdivision does 
not apply to the portion of an increase in taxes payable that 
are attributable to improvements to the property. 
     In addition to the other proofs required by this chapter, 
each claimant under this subdivision shall file with the 
application a copy of the property tax statement for property 
taxes payable in 1989 and 1990 and any other documents required 
by the commissioner. 
    Sec. 5.  Minnesota Statutes 1988, 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 refund allowed at various levels 
of income and assessment.  The table shall follow the schedule 
of income percentages, maximums and other provisions specified 
in subdivision 2, 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.  
     The commissioner shall include on the form an appropriate 
space or method for the claimant to identify if the property 
taxes paid are for a manufactured home, as defined in section 
274.19, subdivision 8, paragraph (c). 
    Sec. 6.  Minnesota Statutes 1988, section 290A.07, 
subdivision 2a, is amended to read: 
    Subd. 2a.  A claimant who is a renter or a homeowner who 
occupies a manufactured home, as defined in section 274.19, 
subdivision 8, paragraph (c), 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 the 
rate specified in section 270.76 from August 15 or 60 days after 
receipt of the application whichever is later. 
    Sec. 7.  [GOVERNOR'S RECOMMENDATION; PROPERTY TAX REFUND.] 
    The legislature finds that it is a desirable policy to 
improve the protection for low income persons and low value 
homes from future property tax increases.  Therefore, the 
governor, by February 15, 1990, shall submit to the legislature 
recommendations regarding 
    (1) modifications to the property tax refund schedule for 
homeowners that will improve eligibility for and the amount of 
refunds that will provide up to $10,000,000 in additional 
refunds over the amount provided by the schedule in effect for 
taxes payable in 1990, (2) other modifications to the program to 
make it simpler and more understandable to the general public, 
(3) a proposal for increasing public awareness of and 
participation in the program by eligible homeowners, and (4) a 
separate effective tax rate credit to be administered as part of 
the property tax refund which would provide state refunds to 
homeowners who have high effective tax rates on modest or low 
value homes and who have low or moderate household incomes. 
     It is the intent of the legislature that this act not 
increase the net cost of rental housing to tenants after taking 
into consideration the combined effect of the reductions in 
property tax, rent, and property tax refund.  Article 2 will 
significantly reduce the property tax burden on rental housing.  
Since the property tax refund for renters is based on the 
property tax paid on the rental unit, the reductions in article 
2 will also reduce the amount of property tax refunds.  However, 
because of conditions in the market for rental housing units in 
some or many areas, the property tax reductions may not affect 
the amount of rent the tenant must pay.  As a result, the net 
effect of the provisions of this act may not improve the net 
cost of housing to some tenants.  The property tax refund 
schedule for renters in this article was increased to partially 
offset this effect.  In order to insure that this act does not 
adversely affect the net cost of housing to tenants, the 
department of revenue is directed to study this issue and to 
prepare a property tax refund schedule for renters that 
increases the eligibility for and amount of refunds in a manner 
found necessary to prevent increases in overall rental housing 
costs resulting from the adoption of article 2 and this article, 
as compared with prior law.  This schedule must be submitted to 
the 1990 legislature along with the governor's recommendations 
required by this section. 
    Sec. 8.  [INTEREST ON ADDITIONAL REFUNDS FOR PROPERTY TAXES 
PAID IN 1989.] 
    Notwithstanding Minnesota Statutes, section 290A.07, 
subdivision 3, interest on the portion of a property tax refund 
generated by removing the $250 maximum limit for taxes paid in 
1989 shall be computed from the later of 60 days from the final 
day of enactment or 60 days from receipt of the application. 
    Sec. 9.  [REPEALER.] 
    Minnesota Statutes 1988, section 290A.04, subdivision 2h, 
is repealed. 
    Sec. 10.  [EFFECTIVE DATE.] 
    Sections 1 and 4 to 6 are effective beginning for property 
taxes paid in 1990.  Section 2 is effective beginning for 
refunds based on rent paid in 1990.  Section 3 is effective 
beginning for property taxes payable in 1990 except that the 
repeal of the $250 maximum limitation is effective for taxes 
paid in 1989 and paragraph (b), clause (1), is effective for 
refunds for taxes payable in 1991.  Section 7 is effective the 
day following final enactment.  Section 8 is effective the day 
following final enactment.  Section 9 is effective for property 
taxes payable in 1995 and thereafter.  

                               ARTICLE 8 

                          LOCAL REVENUE OPTION
    Section 1.  Minnesota Statutes 1989 Supplement, section 
469.190, subdivision 1, is amended to read: 
    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 the affirmative vote of the 
electors at the annual town meeting, or at a special town 
meeting, impose a tax of up to three six percent on the gross 
receipts from the furnishing for consideration of lodging at a 
hotel, motel, rooming house, tourist court, or 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.  
    Sec. 2.  Minnesota Statutes 1988, section 469.190, 
subdivision 2, is amended to read: 
    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 
six percent.  
    Sec. 3.  Minnesota Statutes 1988, section 469.190, 
subdivision 3, is amended to read: 
    Subd. 3.  [DISPOSITION OF PROCEEDS.] Ninety-five percent of 
the gross proceeds from the first three percent of 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.  
    Sec. 4.  [EFFECTIVE DATE.] 
    Sections 1 to 3 are effective January 1, 1990. 

                                ARTICLE 9

                     PROPOSED AND FINAL TAX NOTICE
    Section 1.  Minnesota Statutes 1989 Supplement, section 
124.2131, subdivision 1, is amended to read: 
    Subdivision 1.  [ADJUSTED GROSS TAX CAPACITY.] (a) 
[COMPUTATION.] The department of revenue shall annually conduct 
an assessment/sales ratio study of the taxable property in each 
school district in accordance with the procedures in paragraphs 
(b) and (c).  Based upon the results of this assessment/sales 
ratio study, the department of revenue shall determine an 
aggregate equalized gross tax capacity and an aggregate 
equalized net tax capacity for the various classes of taxable 
property in each school district, which tax capacity shall be 
designated as the adjusted gross tax capacity and the adjusted 
net tax capacity, respectively.  The department of revenue may 
incur the expense necessary to make the determinations.  The 
commissioner of revenue may reimburse any county or governmental 
official for requested services performed in ascertaining the 
adjusted gross tax capacity and the adjusted net tax capacity.  
On or before March 15 annually, the department of revenue shall 
file with the chair of the tax committee of the house of 
representatives and the chair of the committee on taxes and tax 
laws of the senate a report of adjusted gross tax capacities and 
adjusted net tax capacities.  On or before June April 15 
annually, the department of revenue shall file its final report 
on the adjusted gross tax capacities and adjusted net tax 
capacities established by the previous year's assessment with 
the commissioner of education and each county auditor for those 
school districts for which the auditor has the responsibility 
for determination of tax capacity rates.  A copy of the report 
so filed shall be mailed to the clerk of each district involved 
and to the county assessor or supervisor of assessments of the 
county or counties in which each district is located. 
    (b) [METHODOLOGY.] In making its annual assessment/sales 
ratio studies, the department of revenue shall use a methodology 
consistent with the most recent Standard on Assessment Ratio 
Studies published by the assessment standards committee of the 
International Association of Assessing Officers.  The 
commissioner of revenue shall supplement this general 
methodology with specific procedures necessary for execution of 
the study in accordance with other Minnesota laws impacting the 
assessment/sales ratio study.  The commissioner shall document 
these specific procedures in writing and shall publish the 
procedures in the State Register, but these procedures will not 
be considered "rules" pursuant to the Minnesota administrative 
procedure act.  
    (c) [AGRICULTURAL LANDS.] For purposes of determining the 
adjusted gross tax capacity and adjusted net tax capacity of 
agricultural lands for the calculation of adjusted gross tax 
capacities and adjusted net tax capacities, the market value of 
agricultural lands shall be the price for which the property 
would sell in an arms length transaction. 
    Sec. 2.  Minnesota Statutes 1988, section 124.42, 
subdivision 1, is amended to read: 
    Subdivision 1.  [QUALIFICATION; APPLICATION; AWARD; 
INTEREST.] Any school district in which the required levy for 
debt service in any year will exceed its maximum effort debt 
service levy by ten percent or by $5,000, whichever is less, is 
qualified for a debt service loan hereunder in an amount not 
exceeding the amount applied for, and not exceeding one percent 
of the net debt of the district, and not exceeding the 
difference between the required and the maximum effort debt 
service levy in that year.  Applications shall be filed with the 
commissioner in each calendar year up to and including September 
15 July 1.  The commissioner shall determine whether the 
applicant is entitled to a loan and the amount thereof, and on 
or before October 1 shall certify to each applicant district the 
amount granted and its due date.  The commissioner shall notify 
the county auditor of each county in which the district is 
located that the amount certified is available and appropriated 
for payment of principal and interest on its outstanding bonds, 
and the auditors shall reduce by that amount the taxes otherwise 
leviable as the district's debt service levy on the tax rolls 
for that year.  Each debt service loan shall bear interest from 
its date at a rate equal to the average annual rate payable on 
Minnesota state school loan bonds most recently issued prior to 
the disbursement of the loan to the district, but in no event 
less than 3-1/2 percent per annum on the principal amount from 
time to time remaining unpaid, payable on December 15 of the 
year following that in which the loan is received and annually 
thereafter. 
    Sec. 3.  Minnesota Statutes 1988, section 124.42, 
subdivision 4, is amended to read: 
    Subd. 4.  Each district receiving a debt service loan shall 
levy for debt service in that year and each year thereafter, 
until all its debts to the fund are paid, (a) the amount of its 
maximum effort debt service levy, or (b) the amount of its 
required debt service levy less the amount of any debt service 
loan in that year, whichever is greater.  Whenever the maximum 
effort debt service levy is greater the district shall remit to 
the commissioner, within ten days after its receipt of the last 
regular tax distribution in the year in which it is collected, 
that portion of the maximum effort debt service tax collections, 
including penalties and interest, which exceeds the required 
debt service levy.  On or before November September 1 in each 
year the commissioner shall notify the county auditor of each 
county containing taxable property situated within the school 
district of the amount of the maximum effort debt service levy 
of the district for that year, and said county auditor or 
auditors shall extend upon the tax rolls an ad valorem tax upon 
all taxable property within the district in the aggregate amount 
so certified.  
    Sec. 4.  Minnesota Statutes 1988, section 124.83, 
subdivision 1, is amended to read: 
    Subdivision 1.  [HEALTH AND SAFETY PROGRAM.] To receive 
health and safety revenue a district must submit to the 
commissioner of education an application for aid and levy by 
August 15 June 1 in the previous school year.  The application 
may be for hazardous substance removal, fire code compliance, or 
life safety repairs.  The application must include a health and 
safety program adopted by the school district board.  The 
program must include the estimated cost of the program by fiscal 
year. 
    Sec. 5.  Minnesota Statutes 1989 Supplement, section 
124A.03, subdivision 2, is amended to read: 
    Subd. 2.  [REFERENDUM LEVY.] (a) The levy authorized by 
section 124A.23, subdivision 2, may be increased in the amount 
approved by the voters of the district at a referendum called 
for the purpose.  The referendum may be called by the school 
board or shall be called by the school board upon written 
petition of qualified voters of the district.  The referendum 
must be held on the first Tuesday after the first Monday in 
November.  The ballot shall state the maximum amount of the 
increased levy as a percentage of net tax capacity, the amount 
that will be raised by that tax capacity rate in the first year 
it is to be levied, and that the tax capacity rate shall be used 
to finance school operations.  The ballot may shall designate a 
the specific number of years for which the referendum 
authorization shall apply.  The ballot may contain a textual 
portion with the information required in this subdivision and a 
question stating substantially the following:  
    "Shall the increase in the levy proposed by (petition to) 
the board of ........., School District No. .., be approved?"  
    If approved, the amount provided by the approved tax 
capacity rate applied to the net tax capacity for the year 
preceding the year the levy is certified shall be authorized for 
certification for the number of years approved, if applicable, 
or until revoked or reduced by the voters of the district at a 
subsequent referendum. 
    (b) The school board shall prepare and deliver by first 
class mail at least 15 days but no more than 30 days prior to 
the day of the election to each taxpayer at the address listed 
on the school district's current year's assessment roll, a 
notice of the referendum and the proposed levy increase.  For 
the purpose of giving mailed notice under this subdivision, 
owners shall be those shown to be owners on the records of the 
county auditor or, in any county where tax statements are mailed 
by the county treasurer, on the records of the county 
treasurer.  Every property owner whose name does not appear on 
the records of the county auditor or the county treasurer shall 
be deemed to have waived this mailed notice unless the owner has 
requested in writing that the county auditor or county 
treasurer, as the case may be, include the name on the records 
for this purpose.  The notice must project the anticipated 
amount of increase in annual dollars and annual percentage for 
typical residential homesteads, agricultural homesteads, 
apartments, and commercial-industrial property within the school 
district. 
    The notice must include the following statement:  "In 1989 
the legislature reduced property taxes for education by 
increasing the state share of funding for education.  However, 
state aid for cities and townships was reduced by a 
corresponding amount.  As a result, property taxes for cities 
and townships may increase.  Passage of this referendum will 
result in an increase in your property taxes." 
    (c) A referendum on the question of revoking or reducing 
the increased levy amount authorized pursuant to paragraph (a) 
may be called by the school board and shall be called by the 
school board upon the written petition of qualified voters of 
the district.  A levy approved by the voters of the district 
pursuant to paragraph (a) must be made at least once before it 
is subject to a referendum on its revocation or reduction for 
subsequent years.  Only one revocation or reduction election may 
be held to revoke or reduce a levy for any specific year and for 
years thereafter. 
    (c) (d) A petition authorized by paragraph (a) or (b) (c) 
shall be effective if signed by a number of qualified voters in 
excess of 15 percent of the registered voters of the school 
district on the day the petition is filed with the school 
board.  A referendum invoked by petition shall be held on the 
date specified in paragraph (a). 
    (d) (e) The approval of 50 percent plus one of those voting 
on the question is required to pass a referendum authorized by 
this subdivision. 
    (e) (f) Within 30 days after the district holds a 
referendum pursuant to this clause, the district shall notify 
the commissioner of education of the results of the referendum. 
    Sec. 6.  Minnesota Statutes 1989 Supplement, section 
124A.23, subdivision 1, is amended to read: 
    Subdivision 1.  [GENERAL EDUCATION TAX CAPACITY RATE.] The 
commissioner of revenue shall establish the general education 
tax capacity rate and certify it to the commissioner of 
education by September July 1 of each year for levies payable in 
the following year.  The general education tax capacity rate 
shall be a rate, rounded up to the nearest tenth of a percent, 
that, when applied to the adjusted gross tax capacity for all 
districts, raises the amount specified in this subdivision.  The 
general education tax capacity rate shall be the rate that 
raises $1,156,000,000 for fiscal year 1991 and $1,213,800,000 
for subsequent fiscal years.  The general education tax capacity 
rate certified by the commissioner of revenue may not be changed 
due to changes or corrections made to a district's adjusted 
gross tax capacity after the tax capacity rate has been 
certified.  
    Sec. 7.  Minnesota Statutes 1988, section 124A.26, 
subdivision 1, is amended to read: 
    Subdivision 1.  [REVENUE REDUCTION.] A district's general 
education revenue for a school year shall be reduced if 
the estimated net unappropriated operating fund balance as of 
June 30 in the second prior school year exceeds $600 times the 
actual pupil units in the second prior year.  The amount of the 
reduction shall equal the lesser of: 
    (1) the amount of the excess, or 
    (2) $150 times the actual pupil units for the school year. 
    The final adjustment payments made under section 124.195, 
subdivision 6, must be adjusted to reflect actual net operating 
fund balances as of June 30 of the prior school year. 
    Sec. 8.  Minnesota Statutes 1988, section 270.11, 
subdivision 2, is amended to read: 
    Subd. 2.  [COUNTY ASSESSOR'S REPORTS OF ASSESSMENT FILED 
WITH COMMISSIONER.] Each county assessor shall file by June 15 
April 1 with the commissioner of revenue a copy of the abstract 
that will be acted upon by the local and county board boards of 
review.  The abstract must list the real and personal property 
in the county, as equalized by the local board of review or 
equalization, itemized by assessment districts.  A printed or 
typewritten copy of the proceedings of the local board of review 
or equalization must also be filed with the commissioner.  The 
assessor of each county in the state shall file with the 
commissioner, within five ten working days following final 
action of the local board of review or equalization and within 
five days following final action of the county board of 
equalization, any changes made by the local or county board of 
equalization.  The information must be filed in the manner 
prescribed by the commissioner.  It must be accompanied by a 
printed or typewritten copy of the proceedings of the county 
board of equalization appropriate board. 
    The final abstract of assessments after adjustments by the 
state board of equalization and inclusion of any omitted 
property shall be submitted to the commissioner of revenue on or 
before November 15 September 1 of each calendar year.  The final 
abstract must separately report the captured tax capacity of tax 
increment financing districts under section 469.177, subdivision 
2, the metropolitan revenue contribution value under section 
473F.07, and the value subject to the power line credit under 
section 273.42. 
    Sec. 9.  Minnesota Statutes 1989 Supplement, section 
270.12, subdivision 2, is amended to read: 
    Subd. 2.  The board shall meet annually between July April 
15 and October 1 June 30 at the office of the commissioner of 
revenue and examine and compare the returns of the assessment of 
the property in the several counties, and equalize the same so 
that all the taxable property in the state shall be assessed at 
its market value, subject to the following rules: 
    (1) The board shall add to the aggregate valuation of the 
real property of every county, which the board believes to be 
valued below its market value in money, such percent as will 
bring the same to its market value in money; 
    (2) The board shall deduct from the aggregate valuation of 
the real property of every county, which the board believes to 
be valued above its market value in money, such percent as will 
reduce the same to its market value in money; 
    (3) If the board believes the valuation for a class or 
classes of the real property of any town or district in any 
county, or the valuation for a class or classes of the real 
property of any county not in towns or cities, should be raised 
or reduced, without raising or reducing the other real property 
of such county, or without raising or reducing it in the same 
ratio, the board may add to, or take from, the valuation of a 
class or classes in any one or more of such towns or cities, or 
of the property not in towns or cities, such percent as the 
board believes will raise or reduce the same to its market value 
in money; 
    (4) The board shall add to the aggregate valuation of any 
class of personal property of any county, town, or city, which 
the board believes to be valued below the market value thereof, 
such percent as will raise the same to its market value in 
money; 
    (5) The board shall take from the aggregate valuation of 
any class of personal property in any county, town or city, 
which the board believes to be valued above the market value 
thereof, such percent as will reduce the same to its market 
value in money; 
    (6) The board shall not reduce the aggregate valuation of 
all the property of the state, as returned by the several county 
auditors, more than one percent on the whole valuation thereof; 
    (7) When it would be of assistance in equalizing values the 
board may require any county auditor to furnish statements 
showing assessments of real and personal property of any 
individuals, firms, or corporations within the county.  The 
board shall consider and equalize such assessments and may 
increase the assessment of individuals, firms, or corporations 
above the amount returned by the county board of equalization 
when it shall appear to be undervalued, first giving notice to 
such persons of the intention of the board so to do, which 
notice shall fix a time and place of hearing.  The board shall 
not decrease any such assessment below the valuation placed by 
the county board of equalization; and 
    (8) In equalizing values pursuant to this section, the 
board shall utilize a 12-month assessment/sales ratio study 
conducted by the department of revenue containing only sales 
that are filed in the county auditor's office under section 
272.115, by November 1 of the previous year and that occurred 
between October 1 of the year immediately preceding the previous 
year to and September 30 of the previous year.  The sales prices 
used in the study must be discounted for terms of financing.  
The board shall use the median ratio as the statistical measure 
of the level of assessment for any particular category of 
property. 
    Sec. 10.  Minnesota Statutes 1988, section 270.12, 
subdivision 3, is amended to read: 
    Subd. 3.  When a taxing jurisdiction lies in two or more 
counties, if the sales ratio studies prepared by the department 
of revenue show that the average levels of assessment in the 
several portions of the taxing jurisdictions in the different 
counties differ by more than five percent, the board may order 
the apportionment of the levy.  When the sales ratio studies 
prepared by the department of revenue show that the average 
levels of assessment in the several portions of the taxing 
jurisdictions in the different counties differ by more than ten 
percent, the board shall order the apportionment of the levy 
unless (a) the proportion of total adjusted gross tax capacity 
value in one of the counties is less than ten percent of the 
total adjusted gross tax capacity in the taxing jurisdiction and 
the average level of assessment in that portion of the taxing 
jurisdiction is the level which differs by more than five 
percent from the assessment level in any one of the other 
portions of the taxing jurisdiction; (b) significant changes 
have been made in the level of assessment in the taxing 
jurisdiction which have not been reflected in the sales ratio 
study, and those changes alter the assessment levels in the 
portions of the taxing jurisdiction so that the assessment level 
now differs by five percent or less; or (c) commercial, 
industrial, mineral, or public utility property predominates in 
one county within the taxing jurisdiction and another class of 
property predominates in another county within that same taxing 
jurisdiction.  If one or more of these factors are present, the 
board may order the apportionment of the levy.  
    Notwithstanding any other provision, the levy for the 
metropolitan mosquito control district, metropolitan council, 
metropolitan transit district, and metropolitan transit area 
must be apportioned without regard to the percentage difference. 
    If, pursuant to this subdivision, the board apportions the 
levy, then that levy apportionment among the portions in the 
different counties shall be made in the same proportion as the 
adjusted gross tax capacity as determined by the commissioner in 
each portion is to the total adjusted gross tax capacity of the 
taxing jurisdiction. 
    For the purposes of this section, the average level of 
assessment in a taxing jurisdiction or portion thereof shall be 
the aggregate assessment sales ratio.  Gross tax capacities as 
determined by the commissioner shall be the gross tax capacities 
as determined for the year preceding the year in which the levy 
to be apportioned is levied. 
    Actions pursuant to this subdivision shall be commenced 
subsequent to the annual meeting on July April 15 of the state 
board of equalization, but notice of the action shall be given 
to the affected jurisdiction and the appropriate county auditors 
by the following October 1 June 30. 
    Apportionment of a levy pursuant to this subdivision shall 
be considered as a remedy to be taken after equalization 
pursuant to subdivision 2, and when equalization within the 
jurisdiction would disturb equalization within other 
jurisdictions of which the several portions of the jurisdiction 
in question are a part. 
    Sec. 11.  Minnesota Statutes 1988, section 270.13, is 
amended to read: 
    270.13 [RECORD OF PROCEEDINGS CHANGING GROSS TAX CAPACITY; 
DUTIES OF COUNTY AUDITOR.] 
    A record of all proceedings of the commissioner of revenue 
affecting any change in the gross tax capacity of any property, 
as revised by the state board of equalization, shall be kept by 
the commissioner of revenue and a copy thereof, duly certified, 
shall be mailed each year to the auditor of each county wherein 
such property is situated, on or before October 1 June 30 or 30 
days after submission of the abstract required by section 
270.11, subdivision 2, whichever is later.  This record shall 
specify the amounts or amount, or both, added to or deducted 
from the gross tax capacity of the real property of each of the 
several towns and cities, and of the real property not in towns 
or cities, also the percent or amount of both, added to or 
deducted from the several classes of personal property in each 
of the towns and cities, and also the amount added to or 
deducted from the assessments of individuals, copartnerships, 
associations, or corporations.  The county auditor shall add to 
or deduct from such tract or lot, or portion thereof, of any 
real property in the county the required percent or amount, or 
both, on the gross tax capacity thereof as it stood after 
equalized by the county board, adding in each case a fractional 
sum of 50 cents or more, and deducting in each case any 
fractional sum of less than 50 cents, so that no gross tax 
capacity of any separate tract or lot shall contain any fraction 
of a dollar; and add to, or deduct from, the several classes of 
personal property in the county the required percent or amount, 
or both, on the gross tax capacity thereof as it stood after 
equalized by the county board, adding or deducting in manner 
aforesaid any fractional sum so that no gross tax capacity of 
any separate class of personal property shall contain a fraction 
of a dollar, and add to or deduct from assessments of 
individuals, copartnerships, associations, or corporations, as 
they stood after equalization by the county board, the required 
amounts to agree with the assessments as returned by the 
commissioner of revenue. 
    Sec. 12.  Minnesota Statutes 1988, section 270.18, is 
amended to read: 
    270.18 [REASSESSMENT; COMPENSATION; REIMBURSEMENT BY 
COUNTIES.] 
    The compensation of each special assessor and deputies, 
appointed under the provisions of sections 270.11, subdivision 
3, and 270.16, and the expenses as such, shall be fixed by the 
commissioner of revenue and paid out of money appropriated for 
operation of the department of revenue.  The commissioner of 
revenue on October August 1 shall notify the auditor of each 
affected county of the amount thereof paid on behalf of such 
county since October August 1 of the preceding year, whereupon 
the county auditor shall levy a tax upon the taxable property in 
the assessment district or districts wherein such reassessment 
was made sufficient to pay the same.  One-half of such tax shall 
be levied in the year in which the commissioner of revenue so 
notifies the county auditor and the remaining one-half shall be 
levied in the following year.  The respective counties shall 
reimburse the state by paying one-half of the tax so assessed on 
or before July 1 and the remaining one-half on or before 
December 1 in the year in which the tax is payable by owner, 
whether or not the tax was collected by the county.  The 
reimbursement shall be credited to the general fund.  If any 
county fails to reimburse the state within the time specified 
herein, the commissioner of revenue is empowered to order 
withholding of state aids or distributions to such county equal 
to the amount delinquent.  
    Sec. 13.  Minnesota Statutes 1988, section 270.82, is 
amended to read: 
    270.82 [REPORTS OF RAILROAD COMPANIES.] 
    Subdivision 1.  Every railroad company doing business in 
Minnesota shall annually file with the commissioner on or before 
April 30 March 31 a report under oath setting forth the 
information prescribed by the commissioner to enable the 
commissioner to make the valuation and equalization required by 
Laws 1979, chapter 303, article 7, sections 1 to 13.  
    Subd. 2.  The commissioner for good cause may extend for up 
to 15 days the time for filing the report required by 
subdivision 1.  
    Sec. 14.  Minnesota Statutes 1988, section 270.84, is 
amended to read: 
    270.84 [ANNUAL VALUATION OF OPERATING PROPERTY.] 
    Subdivision 1.  The commissioner shall annually between 
April 30 March 31 and July May 31 make a determination of the 
fair market value of the operating property of every railroad 
company doing business in this state as of January 2 of the year 
in which the valuation is made.  In making this determination, 
the commissioner shall employ generally accepted appraisal 
principles and practices which may include the unit method of 
determining value.  The commissioner may promulgate emergency 
rules adopting valuation procedures under sections 14.29 to 
14.36.  
    The commissioner shall give a report to the legislature in 
February 1985 and in February 1986 on the formula used to 
determine the value of railroad operating property pursuant to 
Laws 1984, chapter 502, article 9.  This report shall also 
contain the valuation for taxes payable 1985 and 1986 by company 
and the taxes payable in 1985 and 1986 by company based upon the 
valuation of operating property.  The legislature may review the 
formula, the valuation, and the resulting taxes and may make 
changes in the formula that it deems necessary.  
    Subd. 2.  The commissioner, after determining the fair 
market value of the operating property of each railroad company, 
shall give notice by first class mail to the railroad company of 
the valuation by first class mail, overnight delivery, or 
messenger service.  
    Sec. 15.  Minnesota Statutes 1988, section 270.85, is 
amended to read: 
    270.85 [REVIEW OF VALUATION.] 
    A railroad company may within 15 ten days of receipt the 
date of the notice of valuation file a written request for a 
conference with the commissioner relating to the value of its 
operating property.  The commissioner shall thereupon designate 
a time and place for the conference which the commissioner shall 
conduct, upon commissioner's entire files and records and such 
further information as may be offered.  Said The 
conference shall must be held no later than 30 20 days after 
mailing the date of the commissioner's valuation notice.  At a 
reasonable time after such conference the commissioner shall 
make a final determination of the fair market value of the 
operating property of the railroad company and shall notify the 
company promptly thereof of the determination.  
    Sec. 16.  Minnesota Statutes 1988, section 270.87, is 
amended to read: 
    270.87 [CERTIFICATION TO COUNTY ASSESSORS.] 
    After making an annual determination of the equalized fair 
market value of the operating property of each company in each 
of the respective counties, and in the taxing districts therein, 
the commissioner shall certify the equalized fair market value 
to the county assessor on or before October 1, which shall 
constitute June 30.  The equalized fair market value of the 
operating property of the railroad company in such the county 
and the taxing districts therein upon is the value on which 
taxes shall must be levied and collected in the same manner as 
on the commercial and industrial property of such county and the 
taxing districts therein.  
    Sec. 17.  Minnesota Statutes 1988, section 272.02, 
subdivision 4, is amended to read: 
    Subd. 4.  Any property exempt from taxation on January 2 of 
any year which, due to sale or other reason, loses its exemption 
prior to October 1 December 20 of any year, shall be placed on 
the current assessment rolls for that year. 
    The valuation shall be determined with respect to its value 
on January 2 of such year.  The classification shall be based 
upon the use to which the property was put by the purchaser, or 
in the event the purchaser has not utilized the property by 
October 1 December 20, the intended use of the property, 
determined by the county assessor, based upon all relevant facts.
    Sec. 18.  Minnesota Statutes 1988, section 272.115, 
subdivision 1, is amended to read: 
    Subdivision 1.  Whenever any real estate is sold on or 
after January 1, 1978 for a consideration in excess of $1,000, 
whether by warranty deed, quitclaim deed, contract for deed or 
any other method of sale, the grantor, grantee or the legal 
agent of either shall file a certificate of value with the 
county auditor in the county in which the property is 
located within 30 days of the sale.  Value shall, in the case of 
any deed not a gift, be the amount of the full actual 
consideration thereof, paid or to be paid, including the amount 
of any lien or liens assumed.  The certificate of value shall 
include the classification to which the property belongs for the 
purpose of determining the fair market value of the property.  
The certificate shall include financing terms and conditions of 
the sale which are necessary to determine the actual, present 
value of the sale price for purposes of the sales ratio study.  
The commissioner of revenue shall promulgate administrative 
rules specifying the financing terms and conditions which must 
be included on the certificate. 
    Sec. 19.  Minnesota Statutes 1988, section 273.064, is 
amended to read: 
    273.064 [EXAMINATION OF LOCAL ASSESSOR'S WORK; COMPLETION 
OF ASSESSMENTS.] 
    The county assessor shall examine the assessment appraisal 
records of each local assessor anytime after January 15 of each 
year and shall immediately give notice in writing to the 
governing body of said district of any deficiencies in the 
assessment procedures with respect to the quantity of or quality 
of the work done as of that date and indicating corrective 
measures to be undertaken and effected by the local assessor not 
later than 30 days thereafter.  If, upon reexamination of such 
records at that time, the deficiencies noted in the written 
notice previously given have not been substantially corrected to 
the end that a timely and uniform assessment of all real 
property in the county will be attained, then the county 
assessor with the approval of the county board shall collect the 
necessary records from the local assessor and complete the 
assessment or employ others to complete the assessment.  When 
the county assessor has completed the assessments, the local 
assessor shall thereafter resume the assessment function within 
the district.  In this circumstance the cost of completing the 
assessment shall be charged against the assessment district 
involved.  The county auditor shall certify the costs thus 
incurred to the appropriate governing body not later than 
September August 1 and if unpaid as of October 10 September 1 of 
the assessment year, the county auditor shall levy a tax upon 
the taxable property of said assessment district sufficient to 
pay such costs.  The amount so collected shall be credited to 
the general revenue fund of the county.  
    Sec. 20.  Minnesota Statutes 1988, section 273.065, is 
amended to read: 
    273.065 [DELIVERY OF ASSESSMENT APPRAISAL RECORDS; 
EXTENSIONS.] 
    Assessment districts shall complete the assessment 
appraisal records on or before March 15 February 1.  The records 
shall be delivered to the county assessor as of that date and 
any work which is the responsibility of the local assessor which 
is not completed by March 15 February 1 shall be accomplished by 
the county assessor or persons employed by the county assessor 
and the cost of such work shall be charged against the 
assessment district as provided in section 273.064.  Extensions 
of time to complete the assessment appraisal records may be 
granted to the local assessor by the county assessor if such 
extension is approved by the county board.  
    Sec. 21.  Minnesota Statutes 1989 Supplement, section 
273.1104, subdivision 2, is amended to read: 
    Subd. 2.  On or before September 15 May 1 in each year, the 
commissioner shall send to each person subject to the tax on 
unmined iron ores and to each taxing district affected, a notice 
of the market value of the unmined ores as determined by the 
commissioner prior to adjustment under subdivision 1.  Said 
notice shall be sent by mail directed to such person at the 
address given in the report filed and the assessor of such 
taxing district, but the validity of the tax shall not be 
affected by the failure of the commissioner of revenue to mail 
such notice or the failure of the person subject to the tax to 
receive it. 
    On the first secular day following the first day of October 
May 20, the commissioner of revenue shall hold a hearing which 
may be adjourned from day to day.  All relevant and material 
evidence having probative value with respect to the issues shall 
be submitted at the hearing and such hearing shall not be a 
"contested case" within the meaning of section 14.02, 
subdivision 3.  Every person subject to such tax may at such 
hearing present evidence and argument on any matter bearing upon 
the validity or correctness of the tax determined to be due, and 
the commissioner of revenue shall review the determination of 
such tax. 
    Sec. 22.  Minnesota Statutes 1989 Supplement, section 
273.119, subdivision 2, is amended to read: 
    Subd. 2.  [REIMBURSEMENT FOR LOST REVENUE.] The county may 
transfer money from the county conservation account created in 
section 40A.152 to the county revenue fund to reimburse the fund 
for the cost of the property tax credit.  The county auditor 
shall certify to the commissioner of revenue on or before June 1 
of each year, as part of the abstracts of tax lists required to 
be filed with the commissioner under section 275.29, the amount 
of tax lost to the county from the property tax credit under 
subdivision 1 and the extent that the tax lost exceeds funds 
available in the county conservation account.  Any prior year 
adjustments must also be certified in the abstracts of tax 
lists.  The commissioner of revenue shall review the 
certifications to determine their accuracy.  The commissioner 
may make the changes in the certification that are considered 
necessary or return a certification to the county auditor for 
corrections.  On or before July 15 of each year, The 
commissioner shall reimburse the county each taxing district, 
other than school districts, from the Minnesota conservation 
fund under section 40A.151 for the taxes lost in excess of the 
county account.  The payments must be made at the times provided 
in section 477A.015 for payment of local government aid to 
taxing jurisdictions in the same proportion that the ad valorem 
tax is distributed.  
    Sec. 23.  Minnesota Statutes 1988, 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 2 of the year in which 
the disaster or emergency occurred.  The difference between the 
tax determined on the January 2 gross tax capacity and the tax 
actually payable based on the reassessed gross tax capacity 
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, other than school 
districts, containing the property at the time distributions are 
made pursuant to section 273.13 for taxes payable in 1989, and 
pursuant to section 273.1398 for taxes payable in 1990 and 
thereafter under section 477A.015, in the same proportion that 
the ad valorem tax is distributed.  
    Sec. 24.  Minnesota Statutes 1988, section 273.123, 
subdivision 5, is amended to read: 
    Subd. 5.  [COMPUTATION OF CREDITS.] The amounts of any 
credits or tax relief which reduce the gross tax shall be 
computed upon the reassessed gross tax capacity determined under 
subdivision 2.  Payment shall be made pursuant to section 273.13 
for taxes payable in 1989, and pursuant to section 273.1398 for 
taxes payable in 1990 and thereafter.  For purposes of the 
property tax refund, property taxes payable, as defined in 
section 290A.03, subdivision 13, and net property taxes payable, 
as defined in section 290A.04, subdivision 2d, shall be computed 
upon the reassessed gross tax capacity determined under 
subdivision 2.  
    Sec. 25.  Minnesota Statutes 1988, section 273.1392, is 
amended to read: 
    273.1392 [PAYMENT; AIDS TO SCHOOL DISTRICTS.] 
    The amounts of conservation tax credits under section 
273.119; disaster or emergency reimbursement under section 
273.123; attached machinery aid under section 273.138; homestead 
credit under section 273.13; agricultural credit under section 
273.132; aids and credits under section 273.1398; enterprise 
zone property credit payments under section 469.171; 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 section 124.195, subdivisions 6 and 10. 
    Sec. 26.  Minnesota Statutes 1988, section 273.33, 
subdivision 2, is amended to read: 
    Subd. 2.  The personal property, consisting of the pipeline 
system of mains, pipes, and equipment attached thereto, of 
pipeline companies and others engaged in the operations or 
business of transporting natural gas, gasoline, crude oil, or 
other petroleum products by pipelines, shall be listed with and 
assessed by the commissioner of revenue.  This subdivision shall 
not apply to the assessment of the products transported through 
the pipelines nor to the lines of local commercial gas companies 
engaged primarily in the business of distributing gas to 
consumers at retail nor to pipelines used by the owner thereof 
to supply natural gas or other petroleum products exclusively 
for such owner's own consumption and not for resale to others.  
On or before October 1 June 30, the commissioner shall certify 
to the auditor of each county, the amount of such personal 
property assessment against each company in each district in 
which such property is located. 
    Sec. 27.  Minnesota Statutes 1988, section 273.37, 
subdivision 2, is amended to read: 
    Subd. 2.  Transmission lines of less than 69 kv, 
transmission lines of 69 kv and above located in an unorganized 
township, and distribution lines, and equipment attached 
thereto, having a fixed situs outside the corporate limits of 
cities except distribution lines taxed as provided in sections 
273.40 and 273.41, shall be listed with and assessed by the 
commissioner of revenue in the county where situated.  The 
commissioner shall assess such property at the percentage of 
market value fixed by law; and, on or before the 15th day of 
November June 30, shall certify to the auditor of each county in 
which such property is located the amount of the assessment made 
against each company and person owning such property. 
    Sec. 28.  [273.371] [REPORTS OF UTILITY COMPANIES.] 
    Subdivision 1.  [REPORT REQUIRED.] Every electric light, 
power, gas, water, express, stage, and transportation company 
and pipeline doing business in Minnesota shall annually file 
with the commissioner on or before March 31 a report under oath 
setting forth the information prescribed by the commissioner to 
enable the commissioner to make valuations, recommended 
valuations, and equalization required under sections 273.33, 
273.35, 273.36, and 273.37. 
    Subd. 2.  [EXTENSION.] The commissioner for good cause may 
extend the time for filing the report required by subdivision 
1.  The extension may not exceed 15 days. 
    Sec. 29.  Minnesota Statutes 1988, section 274.14, is 
amended to read: 
    274.14 [LENGTH OF SESSION; RECORD.] 
    The county board of equalization or the special board of 
equalization appointed by it shall meet during the last two 
weeks in June that contain ten meeting days, excluding Saturday 
and Sunday.  The commissioner may extend the session period to 
July 15 but No action taken by the county board of review 
after the extended termination date June 30 is valid.  The 
county auditor shall keep an accurate record of the proceedings 
and orders of the board.  The record must be published like 
other proceedings of county commissioners.  A copy of the 
published record must be sent to the commissioner of revenue, 
with the abstract of assessment required by section 274.16.  
    Sec. 30.  [274.175] [VALUES FINALIZED.] 
    The assessments recorded by the county assessor and the 
county auditor under sections 273.124, subdivision 9; 274.16; 
274.17; or other law for real and personal property are final on 
July 1 of the assessment year, except for property added to the 
assessment rolls under section 272.02, subdivision 4, or deleted 
because of tax forfeiture pursuant to chapter 281.  No changes 
in value may be made after July 1 of the assessment year. 
    Sec. 31.  Minnesota Statutes 1988, section 275.065, 
subdivision 1, is amended to read: 
    Subdivision 1.  [PROPOSED LEVY.] Notwithstanding any law or 
charter to the contrary, on or before August September 1, each 
taxing authority, other than a school district, shall adopt a 
proposed budget and each taxing authority shall certify to the 
county auditor the proposed property tax levy for taxes payable 
in the following year.  For purposes of this section, "taxing 
authority" shall include includes all home rule and statutory 
cities with a population of over 2,500, towns with a population 
over 5,000, counties, school districts, the metropolitan 
council, and the metropolitan regional transit commission and 
special taxing districts.  
    Sec. 32.  Minnesota Statutes 1988, section 275.065, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [OVERLAPPING JURISDICTIONS.] In the case of a 
taxing authority lying in two or more counties, the home county 
auditor shall certify the proposed levy to the other county 
auditor by September 20 for taxes levied in 1990, and 
thereafter, and the proposed tax capacity rate by September 5 
for taxes levied in 1991, and thereafter, for counties 
containing a city of the first class.  The home county auditor 
must estimate the levy or rate in preparing the notices required 
in subdivision 3, if the other county has not certified the 
appropriate information.  If requested by the home county 
auditor, the other county auditor must furnish an estimate to 
the home county auditor. 
    Sec. 33.  Minnesota Statutes 1988, section 275.065, is 
amended by adding a subdivision to read: 
    Subd. 1b.  [CERTIFICATION OF POPULATION; PUPILS.] (a) On or 
before September 1, the state demographer shall certify to the 
county auditor the population of each taxing authority and the 
change in population as required in subdivision 3, paragraph 
(d), clause (3). 
    (b) On or before September 1, the commissioner of education 
shall certify to the county auditor the number of pupils in 
average daily membership in the school district and the change 
in the number of pupils in average daily membership as required 
in subdivision 3, paragraph (d), clause (3). 
    Sec. 34.  Minnesota Statutes 1988, section 275.065, 
subdivision 3, is amended to read: 
    Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) If there 
is a percentage increase in property taxes proposed by the 
taxing authority, on or before September 15, The county auditor 
shall compute for each parcel of property on the assessment 
rolls within the taxing authority the proposed property tax for 
taxes levied in the current year.  In the case of cities under 
2,500 population, and all special taxing districts except the 
metropolitan council and the metropolitan regional transit 
commission, the auditor shall use the taxing district's previous 
year tax capacity rate for use in computing the total property 
tax.  The county auditor shall prepare and the county treasurer 
shall deliver on or before November 10 each year, by first class 
mail to each taxpayer at the address listed on the city's 
county's current year's assessment roll, a notice of the 
taxpayer's proposed property taxes.  
    (b) The commissioner of revenue shall prescribe the form of 
the notice. 
    (c) A notice in substantially the following form shall be 
sufficient. 
NOTICE OF PROPOSED PROPERTY TAXES 
DO NOT PAY   THIS IS NOT A BILL
This notice shows the amount your next property tax bill will be 
if proposed budgets are approved by the local government 
districts you live in.  It also shows the amount of your next 
property tax bill if the local government districts you live in 
do not change their budgets from this year.  
Name of       Description      Market value      Class of 
property      of property      of property       property 
owner 
John Q.         Lot 1,           $65,000         residential 
and Mary        Block 1                          homestead 
W. Smith        Pleasant 
                Acres sub- 
                division 
                Middletown, 
                Minnesota 
Based on their proposed budgets, next year the governing bodies 
of the county, city, school district, and special tax districts 
you live in are proposing to collect from you the amount of 
property tax shown below.  At the meetings listed below, the 
governing bodies will discuss and vote on the amount of their 
budgets for next year.  The larger the amount of the budget, the 
more property tax you will pay.  You can attend the meetings and 
express your opinions about the amount of the budget before the 
budget is voted on.  
These local         Amount of    Amount of    Time and 
governments         your tax     your tax     place of 
These local         Amount of    Amount of    Time and 
governments         your tax     your tax     place of 
collect             next year    next year    meetings on 
property tax        if they      if they      proposed 
from you            do not       adopt        budgets 
                    change       their 
                    their        proposed 
                    budgets      budgets 
                    from 
                    this 
                    year 
County:  Spruce     $218.55       $257.75     September 1,
                                              1988, 7:30 pm
                                              Room 123, Spruce
                                              Co. Courthouse
City or Town:       $168.63       $184.09     October 1, 1988,
Middletown                                    8:00 pm Middletown
                                              Town Hall
Public School:  Ind. Dist. 123
set by school        $47.56       $146.88     September 25, 1988,
board
set by state law    $300.00       $300.00     Cafeteria,
                                              Middletown
                                              Town Hall
Special Tax Districts
Metropolitan Council $25.00        $50.00     October 5,
                                              1988, 3:00 pm
                                              Board Room, 
                                              Tri-County
                                              Hospital
Metropolitan        $10.00        $12.00     October 12,
Regional Transit                              1988, 6:00 pm
Board                                         Common Room,
                                              Tri-County
                                              Library
Tax before State 
 payments:          $769.74       $950.72
Payments by 
State:   (subtract: $215.00) (subtract: $235.00)
-----------------------------------------------------------
      Your tax if budget is not changed: $554.74
                Your tax if proposed budget is adopted: $715.72
    The notice must inform taxpayers that it contains the 
amount of property taxes each taxing authority proposes to 
collect for taxes payable the following year as required in 
paragraph (d) or (e).  It must clearly state that each taxing 
authority, other than a town or special taxing district, will 
hold a public meeting to receive public testimony on the 
proposed budget and property tax levy, or, in case of a school 
district, on the proposed property tax levy.  It must clearly 
state the time and place of each taxing authority's meeting and 
an address where comments will be received by mail.  It must 
state the time and place for the continuation of the hearing if 
the hearing is not completed on the original date.  
    (d) Except as provided in paragraph (e), the notice must 
state by county, city or town, and school district:  
    (1) the total proposed property tax levy for taxes payable 
the following year after reduction for state aid; 
    (2) the percentage increase or decrease from the actual 
property tax levy for taxes payable in the current year; and 
    (3) for counties, cities, and towns, the increase or 
decrease in population from the second previous calendar year to 
the immediately prior calendar year, as determined by the state 
demographer, and for school districts, the increase or decrease 
in the number of pupils in average daily membership from the 
second previous school year to the immediately prior school year 
as determined by the commissioner of education.  
    For purposes of this paragraph, "proposed property taxes 
after reduction for state aid" means the taxing authority's levy 
certified under section 275.07, subdivision 1.  
    (e) In the case of a county containing a city of the first 
class, or taxing authority lying wholly within a county or 
counties containing a city of the first class, for taxes levied 
in 1991, and thereafter, the notice must state for each parcel: 
    (1) the market value of the property as defined under 
section 272.03, subdivision 8, for property taxes payable in the 
following year and for taxes payable the current year; 
    (2) by county, city or town, school district, the sum of 
the special taxing districts, and as a total of the taxing 
authorities, including special taxing districts, the proposed 
net tax on the property for taxes payable the following year and 
the actual tax for taxes payable the current year; and 
    (3) the increase or decrease in the amounts in clause (2) 
from taxes payable in the current year to proposed taxes payable 
the following year, expressed as a dollar amount and as a 
percentage. 
    (f) The notice must clearly state that the proposed taxes 
do not include the following: 
    (1) special assessments; 
    (2) levies approved by the voters after the date the 
proposed taxes are certified, including bond referenda, school 
district levy referenda, and levy limit increase referenda; 
    (3) amounts necessary to pay cleanup or other costs due to 
a natural disaster occurring after the date the proposed taxes 
are certified; and 
    (4) amounts necessary to pay tort judgments against the 
taxing authority that become final after the date the proposed 
taxes are certified. 
    Sec. 35.  Minnesota Statutes 1988, section 275.065, 
subdivision 4, is amended to read: 
    Subd. 4.  [COSTS.] The taxing authority shall pay the 
county for If the reasonable cost of the county auditor's 
services and for the costs cost of preparing and mailing the 
notice required in this section exceed the amount distributed to 
the county by the commissioner of revenue to administer this 
section, the taxing authority must reimburse the county for the 
excess cost.  The excess cost must be apportioned between taxing 
jurisdictions as follows:  
    (1) one-third is allocated to the county; 
    (2) one-third is allocated to cities and towns within the 
county; and 
    (3) one-third is allocated to school districts within the 
county.  
    The amounts in clause (2) must be further apportioned among 
the cities and towns in the proportion that the population of 
the city and town bears to the population of all the cities and 
towns within the county.  The amount in clause (3) must be 
further apportioned among the school districts in the proportion 
that the number of pupils in the school district bears to the 
number of pupils in all school districts within the county. 
    Sec. 36.  Minnesota Statutes 1988, section 275.065, 
subdivision 6, is amended to read: 
    Subd. 6.  [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 
Prior to October 25 Between November 15 and December 20, the 
governing body bodies of the city and county shall each hold a 
public hearing to adopt its final budget and property tax levy 
for taxes payable in the following year, and the governing body 
of the school district shall hold a public hearing to adopt its 
property tax levy for taxes payable in the following year.  The 
hearing must be held not less than two days or more than five 
days after the day the notice is first published. 
    At the hearing, the taxing authority, other than a school 
district, may amend the proposed budget and property tax levy 
and must adopt a final budget and property tax levy, and the 
school district may amend the proposed property tax levy and 
must adopt a final property tax levy.  
    The adopted property tax levy adopted may must not exceed 
the final proposed levy determined under subdivision 2, 1 
paragraph (c)., except by an amount up to the sum of the 
following amounts: 
    (1) the amount of a school district levy whose voters 
approved a referendum to increase taxes under section 124A.03, 
subdivision 2, or 124.82, subdivision 3, after the proposed levy 
was certified; 
    (2) the amount of a city or county levy approved by the 
voters under section 275.58 after the proposed levy was 
certified; 
    (3) the amount of a levy to pay principal and interest on 
bonds issued or approved by the voters under section 475.58 
after the proposed levy was certified; 
    (4) the amount of a levy to pay costs due to a natural 
disaster occurring after the proposed levy was certified, if 
that amount is approved by the commissioner of revenue under 
subdivision 6a; and 
    (5) the amount of a levy to pay tort judgments against a 
taxing authority that become final after the proposed levy was 
certified, if the amount is approved by the commissioner of 
revenue under subdivision 6a.  
    At the hearing the percentage increase in property taxes 
proposed by the taxing authority, if any, and the specific 
purposes for which property tax revenues are being increased 
must be discussed.  During the discussion, the governing body 
shall hear comments regarding a proposed increase and explain 
the reasons for the proposed increase.  The public shall be 
allowed to speak and to ask questions prior to adoption of any 
measures by the governing body.  The governing body, other than 
the governing body school districts, shall adopt its final 
property tax levy prior to adopting its final budget. 
    The hearing must be held after 5:00 p.m. if scheduled on a 
day other than Saturday.  No hearing may be held on a Sunday.  
The school board and county board shall The commissioner of 
revenue shall provide for the coordination of hearing dates so 
that a taxing authority does not schedule public meetings 
on days the days scheduled for the hearing by the governing body 
of the city another taxing authority. 
    If the hearing is recessed, the taxing authority shall 
publish a notice in a qualified newspaper of general paid 
circulation in the city.  The notice must state the time and 
place for the continuation of the hearing and must be published 
at least two days but not more than five days prior to the date 
the hearing will be continued. 
    This subdivision does not apply to towns and special taxing 
districts. 
    Sec. 37.  Minnesota Statutes 1988, section 275.065, is 
amended by adding a subdivision to read: 
    Subd. 6a.  [APPROVAL OF COMMISSIONER.] (a) A taxing 
authority may appeal to the commissioner of revenue for 
authorization to levy an amount over the amount of the proposed 
levy.  The taxing authority must provide evidence satisfactory 
to the commissioner that it has incurred costs for the purposes 
specified in paragraph (b).  The commissioner may approve an 
increase in the taxing authority's levy of up to the amount of 
costs incurred or a lesser amount determined by the 
commissioner.  The commissioner's decision is final.  
    (b) A levy addition may be made under paragraph (a) for the 
following costs incurred after the proposed levy is certified:  
(1) the unreimbursed costs to satisfy judgments rendered against 
the taxing authority by a court of competent jurisdiction in a 
tort action in excess of $50,000 or ten percent of the current 
year's proposed certified levy whichever is less; and (2) the 
costs incurred in clean up of a natural disaster.  For purposes 
of this subdivision, "natural disaster" includes the occurrence 
or threat of widespread or severe damage, injury, or loss of 
life or property resulting from causes such as earthquake, fire, 
flood, windstorm, wave action, oil spill, water contamination, 
air contamination, or drought. 
    Sec. 38.  Minnesota Statutes 1988, section 275.065, 
subdivision 7, is amended to read: 
    Subd. 7.  [CERTIFICATION OF COMPLIANCE.] At the time the 
taxing authority certifies its tax levy under section 275.07, it 
shall certify to the commissioner of revenue its compliance with 
this section.  The certification must contain copies of the 
advertisement required under subdivision 5, the resolution 
adopting the final property tax levy under subdivision 6, and 
any other the information required by the commissioner of 
revenue to determine compliance with this section.  If the 
commissioner determines that the taxing authority has failed to 
substantially comply with the requirements of this section, the 
commissioner of revenue shall notify the county auditor.  The 
decision of the commissioner is final.  When fixing rates under 
section 275.08 for a taxing authority that has not complied with 
this section, the county auditor must use the no-increase tax 
rate taxing authority's previous year's levy.  
    Sec. 39.  Minnesota Statutes 1988, section 275.07, 
subdivision 1, is amended to read: 
    Subdivision 1.  The taxes voted by cities, towns, counties, 
school districts, and special districts shall be certified by 
the proper authorities to the county auditor on or before 
October 25 five working days after December 20 in each year.  
The taxes certified shall not be adjusted by the aid received 
under section 273.1398, subdivisions 2 and 3.  If a city, town, 
county, school district, or special district fails to certify 
its levy by that date, its levy shall be the amount levied by it 
for the preceding year.  If the local unit notifies the 
commissioner of revenue before October 25 of its inability to 
certify its levy by that date, and the commissioner is satisfied 
that the delay is unavoidable and is not due to the negligence 
of the local unit's officials or staff, the commissioner shall 
extend the time within which the local unit shall certify its 
levy up to 15 calendar days beyond the date of request for 
extension.  
    Sec. 40.  Minnesota Statutes 1988, section 275.07, is 
amended by adding a subdivision to read: 
    Subd. 4.  [REPORT TO COMMISSIONER.] On or before September 
15 for taxes levied in 1990, and thereafter, the county auditor 
shall report to the commissioner of revenue the proposed levy 
certified by local units of government under section 275.065, 
subdivision 1.  On or before January 15, for taxes levied in 
1989 and thereafter, the county auditor shall report to the 
commissioner of revenue the final levy certified by local units 
of government under subdivision 1.  The levies must be reported 
in the manner prescribed by the commissioner.  The reports must 
show a total levy and the amount of each special levy. 
    Sec. 41.  Minnesota Statutes 1988, section 275.08, 
subdivision 2, is amended to read: 
    Subd. 2.  [ESTIMATES.] If, by December January 15 of any 
year, the county auditor has not received from another county 
auditor the tax capacity rate or gross tax capacity applicable 
to any taxing district lying in two or more counties, the county 
auditor who has not received the necessary information may levy 
taxes for the overlapping district by estimating the tax 
capacity rate or the gross tax capacity.  
    Sec. 42.  Minnesota Statutes 1988, section 275.08, 
subdivision 3, is amended to read: 
    Subd. 3.  [ASSISTANCE OF COUNTY AUDITOR.] A county auditor 
who has not furnished the tax capacity rate or gross tax 
capacity of property in the county by December January 15 shall, 
on request, furnish the county auditor of a county in the 
overlapping district an estimate of the tax capacities or the 
tax capacity rate.  The auditor may request the assistance of 
the county assessor in determining the estimate.  
    Sec. 43.  Minnesota Statutes 1988, section 275.124, is 
amended to read: 
    275.124 [REPORT OF CERTIFIED LEVY.] 
    Prior to February 1 April 1 of each year, each county 
auditor shall report to the commissioner of education on forms 
furnished by the commissioner, the amount of the certified levy 
made by each school district within the county which has taxable 
property and any other information concerning these levies that 
is deemed necessary by the commissioner. 
    Sec. 44.  Minnesota Statutes 1989 Supplement, section 
275.125, subdivision 5, is amended to read: 
    Subd. 5.  [BASIC TRANSPORTATION LEVY.] Each year, a school 
district may levy for school transportation services an amount 
not to exceed the amount raised by the basic transportation tax 
capacity rate times the adjusted net tax capacity of the 
district for the preceding year.  The commissioner of revenue 
shall establish the basic transportation tax capacity rate and 
certify it to the commissioner of education by September July 1 
of each year for levies payable in the following year.  The 
basic transportation tax capacity rate shall be a rate, rounded 
up to the nearest hundredth of a percent, that, when applied to 
the adjusted net tax capacity of taxable property for all 
districts, raises the amount specified in this subdivision.  The 
basic transportation tax capacity rate for transportation shall 
be the rate that raises $82,063,200 for fiscal year 1991 and 
$86,166,400 for subsequent fiscal years.  The basic 
transportation tax capacity rate certified by the commissioner 
of revenue must not be changed due to changes or corrections 
made to a district's adjusted net tax capacity after the tax 
capacity rate has been certified. 
    Sec. 45.  Minnesota Statutes 1989 Supplement, section 
275.125, subdivision 5b, is amended to read: 
    Subd. 5b.  [TRANSPORTATION LEVY OFF-FORMULA ADJUSTMENT.] 
(a) In the 1989 and 1990 fiscal years, if the basic 
transportation levy under subdivision 5 in a district 
attributable to the fiscal year exceeds the transportation aid 
computation under section 124.225, subdivisions 8b, 8i, 8j, and 
8k, the district's levy limitation shall be adjusted as provided 
in this subdivision.  In the next second year following each 
fiscal year, the district's transportation levy shall be reduced 
by an amount equal to the difference between (1) the amount of 
the basic transportation levy under subdivision 5, and (2) the 
sum of the district's transportation aid computation pursuant to 
section 124.225, subdivisions 8b, 8i, 8j, and 8k, and the amount 
of any subtraction made from special state aids pursuant to 
section 124.2138, subdivision 2, less the amount of any aid 
reduction due to an insufficient appropriation as provided in 
section 124.225, subdivision 8a.  
    (b) For 1991 and later fiscal years, in a district if the 
basic transportation levy under subdivision 5 attributable to 
that fiscal year is more than the difference between (1) the 
district's transportation revenue under section 124.225, 
subdivision 7c, and (2) the sum of the district's maximum 
nonregular levy under subdivision 5c and the district's 
contracted services aid reduction under section 124.225, 
subdivision 8k, and the amount of any reduction due to 
insufficient appropriation under section 124.225, subdivision 
8a, the district's transportation levy in the next second year 
following each fiscal year must be reduced by the amount of the 
excess. 
    Sec. 46.  Minnesota Statutes 1989 Supplement, section 
275.14, is amended to read: 
    275.14 [CENSUS.] 
    For the purposes of sections 124.2713 and 275.11 to 275.16, 
the population of a city shall be that established by the last 
federal census, by a special census taken by the United States 
Bureau of the Census, by an estimate made by the metropolitan 
council, or by the state demographer made according to section 
116K.04, subdivision 4, whichever has the latest stated date of 
count or estimate, before July 2 of the current levy year.  The 
population of a school district must be as certified by the 
department of education from the most recent federal census. 
    In any year in which no federal census is taken pursuant to 
law in any school district affected by sections 275.11 to 275.16 
a population estimate may be made and submitted to the state 
demographer for approval as hereinafter provided.  The school 
board of a school district, in case it desires a population 
estimate, shall pass a resolution by September July 1 containing 
a current estimate of the population of the school district and 
shall submit the resolution to the state demographer.  The 
resolution shall describe the criteria on which the estimate is 
based and shall be in a form and accompanied by the data 
prescribed by the state demographer.  The state demographer 
shall determine whether or not the criteria and process 
described in the resolution provide a reasonable basis for the 
population estimate and shall inform the school district of that 
determination within 30 days of receipt of the resolution.  If 
the state demographer determines that the criteria and process 
described in the resolution do not provide a reasonable basis 
for the population estimate, the resolution shall be of no 
effect.  If the state demographer determines that the criteria 
and process do provide a reasonable basis for the population 
estimate, the estimate shall be treated as the population of the 
school district for the purposes of sections 275.11 to 275.16 
until the population of the school district has been established 
by the next federal census or until a more current population 
estimate is prepared and approved as provided herein, whichever 
occurs first.  The state demographer shall establish guidelines 
for acceptable population estimation criteria and processes.  
The state demographer shall issue advisory opinions upon request 
in writing to cities or school districts as to proposed criteria 
and processes prior to their implementation in an estimation.  
The advisory opinion shall be final and binding upon the 
demographer unless the demographer can show cause why it should 
not be final and binding.  
     In the event that a census tract employed in taking a 
federal or local census overlaps two or more school districts, 
the county auditor shall, on the basis of the best information 
available, allocate the population of said census tract to the 
school districts involved.  
    The term "council," as used in sections 275.11 to 275.16, 
means any board or body, whether composed of one or more 
branches, authorized to make ordinances for the government of a 
city within this state.  
    Sec. 47.  Minnesota Statutes 1989 Supplement, section 
275.28, subdivision 1, is amended to read: 
    Subdivision 1.  [AUDITOR TO MAKE.] The county auditor shall 
make out the tax lists according to the prescribed form, and to 
correspond with the assessment districts.  The rate percent 
necessary to raise the required amount of the various taxes 
shall be calculated on the net tax capacity of property as 
determined by the state board of equalization, but, in 
calculating such rates, no rate shall be used resulting in a 
fraction other than a decimal fraction, or less than a gross tax 
capacity rate of .01 percent or a net tax capacity rate of .01 
percent; and, in extending any tax, whenever it amounts to the 
fractional part of a cent, it shall be made one cent.  The tax 
lists shall also be made out to correspond with the assessment 
books in reference to ownership and description of property, 
with columns for the valuation and for the various items of tax 
included in the total amount of all taxes set down opposite each 
description.  Opposite each description which has been sold for 
taxes, and which is subject to redemption, but not redeemed, 
shall be placed the words "sold for taxes."  The amount of all 
special taxes shall be entered in the proper columns, but the 
general taxes may be shown by entering the rate percent of each 
tax at the head of the proper columns, without extending the 
same, in which case a schedule of the rates percent of such 
taxes shall be made on the first page of each tax list.  If the 
auditor fails to enter on any such list before its delivery to 
the treasurer any tax levied, the tax may be subsequently 
entered.  The tax lists shall be deemed completed, and all taxes 
extended thereon, as of October 16 January 1 annually.  
    Sec. 48.  Minnesota Statutes 1988, section 275.29, is 
amended to read: 
    275.29 [ABSTRACTS TO COMMISSIONER OF REVENUE.] 
    On or before January 1 Not later than March 31, in each 
year, the county auditor shall make and transmit to the 
commissioner of revenue, in such form as may be prescribed by 
the commissioner of revenue, complete abstracts of the tax lists 
of the county, showing the number of acres of land assessed; its 
value, including the structures thereon; the value of town and 
city lots, including structures; the total value of all taxable 
personal property in the several assessment districts; the 
aggregate amount of all taxable property in the county, and the 
total amount of taxes levied therein for state, county, town, 
and all other purposes for that year.  
    Sec. 49.  Minnesota Statutes 1988, section 275.51, is 
amended by adding a subdivision to read: 
    Subd. 7.  [LEVY LIMIT CERTIFICATION.] The commissioner of 
revenue must certify the levy limitations under sections 275.50 
to 275.58 to each governmental subdivision by October 23 for 
levy year 1989 and August 1 of levy year 1990 and thereafter. 
    Sec. 50.  Minnesota Statutes 1988, section 275.58, 
subdivision 2, is amended to read: 
    Subd. 2.  A levy limit base per capita adjustment approved 
pursuant to subdivision 1 at a general or special election held 
prior to October 1 five working days after December 20 in any 
levy year increases the levy limit base per capita in that same 
levy year by the approved per capita amount and provides a 
permanent adjustment to the levy limit base per capita of the 
governmental subdivision for future levy years.  A levy limit 
base per capita adjustment approved pursuant to subdivision 1 at 
a general or special election held on or after September 30 five 
working days after December 20 in any levy year shall not 
increase the levy limit base per capita in that same levy year 
but shall provide a permanent adjustment to the levy limit base 
per capita of the governmental subdivision for future levy years.
    Sec. 51.  Minnesota Statutes 1988, section 275.58, 
subdivision 3, is amended to read: 
    Subd. 3.  An additional levy approved pursuant to 
subdivision 1 at a general or special election held prior to 
October 1 five working days after December 20 in any levy year 
may be levied in that same levy year and in any levy years 
thereafter.  An additional levy approved pursuant to subdivision 
1 at a general or special election held on or after September 30 
five working days after December 20 in any levy year shall not 
be levied in that same levy year, but may be levied in the 
subsequent levy year and in levy years thereafter.  
    Sec. 52.  Minnesota Statutes 1988, section 276.01, is 
amended to read: 
    276.01 [DELIVERY OF LISTS TO TREASURER.] 
    On or before the first business day in January March in 
each year, the county auditor shall deliver the lists of the 
districts of the county to the county treasurer and get the 
treasurer's receipt for them.  The lists must show the total 
amount of taxes due.  Where the names of taxpayers appear in the 
property tax lists, the county auditor shall show the taxpayers' 
addresses.  The lists are authority for the treasurer to collect 
the taxes shown on the list. 
    In counties that have elected to come under section 273.03, 
subdivision 2, when the county treasurer possesses the lists 
provided for in section 275.28, subdivision 3, the county 
auditor shall have access to the lists to change the market 
valuations and the classifications of real estate in the lists 
that the auditor would have been required to change in the 
assessment books provided for in section 273.03, subdivision 1, 
except for the election to discontinue the preparation of the 
assessment books.  The county auditor is the official custodian 
of the lists after the year when they are in the county 
treasurer's possession. 
    Sec. 53.  Minnesota Statutes 1988, section 276.04, 
subdivision 2, is amended to read: 
    Subd. 2.  [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 
shall, whether or not directed by the county board, cause to be 
printed on all provide for the printing of the tax statements, 
or on an attachment,.  The commissioner of revenue shall 
prescribe the form of the property tax statement and its 
contents.  The statement must contain 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 must be separately stated.  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 boldface 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."  
    (b) The property tax statements for manufactured homes and 
sectional structures taxed as personal property shall contain 
the same information that is required on the tax statements for 
real property.  
    (c) For taxes payable in 1990 and thereafter, real and 
personal property tax statements must contain (1) the property's 
market value, as defined in section 272.03, subdivision 8, (2) 
the net tax capacity rate applicable to the property's 
classification under section 273.13, and the product of (1) and 
(2), the property's initial tax.  The statement must show the 
difference between a property's gross tax capacity and net tax 
capacity multiplied by the tax capacity rate as "state paid 
homestead and agricultural credit."  The statement must also 
show the decrease in tax attributable to that portion of the sum 
of the following aids attributable to the property as "state 
paid tax relief":  (i) education aids payable under chapters 124 
and 124A, (ii) local government aid for cities, towns, and 
counties under chapter 477A, (iii) disparity reduction aid paid 
under section 273.1398, and (iv) income maintenance aids as 
defined in section 273.1398, subdivision 1, paragraph (i).  The 
commissioner of revenue shall certify to the county auditor the 
actual or estimated aids local governments will receive in the 
following year. 
    (d) For taxes payable in 1989 only, the statement must show 
the property's market value, as defined in section 272.03, 
subdivision 8, and the amount attributable to section 273.13, 
subdivisions 22 and 23, as "state paid homestead credit" and the 
amount attributable to section 273.132 as "state paid 
agricultural credit."  The statement must also show the decrease 
in tax attributable to that portion of the sum of the following 
aids attributable to the property as "state paid tax relief":  
(i) education aids under chapters 124 and 124A, (ii) local 
government aid for cities, towns, and counties under chapter 
477A, and (iii) disparity reduction aid under section 273.1398.  
The commissioner of revenue shall certify to the county auditor 
the actual or estimated aids local governments will receive in 
the following year. 
    Real and personal property tax statements must contain the 
following information in the order given in this paragraph.  The 
information must contain the current year tax information in the 
right column with the corresponding information for the previous 
year in a column on the left: 
    (1) the property's estimated market value as defined in 
section 272.03, subdivision 8; 
    (2) the property's gross tax, calculated by multiplying the 
property's gross tax capacity times the total tax capacity rate 
and adding to the result the sum of the aids enumerated in 
clause (3); 
    (3) a total of the following aids: 
    (i) education aids payable under chapters 124 and 124A; 
    (ii) local government aids for cities, towns, and counties 
under chapter 477A; and 
    (iii) disparity reduction aid under section 273.1398; 
    (4) for homestead residential and agricultural properties, 
the homestead and agricultural credit aid apportioned to the 
property.  This amount is obtained by multiplying the total tax 
capacity rate by the difference between the property's gross and 
net tax capacities under section 273.13.  This amount must be 
separately stated and identified as "homestead and agricultural 
credit."  For purposes of comparison with the previous year's 
amount for the statement for taxes payable in 1990, the 
statement must show the homestead credit for taxes payable in 
1989 under section 273.13, and the agricultural credit under 
section 273.132 for taxes payable in 1989; 
    (5) any credits received under sections 273.119; 273.123; 
273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 
473H.10; and 
    (6) the net tax payable in the manner required in paragraph 
(a). 
    The commissioner of revenue shall certify to the county 
auditor the actual or estimated aids enumerated in clauses (3) 
and (4) that local governments will receive in the following 
year.  In the case of a county containing a city of the first 
class, or a county that has adopted the provisions of section 
81, the commissioner must certify this amount by September 1. 
     (d) For taxes payable in 1990, the commissioner shall 
prescribe language notifying taxpayers that state aid dollars 
were transferred from the city or town to the school district.  
The language must notify taxpayers that the transfer results in 
an increase in city or town taxes and a decrease in school taxes 
that is unrelated to spending decisions of the city or town and 
school district.  The commissioner may prescribe that the amount 
of the transfer be stated.  The commissioner may provide that 
the statement required under this clause be included as a 
separate enclosure. 
    Sec. 54.  Minnesota Statutes 1988, section 276.04, 
subdivision 3, is amended to read: 
    Subd. 3.  [MAILING OF TAX STATEMENTS.] The county treasurer 
shall mail to taxpayers statements of their personal property 
taxes due not later than February 15 April 15 for property taxes 
payable in 1990 and March 31 thereafter, except in the case of 
manufactured homes and sectional structures taxed as personal 
property.  Statements of the real property taxes due shall be 
mailed not later than January 31 April 15 for property taxes 
payable in 1990 and March 31 thereafter.  The validity of the 
tax shall not be affected by failure of the treasurer to mail 
the statement.  The taxpayer is defined as the owner who is 
responsible for the payment of the tax.  
    Sec. 55.  Minnesota Statutes 1988, section 276.09, is 
amended to read: 
    276.09 [SETTLEMENT BETWEEN AUDITOR AND TREASURER.] 
    On March 5, and May 20 of each year, the county treasurer 
shall make full settlement with the county auditor of all 
receipts collected for all purposes, from the date of the last 
settlement up to and including each day mentioned.  The county 
auditor shall, within 30 days after each the settlement, send an 
abstract of it to the state auditor in the form prescribed by 
the state auditor.  At each the settlement the treasurer shall 
make complete returns of the receipts on the current tax list, 
showing the amount collected on account of the several funds 
included in the list. 
    Settlement of receipts from May 20 to December 31 of each 
year must be made as provided in section 276.111. 
    For purposes of this section, "receipts" includes all tax 
payments received by the county treasurer on or before the 
settlement date.  
    Sec. 56.  Minnesota Statutes 1988, section 276.10, is 
amended to read: 
    276.10 [APPORTIONMENT AND DISTRIBUTION OF FUNDS.] 
    On the settlement day in March and May of each year, the 
county auditor and county treasurer shall distribute all 
undistributed funds in the treasury.  The funds must be 
apportioned as provided by law, and credited to the state, town, 
city, school district, special district and each county fund.  
Within 20 days after the distribution is completed, the county 
auditor shall report to the state auditor in the form prescribed 
by the state auditor.  The county auditor shall issue a warrant 
for the payment of money in the county treasury to the credit of 
the state, town, city, school district, or special districts on 
application of the persons entitled to receive the payment.  The 
county auditor may apply the tax capacity rate from the year 
before the year of distribution when apportioning and 
distributing delinquent tax proceeds, if the composition of the 
previous year's tax capacity rate between taxing districts is 
not significantly different than the tax capacity rate that 
existed for the year of the delinquency.  
    Sec. 57.  Minnesota Statutes 1988, section 276.11, 
subdivision 1, is amended to read: 
    Subdivision 1.  [GENERALLY.] As soon as practical after the 
March and May settlements settlement the county treasurer shall 
pay to the state treasurer or the treasurer of a town, city, 
school district, or special district, on the warrant of the 
county auditor, all receipts of taxes levied by the taxing 
district and deliver up all orders and other evidences of 
indebtedness of the taxing district, taking triplicate receipts 
for them.  The treasurer shall file one of the receipts with the 
county auditor, and shall return one by mail on the day of its 
receipt to the clerk of the town, city, school district, or 
special district to which payment was made.  The clerk shall 
keep the receipt in the clerk's office.  Upon written request of 
the taxing district, to the extent practicable, the county 
treasurer shall make partial payments of amounts collected 
periodically in advance of the next settlement and 
distribution.  A statement prepared by the county treasurer must 
accompany each payment.  It must state the years for which taxes 
included in the payment were collected and, for each year, the 
amount of the taxes and any penalties on the tax.  Upon written 
request of a taxing district, except school districts, the 
county treasurer shall pay at least 70 percent of the estimated 
collection within 30 days after the March and May settlement 
dates date.  Within seven business days after the due date, the 
county treasurer shall pay to the treasurer of the school 
districts 50 percent of the estimated collections arising from 
taxes levied by and belonging to the school district.  The 
remaining 50 percent of the estimated collections must be paid 
to the treasurer of the school district within the next seven 
business days.  The treasurer shall pay the balance of the 
amounts collected to the state or to a municipal corporation or 
other body within 60 days after the March and May settlement 
dates date.  After 45 days interest at an annual rate of eight 
percent accrues and must be paid to the taxing district.  
Interest must be paid upon appropriation from the general 
revenue fund of the county.  If not paid, it may be recovered by 
the taxing district, in a civil action. 
    Sec. 58.  Minnesota Statutes 1988, section 277.01, 
subdivision 1, is amended to read: 
    Subdivision 1.  All unpaid personal property taxes where 
the amount is $50 or less shall be deemed delinquent on the 
later of March 1 May 16 next after they become due or 30 days 
after the postmark date on the envelope containing the property 
tax statement, and thereupon a penalty of eight percent shall 
attach and be charged upon all such taxes.  When the amount of 
such tax exceeds the sum of $50 the first half shall become 
delinquent if not paid prior to March 1 or 30 days after the 
postmark date on the envelope containing the property tax 
statement, whichever is later, and thereupon a penalty of eight 
percent shall attach on such unpaid first half.  The second half 
of a tax in excess of $50 shall become delinquent if not paid 
prior to July 1 and thereupon a penalty of eight percent shall 
attach on such unpaid second half.  This section shall not apply 
to class 2a property. 
    A county may provide by resolution that in the case of a 
property owner that has multiple personal property tax 
statements with the aggregate taxes exceeding $50, payments may 
be made in installments as provided in this subdivision. 
    The county treasurer may accept payments of more or less 
than the exact amount of a tax installment due.  If the accepted 
payment is less than the amount due, payments must be applied 
first to the penalty accrued for the year the payment is made.  
Acceptance of partial payment of tax does not constitute a 
waiver of the minimum payment required as a condition for filing 
an appeal under section 277.011 or any other law, nor does it 
affect the order of payment of delinquent taxes under section 
280.39. 
    Sec. 59.  Minnesota Statutes 1988, section 277.02, is 
amended to read: 
    277.02 [DELINQUENT LIST FILED IN COURT.] 
    On the last secular day of July, By June 15 of each year, 
the county treasurer shall make a list of all personal property 
taxes remaining delinquent July first May 16, and shall 
immediately certify to and file the same with the court 
administrator of the district court of the county, and upon such 
filing the list shall be prima facie evidence that all of the 
provisions of law in relation to the assessment and levy of such 
taxes have been complied with.  
    Sec. 60.  Minnesota Statutes 1988, section 277.05, is 
amended to read: 
    277.05 [SHERIFF TO FILE LIST OF UNCOLLECTED TAXES.] 
    If the sheriff is unable, for want of goods and chattels 
whereon to levy, to collect by a distress, or otherwise, the 
taxes, or any part thereof, assessed upon the personal property 
of any persons, the sheriff shall file with the court 
administrator of the district court, on September first July 15 
following, a list of such taxes, with an affidavit of the 
sheriff, or of the deputy sheriff entrusted with the collection 
thereof, stating that the affiant has made diligent search and 
inquiry for goods and chattels from which to collect such taxes, 
and is unable to collect the same.  The list of such taxes as 
they apply to manufactured homes shall be filed on December 1.  
The sheriff shall note on the margin of such list the place to 
which any delinquent taxpayer may have removed, with the date of 
removal, if known.  At the time of filing the list the sheriff 
shall also return all the warrants with endorsements thereon 
showing the doings of the sheriff or deputy in the premises, and 
the court administrator shall file and preserve the same.  On or 
before September tenth thereafter, the court administrator shall 
deliver such list and affidavit to the county treasurer, who 
shall, by comparison of such list with the tax duplicates in the 
treasurer's office, ascertain whether or not all personal 
property taxes reported by the treasurer to the court 
administrator as delinquent, except those included in such list, 
have been paid into the treasurer's office, and shall attach to 
the list a certificate stating whether or not all taxes reported 
by the treasurer to the court administrator as delinquent and 
not included in the list have been received, and stating the 
items of such taxes, if any, as have been received.  The court 
administrator shall deliver such list and affidavit as they 
apply to manufactured homes on or before December 10.  The 
treasurer shall deliver such list and affidavit, with the 
certificate attached, to the county board at its first session 
thereafter, which shall cancel such taxes as it is satisfied 
cannot be collected.  A copy of the tax list so revised, and 
also a separate list of the taxes so canceled, shall be included 
in the records of the proceedings of the board, and published in 
full, as a part of the proceedings.  
    Sec. 61.  Minnesota Statutes 1988, section 277.06, is 
amended to read: 
    277.06 [CITATION TO DELINQUENTS; DEFAULT JUDGMENT.] 
    On October 20 September 5, or within ten days after the 
adjournment of the county board, whichever occurs first, the 
county auditor shall file a copy of such revised list with the 
court administrator of the district court.  The county auditor 
shall file a copy of the revised list as it applies to 
manufactured homes on January 20.  Within ten days after the 
list has been filed, the court administrator shall issue a 
citation to each delinquent named in the list, stating the 
amount of tax and penalty, and requiring such delinquent to 
appear on a day to be set by the district court in the county, 
appointed to be held at a time not less than 30 days after the 
issuance of such citation, and show cause, if any there be, why 
the delinquent should not pay the tax and penalty.  The citation 
shall be delivered for service to the sheriff of the county 
where such person may at the time reside or be.  If such person, 
after service of the citation, fails to pay such tax, penalty, 
and costs to the sheriff before the first day of the term, or on 
such day to show cause as aforesaid, the court shall direct 
judgment against the person for the amount of such tax, penalty, 
and costs.  When unable to serve the citation, the sheriff shall 
return the same to the court administrator, with a return 
thereto to that effect, and thereupon, or if the court decides 
that the service of such citation made or attempted to be made, 
or the issuance thereof by the court administrator, was illegal, 
the court administrator shall issue another like citation, 
requiring such delinquent to appear on the first day of the next 
general term to be held in the county, and show cause as 
aforesaid, and if the delinquent fails to pay or to show cause, 
the court shall direct judgment as aforesaid.  Whenever the 
sheriff has been unable to serve any such citation theretofore 
issued in any year or years, or whenever the court decides that 
the service of any such citation theretofore made or attempted 
to be made, or the issuance thereof by the court administrator, 
was illegal, the court administrator shall issue another like 
citation requiring such delinquent to appear, as in the case 
last provided, and with like effect; provided, that all 
citations other than the first shall be issued only on the 
request of the county attorney. 
    Sec. 62.  Minnesota Statutes 1988, section 277.13, is 
amended to read: 
    277.13 [REMOVAL OF DELINQUENT; DUTY OF COUNTY AUDITOR.] 
    Within 30 days after June first By July 30, in each year, 
the county auditor shall make out and forward to the court 
administrator of the district court of any county to which any 
delinquent personal property taxpayer may have removed a 
statement of such delinquent taxes, specifying the value of the 
property on which such taxes were levied and the amount of the 
taxes, to which the auditor shall add an amount equal to 25 
percent on the taxes levied if such delinquent taxpayer left the 
county in which the taxes were levied after the day upon which 
they became due, but not otherwise.  On receipt of such 
statement or account, the court administrator shall issue a 
warrant to the sheriff of the county, who shall immediately 
proceed to collect the same of the person so charged with the 
taxes and percent, together with a court administrator's fee of 
25 cents for each warrant so issued.  The sheriff shall deliver 
such warrant, with the doings thereunder, to the court 
administrator, together with the amount of collections thereon.  
The court administrator shall remit all taxes thus collected to 
the treasurer of the county to which they belong, and at the 
same time shall return the original statement to the auditor of 
such county, certifying the amount of such collections, and, if 
any taxes remain unpaid, the reason why they could not be 
collected.  The auditor shall charge the treasurer to whom such 
remittance is made with the amount thereof, and cancel such 
taxes from the list.  Receipts shall be issued to the sheriff 
for delinquent taxes collected and the payment shall be made in 
the manner provided in section 276.05.  
    Sec. 63.  Minnesota Statutes 1989 Supplement, section 
469.033, subdivision 6, is amended to read: 
    Subd. 6.  [OPERATION AREA AS TAXING DISTRICT, SPECIAL TAX.] 
All of the territory included within the area of operation of 
any authority shall constitute a taxing district for the purpose 
of levying and collecting special benefit taxes as provided in 
this subdivision.  All of the taxable property, both real and 
personal, within that taxing district shall be deemed to be 
benefited by projects to the extent of the special taxes levied 
under this subdivision.  Subject to the consent by resolution of 
the governing body of the city in and for which it was created, 
an authority may levy each year a tax upon all taxable property 
within that taxing district.  The authority shall certify the 
tax to the auditor of the county in which the taxing district is 
located on or before October 10 five working days after December 
20 in each year.  The tax shall be extended, spread, and 
included with and as a part of the general taxes for state, 
county, and municipal purposes by the county auditor, to be 
collected and enforced therewith, together with the penalty, 
interest, and costs.  As the tax, including any penalties, 
interest, and costs, is collected by the county treasurer it 
shall be accumulated and kept in a separate fund to be known as 
the "housing and redevelopment project fund."  The money in the 
fund shall be turned over to the authority at the same time and 
in the same manner that the tax collections for the city are 
turned over to the city, and shall be expended only for the 
purposes of sections 469.001 to 469.047.  It shall be paid out 
upon vouchers signed by the chair of the authority or an 
authorized representative.  The amount of the levy shall be an 
amount approved by the governing body of the city, but shall not 
exceed .0081 percent of taxable market value except that in 
cities of the first class having a population of less than 
200,000, the levy shall not exceed .00403 percent of taxable 
market value.  The authority may levy an additional levy, not to 
exceed .0008 percent of taxable market value, to be used to 
defray costs of providing informational service and relocation 
assistance as set forth in section 462.445, subdivision 4.  The 
authority shall each year formulate and file a budget in 
accordance with the budget procedure of the city in the same 
manner as required of executive departments of the city or, if 
no budgets are required to be filed, by August 1.  The amount of 
the tax levy for the following year shall be based on that 
budget and shall be approved by the governing body. 
    Sec. 64.  Minnesota Statutes 1988, section 469.171, is 
amended by adding a subdivision to read: 
    Subd. 7a.  [PROPERTY TAX CREDIT; APPROPRIATION.] There is 
annually appropriated from the general fund to the commissioner 
of revenue the amounts required to reimburse taxing 
jurisdictions for the revenue lost due to the property tax 
credit provided in subdivision 1, clause (4).  Payment shall be 
made to taxing jurisdictions in the same proportion that the ad 
valorem tax is distributed.  Payment shall be made to taxing 
jurisdictions, other than school districts, at the times 
provided in section 477A.015.  
    Sec. 65.  Minnesota Statutes 1988, section 469.177, 
subdivision 6, is amended to read: 
    Subd. 6.  [REQUEST FOR CERTIFICATION OF NEW TAX INCREMENT 
FINANCING DISTRICT.] A request for certification of a new tax 
increment financing district pursuant to subdivision 1 or of a 
modification to an existing tax increment financing district 
pursuant to section 469.175, subdivision 4, received by the 
county auditor on or before October 10 July 1 of the calendar 
year shall be recognized by the county auditor in determining 
tax capacity rates for the current and subsequent levy years.  
Requests received by the county auditor after October 10 July 1 
of the calendar year shall not be recognized by the county 
auditor in determining tax capacity rates for the current levy 
year but shall be recognized by the county auditor in 
determining tax capacity rates for subsequent levy years.  
    Sec. 66.  Minnesota Statutes 1988, section 473.167, 
subdivision 4, is amended to read: 
    Subd. 4.  [STATE REVIEW.] The council must certify its 
property tax levy to the commissioner of revenue by August 1 of 
the levy year.  The commissioner of revenue shall annually 
determine whether the property tax for the right-of-way 
acquisition loan fund certified by the metropolitan council for 
levy following the adoption of its budget is within the levy 
limitation imposed by this section.  To the extent practicable, 
The determination must be completed prior to November September 
1 of each year.  If current information regarding market 
valuation in any county is not transmitted to the commissioner 
in a timely manner, the commissioner may estimate the current 
market valuation within that county for purposes of making the 
calculation. 
    Sec. 67.  Minnesota Statutes 1988, section 473.249, 
subdivision 2, is amended to read: 
    Subd. 2.  The council must certify its property tax levy to 
the commissioner of revenue by August 1 of the levy year.  The 
commissioner of revenue shall annually determine whether the ad 
valorem property tax certified by the metropolitan council for 
levy following the adoption of its budget is within the levy 
limitation imposed by this section.  To the extent practicable, 
The determination shall be completed prior to December September 
1 of each year.  If current information regarding gross tax 
capacity in any county is not transmitted to the commissioner in 
a timely manner, the commissioner may estimate the current gross 
tax capacity within that county for purposes of making the 
calculation. 
    Sec. 68.  Minnesota Statutes 1988, section 473.446, 
subdivision 8, is amended to read: 
    Subd. 8.  [STATE REVIEW.] The board must certify its 
property tax levy to the commissioner of revenue by August 1 of 
the levy year.  The commissioner of revenue shall annually 
determine whether the property tax for general purposes 
certified by the regional transit board for levy following the 
adoption of its budget is within the levy limitation imposed by 
subdivision 1.  The commissioner shall also annually determine 
whether the transit tax imposed on all taxable property within 
the metropolitan transit area but outside of the metropolitan 
transit taxing district is within the levy limitation imposed by 
subdivision 1a.  To the extent practicable, The determination 
must be completed prior to November September 1 of each year.  
If current information regarding market valuation in any county 
is not transmitted to the commissioner in a timely manner, the 
commissioner may estimate the current market valuation within 
that county for purposes of making the calculations. 
    Sec. 69.  Minnesota Statutes 1988, section 473.711, 
subdivision 5, is amended to read: 
    Subd. 5.  [STATE REVIEW.] The commission must certify its 
property tax levy to the commissioner of revenue by August 1 of 
the levy year.  The commissioner of revenue shall annually 
determine whether the property tax certified by the metropolitan 
mosquito control commission for levy following the adoption of 
its budget is within the levy limitation imposed by subdivision 
2.  To the extent practicable, The determination must be 
completed prior to November September 1 of each year.  If 
current information regarding market valuation in any county is 
not transmitted to the commissioner in a timely manner, the 
commissioner may estimate the current market valuation within 
that county for purposes of making the calculation. 
    Sec. 70.  Minnesota Statutes 1988, section 473F.05, is 
amended to read: 
    473F.05 [GROSS TAX CAPACITY; 1988 AND SUBSEQUENT YEARS.] 
    On or before November 20 August 5 of 1988 and 
each subsequent year, the assessors within each county in the 
area shall determine and certify to the county auditor the gross 
tax capacity in that year of commercial-industrial property 
subject to taxation within each municipality in the county, 
determined without regard to section 469.177, subdivision 3.  
    Sec. 71.  Minnesota Statutes 1988, section 473F.06, is 
amended to read: 
    473F.06 [INCREASE IN GROSS TAX CAPACITY.] 
    On or before September 1 July 15 of 1976 and 
each subsequent year, the auditor of each county in the area 
shall determine the amount, if any, by which the gross tax 
capacity determined in the preceding year pursuant to section 
473F.05, of commercial-industrial property subject to taxation 
within each municipality in the auditor's county exceeds the 
gross tax capacity in 1971 of commercial-industrial property 
subject to taxation within that municipality.  If a municipality 
is located in two or more counties within the area, the auditors 
of those counties shall certify the data required by section 
473F.05 to the county auditor who is responsible under other 
provisions of law for allocating the levies of that municipality 
between or among the affected counties.  That county auditor 
shall determine the amount of the net excess, if any, for the 
municipality under this section, and certify that amount under 
section 473F.07.  Notwithstanding any other provision of 
sections 473F.01 to 473F.13 to the contrary, in the case of a 
municipality which is designated on July 24, 1971, as a 
redevelopment area pursuant to section 401(a)(4) of the Public 
Works and Economic Development Act of 1965, Public Law Number 
89-136, the increase in its gross tax capacity of 
commercial-industrial property for purposes of this section 
shall be determined in each year subsequent to the termination 
of such designation by using as a base the gross tax capacity of 
commercial-industrial property in that municipality in the year 
following that in which such designation is terminated, rather 
than the gross tax capacity of such property in 1971.  The 
increase in gross tax capacity determined by this section shall 
be reduced by the amount of any decreases in the gross tax 
capacity of commercial-industrial property resulting from any 
court decisions, court related stipulation agreements, or 
abatements for a prior year, and only in the amount of such 
decreases made during the 12-month period ending on June 30 May 
1 of the current assessment year, where such decreases, if 
originally reflected in the determination of a prior year's 
gross tax capacity under section 473F.05, would have resulted in 
a smaller contribution from the municipality in that year.  An 
adjustment for such decreases shall be made only if the 
municipality made a contribution in a prior year based on the 
higher gross tax capacity of the commercial-industrial property. 
    Sec. 72.  Minnesota Statutes 1988, section 473F.07, 
subdivision 1, is amended to read: 
    Subdivision 1.  Each county auditor shall certify the 
determinations pursuant to sections 473F.05 and 473F.06 to the 
administrative auditor on or before November 20 August 1 of each 
year.  The administrative auditor shall determine the sum of the 
amounts certified pursuant to section 473F.06, and divide that 
sum by 2-1/2.  The resulting amount shall be known as the 
"areawide gross tax capacity for ........(year)." 
    Sec. 73.  Minnesota Statutes 1988, section 473F.07, 
subdivision 2, is amended to read: 
    Subd. 2.  The commissioner of revenue shall certify to the 
administrative auditor, on or before November 20 August 10 of 
each year, the population of each municipality for the second 
preceding year, the proportion of that population which resides 
within the area, the average fiscal capacity of municipalities 
for the preceding year, and the fiscal capacity of each 
municipality for the preceding year. 
    Sec. 74.  Minnesota Statutes 1988, section 473F.07, 
subdivision 5, is amended to read: 
    Subd. 5.  The product of the multiplication prescribed by 
subdivision 4 shall be known as the "areawide gross tax capacity 
for ........(year) attributable to 
..................(municipality)."  The administrative auditor 
shall certify such product to the auditor of the county in which 
the municipality is located on or before November 25 August 15. 
    Sec. 75.  Minnesota Statutes 1988, section 473F.08, 
subdivision 3, is amended to read: 
    Subd. 3.  On or before October 15 of 1976 and each 
subsequent year, The county auditor shall apportion the levy of 
each governmental unit in the auditor's county in the manner 
prescribed by this subdivision.  The auditor shall: 
    (a) by August 20, determine the areawide portion of the 
levy for each governmental unit by multiplying the tax capacity 
rate of the governmental unit for the preceding levy year times 
the distribution value set forth in subdivision 2, clause (b); 
and 
    (b) by September 5, determine the local portion of the 
current year's levy by subtracting the resulting amount from 
clause (a) from the governmental unit's current year's levy. 
    Sec. 76.  Minnesota Statutes 1988, section 473F.08, 
subdivision 5, is amended to read: 
    Subd. 5.  On or before November 30 of 1972 and August 25 of 
each subsequent year, the county auditor shall certify to the 
administrative auditor that portion of the levy of each 
governmental unit determined pursuant to subdivision 3, clause 
(a).  The administrative auditor shall then determine the tax 
capacity rate sufficient to yield an amount equal to the sum of 
such levies from the areawide gross tax capacity.  On or before 
December 5 September 1 of each year, the administrative auditor 
shall certify said rate to each of the county auditors. 
    Sec. 77.  Minnesota Statutes 1988, section 473F.09, is 
amended to read: 
    473F.09 [ADJUSTMENTS IN DATES.] 
    If, by reason of the enactment of any other law, the date 
by which the commissioner of revenue is required to certify to 
the county auditors the records of proceedings affecting the 
gross tax capacity of property is advanced to a date earlier 
than November 15 June 30, the dates specified in sections 
473F.07 and 473F.10 may be modified in the years to which such 
other law applies in the manner and to the extent prescribed by 
the administrative auditor. 
    Sec. 78.  Minnesota Statutes 1988, section 473H.10, 
subdivision 3, is amended to read: 
    Subd. 3.  [COMPUTATION OF TAX; STATE REIMBURSEMENT.] (a) 
After having determined the market value of all land valued 
according to subdivision 2, the assessor shall compute the gross 
tax capacity of those properties by applying the appropriate 
classification percentages.  When computing the rate of tax 
pursuant to section 275.08, the county auditor shall include the 
gross tax capacity of land as provided in this clause.  
     (b) The county auditor shall compute the tax on lands 
valued according to subdivision 2 and nonresidential buildings 
by multiplying the gross tax capacity times the total rate of 
tax for all purposes as provided in clause (a).  
     (c) The county auditor shall then compute the maximum ad 
valorem property tax on lands valued according to subdivision 2 
and nonresidential buildings by multiplying the gross tax 
capacity times 105 percent of the previous year's statewide 
average tax capacity rate levied on property located within 
townships for all purposes.  
     (d) The tax due and payable by the owner of preserve land 
valued according to subdivision 2 and nonresidential buildings 
will be the amount determined in clause (b) or (c), whichever is 
less.  If the gross tax in clause (c) is less than the gross tax 
in clause (b), the state shall reimburse the taxing 
jurisdictions for the amount of difference.  Residential 
buildings shall continue to be valued and classified according 
to the provisions of sections 273.11 and 273.13, as they would 
be in the absence of this section, and the tax on those 
buildings shall not be subject to the limitation contained in 
this clause.  
    The county may transfer money from the county conservation 
account created in section 40A.152 to the county revenue fund to 
reimburse the fund for the tax lost as a result of this 
subdivision or to pay taxing jurisdictions within the county for 
the tax lost.  The county auditor shall certify to the 
commissioner of revenue on or before June 1 the total amount of 
tax lost to the county and taxing jurisdictions located within 
the county as a result of this subdivision and the extent that 
the tax lost exceeds funds available in the county conservation 
account.  Payments shall be made by the state as provided in 
section 273.13, subdivision 15a, at the times provided in 
section 477A.015 to each of the affected taxing jurisdictions, 
other than school districts, in the same proportion that the ad 
valorem tax is distributed if the county conservation account is 
insufficient to make the reimbursement.  There is annually 
appropriated from the Minnesota conservation fund under section 
40A.151 to the commissioner of revenue an amount sufficient to 
make the reimbursement provided in this subdivision.  If the 
amount available in the Minnesota conservation fund is 
insufficient, the balance that is needed is appropriated from 
the general fund. 
    Sec. 79.  Minnesota Statutes 1988, 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 for the preceding calendar year.  The term "per 
capita" refers to population as defined by this subdivision. 
    Sec. 80.  Minnesota Statutes 1988, section 477A.011, 
subdivision 3a, is amended to read: 
    Subd. 3a.  [NUMBER OF HOUSEHOLDS.] Number of households 
means the number of households established by the most recent 
federal census, by a special census conducted under contract 
with the United States bureau of the census, by an estimate made 
by the metropolitan council, or by an estimate of the state 
demographer made pursuant to section 116K.04, subdivision 4, 
whichever is the most recent as to the stated date of the count 
or estimate for the preceding calendar year. 
    Sec. 81.  [APPROPRIATION.] 
    $1,840,000 is appropriated for fiscal year 1991 from the 
general fund to the commissioner of revenue to reimburse 
counties for costs of compliance with Minnesota Statutes, 
section 275.065, for taxes payable in 1991.  This appropriation 
must be apportioned among the counties and distributed by the 
commissioner of revenue in the same manner that the 
appropriation in Laws 1988, chapter 719, article 5, section 85, 
was apportioned and distributed. 
    Sec. 82.  [APPROPRIATION; COMPLEMENT INCREASE.] 
    $60,000 is appropriated for fiscal year 1990 and $80,000 
for fiscal year 1991 is appropriated from the general fund to 
the commissioner of education for costs to administer Minnesota 
Statutes, section 275.065.  The complement of the education 
finance and analysis section of the department of education is 
increased by two. 
    Sec. 83.  [PROPOSED PROPERTY TAXES; NOTICE FOR PROPERTY 
TAXES PAYABLE IN 1990.] 
    Subdivision 1.  [APPLICABILITY.] Notwithstanding Minnesota 
Statutes, section 275.065, or any other law or charter to the 
contrary, for property taxes levied in 1989 and payable in 1990, 
proposed budgets and property tax levies shall be certified and 
adopted under this section. 
    Subd. 2.  [PROPOSED LEVY.] On or before November 15, 1989, 
each taxing authority, other than a school district, shall adopt 
a proposed budget and each taxing authority shall certify to the 
county auditor the proposed property tax levy.  For purposes of 
this section, "taxing authority" includes all home rule and 
statutory cities with a population over 2,500, counties, school 
districts, the metropolitan council, and the metropolitan 
regional transit commission. 
    Subd. 3.  [FORM OF NOTICE.] (a) Each taxing authority shall 
publish an advertisement at least five weekdays before a public 
budget hearing or public property tax levy hearing that includes:
    (1) the hour, date, and place of hearing; and the hour, 
date, and place for a continuation of the hearing if the hearing 
is not completed on the original date; 
    (2) the total dollar amount of the proposed property taxes 
payable in 1990 to be levied by the taxing authority; 
    (3) the percentage of increase or decrease between the 
proposed property tax payable in 1990 over the amount of 
property taxes payable in 1989; and 
    (4) a statement inviting all citizens to attend and 
participate in the hearing. 
    (b) In the case of cities, the notice may include a 
statement that part of a percentage increase in property taxes 
under paragraph (a), clause (3), reflects a transfer of state 
aid dollars from the city to the school district to reduce 
school district taxes, and is not caused by increased city 
spending. 
    Subd. 4.  [PUBLICATION OF NOTICE.] (a) Taxing authorities 
located within the counties of Hennepin, Ramsey, Dakota, 
Washington, Anoka, Carver, and Scott and not located partly 
within any other county must publish the notice provided under 
subdivision 3 in the community section of the Minneapolis Star 
Tribune or the St. Paul Pioneer Press-Dispatch, whichever is 
circulated to the greatest number of people within the taxing 
authority.  The notice must be published in the edition of the 
community section that regularly publishes news of the taxing 
authority area. 
    (b) All taxing authorities not included in paragraph (a), 
except for cities with a population over 2,500, shall publish 
the notice provided under subdivision 3 in the official 
newspaper of the taxing authority. 
    (c) Cities with populations over 2,500 not included in 
paragraph (a) shall publish the notice provided under 
subdivision 3 in a daily newspaper that is printed in the city 
for circulation in the city.  If there is no daily newspaper 
printed in the city, the notice must be published in the weekly 
newspaper of the greatest circulation that is printed in the 
city for circulation in the city.  If there is no daily or 
weekly newspaper printed in the city for circulation in the city 
then the notice must be published in a daily newspaper printed 
in the county in which the city is located for circulation 
within the county.  If there is no daily newspaper printed in 
the county for circulation in the county, the notice must be 
published in the weekly newspaper of the greatest circulation 
that is printed in the county for circulation in the county. 
    (d) For purposes of paragraphs (b) and (c), the newspapers 
in which the notices are published must meet the following 
requirements: 
    (1) the newspaper must be sold; 
    (2) the newspaper must regularly contain news articles of 
general interest; 
    (3) the newspaper must be delivered directly to subscribers 
by mail or carrier; and 
    (4) if there is no newspaper of general circulation that is 
sold within the taxing authority, the notice may be published in 
a free newspaper if the free newspaper meets the requirements of 
clauses (2) and (3). 
    Subd. 5.  [PUBLIC HEARING.] On or before December 28, 1989, 
the governing body of each taxing authority shall hold a public 
hearing to adopt its final budget and property tax levy, or, in 
the case of a school district, its property tax levy, for taxes 
payable in 1990. 
     At the hearing, the taxing authority, other than a school 
district, may amend the proposed budget and property tax levy 
and must adopt a final budget and property tax levy, and the 
school district may amend the proposed property tax levy and 
must adopt a final property tax levy. 
     Subd. 6.  [ADDITIONS TO LEVY.] (a) The adopted property tax 
levy must not exceed the proposed levy, except by an amount up 
to the sum of the following amounts: 
    (1) the amount of a school district levy whose voters 
approved a referendum to increase taxes under section 124A.03, 
subdivision 2, after the proposed levy was certified; 
    (2) the amount of a city or county levy approved by the 
voters under section 275.58 after the proposed levy was 
certified; 
    (3) the amount of a levy to pay principal and interest on 
bonds issued or approved by the voters under section 475.58 
after the proposed levy was certified; 
    (4) the amount of a levy to pay costs due to a natural 
disaster occurring after the proposed levy was certified, if 
that amount is approved by the commissioner of revenue under 
this subdivision; and 
    (5) the amount of a levy to pay tort judgments against a 
taxing authority that become final after the proposed levy was 
certified, if the amount is approved by the commissioner of 
revenue under this subdivision. 
    (b) A taxing authority may appeal to the commissioner of 
revenue for authorization to levy an amount over the amount of 
the proposed levy under clause (4) or (5).  The taxing authority 
must provide evidence satisfactory to the commissioner that it 
has incurred costs for the purposes specified in this 
subdivision.  The commissioner may approve an increase in the 
taxing authority's levy of up to the amount of costs incurred or 
a lesser amount determined by the commissioner.  The 
commissioner's decision is final.  
    A levy addition may be made under this subdivision only if 
the following costs incurred after the proposed levy is 
certified are:  (1) the unreimbursed costs to satisfy judgments 
rendered against the taxing authority by a court of competent 
jurisdiction in a tort action in excess of $50,000 or ten 
percent of the current year's proposed certified levy whichever 
is less; and (2) the costs incurred in clean up of a natural 
disaster.  For purposes of this subdivision, "natural disaster" 
includes the occurrence or threat of widespread or severe 
damage, injury, or loss of life or property resulting from 
causes such as earthquake, fire, flood, windstorm, wave action, 
oil spill, water contamination, air contamination, or drought. 
    Subd. 7.  [CERTIFICATION.] Each taxing authority shall 
certify its final levy for property taxes payable in 1990 on or 
before December 28, 1989. 
    Subd. 8.  [APPROVAL OF COMMISSIONER.] Each taxing authority 
shall certify to the commissioner of revenue its compliance with 
this section.  The certification must contain copies of the 
advertisement required under subdivision 4, the final property 
tax levy under subdivision 5, and any other information required 
by the commissioner.  If the commissioner determines that the 
taxing authority has failed to substantially comply with this 
section, the commissioner shall notify the county auditor.  The 
decision of the commissioner is final.  When fixing rates under 
section 275.08 for a taxing authority that has not complied with 
this section, the county auditor must use the taxing authority's 
1988 property tax levy. 
     Subd. 9.  [NEW NOTICE AND HEARING REQUIRED.] Each taxing 
authority must comply with the provisions of this section for 
taxes levied in 1989.  If a taxing authority has published a 
notice or had a public hearing prior to the date of final 
enactment of this act that does not comply with the provisions 
of this section, or if a proposed levy or adopted levy will 
change as a result of the provisions of this act, the taxing 
authority must publish a correct notice and hold a hearing that 
complies with the provisions of this section. 
    Sec. 84.  [PRESCRIPTION OF TAX STATEMENTS; NOTIFICATION.] 
    At least 15 working days before the commissioner of revenue 
prescribes the property tax statement for taxes payable in 1990 
as required under Minnesota Statutes, section 276.04, the 
commissioner shall notify the chairs of the senate committee on 
taxes and tax laws and the house committee on taxes of the 
property tax statement that the commissioner proposes to 
prescribe.  The commissioner shall consider the advice and 
comments of the chairs before prescribing the statement.  
    Sec. 85.  [REPEALER.] 
    Minnesota Statutes 1988, sections 270.81, subdivision 5; 
and 275.065, subdivisions 2 and 5, are repealed. 
    Sec. 86.  [EFFECTIVE DATES.] 
    Section 5 is effective for school district referenda held 
after July 15, 1990, for property taxes levied in 1990, payable 
in 1991, and thereafter. 
    Sections 1 to 4, 6 to 8, 10 to 12, 17, 19 to 21, 26 to 30, 
41 to 48, 50 to 52, and 66 to 77 are effective for taxes levied 
in 1990, payable in 1991, and thereafter. 
    The part of section 9 changing the meeting date of the 
state board of equalization is effective for taxes levied in 
1990, payable in 1991, and thereafter.  The rest of section 9 
and sections 13 to 16, 22 to 25, 78, and 82, 84, and 85 are 
effective the day following final enactment. 
    Section 18 is effective for sales after January 1, 1990. 
    Sections 31 to 38 and 40 are effective for taxes levied in 
1990, payable in 1991, and thereafter, except as otherwise 
provided. 
    Sections 39, 49, 54 to 64, 79, and 80 are effective for 
property taxes levied in 1989, payable in 1990, and thereafter. 
    Section 53 is effective for property taxes levied in 1989, 
payable in 1990, and thereafter, except that the provision 
requiring certification of aids by September 1, is effective for 
taxes levied in 1990, payable in 1991, and thereafter. 
    Sections 65 and 81 are effective July 1, 1990. 
    Section 83 is effective only for taxes levied in 1989, 
payable in 1990. 

                               ARTICLE 10

                        INCOME AND BUSINESS TAXES
    Section 1.  Minnesota Statutes 1988, section 10A.31, 
subdivision 5, is amended to read: 
    Subd. 5.  In each calendar year the money in the general 
account shall be allocated to candidates as follows: 
    (1) 21 percent for the offices of governor and lieutenant 
governor together; 
    (2) 3.6 percent for the office of attorney general; 
    (3) 1.8 percent each for the offices of secretary of state, 
state auditor, and state treasurer; 
    (4) In each calendar year during the period in which state 
senators serve a four-year term, 23-1/3 percent for the office 
of state senator and 46-2/3 percent for the office of state 
representative; 
    (5) In each calendar year during the period in which state 
senators serve a two-year term, 35 percent each for the offices 
of state senator and state representative. 
    In each calendar year the money in each party account shall 
be allocated as follows: 
    (1) 14 percent for the offices of governor and lieutenant 
governor together; 
    (2) 2.4 percent for the office of attorney general; 
    (3) 1.2 percent each for the offices of secretary of state, 
state auditor, and state treasurer; 
    (4) In each calendar year during the period in which state 
senators serve a four-year term, 23-1/3 percent for the office 
of state senator and 46-2/3 percent for the office of state 
representative; 
    (5) In each calendar year during the period in which state 
senators serve a two-year term, 35 percent each for the offices 
of state senator and state representative; 
    (6) ten percent for the state committee of a political 
party; money allocated to each state committee under this clause 
must be deposited in a separate account and must be spent for 
legitimate political party operations, including voter 
education; the sample ballot; operations of precinct caucuses, 
county unit conventions, and state conventions; and the 
maintenance and programming of computers used to provide lists 
of voters, party workers, party officers, patterns of voting, 
and other data for use in political party activities only those 
items enumerated in section 10A.275; money allocated to a state 
committee under this clause must be paid to the committee by the 
state treasurer as notified by the state ethical practices board 
as it is received in the account, on a monthly or other basis 
agreed to between the committee and the board., with payment on 
the 15th day of the calendar month following the month in which 
the tax returns were received, provided that these distributions 
would be equal to the amount of money indicated in the 
department of revenue's weekly unedited reports of income tax 
returns for that month, subject to final annual adjustment and 
settlement as indicated according to the certification by the 
commissioner of revenue under subdivision 6.  If the amount of 
total payments received before September 15 is greater than the 
amount certified by the commissioner of revenue on September 15, 
the total amount of payments distributed between September 1 and 
December 31 must be reduced by the amount of the overpayment. 
    To assure that moneys will be returned to the counties from 
which they were collected, and to assure that the distribution 
of those moneys rationally relates to the support for particular 
parties or for particular candidates within legislative 
districts, money from the party accounts for legislative 
candidates shall be distributed as follows: 
     Each candidate for the state senate and state house of 
representatives whose name is to appear on the ballot in the 
general election shall receive money from the candidate's party 
account set aside for candidates of the state senate or state 
house of representatives, whichever applies, according to the 
following formula; 
     For each county within the candidate's district the 
candidate's share of the dollars allocated in that county to the 
candidate's party account and set aside for that office shall be:
     (a) The sum of the votes cast in the last general election 
in that part of the county in the candidate's district for all 
candidates of that candidate's party (i) whose names appeared on 
the ballot in each voting precinct of the state and (ii) for the 
state senate and state house of representatives, divided by 
     (b) The sum of the votes cast in that county in the last 
general election for all candidates of that candidate's party 
(i) whose names appeared on the ballot in each voting precinct 
in the state and (ii) for the state senate and state house of 
representatives, multiplied by 
     (c) The amount in the candidate's party account allocated 
in that county and set aside for the candidates for the office 
for which the candidate is running. 
     The sum of all the county shares calculated in the formula 
above is the candidate's share of the candidate's party account. 
     In a year in which an election for the state senate occurs, 
with respect to votes for candidates for the state senate only, 
"last general election" means the last general election in which 
an election for the state senate occurred. 
     For any party under whose name no candidate's name appeared 
on the ballot in each voting precinct in the state in the last 
general election, amounts in the party's account shall be 
allocated based on (a) the number of people voting in the last 
general election in that part of the county in the candidate's 
district, divided by (b) the number of the people voting in that 
county in the last general election, multiplied by (c) the 
amount in the candidate's party account allocated in that county 
and set aside for the candidates for the office for which the 
candidate is running. 
     In a year in which the first election after a legislative 
reapportionment is held, "the candidate's district" means the 
newly drawn district, and voting data from the last general 
election will be applied to the area encompassing the newly 
drawn district notwithstanding that the area was in a different 
district in the last general election. 
     If in a district there was no candidate of a party for the 
state senate or state house of representatives in the last 
general election, or if a candidate for the state senate or 
state house of representatives was unopposed, the vote for that 
office for that party shall be the average vote of all the 
remaining candidates of that party in each county of that 
district whose votes are included in the sums in clauses (a) and 
(b).  The average vote shall be added to the sums in clauses (a) 
and (b) before the calculation is made for all districts in the 
county. 
     Money from a party account not distributed to candidates 
for state senator and representative in any election year shall 
be returned to the general fund of the state.  Money from a 
party account not distributed to candidates for other offices in 
an election year shall be returned to the party account for 
reallocation to candidates as provided in clauses (1) to (6) in 
the following year.  Money from the general account refused by 
any candidate shall be distributed to all other qualifying 
candidates in proportion to their shares as provided in this 
subdivision.  
    Sec. 2.  Minnesota Statutes 1988, section 60A.14, 
subdivision 1, is amended to read: 
    Subdivision 1.  [FEES OTHER THAN EXAMINATION FEES.] In 
addition to the fees and charges provided for examinations, the 
following fees must be paid to the commissioner for deposit in 
the general fund: 
    (a) by township mutual fire insurance companies: 
    (1) for filing certificate of incorporation $25 and 
amendments thereto, $10; 
    (2) for filing annual statements, $15; 
    (3) for each annual certificate of authority, $15; 
    (4) for filing bylaws $25 and amendments thereto, $10. 
    (b) by other domestic and foreign companies including 
fraternals and reciprocal exchanges: 
    (1) for filing certified copy of certificate of articles of 
incorporation, $100; 
     (2) for filing annual statement, $225; 
     (3) for filing certified copy of amendment to certificate 
or articles of incorporation, $100; 
     (4) for filing bylaws, $75 or amendments thereto, $75; 
     (5) for each company's certificate of authority, $575, 
annually. 
     (c) the following general fees apply: 
     (1) for each certificate, including certified copy of 
certificate of authority, renewal, valuation of life policies, 
corporate condition or qualification, $15; 
     (2) for each copy of paper on file in the commissioner's 
office 50 cents per page, and $2.50 for certifying the same; 
     (3) for license to procure insurance in unadmitted foreign 
companies, $575; 
     (4) for receiving and forwarding each notice, proof of 
loss, summons, complaint or other process served upon the 
commissioner of commerce, as attorney for service of process 
upon any nonresident agent or insurance company, including 
reciprocal exchanges, $15 plus the cost of effectuating service 
by certified mail, which amount must be paid by the party 
serving the notice and may be taxed as other costs in the 
action; 
    (5) for valuing the policies of life insurance companies, 
one cent per $1,000 of insurance so valued, provided that the 
fee shall not exceed $1,000 per year for any company.  The 
commissioner may, in lieu of a valuation of the policies of any 
foreign life insurance company admitted, or applying for 
admission, to do business in this state, accept a certificate of 
valuation from the company's own actuary or from the 
commissioner of insurance of the state or territory in which the 
company is domiciled; 
    (6) for receiving and filing certificates of policies by 
the company's actuary, or by the commissioner of insurance of 
any other state or territory, $50; 
    (7) for issuing an initial license to an individual agent, 
$20 per license, for issuing an initial agent's license to a 
partnership or corporation, $50, and for issuing an amendment 
(variable annuity) to a license, $20, and for renewal of 
amendment, $20; 
    (8) for each appointment of an agent filed with the 
commissioner, a domestic insurer shall remit $5 and all other 
insurers shall remit $3; 
    (9) for renewing an individual agent's license, $20 per 
year per license, and for renewing a license issued to a 
corporation or partnership, $50 per year; 
    (10) for issuing and renewing a surplus lines agent's 
license, $150; 
    (11) for issuing duplicate licenses, $5; 
    (12) for issuing licensing histories, $10; 
    (13) for filing forms and rates, $50 per filing; 
    (14) for annual renewal of surplus lines insurer license, 
$300. 
    The commissioner shall adopt rules to define filings that 
are subject to a fee. 
    Sec. 3.  Minnesota Statutes 1988, section 60A.15, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DOMESTIC AND FOREIGN COMPANIES.] (a) On or 
before April 15, June 15, and December 15 of each year, every 
domestic and foreign company, including town and farmers' mutual 
insurance companies and domestic mutual insurance companies, 
shall pay to the commissioner of revenue installments equal to 
one-third of the insurer's total estimated tax for the current 
year.  For insurers other than town and farmers' mutual 
insurance companies and mutual property and casualty insurance 
companies other than those (i) principally writing workers' 
compensation insurance, (ii) writing life insurance, or (iii) 
whose total assets at the end of the preceding calendar year 
exceed $1,600,000,000 Except as provided in paragraph (b), 
installments must be based on a sum equal to two percent of the 
premiums described in paragraph (b) (c).  
    (b) For town and farmers' mutual insurance companies and 
mutual property and casualty insurance companies other than 
those (i) principally writing workers' compensation insurance, 
(ii) writing life insurance, or (iii) (ii) whose total assets at 
the end of the preceding calendar year exceed $1,600,000,000, 
the installments must be based on an amount equal to the 
following percentages of the premiums described in 
paragraph (b) (c):  
    (1) for premiums paid after December 31, 1987, and before 
January 1, 1989, 1.5 percent; 
    (2) for premiums paid after December 31, 1988, and before 
January 1, 1992, one percent; and 
    (3) (2) for premiums paid after December 31, 1991, one-half 
of one percent. 
    (b) (c) Installments under paragraph (a) or (b) are 
percentages of gross premiums less return premiums on all direct 
business received by the insurer in this state, or by its agents 
for it, in cash or otherwise, during such year, excepting 
premiums written for marine insurance as specified in 
subdivision 6.  
    (c) (d) Failure of a company to make payments of at least 
one-third of either (1) the total tax paid during the previous 
calendar year or (2) 80 percent of the actual tax for the 
current calendar year shall subject the company to the penalty 
and interest provided in this section. 
    Sec. 4.  Minnesota Statutes 1988, section 60A.19, 
subdivision 6, is amended to read: 
    Subd. 6.  [RETALIATORY PROVISIONS.] (1) When by the laws of 
any other state or country any taxes, fines, deposits, 
penalties, licenses, or fees, other than assessments made by an 
insurance guaranty association or similar organization, in 
addition to or in excess of those imposed by the laws of this 
state upon foreign insurance companies and their agents doing 
business in this state, other than assessments made pursuant to 
section 60C.06, are imposed on insurance companies of this state 
and their agents doing business in that state or country, or 
when any conditions precedent to the right to do business in 
that state are imposed by the laws thereof, beyond those imposed 
upon these foreign companies by the laws of this state, the same 
taxes, fines, deposits, penalties, licenses, fees, and 
conditions precedent shall be imposed upon every similar 
insurance company of that state or country and their agents 
doing or applying to do business in this state so long as these 
foreign laws remain in force. 
    (2) In the event that a domestic insurance company, after 
complying with all reasonable laws and rulings of any other 
state or country, is refused permission by that state or country 
to transact business therein after the commissioner of commerce 
of Minnesota has determined that that company is solvent and 
properly managed and after the commissioner has so certified to 
the proper authority of that other state or country, then, and 
in every such case, the commissioner may forthwith suspend or 
cancel the certificate of authority of every insurance company 
organized under the laws of that other state or country to the 
extent that it insures, or seeks to insure, in this state 
against any of the risks or hazards which that domestic company 
seeks to insure against in that other state or country.  Without 
limiting the application of the foregoing provision, it is 
hereby determined that any law or ruling of any other state or 
country which prescribes to a Minnesota domestic insurance 
company the premium rate or rates for life insurance issued or 
to be issued outside that other state or country shall not be 
reasonable. 
    (3) This section does not apply to insurance companies 
organized or domiciled in a state or country, the laws of which 
do not impose retaliatory taxes, fines, deposits, penalties, 
licenses, or fees or which grant, on a reciprocal basis, 
exemptions from retaliatory taxes, fines, deposits, penalties, 
licenses, or fees to insurance companies domiciled in this state.
    Sec. 5.  Minnesota Statutes 1989 Supplement, section 
290.01, subdivision 19c, is amended to read: 
    Subd. 19c.  [CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE 
INCOME.] For corporations, there shall be added to federal 
taxable income: 
    (1) the amount of any deduction taken for federal income 
tax purposes for income, excise, or franchise taxes based on net 
income or related minimum taxes paid by the corporation to 
Minnesota, another state, a political subdivision of another 
state, the District of Columbia, or any foreign country or 
possession of the United States; 
    (2) interest not subject to federal tax upon obligations 
of:  the United States, its possessions, its agencies, or its 
instrumentalities; the state of Minnesota or any other state, 
any of its political or governmental subdivisions, any of its 
municipalities, or any of its governmental agencies or 
instrumentalities; or the District of Columbia; 
    (3) exempt-interest dividends received as defined in 
section 852(b)(5) of the Internal Revenue Code; 
    (4) the amount of any windfall profits tax deducted under 
section 164 or 471 of the Internal Revenue Code; 
    (5) the amount of any net operating loss deduction taken 
for federal income tax purposes under section 172 or 832(c)(10) 
of the Internal Revenue Code or operations loss deduction under 
section 810 of the Internal Revenue Code; 
    (6) the amount of any special deductions taken for federal 
income tax purposes under sections 241 to 247 of the Internal 
Revenue Code; 
    (7) losses from the business of mining, as defined in 
section 290.05, subdivision 1, clause (a), that are not subject 
to Minnesota income tax; 
    (8) the amount of any capital losses deducted for federal 
income tax purposes under sections 1211 and 1212 of the Internal 
Revenue Code; 
    (9) the amount of any charitable contributions deducted for 
federal income tax purposes under section 170 of the Internal 
Revenue Code; 
    (10) the exempt foreign trade income of a foreign sales 
corporation under sections 921(a) and 291 of the Internal 
Revenue Code; 
    (11) the amount of percentage depletion deducted under 
sections 611 through 614 and 291 of the Internal Revenue Code; 
    (12) for certified pollution control facilities placed in 
service in a taxable year beginning before December 31, 1986, 
and for which amortization deductions were elected under section 
169 of the Internal Revenue Code of 1954, as amended through 
December 31, 1985, the amount of the amortization deduction 
allowed in computing federal taxable income for those 
facilities; and 
    (13) the amount of any deemed dividend from a foreign 
operating corporation determined pursuant to section 290.17, 
subdivision 4, paragraph (g). 
    Sec. 6.  Minnesota Statutes 1988, section 290.01, 
subdivision 29, is amended to read: 
    Subd. 29.  [TAXABLE INCOME.] For tax years beginning after 
December 31, 1986, the term "taxable income" means:  
    (1) for individuals, estates, and trusts, the same as 
taxable net income; 
    (2) for corporations, including insurance companies, the 
taxable net income less 
    (i) the net operating loss deduction under section 290.095; 
    (ii) the dividends received deduction under section 290.21, 
subdivision 4; and 
    (iii) the charitable contribution deduction under section 
290.21, subdivision 3. 
    Sec. 7.  Minnesota Statutes 1989 Supplement, section 
290.015, subdivision 3, is amended to read: 
    Subd. 3.  [EXCEPTIONS.] (a) A person is not subject to tax 
under this chapter if the person is engaged in the business of 
selling tangible personal property and taxation of that person 
under this chapter is precluded by Public Law Number 86-272, 
United States Code, title 15, sections 381 to 384 or would be so 
precluded except for the fact that the person stored tangible 
personal property in a state licensed facility under chapter 231.
    (b) Ownership of an interest in the following types of 
property (including those contacts with this state reasonably 
required to evaluate and complete the acquisition or disposition 
of the property, the servicing of the property or the income 
from it, the collection of income from the property, or the 
acquisition or liquidation of collateral relating to the 
property) shall not be a factor in determining whether the owner 
is subject to tax under this chapter: 
    (1) an interest in a real estate mortgage investment 
conduit, a real estate investment trust, or a regulated 
investment company or a fund of a regulated investment company, 
as those terms are defined in the Internal Revenue Code of 1986, 
as amended through December 31, 1987; 
    (2) an interest in money market instruments or securities 
as defined in section 290.191, subdivision 6, paragraphs (c) and 
(d); 
    (3) an interest in a loan-backed, mortgage-backed, or 
receivable-backed security representing either:  (i) ownership 
in a pool of promissory notes, mortgages, or receivables or 
certificates of interest or participation in such notes, 
mortgages, or receivables, or (ii) debt obligations or equity 
interests which provide for payments in relation to payments or 
reasonable projections of payments on the notes, mortgages, or 
receivables, and which are issued by a financial institution or 
by an entity substantially all of whose assets consist of 
promissory notes, mortgages, receivables, or interests in them; 
    (4) an interest acquired from a person in any assets 
described in section 290.191, subdivision 11, paragraphs (e) to 
(l), and in which the payment obligations embodied in such 
assets were solicited and entered into by persons independent 
and not acting on behalf of the owner subject to the provisions 
of paragraph (c), clause (2)(A); 
    (5) an interest acquired from a person in the right to 
service, or collect income from any assets described in section 
290.191, subdivision 11, paragraphs (e) to (l), and in which the 
payment obligations embodied in such assets were solicited and 
entered into by persons independent and not acting on behalf of 
the owner subject to the provisions of paragraph (c), clause 
(2)(A); 
    (6) an interest acquired from a person in a funded or 
unfunded agreement to extend or guarantee credit whether 
conditional, mandatory, temporary, standby, secured, or 
otherwise, subject to the provisions of paragraph (c), clause 
(2)(A); 
    (7) an interest of a person other than an individual, 
estate, or trust, in any intangible, tangible, real, or personal 
property acquired in satisfaction, whether in whole or in part, 
of any asset embodying a payment obligation which is in default, 
whether secured or unsecured, the ownership of an interest in 
which would be exempt under the preceding provisions of this 
subdivision, provided the property is disposed of within a 
reasonable period of time; or 
    (7) (8) amounts held in escrow or trust accounts, pursuant 
to and in accordance with the terms of property described in 
this subdivision. 
    If the person is a member of the unitary group, paragraph 
(b), clauses (2) to (7), do not apply to an interest acquired 
from another member of the unitary group.  
    (c)(1) For purposes of paragraph (b), clauses (4) to (6), 
an interest in the type of assets or credit agreements described 
is deemed to exist at the time the owner becomes legally 
obligated, conditionally or unconditionally, to fund, acquire, 
renew, extend, amend, or otherwise enter into the credit 
arrangement. 
    (2)(A) An owner has acquired an interest from a person in 
paragraph (b), clauses (4) to (6), assets if:  
    (i) the owner at the time of the acquisition of the asset 
does not own, directly or indirectly, 15 percent or more of the 
outstanding stock or in the case of a partnership 15 percent or 
more of the capital or profit interests of the person from whom 
it acquired the asset; 
    (ii) the person from whom the owner acquired the asset 
regularly sells, assigns, or transfers interests in paragraph 
(b), clauses (4) to (6), assets during the 12 calendar months 
immediately preceding the month of acquisition to three or more 
persons; and 
    (iii) the person from whom the owner acquired the asset 
does not sell, assign, or transfer 75 percent or more of its 
paragraph (b), clauses (4) to (6), assets during the 12 calendar 
months immediately preceding the month of acquisition to the 
owner. 
For purposes of determining indirect ownership under item (i), 
the owner is deemed to own all stock, capital, or profit 
interests owned by another person if the owner directly owns 15 
percent or more of the stock, capital, or profit interests in 
the other person.  The owner is also deemed to own through any 
intermediary parties all stock, capital, and profit interests 
directly owned by a person to the extent there exists a 15 
percent or more chain of ownership of stock, capital, or profit 
interests between the owner, intermediary parties and the person.
    (B) If the owner of the asset is a member of the unitary 
group, paragraph (b), clauses (4) to (8), do not apply to an 
interest acquired from another member of the unitary group.  If 
the interest in the asset was originally acquired from a 
nonunitary member and at that time qualified as a section 
290.015, subdivision 3, paragraph (b), asset, the foregoing 
limitation does not apply. 
    Sec. 8.  Minnesota Statutes 1989 Supplement, section 
290.015, subdivision 4, is amended to read: 
    Subd. 4.  [LIMITATIONS.] (a) This section does not subject 
a trade or business to any regulation, including any tax, of any 
local unit of government or subdivision of this state if the 
trade or business does not own or lease tangible or real 
property located within this state and has no employees or 
independent contractors present in this state to assist in the 
carrying on of the business. 
    (b) The purchase of tangible personal property or 
intangible property or services by a person that conducts a 
trade or business with the principal place of business outside 
of Minnesota (, referred to as the "non-Minnesota person"), from 
a person within Minnesota shall not be taken into account in 
determining whether the non-Minnesota person is subject to the 
taxes imposed by this chapter, except for services involving 
either the direct solicitation of Minnesota customers or 
relationships with Minnesota customers after sales are made.  
This paragraph is subject to the limitations contained in 
subdivision 3, paragraph (b), clauses (4) and (5) to (6). 
    (c) No contact with any Minnesota financial institution by 
any financial institution with its principal place of business 
outside Minnesota with respect to transactions described in 
subdivision 3, or with respect to deposits received from or by a 
Minnesota financial institution, shall be taken into account in 
determining whether such a financial institution is subject to 
the taxes imposed by this chapter.  The fact of participation by 
a Minnesota financial institution in a transaction which also 
involves a borrower and a financial institution that conducts a 
trade or business with its principal place of business outside 
of Minnesota shall not be a factor in determining whether such 
financial institution is subject to the taxes imposed by this 
chapter.  This paragraph does not apply to transactions between 
or among members of the same unitary group. 
    Sec. 9.  Minnesota Statutes 1988, section 290.02, is 
amended to read: 
    290.02 [FRANCHISE TAX ON CORPORATIONS MEASURED BY NET 
INCOME.] 
    An annual franchise tax on the exercise of the corporate 
franchise to engage in contacts with this state that produce 
gross income attributable to sources within this state is 
imposed upon every corporation that so exercises its franchise 
during the taxable year.  
    Contacts within this state do not include transportation in 
interstate or foreign commerce, or both, by means of ships 
navigating within or through waters that are made international 
for navigation purposes by any treaty or agreement to which the 
United States is a party. 
    The tax so imposed shall be is measured by such the 
corporations' taxable income and alternative minimum tax 
base taxable income for the taxable year for which the tax is 
imposed, and computed in the manner and at the rates provided in 
this chapter. 
    Sec. 10.  Minnesota Statutes 1988, section 290.05, 
subdivision 1, is amended to read: 
    Subdivision 1.  The following corporations, individuals, 
estates, trusts, and organizations shall be exempted from 
taxation under this chapter, provided that every such person or 
corporation claiming exemption under this chapter, in whole or 
in part, must establish to the satisfaction of the commissioner 
the taxable status of any income or activity: 
    (a) corporations, individuals, estates, and trusts engaged 
in the business of mining or producing iron ore and other ores 
the mining or production of which is subject to the occupation 
tax imposed by section 298.01; but if any such corporation, 
individual, estate, or trust engages in any other business or 
activity or has income from any property not used in such 
business it shall be subject to this tax computed on the net 
income from such property or such other business or activity.  
Royalty shall not be considered as income from the business of 
mining or producing iron ore within the meaning of this section; 
    (b) the United States of America, the state of Minnesota or 
any political subdivision of either agencies or 
instrumentalities, whether engaged in the discharge of 
governmental or proprietary functions.; 
    (c) any insurance company that is domiciled in a state or 
country other than Minnesota that imposes retaliatory taxes, 
fines, deposits, penalties, licenses, or fees and that does not 
grant, on a reciprocal basis, exemption from such retaliatory 
taxes to insurance companies or their agents domiciled in 
Minnesota.  "Retaliatory taxes" means taxes imposed on insurance 
companies organized in another state or country that result from 
the fact that an insurance company organized in the taxing 
jurisdiction and doing business in the other jurisdiction is 
subject to taxes, fines, deposits, penalties, licenses, or fees 
in an amount exceeding that imposed by the taxing jurisdiction 
upon an insurance company organized in the other state or 
country and doing business to the same extent in the taxing 
jurisdiction; and 
    (d) town and farmers' mutual insurance companies and mutual 
property and casualty insurance companies, other than those (1) 
writing life insurance or (2) whose total assets at the end of 
the preceding calendar year exceed $1,600,000,000. 
    Sec. 11.  Minnesota Statutes 1988, section 290.05, 
subdivision 2, is amended to read: 
    Subd. 2.  Except as provided in subdivisions 1 and 3, 
organizations are exempted from, including specifically 
nonprofit health service plan corporations, as defined in 
chapter 62C, are subject to taxation under this chapter if 
unless they are exempt from income taxation pursuant to 
Subchapter F of the Internal Revenue Code.  Township mutual 
insurance companies, as defined in chapter 67A, and nonprofit 
health service plan corporations, as defined in chapter 62C, are 
subject to taxation under this chapter unless they are exempt 
from taxation under subchapter F of the Internal Revenue Code of 
1986. 
    Sec. 12.  Minnesota Statutes 1989 Supplement, 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); and 
    (iii) sections 511 to 515 (dealing with unrelated business 
income); 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 or the 
unrelated business taxable income, as defined in section 512 of 
the Internal Revenue Code, of organizations defined in section 
511 of the Internal Revenue Code, provided that the tax is not 
imposed on advertising revenues from a newspaper published by an 
organization described in section 501(c)(4) of the Internal 
Revenue Code.  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.  To the extent 
deducted in computing federal taxable income, the deductions 
contained in section 290.21 shall not be allowed in computing 
Minnesota taxable net income. 
    Sec. 13.  Minnesota Statutes 1988, section 290.06, 
subdivision 1, is amended to read: 
    Subdivision 1.  [COMPUTATION, CORPORATIONS.] (a) The 
franchise tax imposed by this chapter upon corporations shall be 
computed by applying to their taxable income the rate of 9.5 
percent adjusted as provided in paragraph (b). 
    (b) For taxable years beginning after December 31, 1989, 
the commissioner of revenue must adjust the rate provided in 
paragraph (a) as provided in this paragraph.  By December 15, 
1989, the commissioner shall prepare a forecast of revenues 
predicted to be raised for taxable years beginning in 1990 by 
the franchise tax on corporations under this chapter for taxable 
years beginning in 1990, including the tax under section 
290.092, computed as if the tax were imposed under section 
290.092, subdivisions 1 to 4, and the rate in effect in this 
subdivision were 9.5 percent.  The commissioner shall adjust the 
rate provided in paragraph (a) so that the amount forecast to be 
raised by the franchise tax on corporations under this chapter, 
including the tax under section 290.092, subdivision 5, is equal 
to the amount of the forecast computed as if the tax under 
section 290.092, subdivisions 1 to 4, were in effect.  The 
adjustment of the tax rate by the commissioner under this 
subdivision shall not be considered a "rule" and shall not be 
subject to the administrative procedure act contained in chapter 
14. 
    Sec. 14.  Minnesota Statutes 1988, section 290.06, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [SURTAX; CORPORATIONS.] (a) In addition to the 
tax computed under subdivision 1 and section 290.0921, a surtax 
is imposed upon corporations equal to a percentage of the sum of 
the corporation's tax under subdivision 1 and section 290.0921. 
    (b) By May 31, 1990, the commissioner of revenue shall 
determine the rate of the surtax to be imposed under paragraph 
(a).  The commissioner of revenue shall prepare a forecast of 
the revenue predicted to be raised for taxable years beginning 
in calendar years 1990 through 1992 by the franchise tax on 
corporations under this chapter, including the tax under section 
290.092, computed as if the tax were imposed under section 
290.092, subdivisions 1 to 4a, and the rate under subdivision 1 
were 9.5 percent.  The commissioner shall set the rate of the 
surtax so that the amount forecast to be raised by the surtax 
(when added to the tax imposed under subdivision 1 and section 
290.0921) equals the amount of revenue forecast to be raised if 
the tax under section 290.092, subdivisions 1 to 4a, were in 
effect and section 290.0921 did not apply. 
    (c) The rate determined under paragraph (b) applies to 
taxable years beginning after December 31, 1989. 
    (d) If the rate determined under paragraph (b) is held 
invalid, the surtax rate in effect for taxable years beginning 
after December 31, 1989 is 7.5 percent. 
     Sec. 15.  Minnesota Statutes 1989 Supplement, section 
290.06, subdivision 2c, is amended to read: 
    Subd. 2c.  [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 
AND TRUSTS.] (a) The income taxes imposed by this chapter upon 
married individuals filing joint returns and surviving spouses 
as defined in section 2(a) of the Internal Revenue Code of 1986 
as amended through December 31, 1987, must be computed by 
applying to their taxable net income the following schedule of 
rates: 
     if taxable income is:               the tax is:
       not over $19,000             6 percent
       over $19,000                 $1,140 plus 8 percent of
                                    the excess over $19,000 
plus an amount computed using the following schedule of rates: 
     if taxable income is:               the tax is: 
       over $75,500, but not        0.5 percent of the 
       over $165,000                excess over $75,500 
       over $165,000                $447.50. 
     Married individuals filing separate returns, estates, and 
trusts must compute their income tax by applying the above rates 
to their taxable income, except that the income brackets will be 
one-half of the above amounts.  In the case of married 
individuals filing separately, the additional 0.5 percent tax 
provided in this subdivision shall be applied to taxable income 
over $37,750, but not over $127,500.  
     (b) The income taxes imposed by this chapter upon unmarried 
individuals must be computed by applying to taxable net income 
the following schedule of rates: 
     if taxable income is:               the tax is:
       not over $13,000             6 percent
       over $13,000                 $780 plus 8 percent
                                    of the excess over $13,000 
plus an amount computed using the following schedule of rates: 
     if taxable income is:               the tax is: 
       over $42,700, but not         0.5 percent of the 
       over $93,000                  excess over $42,700 
       over $93,000                  $251.50.  
      (c) The income taxes imposed by this chapter upon unmarried 
individuals qualifying as a head of household as defined in 
section 2(b) of the Internal Revenue Code of 1986, as amended 
through December 31, 1987, must be computed by applying to 
taxable net income the following schedule of rates: 
     if taxable income is:               the tax is:
       not over $16,000             6 percent
       over $16,000                 $960 plus 8 percent
                                    of the excess over $16,000 
 plus an amount computed using the following schedule of rates: 
     if taxable income is:               the tax is: 
       over $64,300, but not        0.5 percent of the 
       over $135,000                excess over $64,300 
       over $135,000                $353.50. 
      (d) In lieu of a tax computed according to the rates set 
forth in this subdivision, the tax of any individual taxpayer 
whose taxable net income for the taxable year is less than 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. 
      (e) An individual who is not a Minnesota resident for the 
entire year must compute the individual's Minnesota income tax 
as provided in 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 source 
federal adjusted gross income as defined in section 62 of the 
Internal Revenue Code of 1986, as amended through December 31, 
1987, after applying the allocation and assignability provisions 
of section 290.081, clause (a), or 290.17; and 
     (2) the denominator is the individual's federal adjusted 
gross income as defined in section 62 of the Internal Revenue 
Code of 1986, as amended through December 31, 1987, increased by 
the addition required for interest income from non-Minnesota 
state and municipal bonds under section 290.01, subdivision 19a, 
clause (1). 
    (f) Any individual who has income which is included in the 
computation of federal adjusted gross income but is not subject 
to tax by Minnesota other than income specifically allowed as a 
subtraction under section 290.01, subdivision 19b, shall compute 
the tax in the same manner described in paragraph (e).  The 
numerator of the fraction under paragraph (e) is the 
individual's Minnesota source federal adjusted gross income 
reduced by the income not subject to Minnesota tax and the 
denominator is the federal adjusted gross income. 
    Sec. 16.  Minnesota Statutes 1988, section 290.06, 
subdivision 21, is amended to read: 
    Subd. 21.  [ALTERNATIVE MINIMUM TAX; FACTORS TAX.] (a) A 
corporation is allowed a credit for alternative minimum tax 
previously paid for any taxable year in which the corporation 
has no tax liability under section 290.092, subdivision 1, and 
has an alternative minimum tax credit carryover from a previous 
year.  The credit allowable in any taxable year shall be equal 
to equals the lesser of (1) the excess of the tax under this 
section for the taxable year over the amount computed under 
section 290.092, subdivision 1, clause (1), for the taxable 
year, or (2) the alternative minimum tax credit carryover to the 
taxable year. 
    (b) The tax imposed under section 290.092, subdivision 1, 
for any the taxable year is an alternative minimum tax credit 
carryover to each of the five taxable years succeeding the 
taxable year.  The entire amount of the alternative minimum tax 
credit must be carried to the earliest taxable year to which 
such the amount may be carried.  Any The unused portion of the 
credit must be carried to the following taxable year.  No credit 
may be carried to a taxable year more than five years after the 
taxable year in which the alternative minimum tax under section 
290.092, subdivision 1, was paid. 
    (c) For taxable years beginning after December 31, 1989, 
qualification for a credit and computation of the amount of the 
credit for alternative minimum tax under paragraph (a) must be 
determined by computing the alternative minimum tax that would 
apply if section 290.092 were in effect for the taxable year. 
    Sec. 17.  Minnesota Statutes 1988, section 290.067, 
subdivision 2, is amended to read: 
    Subd. 2.  [LIMITATIONS.] The credit for expenses incurred 
for the care of each dependent shall not exceed $720 in any 
taxable year, and the total credit for all dependents of a 
claimant shall not exceed $1,440 in a taxable year.  The maximum 
total credit shall be reduced according to the amount of the 
income of the claimant and a spouse, if any, as follows:  
    income up to $12,200 $13,350, $720 maximum for one 
dependent, $1,440 for all dependents; 
    income over $12,200 $13,350, the maximum credit for one 
dependent shall be reduced by $12 $18 for every $200 $350 of 
additional income, $24 $36 for all dependents; 
    for income of $24,001 and over, no credit shall be received.
    The commissioner shall construct and make available to 
taxpayers tables showing the amount of the credit at various 
levels of income and expenses.  The tables shall follow the 
schedule contained in this subdivision, except that the 
commissioner may graduate the transitions between expenses and 
income brackets.  
    Sec. 18.  Minnesota Statutes 1988, section 290.067, is 
amended by adding a subdivision to read: 
    Subd. 2b.  [INFLATION ADJUSTMENT.] The dollar amount of the 
income threshold at which the maximum credit begins to be 
reduced under subdivision 2 must be adjusted for inflation.  The 
commissioner shall adjust the threshold amount by the percentage 
determined under section 290.06, subdivision 2d, for the taxable 
year. 
    Sec. 19.  Minnesota Statutes 1989 Supplement, section 
290.0802, subdivision 1, is amended to read: 
    Subdivision 1.  [DEFINITIONS.] For purposes of this 
section, the following terms have the meanings given. 
    (a) "Adjusted gross income" means federal adjusted gross 
income as used in section 22(d) of the Internal Revenue Code for 
the taxable year, plus the ordinary income portion of a lump sum 
distribution as defined in section 402(e) of the Internal 
Revenue Code, and less pension, annuity, or disability benefits 
paid under the Railroad Retirement Act of 1974 that are included 
in federal gross income but are not subject to state taxation. 
    (b) "Disability income" means disability income as defined 
in section 22(c)(2)(B)(iii) of the Internal Revenue Code. 
    (c) "Internal Revenue Code" means the Internal Revenue Code 
of 1986, as amended through December 31, 1987. 
    (d) "Nontaxable retirement and disability benefits" means 
the amount of pension, annuity, or disability benefits that 
would be included in the reduction under section 22(c)(3) of the 
Internal Revenue Code, but excluding tier one railroad 
retirement benefits and pension, annuity, or disability benefits 
paid under the Railroad Retirement Act of 1974 that are included 
in federal gross income but are not subject to state taxation. 
    (e) "Qualified individual" means a qualified individual as 
defined in section 22(b) of the Internal Revenue Code. 
    Sec. 20.  Minnesota Statutes 1988, section 290.091, 
subdivision 2, is amended to read: 
    Subd. 2.  [DEFINITIONS.] For purposes of the tax imposed by 
this section, the following 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 alternative minimum taxable 
income as defined in section 55(b)(2) of the Internal Revenue 
Code; 
    (2) the taxpayer's itemized deductions allowed in computing 
federal alternative minimum taxable income, but excluding the 
portion of the charitable contribution deduction that 
constitutes an item of tax preference under section 57(a)(6) of 
the Internal Revenue Code; 
    (3) to the extent not included in federal alternative 
minimum taxable income, the amount of interest income as 
provided by section 290.01, subdivision 19a, clause (1); less 
the sum of 
    (i) interest income as defined in section 290.01, 
subdivision 19b, clause (1); 
    (ii) an overpayment of state income tax as provided by 
section 290.01, subdivision 19b, clause (2); and 
    (iii) the amount of investment interest paid or accrued 
within the taxable year on indebtedness to the extent that the 
amount does not exceed net investment income, as defined in 
section 163(d)(4) of the Internal Revenue Code.  Interest does 
not include amounts deducted in computing federal adjusted gross 
income. 
    In the case of an estate or trust, alternative minimum 
taxable income must be computed as provided in section 59(c) of 
the Internal Revenue Code. 
    (b) "Internal Revenue Code" means the Internal Revenue Code 
of 1986, as amended through December 31, 1987. 
    (c) "Investment interest" means investment interest as 
defined in section 163(d)(3) of the Internal Revenue Code. 
    (d) "Tentative minimum tax" equals six percent of 
alternative minimum taxable income after subtracting the 
exemption amount determined under subdivision 3. 
    (e) "Regular tax" means the tax that would be imposed under 
this chapter (without regard to this section and section 
290.032), reduced by the sum of the nonrefundable credits 
allowed under this chapter.  
    (f) "Net minimum tax" means the minimum tax imposed by this 
section. 
    Sec. 21.  Minnesota Statutes 1988, section 290.091, is 
amended by adding a subdivision to read: 
    Subd. 6.  [CREDIT FOR PRIOR YEARS' LIABILITY.] (a) A credit 
is allowed against the tax imposed by this chapter on 
individuals, trusts, and estates equal to the minimum tax credit 
for the taxable year.  The minimum tax credit equals the 
adjusted net minimum tax for taxable years beginning after 
December 31, 1988, reduced by the minimum tax credits allowed in 
a prior taxable year.  The credit may not exceed the excess (if 
any) for the taxable year of 
    (1) the regular tax, over 
    (2) the greater of (i) the tentative alternative minimum 
tax, or (ii) zero. 
    (b) The adjusted net minimum tax for a taxable year equals 
the lesser of the net minimum tax or the excess (if any) of 
    (1) the tentative minimum tax, over 
    (2) six percent of the sum of 
    (i) adjusted gross income as defined in section 62 of the 
Internal Revenue Code, 
    (ii) interest income as defined in section 290.01, 
subdivision 19a, clause (1), 
    (iii) interest on specified private activity bonds, as 
defined in section 57(a)(5) of the Internal Revenue Code, to the 
extent not included under clause (ii), 
    (iv) depletion as defined in section 57(a)(1) of the 
Internal Revenue Code, less 
    (v) the deductions provided in clauses (3)(i), (3)(ii), and 
(3)(iii) of subdivision 2, paragraph (a), and 
    (vi) the exemption amount determined under subdivision 3. 
    In the case of an individual who is not a Minnesota 
resident for the entire year, adjusted net minimum tax must be 
multiplied by the fraction defined in section 290.06, 
subdivision 2c, paragraph (e).  In the case of a trust or 
estate, adjusted net minimum tax must be multiplied by the 
fraction defined under subdivision 4, paragraph (b). 
    Sec. 22.  [290.0921] [CORPORATE ALTERNATIVE MINIMUM TAX 
AFTER 1989.] 
    Subdivision 1.  [TAX IMPOSED.] (a) In addition to the taxes 
computed under this chapter without regard to this section, the 
franchise tax imposed on corporations includes a tax equal to 
the excess, if any, for the taxable year of:  
    (1) seven percent of Minnesota alternative minimum taxable 
income less the credit allowed under section 290.35, subdivision 
3; over 
    (2) the tax imposed under section 290.06, subdivision 1, 
without regard to this section.  
    (b) If the sum of the corporation's Minnesota sales and 
receipts, property, and payrolls, as defined in section 290.092, 
subdivision 4, exceeds $5,000,000, the amount under paragraph 
(a), clause (1) is the greater of 
    (1) $500 or 
    (2) the amount otherwise determined. 
     The provisions of this paragraph do not apply to 
corporations subject to tax under section 60A.15, subdivision 1; 
real estate investment trusts; and regulated investment 
companies or a fund thereof. 
    Subd. 2.  [DEFINITIONS.] (a) For purposes of this section, 
the following terms have the meanings given them. 
    (b) "Alternative minimum taxable net income" is alternative 
minimum taxable income, 
    (1) less the exemption amount, and 
    (2) apportioned or allocated to Minnesota under section 
290.17, 290.191, or 290.20. 
    (c) The "exemption amount" is $40,000, reduced, but not 
below zero, by 25 percent of the excess of alternative minimum 
taxable income over $150,000. 
    (d) "Internal Revenue Code" means the Internal Revenue Code 
of 1986, as amended through December 31, 1988. 
    (e) "Minnesota alternative minimum taxable income" is 
alternative minimum taxable net income, less the deductions for 
alternative tax net operating loss under subdivision 4; 
charitable contributions under subdivision 5; and dividends 
received under subdivision 6.  The sum of the deductions under 
this paragraph may not exceed 90 percent of alternative minimum 
taxable net income.  This limitation does not apply to a 
deduction for dividends paid to or received from a corporation 
which is subject to tax under section 290.35 or 290.36 and which 
is a member of an affiliated group of corporations as defined by 
the Internal Revenue Code. 
    Subd. 3.  [ALTERNATIVE MINIMUM TAXABLE INCOME.] 
"Alternative minimum taxable income" is Minnesota net income as 
defined in section 290.01, subdivision 19, and includes the 
adjustments and tax preference items in sections 56, 57, 58, and 
59(d), (e), (f) and (h) of the Internal Revenue Code.  If a 
corporation files a separate company Minnesota tax return, the 
minimum tax must be computed on a separate company basis.  If a 
corporation is part of a tax group filing a unitary return, the 
minimum tax must be computed on a unitary basis.  The following 
adjustments must be made. 
    (1) For purposes of the depreciation adjustments under 
section 56(a)(1) and 56(g)(4)(A) of the Internal Revenue Code, 
the basis for depreciable property placed in service in a 
taxable year beginning before January 1, 1990, is the adjusted 
basis for federal income tax purposes, including any 
modification made in a taxable year under section 290.01, 
subdivision 19e, or Minnesota Statutes 1986, section 290.09, 
subdivision 7, paragraph (c). 
     (2) The alternative tax net operating loss deduction under 
sections 56(a)(4) and 56(d) of the Internal Revenue Code does 
not apply. 
     (3) The special rule for 100 percent dividends under 
section 56(g)(4)(C)(ii) of the Internal Revenue Code does not 
apply. 
     (4) The special rule for dividends from section 936 
companies under section 56(g)(4)(C)(iii) does not apply. 
    (5) The tax preference for depletion under section 57(a)(1) 
of the Internal Revenue Code does not apply. 
    (6) The tax preference for intangible drilling costs under 
section 57(a)(2) of the Internal Revenue Code must be calculated 
without regard to the subtraction under section 290.01, 
subdivision 19d, clause (4). 
    (7) The tax preference for tax exempt interest under 
section 57(a)(5) of the Internal Revenue Code does not apply.  
    (8) The tax preference for charitable contributions of 
appreciated property under section 57(a)(6) of the Internal 
Revenue Code does not apply. 
     (9) For purposes of calculating the tax preference for 
accelerated depreciation or amortization on certain property 
placed in service before January 1, 1987, under section 57(a)(7) 
of the Internal Revenue Code, the deduction allowable for the 
taxable year is the deduction allowed under section 290.01, 
subdivision 19e. 
    Items of tax preference must not be reduced below zero as a 
result of the modifications in this subdivision. 
    Subd. 4.  [ALTERNATIVE TAX NET OPERATING LOSS.] (a) An 
alternative tax net operating loss deduction is allowed from 
alternative minimum taxable net income equal to the net 
operating loss deduction allowable for the taxable year under 
section 290.095 with the following modifications: 
     (1) The amount of the net operating loss deduction must not 
exceed 90 percent of alternative minimum taxable net income. 
    (2) In determining the amount of the net operating loss 
deduction (i) the net operating loss under section 290.095 must 
be adjusted as provided in paragraph (b), and (ii) for taxable 
years beginning after December 31, 1989, section 290.095, 
subdivision 3, must be applied by substituting "90 percent of 
alternative minimum taxable net income" for "taxable net income."
    (b) The following adjustments must be made to the 
alternative tax net operating loss deduction under paragraph (a):
    (1) For a loss year beginning after December 31, 1989, the 
net operating loss for each year under section 290.095 must be 
(i) determined with the adjustments provided in sections 56 and 
58 of the Internal Revenue Code, as modified by subdivision 3 
and (ii) reduced by the items of tax preference for the year 
determined under section 57 of the Internal Revenue Code, as 
modified by subdivision 3. 
    (2) For a loss year beginning before January 1, 1990, the 
amount of the net operating loss that may be carried over to 
taxable years beginning after December 31, 1989, equals the 
amount which may be carried from the loss year to the first 
taxable year of the taxpayer beginning after December 31, 1989. 
     Subd. 5.  [CHARITABLE CONTRIBUTIONS.] (a) A deduction from 
alternative minimum taxable net income is allowed equal to the 
deduction for charitable contributions under section 290.21, 
subdivision 3.  The deduction allowable for capital gain 
property is limited to the adjusted basis of the property as 
defined in section 290.01, subdivision 19f.  The term capital 
gain property has the meaning given by section 170(b)(1)(C)(iv) 
of the Internal Revenue Code, but does not include property to 
which an election under section 170(b)(1)(C)(iii) of the 
Internal Revenue Code applies. 
    (b) The amount of the deduction may not exceed 15 percent 
of alternative minimum taxable net income less the deduction 
allowed under subdivision 6. 
    Subd. 6.  [DIVIDENDS RECEIVED.] (a) A deduction is allowed 
from alternative minimum taxable net income equal to the 
deduction for dividends received under section 290.21, 
subdivision 4, for purposes of calculating taxable income under 
section 290.01, subdivision 29. 
     (b) The amount of the deduction must not exceed 90 percent 
of alternative minimum taxable net income.  This limitation does 
not apply to dividends paid to or received from a corporation 
which is subject to tax under section 290.35 or 290.36 and which 
is a member of an affiliated group of corporations as defined by 
the Internal Revenue Code. 
     Subd. 7.  [FOREIGN OPERATING COMPANIES.] The income and 
deductions related to foreign operating companies, as defined in 
section 290.01, subdivision 6b, that are used to calculate 
Minnesota alternative minimum taxable income, are limited to the 
amounts included for purposes of calculating taxable income 
under section 290.01, subdivision 29. 
     Subd. 8.  [CARRYOVER CREDIT.] (a) A corporation is allowed 
a credit against qualified regular tax for qualified alternative 
minimum tax previously paid.  The credit is allowable only if 
the corporation has no tax liability under section 290.0921 for 
the taxable year and if the corporation has an alternative 
minimum tax credit carryover from a previous year.  The credit 
allowable in a taxable year equals the lesser of 
    (1) the excess of the qualified regular tax for the taxable 
year over the amount computed under subdivision 1, paragraph 
(a), clause (1) multiplied by the sum of one plus the surtax 
percentage under section 290.06, subdivision 1a, for the taxable 
year or 
    (2) the carryover credit to the taxable year. 
    (b) For purposes of this subdivision, the following terms 
have the meanings given. 
    (1) "Qualified alternative minimum tax" equals the amount 
determined under subdivision 1 for the taxable year multiplied 
by the sum of one plus the surtax percentage rate under section 
290.06, subdivision 1a.  In computing the amount of alternative 
minimum tax 
    (i) the adjustment under section 56(c)(3) of the Internal 
Revenue Code must not be made; 
    (ii) the full amount of the charitable contribution 
deduction under section 290.21, subdivision 3, must be deducted 
in computing Minnesota alternative minimum taxable income; and 
    (iii) in the case of a corporation subject to an occupation 
tax under section 298.01 the tax preference for depletion under 
section 57(a)(1) of the Internal Revenue Code must be deducted 
in computing Minnesota alternative minimum taxable income. 
    (2) "Qualified regular tax" means the tax imposed under 
section 290.06, subdivision 1, and a surtax imposed on that tax 
under section 290.06, subdivision 1a. 
    (c) The qualified alternative minimum tax for a taxable 
year is an alternative minimum tax credit carryover to each of 
the five taxable years succeeding the taxable year.  The entire 
amount of the credit must be carried to the earliest taxable 
year to which the amount may be carried.  Any unused portion of 
the credit must be carried to the following taxable year.  No 
credit may be carried to a taxable year in which alternative 
minimum tax was paid. 
    Sec. 23.  Minnesota Statutes 1988, section 290.095, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [INSURANCE COMPANIES.] Insurance companies may 
deduct for the taxable year the amount of any operations loss 
deduction as provided in section 810, or a net operating loss 
deduction as provided in sections 172 and 832(c)(10) of the 
Internal Revenue Code of 1986 as amended through December 31, 
1988, subject to the limitations provided in this section. 
    Sec. 24.  Minnesota Statutes 1988, section 290.095, 
subdivision 2, is amended to read: 
    Subd. 2.  [DEFINED AND LIMITED.] (a) The term "net 
operating loss" as used in this section shall mean a net 
operating loss as defined in section 172(c) or 810(a), in the 
case of life insurance companies, of the Internal Revenue Code 
of 1986, as amended through December 31, 1987 1988, with the 
modifications specified in subdivision 4.  The deductions 
provided in section 290.21 and the modification provided in 
section 290.01, subdivision 19d, clause (11), cannot be used in 
the determination of a net operating loss.  
    (b) The term "net operating loss deduction" as used in this 
section means the aggregate of the net operating loss carryovers 
to the taxable year, computed in accordance with subdivision 3.  
The provisions of section 172(b) or 810(b), in the case of life 
insurance companies, of the Internal Revenue Code of 1986, as 
amended through December 31, 1987 1988, relating to the 
carryback of net operating losses, do not apply. 
    Sec. 25.  Minnesota Statutes 1989 Supplement, section 
290.17, subdivision 2, is amended to read: 
    Subd. 2.  [INCOME NOT DERIVED FROM CONDUCT OF A TRADE OR 
BUSINESS.] The income of a taxpayer subject to the allocation 
rules that is not derived from the conduct of a trade or 
business must be assigned in accordance with paragraphs (a) to 
(f):  
    (a)(1) Subject to paragraphs (a)(2) and (a)(3), income from 
labor or personal or professional services is assigned to this 
state if, and to the extent that, the labor or services are 
performed within it; all other income from such sources is 
treated as income from sources without this state.  
    Severance pay shall be considered income from labor or 
personal or professional services. 
    (2) In the case of an individual who is a nonresident of 
Minnesota and who is an athlete or entertainer, income from 
compensation for labor or personal services performed within 
this state shall be determined in the following manner:  
    (i) The amount of income to be assigned to Minnesota for an 
individual who is a nonresident salaried athletic team employee 
shall be determined by using a fraction in which the denominator 
contains the total number of days in which the individual is 
under a duty to perform for the employer, and the numerator is 
the total number of those days spent in Minnesota; and 
    (ii) The amount of income to be assigned to Minnesota for 
an individual who is a nonresident, and who is an athlete or 
entertainer not listed in clause (i), for that person's athletic 
or entertainment performance in Minnesota shall be determined by 
assigning to this state all income from performances or athletic 
contests in this state.  
     (3) For purposes of this section, amounts received by a 
nonresident from the United States, its agencies or 
instrumentalities, the Federal Reserve Bank, the state of 
Minnesota or any of its political or governmental subdivisions, 
or a Minnesota volunteer firefighters' relief association, by 
way of payment as a pension, public employee retirement benefit, 
or any combination of these, or as a retirement or survivor's 
benefit made from a plan qualifying under section 401, 403, 408, 
or 409, or as defined in section 403(b) or 457 of the Internal 
Revenue Code of 1986, as amended through December 31, 1987, are 
not considered income derived from carrying on a trade or 
business or from performing personal or professional services in 
Minnesota, and are not taxable under this chapter.  
     (b) Income or gains from tangible property located in this 
state that is not employed in the business of the recipient of 
the income or gains must be assigned to this state. 
    (c) Except upon the sale of a partnership interest or the 
sale of stock of an S corporation, income or gains from 
intangible personal property not employed in the business of the 
recipient of the income or gains must be assigned to this state 
if the recipient of the income or gains is a resident of this 
state or is a resident trust or estate.  
    Gain on the sale of a partnership interest is allocable to 
this state in the ratio of the original cost of partnership 
tangible property in this state to the original cost of 
partnership tangible property everywhere, determined at the time 
of the sale.  If more than 50 percent of the value of the 
partnership's assets consists of intangibles, gain or loss from 
the sale of the partnership interest is allocated to this state 
in accordance with the sales factor of the partnership for its 
first full tax period immediately preceding the tax period of 
the partnership during which the partnership interest was sold. 
    Gain on the sale of stock held in an S corporation is 
allocable to this state in the ratio of the original cost of 
tangible property of the S corporation within this state to the 
original cost of tangible property of the S corporation 
everywhere. 
    Gain on the sale of goodwill or income from a covenant not 
to compete that is connected with a business operating all or 
partially in Minnesota is allocated to this state to the extent 
that the income from the business in the year preceding the year 
of sale was assignable to Minnesota under subdivision 3.  
    (d) Income from the operation of a farm shall be assigned 
to this state if the farm is located within this state and to 
other states only if the farm is not located in this state.  
    (e) Income from winnings on Minnesota pari-mutuel betting 
tickets, the Minnesota state lottery, and lawful gambling as 
defined in section 349.12, subdivision 2, conducted within the 
boundaries of the state of Minnesota shall be assigned to this 
state.  
    (f) All items of gross income not covered in paragraphs (a) 
to (e) and not part of the taxpayer's income from a trade or 
business shall be assigned to the taxpayer's domicile. 
    Sec. 26.  Minnesota Statutes 1988, section 290.17, is 
amended by adding a subdivision to read: 
    Subd. 7.  [ALLOCATION AND APPORTIONMENT OF CERTAIN FARM 
INCOME BY C CORPORATIONS.] Notwithstanding any other 
subdivision, income to a taxpayer from the operation of a farm 
by a C corporation is assigned to this state and other states 
and countries under subdivision 3, the unitary business 
principle in subdivision 4, and the allocation provisions of 
sections 290.191 and 290.20, if:  
    (1) the farm operation provides material value added to an 
agricultural product by processing, packaging, grading, 
promotion, or distribution; 
    (2) the farm operation is industrial, manufacturing, or 
distributing under the United States Department of Commerce 
Standard Industrial Classification criteria; 
    (3) a material part of the income is attributable directly 
or indirectly to testing, research, genetic, or biological 
selection, genetic engineering, or creation or licensing of 
patents, copyrights, trademarks, or other intellectual property; 
or 
    (4) a material part of the income is derived from an 
activity that would not in itself be income from farming if 
performed by another person not otherwise engaged in farming. 
    Sec. 27.  Minnesota Statutes 1989 Supplement, section 
290.191, subdivision 6, is amended to read: 
    Subd. 6.  [DETERMINATION OF RECEIPTS FACTOR FOR FINANCIAL 
INSTITUTIONS.] (a) For purposes of this section, the rules in 
this subdivision and subdivisions 7 and 8 apply in determining 
the receipts factor for financial institutions.  
    (b) "Receipts" for this purpose means gross income, 
including net taxable gain on disposition of assets, including 
securities and money market instruments, when derived from 
transactions and activities in the regular course of the 
taxpayer's trade or business.  
    (c) "Money market instruments" means federal funds sold and 
securities purchased under agreements to resell, commercial 
paper, banker's acceptances, and purchased certificates of 
deposit and similar instruments to the extent that the 
instruments are reflected as assets under generally accepted 
accounting principles.  
    (d) "Securities" means United States Treasury securities, 
obligations of United States government agencies and 
corporations, obligations of state and political subdivisions, 
corporate stock and other securities, participations in 
securities backed by mortgages held by United States or state 
government agencies, loan-backed securities and similar 
investments to the extent the investments are reflected as 
assets under generally accepted accounting principles.  
    (e) Receipts from the lease or rental of real or tangible 
personal property, including both finance leases and true 
leases, must be attributed to this state if the property is 
located in this state.  Tangible personal property that is 
characteristically moving property, such as motor vehicles, 
rolling stock, aircraft, vessels, mobile equipment, and the 
like, is considered to be located in a state if:  
    (1) the operation of the property is entirely within the 
state; or 
    (2) the operation of the property is in two or more states, 
but the principal base of operations from which the property is 
sent out is in the state.  
    (f) Interest income and other receipts from assets in the 
nature of loans that are secured primarily by real estate or 
tangible personal property must be attributed to this state if 
the security property is located in this state under the 
principles stated in paragraph (e).  
    (g) Interest income and other receipts from consumer loans 
not secured by real or tangible personal property that are made 
to residents of this state, whether at a place of business, by 
traveling loan officer, by mail, by telephone or other 
electronic means, must be attributed to this state.  
    (h) Interest income and other receipts from commercial 
loans and installment obligations that are unsecured by real or 
tangible personal property or secured by intangible property 
must be attributed to this state if the proceeds of the loan are 
to be applied in this state.  If it cannot be determined where 
the funds are to be applied, the income and receipts are 
attributed to the state in which the office of the borrower from 
which the application would be made in the regular course of 
business is located.  If this cannot be determined, the 
transaction is disregarded in the apportionment formula.  
    (i) Interest income and other receipts from a participating 
financial institution's portion of participation and syndication 
loans must be attributed under paragraphs (e) to (h).  A 
participation loan is an arrangement in which a lender makes a 
loan to a borrower and then sells, assigns, or otherwise 
transfers all or a part of the loan to a purchasing financial 
institution.  A syndication loan is a multibank loan transaction 
in which all the lenders are named as parties to the loan 
documentation, are known to the borrower, and have privity of 
contract with the borrower.  
    (j) Interest income and other receipts including service 
charges from financial institution credit card and travel and 
entertainment credit card receivables and credit card holders' 
fees must be attributed to the state to which the card charges 
and fees are regularly billed.  
    (k) Merchant discount income derived from financial 
institution credit card holder transactions with a merchant must 
be attributed to the state in which the merchant is located.  In 
the case of merchants located within and outside the state, only 
receipts from merchant discounts attributable to sales made from 
locations within the state are attributed to this state.  It is 
presumed, subject to rebuttal, that the location of a merchant 
is the address shown on the invoice submitted by the merchant to 
the taxpayer.  
     (l) Receipts from the performance of fiduciary and other 
services must be attributed to the state in which the benefits 
of the services are consumed.  If the benefits are consumed in 
more than one state, the receipts from those benefits must be 
apportioned to this state pro rata according to the portion of 
the benefits consumed in this state.  If the extent to which the 
benefits of services are consumed in this state is not readily 
determinable, the benefits of the services shall be deemed to be 
consumed at the location of the office of the customer from 
which the services were ordered in the regular course of the 
customer's trade or business.  If the ordering office cannot be 
determined, the benefits of the services shall be deemed to be 
consumed at the office of the customer to which the services are 
billed.  
     (m) Receipts from the issuance of travelers checks and 
money orders must be attributed to the state in which the checks 
and money orders are purchased.  
    (n) Receipts from investments of a financial institution in 
securities of this state, its political subdivisions, agencies, 
and instrumentalities must be attributed to this state.  
    (o) Receipts from a financial institution's interest in any 
property described in section 290.015, subdivision 3, paragraph 
(b), is not included in the numerator or the denominator of the 
receipts factor provided the financial institution's activities 
within this state with respect to any interest in the property 
are limited in the manner provided in section 290.015, 
subdivision 3, paragraph (b).  If a financial institution is 
subject to tax under this chapter, its interest in property 
described in section 290.015, subdivision 3, paragraph (b), is 
included in the receipts factor in the same manner as assets in 
the nature of securities or money market instruments are 
included under paragraph (n) and subdivision 7. 
    Sec. 28.  Minnesota Statutes 1988, section 290.21, 
subdivision 4, is amended to read: 
    Subd. 4.  (a)(1) Eighty percent of dividends received by a 
corporation during the taxable year from another corporation, in 
which the recipient owns 20 percent or more of the stock, by 
vote and value, not including stock described in section 
1504(a)(4) of the Internal Revenue Code of 1986, as amended 
through December 31, 1987, when the corporate stock with respect 
to which dividends are paid does not constitute the stock in 
trade of the taxpayer or would not be included in the inventory 
of the taxpayer, or does not constitute property held by the 
taxpayer primarily for sale to customers in the ordinary course 
of the taxpayer's trade or business, or when the trade or 
business of the taxpayer does not consist principally of the 
holding of the stocks and the collection of the income and gains 
therefrom.; and 
    (2)(i) The remaining 20 percent of dividends if the 
dividends received are the stock in an affiliated company 
transferred in an overall plan of reorganization and the 
dividend is eliminated in consolidation under Treasury 
Department Regulation 1.1502-14(a), as amended through December 
31, 1988; or 
    (ii) The remaining 20 percent of dividends if the dividends 
are received from a corporation which is subject to tax under 
section 290.35 or 290.36 and which is a member of an affiliated 
group of corporations as defined by the Internal Revenue Code of 
1986, as amended through December 31, 1988, and the dividend is 
eliminated in consolidation under Treasury Department Regulation 
1.1502-14(a), as amended through December 31, 1988, or is 
deducted under an election under section 243(b) of the Internal 
Revenue Code of 1986, as amended through December 31, 1988. 
    (b) Seventy percent of dividends received by a corporation 
during the taxable year from another corporation in which the 
recipient owns less than 20 percent of the stock, by vote or 
value, not including stock described in section 1504(a)(4) of 
the Internal Revenue Code of 1986 as amended through December 
31, 1987, when the corporate stock with respect to which 
dividends are paid does not constitute the stock in trade of the 
taxpayer, or does not constitute property held by the taxpayer 
primarily for sale to customers in the ordinary course of the 
taxpayer's trade or business, or when the trade or business of 
the taxpayer does not consist principally of the holding of the 
stocks and the collection of income and gain therefrom.  
     (c) The dividend deduction provided in this subdivision 
shall be allowed only with respect to dividends that are 
included in a corporation's Minnesota taxable net income for the 
taxable year. 
     The dividend deduction provided in this subdivision does 
not apply to a dividend from a corporation which, for the 
taxable year of the corporation in which the distribution is 
made or for the next preceding taxable year of the corporation, 
is a corporation exempt from tax under section 501 of the 
Internal Revenue Code of 1986, as amended through December 31, 
1987.  
     The dividend deduction provided in this subdivision applies 
to the amount of regulated investment company dividends only to 
the extent determined under section 854(b) of the Internal 
Revenue Code of 1986, as amended through December 31, 1987. 
     The dividend deduction provided in this subdivision shall 
not be allowed with respect to any dividend for which a 
deduction is not allowed under the provisions of section 246(c) 
of the Internal Revenue Code of 1986, as amended through 
December 31, 1987.  
     (d) If dividends received by a corporation that does not 
have nexus with Minnesota under the provisions of Public Law 
Number 86-272 are included as income on the return of an 
affiliated corporation permitted or required to file a combined 
report under section 290.34, subdivision 2, then for purposes of 
this subdivision the determination as to whether the trade or 
business of the corporation consists principally of the holding 
of stocks and the collection of income and gains therefrom shall 
be made with reference to the trade or business of the 
affiliated corporation having a nexus with Minnesota. 
     (e) The deduction provided by this subdivision does not 
apply if the dividends are paid by a FSC as defined in section 
922 of the Internal Revenue Code of 1986, as amended through 
December 31, 1987. 
      (f) If one or more of the members of the unitary group 
whose income is included on the combined report received a 
dividend, the deduction under this subdivision for each member 
of the unitary business required to file a return under this 
chapter is the product of:  (1) 100 percent of the dividends 
received by members of the group; (2) 80 percent or 70 percent, 
the percentage allowed pursuant to paragraph (a) or (b); and (3) 
the percentage of the taxpayer's business income apportionable 
to this state for the taxable year under section 290.191 or 
290.20. 
    Sec. 29.  Minnesota Statutes 1988, section 290.35, 
subdivision 1, is amended to read: 
    Subdivision 1.  [COMPUTATION OF TAXABLE NET INCOME.] 
The taxable net income of insurance companies taxable under this 
chapter shall be computed as follows: 
    (a) Each such life insurance company shall report to the 
commissioner the net income returned by it for the taxable year 
to the United States under the provisions of the act of 
congress, known as the revenue act of 1936, or that it would be 
required to return as net income thereunder if it were in 
effect.  Notwithstanding the provisions of the Revenue Act of 
1936, whether or not an insurance company is exempt from 
taxation must be determined under section 290.05. life insurance 
company taxable net income as defined in section 801(b) of the 
Internal Revenue Code of 1986, as amended through December 31, 
1988, incorporating any elections made by the taxpayer in 
determining life insurance company taxable income for federal 
income tax purposes. 
    (b) Each insurance company other than a life insurance 
company shall report to the commissioner its federal taxable 
income as defined in section 832 of the Internal Revenue Code of 
1986, as amended through December 31, 1988, or its taxable 
investment income as defined in section 832 of the Internal 
Revenue Code of 1986, as amended through December 31, 1988, 
incorporating any elections made by the taxpayer in accordance 
with the Internal Revenue Code in determining federal taxable 
income or taxable investment income for federal income tax 
purposes. 
    (c) The life insurance company taxable net income, federal 
taxable income, or taxable investment income so reported is 
subject to the modifications provided in section 290.01, 
subdivisions 19c to 19f. 
    Sec. 30.  Minnesota Statutes 1988, section 290.35, 
subdivision 4, is amended to read: 
    Subd. 4.  [NONPROFIT HEALTH SERVICE PLAN CORPORATION.] For 
purposes of this section, a nonprofit health service corporation 
is not an insurance company and the taxable income of a 
nonprofit health service plan corporation must be determined as 
provided under section 833 of the Internal Revenue Code of 1986, 
as amended through December 31, 1988, and section 290.01, 
subdivisions 19c and 19d to 19f. 
    Sec. 31.  Minnesota Statutes 1988, section 290.35, is 
amended by adding a subdivision to read: 
    Subd. 5.  [DEFINITION OF INSURANCE COMPANY.] For purposes 
of this section, the terms "insurance company," "life insurance 
company," and "insurance company other than life" have the 
meanings given in the Internal Revenue Code of 1986, as amended 
through December 31, 1988. 
    Sec. 32.  Minnesota Statutes 1988, section 290.37, 
subdivision 1, is amended to read: 
    Subdivision 1.  [PERSONS MAKING RETURNS.] (a) A taxpayer 
shall file a return for each taxable year the taxpayer is 
required to file a return under section 6012 of the Internal 
Revenue Code of 1986, as amended through December 31, 1987, 
except that 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 gross income derived from 
Minnesota sources under sections 290.081, paragraph (a), and 
290.17, is less than the filing requirements for a single 
individual who is a full year resident of Minnesota.  
    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 the 
decedent's 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, if the corporation 
is subject to the state's jurisdiction to tax under section 
290.014, subdivision 5, except that a foreign operating 
corporation as defined in section 290.01, subdivision 6b, is not 
required to file a return.  The return in the case of a 
corporation must be signed by a person designated by the 
corporation.  The commissioner may shall 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 bank subject to tax 
under this chapter.  Members of an affiliated group that elect 
to file one return on behalf of the members of the group under 
rules adopted by the commissioner may modify or rescind the 
election by filing the form required by the commissioner.  
     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 a return is required. 
     (b) Such return shall (1) contain a written declaration 
that it is 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) An exempt organization that is subject to tax on 
unrelated business income under section 290.05, subdivision 3, 
must file a return for each taxable year in which the 
organization is required to file a return under section 6012 of 
the Internal Revenue Code of 1986, as amended through December 
31, 1988, because of the receipt of unrelated business income.  
If an organization is required to file a return under federal 
law but has no federal tax liability for the taxable year, the 
commissioner may provide that the filing requirement under this 
paragraph is satisfied by filing a copy of the taxpayer's 
federal return. 
    Sec. 33.  Minnesota Statutes 1988, section 290.38, is 
amended to read: 
    290.38 [RETURNS OF MARRIED PERSONS.] 
    A husband and wife 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; provided that a spouse who is relieved of a 
liability attributable to a substantial underpayment under 
section 6013(e) of the Internal Revenue Code of 1986, as amended 
through December 31, 1987, shall also be relieved of the state 
tax liability on the substantial underpayment.  
     In the case of individuals who were a husband and wife 
prior to the dissolution of their marriage, for tax liabilities 
reported on a joint or combined return, the liability of each 
person is limited to the proportion of the tax due on the return 
that equals that person's proportion of the total tax due if the 
husband and wife filed separate returns for the taxable year.  
This provision is effective only when the commissioner receives 
written notice of the marriage dissolution from the husband or 
wife.  No refund may be claimed by an ex-spouse for any taxes 
paid before receipt by the commissioner of the written notice.  
     If the husband and wife have elected to file separate 
federal income tax returns they must file separate Minnesota 
income tax returns.  This election to file a joint or separate 
returns must be changed 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 rule. 
    The determination of whether an individual is married shall 
be made under provisions of section 7703 of the Internal Revenue 
Code of 1986, as amended through December 31, 1987.  
    Sec. 34.  Minnesota Statutes 1989 Supplement, section 
290.92, subdivision 4b, is amended to read: 
    Subd. 4b.  [WITHHOLDING BY PARTNERSHIPS.] (a) A partnership 
shall deduct and withhold a tax as provided in paragraph (b) 
when the partnership pays or credits amounts to any of its 
nonresident individual partners on account of their distributive 
shares of partnership income for a taxable year of the 
partnership. 
    (b) The amount of tax withheld is determined by multiplying 
the partner's distributive share allocable to Minnesota under 
section 290.17, paid or credited during the taxable year by the 
highest rate used to determine the income tax liability for an 
individual under section 290.06, subdivision 2c, except that the 
amount of tax withheld may be determined based on tables 
provided by the commissioner if the partner submits a 
withholding exemption certificate under subdivision 5. 
    (c) A partnership required to deduct and withhold tax under 
this subdivision shall file a return with the commissioner.  The 
tax required to be deducted and withheld during that year must 
be paid with the return.  The return and payment is due on or 
before the due date specified for filing the partnership return 
under section 290.42. 
    (d) A partnership required to withhold and remit tax under 
this subdivision is liable for payment of the tax to the 
commissioner, and a person having control of or responsibility 
for the withholding of the tax or the filing of returns due 
under this subdivision is personally liable for the tax due.  
The commissioner may reduce or abate the tax withheld under this 
subdivision if the partnership had reasonable cause to believe 
that no tax was due under this section. 
    (e) Notwithstanding paragraph (a), a partnership is not 
required to deduct and withhold tax for a nonresident partner if:
    (1) the partner elects to have the tax due paid as part of 
the partnership's composite return under section 290.39, 
subdivision 5; 
    (2) the partner has Minnesota assignable federal adjusted 
gross income from the partnership of less than $1,000; or 
    (3) the partnership is liquidated or terminated, the income 
was generated by a transaction related to the termination or 
liquidation, and no cash or other property was distributed in 
the current or prior taxable year; or 
    (4) the distributive shares of partnership income are 
attributable to: 
    (i) income required to be recognized because of discharge 
of indebtedness; 
    (ii) income recognized because of a sale, exchange, or 
other disposition of real estate, depreciable property, or 
property described in section 179 of the Internal Revenue Code 
of 1986, as amended through December 31, 1988; or 
    (iii) income recognized on the sale, exchange, or other 
disposition of any property that has been the subject of a basis 
reduction pursuant to section 108, 734, 743, 754, or 1017 of the 
Internal Revenue Code of 1986, as amended through December 31, 
1988, 
to the extent that the income does not include cash received or 
receivable or, if there is cash received or receivable, to the 
extent that the cash is required to be used to pay indebtedness 
by the partnership or a secured debt on partnership property. 
    (f) For purposes of subdivisions 6, paragraph (1)(c), 6a, 
7, 11, and 15, a partnership is considered an employer.  
     (g) To the extent that income is exempt from withholding 
under paragraph (e), clause (4), the commissioner has a lien in 
an amount up to the amount that would be required to be withheld 
with respect to the income of the partner attributable to the 
partnership interest, but for the application of paragraph (e), 
clause (4).  The lien arises under section 270.69 from the date 
of assessment of the tax against the partner, and attaches to 
that partner's share of the profits and any other money due or 
to become due to that partner in respect of the partnership.  
Notice of the lien may be sent by mail to the partnership, 
without the necessity for recording the lien.  The notice has 
the force and effect of a levy under section 270.70, and is 
enforceable against the partnership in the manner provided by 
that section.  Upon payment in full of the liability subsequent 
to the notice of lien, the partnership must be notified that the 
lien has been satisfied.  
    Sec. 35.  Minnesota Statutes 1988, section 290.92, 
subdivision 21, is amended to read: 
    Subd. 21.  [EXTENSION OF WITHHOLDING TO UNEMPLOYMENT 
COMPENSATION BENEFITS.] (a) At the time an individual makes a 
claim for unemployment compensation benefits, the commissioner 
of jobs and training must notify the individual that the 
individual's unemployment compensation may be subject to state 
income taxes depending on the individual's other income and that 
the individual may elect to have the payments subject to 
withholding under this section.  If the individual so requests 
does not notify the commissioner of jobs and training that the 
individual elects to have the payments not be subject to 
withholding within five working days of receipt of the notice 
from the commissioner, unemployment compensation benefits paid 
to the individual shall be treated as if it were a payment of 
wages by an employer to an employee for a payroll period. 
    (b) For purposes of this section, any supplemental 
unemployment compensation benefit paid to an individual to the 
extent includable in such individual's Minnesota gross income, 
shall be treated as if it were a payment of wages by an employer 
to an employee for a payroll period. 
    Sec. 36.  Minnesota Statutes 1988, section 290.92, is 
amended by adding a subdivision to read: 
    Subd. 29.  [LOTTERY PRIZES.] Eight percent of the payment 
of Minnesota State lottery winnings which are subject to 
withholding must be withheld as Minnesota withholding tax.  For 
purposes of this subdivision, the term "winnings which are 
subject to withholding" has the meaning given in section 
3402(q)(3) of the Internal Revenue Code of 1986, as amended 
through December 31, 1988.  For purposes of the provisions of 
this section, a payment to any person of winnings which are 
subject to withholding must be treated as if the payment was a 
wage paid by an employer to an employee.  Every individual who 
is to receive a payment of winnings which are subject to 
withholding shall furnish the state lottery division of the 
department of gaming with a statement, made under the penalties 
of perjury, containing the name, address, and social security 
account number of the person receiving the payment.  The 
Minnesota state lottery is liable for the payment of the tax 
required to be withheld under this subdivision but is not liable 
to any person for the amount of the payment. 
    Sec. 37.  Minnesota Statutes 1988, section 290.934, 
subdivision 3a, is amended to read: 
    Subd. 3a.  [REQUIRED INSTALLMENTS.] (1) Except as otherwise 
provided in this subdivision, the amount of a required 
installment is 25 percent of the required annual payment. 
    (2) Except as otherwise provided in this subdivision, the 
term "required annual payment" means the lesser of: 
    (a) 90 percent of the tax shown on the return for the 
taxable year, or if no return is filed 90 percent of the tax for 
such year; or 
    (b) 100 percent of the tax shown on the return of the 
corporation for the preceding taxable year providing such return 
was for a full 12-month period, did show a liability, and was 
filed by the corporation. 
    (3) Except for determining the first required installment 
for any taxable year, paragraph (2), clause (b), does not apply 
in the case of a large corporation.  The term "large 
corporation" means a corporation or any predecessor corporation 
that had taxable net income of $1,000,000 or more for any 
taxable year during the testing period.  The term "testing 
period" means the three taxable years immediately preceding the 
taxable year involved.  A reduction allowed to a large 
corporation for the first installment that is allowed by 
applying paragraph (2), clause (b), must be recaptured by 
increasing the next required installment by the amount of the 
reduction. 
     (4) In the case of a required installment, if the 
corporation establishes that the annualized income installment 
is less than the amount determined in paragraph (1), the amount 
of the required installment is the annualized income installment 
and the recapture of previous quarters' reductions allowed by 
this paragraph must be recovered by increasing subsequent 
required installments to the extent the reductions have not 
previously been recovered.  A reduction shall be treated as 
recaptured for purposes of this paragraph if 90 percent of the 
reduction is recaptured.  
    (5) The "annualized income installment" is the excess, if 
any, of: 
    (a) an amount equal to the applicable percentage of the tax 
for the taxable year computed by placing on an annualized basis 
the taxable income: 
    (i) for the first two months of the taxable year, in the 
case of the first required installment; 
    (ii) for the first two months or for the first five months 
of the taxable year, in the case of the second required 
installment; 
    (iii) for the first six months or for the first eight 
months of the taxable year, in the case of the third required 
installment; and 
    (iv) for the first nine months or for the first 11 months 
of the taxable year, in the case of the fourth required 
installment, over; 
     (b) the aggregate amount of any prior required installments 
for the taxable year. 
     (c) For the purpose of this paragraph, the annualized 
income shall be computed by placing on an annualized basis the 
taxable income for the year up to the end of the month preceding 
the due date for the quarterly payment multiplied by 12 and 
dividing the resulting amount by the number of months in the 
taxable year (2, 5, 6, 8, 9, or 11 as the case may be) referred 
to in clause (a). 
     (d) The "applicable percentage" used in clause (a) is: 
     In the case of the following         The applicable
     required installments:               percentage is:
               1st                             22.5
               2nd                             45
               3rd                             67.5
               4th                             90
     (6)(a) If this paragraph applies, the amount determined for 
any installment must be determined in the following manner: 
     (i) take the taxable income for all months during the 
taxable year preceding the filing month; 
     (ii) divide that amount by the base period percentage for 
all months during the taxable year preceding the filing month; 
     (iii) determine the tax on the amount determined under item 
(ii); and 
     (iv) multiply the tax computed under item (iii) by the base 
period percentage for the filing month and all months during the 
taxable year preceding the filing month. 
     (b) For purposes of this paragraph: 
     (i) the "base period percentage" for any period of months 
is the average percent which the taxable income for the 
corresponding months in each of the three preceding taxable 
years bears to the taxable income for the three preceding 
taxable years; 
    (ii) the term "filing month" means the month in which the 
installment is required to be paid; 
    (iii) this paragraph shall only apply if the base period 
percentage for any six consecutive months of the taxable year 
equals or exceeds 70 percent; and 
    (iv) the commissioner may provide by rule for the 
determination of the base period percentage in the case of 
reorganizations, new corporations, and other similar 
circumstances.  
    (c) In the case of a required installment, determined under 
this paragraph, if the corporation determines that the 
installment is less than the amount determined in paragraph (1), 
the amount of the required installment is the amount determined 
under this paragraph and the recapture of previous quarters' 
reductions allowed by this paragraph must be recovered by 
increasing subsequent required installments to the extent the 
reductions have not previously been recovered.  A reduction 
shall be treated as recaptured for purposes of this paragraph if 
90 percent of the reduction is recaptured.  
    Sec. 38.  Minnesota Statutes 1988, section 298.01, is 
amended by adding a subdivision to read: 
    Subd. 3c.  [ALTERNATIVE MINIMUM TAX.] For purposes of 
calculating the alternative minimum tax under section 290.0921, 
Minnesota alternative minimum taxable income must be computed 
under the provisions of subdivisions 3, 3a, and 3b, and the 
provisions of section 290.0921, except that: 
    (1) the adjustment for adjusted current earnings under 
section 56(g) of the Internal Revenue Code of 1986, as amended 
through December 31, 1988, must be determined using gross income 
as defined in subdivision 3a; and 
    (2) the tax preference for depletion under section 57(a)(1) 
of the Internal Revenue Code of 1986, as amended through 
December 31, 1988, must be included in alternative minimum 
taxable income. 
    Sec. 39.  Minnesota Statutes 1988, section 298.01, is 
amended by adding a subdivision to read: 
    Subd. 4d.  [ALTERNATIVE MINIMUM TAX.] For purposes of 
calculating the alternative minimum tax under section 290.0921, 
Minnesota alternative minimum taxable income must be computed 
under the provisions of subdivisions 4, 4a, 4b and 4c, and the 
provisions of section 290.0921, except that: 
    (1) for purposes of the depreciation adjustments provided 
by section 56(a)(1) of the Internal Revenue Code of 1986, as 
amended through December 31, 1988, the basis for depreciable 
property placed in service is the remaining depreciable basis as 
defined in subdivision 4c; 
    (2) the adjustment for adjusted current earnings under 
section 56(g) of the Internal Revenue Code of 1986, as amended 
through December 31, 1988, must be determined using gross income 
as defined in subdivision 4a; 
    (3) the tax preference for depletion under section 57(a)(1) 
of the Internal Revenue Code of 1986, as amended through 
December 31, 1988, must be included in alternative minimum 
taxable income; and 
    (4) for purposes of calculating the tax preference for 
accelerated depreciation or amortization of certain property 
placed in service before January 1, 1987, under section 57(a)(7) 
of the Internal Revenue Code of 1986, as amended through 
December 31, 1988, the deduction allowable for the taxable year 
shall mean the deduction allowable under subdivision 4c, 
provided that this modification must not reduce the amount of 
tax preference to less than zero. 
    Sec. 40.  Laws 1988, chapter 719, article 1, section 22, is 
amended to read:  
    Sec. 22.  [EFFECTIVE DATES.] 
    Except as otherwise provided, sections 1 to 3 and 16 are 
effective for taxable years beginning after December 31, 1986.  
Sections 5, 7 to 12, 14, 15, 17, and 21 are effective for 
taxable years beginning after December 31, 1987.  The deduction 
allowed under section 4, clause (4) and the ability of surviving 
spouses to use the married filing joint rates in section 7 are 
effective for taxable years beginning after December 31, 1986.  
The rest of sections 4 and 7 are effective for taxable years 
beginning after December 31, 1987.  Section 13 is effective for 
taxable years beginning after December 31, 1984 1973.  Section 
18 is effective the day following final enactment. 
    Sec. 41.  [PENSION EXCLUSION; FEDERAL LAW ENFORCEMENT AND 
CORRECTIONS EMPLOYEES.] 
    Notwithstanding Minnesota Statutes 1986, section 290.08, 
subdivision 26, paragraph (a), clause (4), for purposes of the 
pension income exclusion contained in Minnesota Statutes 1986, 
section 290.08, subdivision 26, for taxable years beginning 
after December 31, 1984, and before January 1, 1987, an 
individual who received pension income for service as a law 
enforcement or corrections officer employed by the federal 
government is a qualified recipient without regard to age. 
    Sec. 42.  [AMENDING RETURNS.] 
    Individuals qualifying for the pension exclusion under 
section 41 for taxable years beginning after December 31, 1984, 
and before January 1, 1987, may file amended returns under 
Minnesota Statutes, section 290.391.  Notwithstanding section 
290.50, subdivision 1, paragraph (a), a federal retiree may file 
an amended return and the commissioner may allow a refund for 
tax year 1985 based on the change made by section 41 if the 
amended return is filed with the commissioner prior to October 
15, 1990. 
    Sec. 43.  [STATEMENT OF PURPOSE; ALTERNATIVE MINIMUM TAX.] 
    The purpose of the corporate alternative minimum tax 
provisions of this act is to insure that all corporations with 
economic profits, broadly defined, pay at least a minimum 
corporate franchise tax.  The changes are intended to be revenue 
neutral, neither increasing nor reducing state corporate 
franchise tax revenues.  The legislature intends to continue, 
during 1989 and 1990, studying the corporate alternative minimum 
tax and attempting to develop a more appropriate tax structure 
for achieving that purpose. 
    Sec. 44.  [RAILROAD RETIREMENT REFUNDS.] 
    In determining the amount of a refund to be paid as a 
result of the resolution of litigation over the taxability of 
benefits received under the Railroad Retirement Act of 1974, the 
commissioner of revenue shall determine the amount of the tax 
due without regard to Minnesota Statutes, section 290.06, 
subdivision 2c, paragraph (f).  The provisions of this section 
apply to taxable years beginning before January 1, 1989 only. 
    Sec. 45.  [TEMPORARY ALTERNATIVE MINIMUM TAX EXEMPTION.] 
    Corporations subject to tax under Minnesota Statutes, 
sections 60A.15, subdivision 1, and 290.35 or exempt from tax 
under section 290.092, subdivision 2, are not subject to the tax 
imposed by Minnesota Statutes, section 290.0921 for taxable 
years beginning after December 31, 1989 and before January 1, 
1991. 
    Sec. 46.  [REPEALER.] 
    Minnesota Statutes 1988, section 290.092, subdivision 5, is 
repealed. 
    Sec. 47.  [EFFECTIVE DATE.] 
    Section 1 is effective October 1, 1989, for returns filed 
after December 31, 1988. 
    Sections 3 is effective for premiums paid after December 
31, 1988. 
    Sections 7, 8, and 27 are effective for taxable years 
beginning after December 31, 1986. 
    Sections 2; 9; 12 to 14; 16; 22, subdivisions 1 to 6 and 8; 
and 32 are effective for taxable years beginning after December 
31, 1989.  
    Sections 15, 17, 19, and 28, paragraph (a), clause (2)(i), 
and paragraph (f), are effective for taxable years beginning 
after December 31, 1988. 
    Sections 4 to 6, 10, 11, 18, 23, 24, 26, 28, paragraph (a), 
clause (2)(ii), 29, 30, and 31 are effective for taxable years 
beginning after December 31, 1990. 
    Sections 20 and 21 are effective for alternative minimum 
tax paid in taxable years beginning after December 31, 1988 and 
for carryover credits allowed in taxable years beginning after 
December 31, 1989. 
    Section 22, subdivision 7, is effective for taxable years 
beginning after December 31, 1989, in its application to section 
936 corporations and for taxable years beginning after December 
31, 1990, in its application to all other foreign operating 
companies. 
    Sections 25, 36, and 40 to 46 are effective the day 
following final enactment. 
    Section 33 is effective the day following final enactment 
for taxable years beginning after December 31, 1973. 
     Section 34 is effective after December 31, 1989. 
    Section 35 is effective for notices sent by the 
commissioner of jobs and training after July 31, 1989. 
    Section 37 is effective for payments due after October 1, 
1989. 
    Sections 38 and 39 are effective for ores mined after 
December 31, 1989. 

                               ARTICLE 11

                       REAL ESTATE ASSURANCE FUND
    Section 1.  Minnesota Statutes 1988, section 284.28, 
subdivision 4, is amended to read: 
    Subd. 4.  Except as provided in subdivision 5, no person 
under disability to sue during the one year periods provided by 
subdivisions 2 and 3 by reason of absence, infancy, mental 
illness resulting in commitment pursuant to chapter 253B, or any 
other disability shall have a right to assert any cause of 
action or defense adverse to the title of the state, or its 
successors in interest, in any proceeding at law or in equity 
for opening, vacating, setting aside or invalidating the 
forfeiture, the auditor's certificate of sale or the state 
assignment certificate.  Persons under the disability to sue 
shall have the right to commence an action for recovery of 
damages out of the assurance general fund after the disability 
is removed in accordance with subdivision 10. 
    Sec. 2.  Minnesota Statutes 1988, section 284.28, 
subdivision 7, is amended to read: 
    Subd. 7.  Any claimant who by reason of any material 
failure, omission, error or defect of any public officer or 
employee in the performance of the officer's or employee's 
duties under the laws relating to the taxation of land or 
forfeiture thereof is unjustly deprived of any land or of any 
interest therein, may institute an action in the district court 
to recover compensation for such unjust deprivation out of the 
assurance account general fund provided in subdivision 8. 
    Sec. 3.  Minnesota Statutes 1988, section 386.015, 
subdivision 5, is amended to read: 
    Subd. 5.  The county recorder shall charge and collect all 
fees as prescribed by law and all such fees collected as county 
recorder shall be paid to the county in the manner and at the 
time prescribed by the county board, but not less often than 
once each month.  This subdivision shall apply to the fees 
collected by the county recorder in performing the duties of the 
registrar of titles and all such fees shall be paid to the 
county as herein provided except that money paid to the 
registrar of titles for the assurance state general fund as 
provided in Minnesota Statutes 1961, section 508.74, shall be 
paid to the county as provided in Minnesota Statutes 1961, 
section 508.75.  A county recorder may retain as personal 
compensation any fees the recorder is permitted to charge by law 
for services rendered in a private capacity as a registered 
abstracter as defined in Minnesota Statutes 1961, section 
386.61, subdivision 2, clause (2).  
    Sec. 4.  Minnesota Statutes 1988, section 508.75, is 
amended to read: 
    508.75 [ASSURANCE FUND; INVESTMENT.] 
    All money received by the registrar under the provisions of 
sections 508.74 and 508.82, clause (1) shall be paid quarterly 
by the registrar or the county treasurer to the state treasurer 
and placed in the real estate assurance account as an assurance 
general fund.  There is annually appropriated to the state 
treasurer from the real estate assurance account general fund 
sums sufficient to pay claims ordered by a district court under 
sections 508.77 and 508A.77. 
    Sec. 5.  Minnesota Statutes 1988, section 508.76, is 
amended to read: 
    508.76 [DAMAGES THROUGH ERRONEOUS REGISTRATION; ACTION.] 
    Any person who, without negligence on that person's part, 
sustains any loss or damage by reason of any omission, mistake 
or misfeasance of the registrar or the registrar's deputy, or of 
any examiner or of any court administrator, or of a deputy of 
the court administrator or examiner, in the performance of their 
respective duties under this law, and any person who, without 
negligence on that person's part, is wrongfully deprived of any 
land or of any interest therein by the registration thereof, or 
by reason of the registration of any other person, as the owner 
of such land, or by reason of any mistake, omission, or 
misdescription in any certificate of title, or in any entry or 
memorial, or by any cancellation, in the register of titles, and 
who, by the provisions of this law, is precluded from bringing 
an action for the recovery of such land, or of any interest 
therein, or from enforcing any claim or lien upon the same, may 
institute an action in the district court to recover 
compensation out of the assurance general fund for such loss or 
damage.  
    Sec. 6.  Minnesota Statutes 1988, section 508.77, is 
amended to read: 
     508.77 [PARTIES DEFENDANT; JUDGMENT; EXECUTION.] 
     If such action is brought to recover any loss or damage 
occasioned solely by the registration of such land, or solely by 
the registration of any other person as the owner thereof, or if 
such action be brought for the recovery of any loss or damage 
occasioned solely by the omission, mistake or misfeasance of the 
registrar or the registrar's deputy, or of any examiner or of 
any court administrator, or a deputy of the court administrator 
or examiner, in the performance of their respective duties, the 
state treasurer, in the treasurer's official capacity, shall be 
the sole defendant.  If such action be brought to recover for 
any loss or damage occasioned either wholly, or in part, by the 
fraud or wrongful act of some person other than the officers 
herein named, or to recover for any loss or damage caused 
jointly by the fraud or wrongful act, and by the omission, 
mistake or misfeasance of the officers above named, or any of 
them, and of some other person, the state treasurer, in the 
treasurer's official capacity, and such other person shall be 
joined as defendants therein.  In any action where there are 
defendants other than the state treasurer, no execution shall 
issue against such treasurer until execution against all other 
defendants against whom judgment has been recovered has been 
returned unsatisfied, either in whole or in part.  An officer 
returning such execution shall certify thereon that the amount 
still due upon the execution cannot be collected from them.  
Thereupon the court, being satisfied as to the truth of the 
return, shall order the state treasurer to pay the amount due 
upon such execution out of the assurance general fund.  If the 
assurance fund is insufficient to pay the amount of any judgment 
in full, the unpaid balance thereof shall bear interest at the 
legal rate and be paid out of the first moneys coming into the 
assurance fund.  The attorney general or, at the request of 
either the attorney general or the board of county commissioners 
of the county in which the land or a major part of it lies, the 
county attorney of that county shall defend the state treasurer 
in all such actions. 
    Sec. 7.  Minnesota Statutes 1988, section 508.78, is 
amended to read: 
    508.78 [LIABILITY OF ASSURANCE FUND.] 
    No person shall recover from the assurance general fund any 
sum by reason of any loss, damage, or deprivation occasioned 
solely by a breach of trust on the part of any registered owner 
who is trustee, or by the improper exercise of any power of sale 
in a mortgage, nor shall any person recover from the assurance 
general fund any greater sum than the fair market value of the 
real estate at the time of the last payment into such fund, on 
account thereof. 
    Sec. 8.  Minnesota Statutes 1988, section 508.79, is 
amended to read: 
    508.79 [LIMITATION OF ACTION.] 
    Any action or proceeding pursuant to section 508.76 to 
recover damages out of the assurance general fund, shall be 
commenced within six years from the time when the right to 
commence the same accrued, and not afterwards.  If at the time 
the right accrued or thereafter within the six-year period, the 
person entitled to bring such action or proceeding is a minor, 
or insane, or imprisoned, or absent from the United States in 
its service or the service of the state, such person, or anyone 
claiming under that person, may commence such action or 
proceeding within two years after such disability is removed. 
    Sec. 9.  Minnesota Statutes 1988, section 508.82, is 
amended to read: 
    508.82 [REGISTRAR'S FEES.] 
    The fees to be paid to the registrar shall be as follows: 
    (1) of the fees provided herein, five percent of the fees 
collected under clauses (3), (4), (11), (13), (14), (15), (17), 
and (18) for filing or memorializing shall be paid to the state 
treasurer and credited to the real estate assurance account 
general fund; 
    (2) for registering each original certificate of title, and 
issuing a duplicate of it, $20; 
    (3) for registering each instrument transferring the fee 
simple title for which a new certificate of title is issued and 
for the issuance and registration of the new certificate of 
title, $20; 
    (4) for the entry of each memorial on a certificate and 
endorsements upon duplicate certificates, $10; 
    (5) for issuing each mortgagee's or lessee's duplicate, 
$10; 
    (6) for issuing each residue certificate, $20; 
    (7) for exchange certificates, $10 for each certificate 
canceled and $10 for each new certificate issued; 
    (8) for each certificate showing condition of the register, 
$10; 
    (9) for any certified copy of any instrument or writing on 
file in the registrar's office, the same fees allowed by law to 
county recorders for like services; 
    (10) for a noncertified copy of any instrument or writing 
on file in the office of the registrar of titles, or any 
specified page or part of it, an amount as determined by the 
county board for each page or fraction of a page specified.  If 
computer or microfilm printers are used to reproduce the 
instrument or writing, a like amount per image; 
      (11) for filing two copies of any plat in the office of the 
registrar, $30; 
      (12) for any other service under this chapter, such fee as 
the court shall determine; 
      (13) for issuing a duplicate certificate of title pursuant 
to the directive of the examiner of titles in counties in which 
the compensation of the examiner is paid in the same manner as 
the compensation of other county employees, $50, plus $10 to 
memorialize; 
     (14) for issuing a duplicate certificate of title pursuant 
to the directive of the examiner of titles in counties in which 
the compensation of the examiner is not paid by the county or 
pursuant to an order of the court, $10; 
     (15) for filing a condominium plat or an amendment to it in 
accordance with chapter 515, $30; 
     (16) for a copy of a condominium plat filed pursuant to 
chapters 515 and 515A, the fee shall be $1 for each page of the 
condominium plat with a minimum fee of $10; 
     (17) for filing a condominium declaration and plat or an 
amendment to it in accordance with chapter 515A, $10 for each 
certificate upon which the document is registered and $30 for 
the filing of the condominium plat or an amendment thereto; 
     (18) for the filing of a certified copy of a plat of the 
survey pursuant to section 508.23 or 508.671, $10; 
     (19) for filing a registered land survey in triplicate in 
accordance with section 508.47, subdivision 4, $30; 
     (20) for furnishing a certified copy of a registered land 
survey in accordance with section 508.47, subdivision 4, $10. 
    Sec. 10.  Minnesota Statutes 1988, section 508A.76, is 
amended to read: 
    508A.76 [DAMAGES THROUGH ERRONEOUS REGISTRATION; ACTION.] 
    Any person who, without negligence on that person's part, 
sustains any loss or damage by reason of any omission, mistake 
or misfeasance of the registrar or the registrar's deputy, or of 
any examiner or of any court administrator, or of a deputy of 
the court administrator or examiner, in the performance of their 
respective duties under sections 508A.01 to 508A.85, and any 
person who, without negligence on that person's part, is 
wrongfully deprived of any land or of any interest in it by the 
registration of it, or by reason of the registration of any 
other person, as the owner of the land, or by reason of any 
mistake, omission, or misdescription in any CPT, or in any entry 
or memorial, or by any cancellation, in the register of titles, 
and who, by the provisions of sections 508A.01 to 508A.85, is 
precluded from bringing an action for the recovery of the land, 
or of any interest in it, or from enforcing any claim or lien 
upon the same, may institute an action in the district court to 
recover compensation out of the assurance general fund for the 
loss or damage.  
    Sec. 11.  Minnesota Statutes 1988, section 508A.77, is 
amended to read: 
     508A.77 [PARTIES DEFENDANT; JUDGMENT; EXECUTION.] 
     If an action is brought to recover any loss or damage 
occasioned solely by the registration of the land, or solely by 
the registration of any other person as the owner thereof, or if 
the action be brought for the recovery of any loss or damage 
occasioned solely by the omission, mistake or misfeasance of the 
registrar or the registrar's deputy, or of any examiner or of 
any court administrator, or of a deputy of the court 
administrator or examiner, in the performance of their 
respective duties, the state treasurer, in the treasurer's 
official capacity, shall be the sole defendant.  If the action 
is brought to recover for any loss or damage occasioned either 
wholly, or in part, by the fraud or wrongful act of some person 
other than the officers herein named, or to recover for any loss 
or damage caused jointly by the fraud or wrongful act, and by 
the omission, mistake or misfeasance of the officers above 
named, or any of them, and of some other person, the state 
treasurer, in the treasurer's official capacity, and the other 
person shall be joined as defendants in it.  In any action where 
there are defendants other than the state treasurer, no 
execution shall issue against the treasurer until execution 
against all other defendants against whom judgment has been 
recovered has been returned unsatisfied, either in whole or in 
part.  An officer returning the execution shall certify on it 
that the amount still due upon the execution cannot be collected 
from them.  The court, being satisfied as to the truth of the 
return, shall then order the state treasurer to pay the amount 
due upon the execution out of the assurance general fund.  If 
the assurance fund is insufficient to pay the amount of any 
judgment in full, the unpaid balance on it shall bear interest 
at the legal rate and be paid out of the first moneys coming 
into the assurance fund.  The attorney general or, at the 
request of either the attorney general or the board of county 
commissioners of the county in which the land or a major part of 
it lies, the county attorney of that county shall defend the 
state treasurer in all these actions.  
    Sec. 12.  Minnesota Statutes 1988, section 508A.78, is 
amended to read: 
    508A.78 [LIABILITY OF ASSURANCE FUND.] 
    No person shall recover from the assurance general fund any 
sum by reason of any loss, damage, or deprivation occasioned 
solely by a breach of trust on the part of any registered owner 
who is trustee, or by the improper exercise of any power of sale 
in a mortgage, nor shall any person recover from the assurance 
general fund any greater sum than the fair market value of the 
real estate at the time of the last payment into that fund, on 
account thereof. 
    Sec. 13.  Minnesota Statutes 1988, section 508A.79, is 
amended to read: 
    508A.79 [LIMITATION OF ACTION.] 
    Any action or proceeding pursuant to section 508A.76 to 
recover damages out of the assurance general fund shall be 
commenced within six years from the time when the right to 
commence the same accrued, and not afterwards.  If at the time 
the right accrued or thereafter within the six-year period, the 
person entitled to bring the action or proceeding is a minor, or 
insane, or imprisoned, or absent from the United States in its 
service or the service of the state, the person, or anyone 
claiming under the person, may commence the action or proceeding 
within two years after the disability is removed.  
    Sec. 14.  Minnesota Statutes 1988, section 508A.82, is 
amended to read: 
    508A.82 [REGISTRAR'S FEES.] 
    The fees to be paid to the registrar shall be as follows:  
    (1) of the fees provided herein, five percent of the fees 
collected under clauses (3), (4), (11), (13), (14), (15), and 
(17) for filing or memorializing shall be paid to the state 
treasurer and credited to the real estate assurance account 
general fund; 
    (2) for registering each original CPT, and issuing a 
duplicate of it, $20; 
    (3) for registering each instrument transferring the fee 
simple title for which a new CPT is issued and for the issuance 
and registration of the new CPT, $20; 
    (4) for the entry of each memorial on a certificate and 
endorsements upon duplicate CPTs, $10; 
    (5) for issuing each mortgagee's or lessee's duplicate, 
$10; 
    (6) for issuing each residue CPT, $20; 
    (7) for exchange CPTs, $10 for each CPT canceled and $10 
for each new CPT issued; 
    (8) for each certificate showing condition of the register, 
$10; 
    (9) for any certified copy of any instrument or writing on 
file in the registrar's office, the same fees allowed by law to 
county recorders for like services; 
    (10) for a noncertified copy of any instrument or writing 
on file in the office of the registrar of titles, or any 
specified page or part of it, an amount as determined by the 
county board for each page or fraction of a page specified.  If 
computer or microfilm printers are used to reproduce the 
instrument or writing, a like amount per image; 
      (11) for filing two copies of any plat in the office of the 
registrar, $30; 
      (12) for any other service under sections 508A.01 to 
508A.85, the fee the court shall determine; 
     (13) for issuing a duplicate CPT pursuant to the directive 
of the examiner of titles in counties in which the compensation 
of the examiner is paid in the same manner as the compensation 
of other county employees, $50, plus $10 to memorialize; 
     (14) for issuing a duplicate CPT pursuant to the directive 
of the examiner of titles in counties in which the compensation 
of the examiner is not paid by the county or pursuant to an 
order of the court, $10; 
     (15) for filing a condominium plat or an amendment to it in 
accordance with chapter 515, $30; 
     (16) for a copy of a condominium plat filed pursuant to 
chapters 515 and 515A, the fee shall be $1 for each page of the 
plat with a minimum fee of $10; 
     (17) for filing a condominium declaration and condominium 
plat or an amendment to it in accordance with chapter 515A, $10 
for each certificate upon which the document is registered and 
$30 for the filing of the condominium plat or an amendment to 
it; 
     (18) in counties in which the compensation of the examiner 
of titles is paid in the same manner as the compensation of 
other county employees, for each parcel of land contained in the 
application for a CPT, as the number of parcels is determined by 
the examiner, $50; 
     (19) for filing a registered land survey in triplicate in 
accordance with section 508A.47, subdivision 4, $30; 
     (20) for furnishing a certified copy of a registered land 
survey in accordance with section 508A.47, subdivision 4, $10. 
     Sec. 15.  [EFFECTIVE DATE.] 
     Sections 1 to 14 are effective July 1, 1989. 

                               ARTICLE 12

                              SALES TAXES 
    Section 1.  Minnesota Statutes 1988, section 270.77, is 
amended to read: 
    270.77 [SUBSTANTIAL UNDERSTATEMENT OF LIABILITY.] 
    The commissioner of revenue shall impose a penalty for 
substantial understatement of any tax payable to the 
commissioner, except a tax imposed under chapter 297A.  
    There must be added to the tax an amount equal to 25 
percent of the amount of any underpayment attributable to the 
understatement.  There is a substantial understatement of tax 
for the period if the amount of the understatement for the 
period exceeds the greater of:  (1) ten percent of the tax 
required to be shown on the return for the period; or (2)(a) 
$10,000 in the case of a corporation other than an S corporation 
as defined in section 290.9725 when the tax is imposed by 
chapter 290, or (b) $5,000 in the case of any other taxpayer, 
and in the case of a corporation any tax not imposed by chapter 
290.  The term "understatement" means the excess of the amount 
of the tax required to be shown on the return for the period, 
over the amount of the tax imposed which is shown on the 
return.  The amount of the understatement shall be reduced by 
that portion of the understatement which is attributable to the 
tax treatment of any item by the taxpayer if there is or was 
substantial authority for the treatment, or any item with 
respect to which the relevant facts affecting the item's tax 
treatment are adequately disclosed in the return or in a 
statement attached to the return.  The special rules in cases 
involving tax shelters provided in section 6661(b)(2)(C) of the 
Internal Revenue Code of 1954, as amended through December 31, 
1985, shall apply and shall apply to a tax shelter the principal 
purpose of which is the avoidance or evasion of state taxes.  
The commissioner may abate all or any part of the addition to 
the tax provided by this section on a showing by the taxpayer 
that there was reasonable cause for the understatement, or part 
of it, and that the taxpayer acted in good faith.  The 
additional tax and penalty shall bear interest at the rate 
specified in section 270.75 from the time the tax should have 
been paid until paid.  
    Sec. 2.  Minnesota Statutes 1988, section 297A.01, 
subdivision 3, is amended to read: 
    Subd. 3.  A "sale" and a "purchase" includes, but is not 
limited to, each of the following transactions: 
     (a) Any transfer of title or possession, or both, of 
tangible personal property, whether absolutely or conditionally, 
and the leasing of or the granting of a license to use or 
consume tangible personal property other than manufactured homes 
used for residential purposes for a continuous period of 30 days 
or more, for a consideration in money or by exchange or barter; 
     (b) The production, fabrication, printing or processing of 
tangible personal property for a consideration for consumers who 
furnish either directly or indirectly the materials used in the 
production, fabrication, printing, or processing; 
    (c) The furnishing, preparing, or serving for a 
consideration of food, meals or drinks, not including meals or 
drinks served to patients, inmates, or persons residing at 
hospitals, sanitariums, nursing homes, senior citizens homes, 
and correctional, detention, and detoxification facilities, 
meals or drinks purchased for and served exclusively to 
individuals who are 60 years of age or over and their spouses or 
to the handicapped and their spouses by governmental agencies, 
nonprofit organizations, agencies, or churches or pursuant to 
any program funded in whole or part through 42 USCA sections 
3001 through 3045, wherever delivered, prepared or served, meals 
and lunches served at public and private schools, universities 
or colleges.  "Sales" also includes meals furnished by employers 
to employees at less than fair market value, except meals 
furnished to employees of restaurants, resorts, and hotels, and 
except meals furnished at no charge to employees of hospitals, 
nursing homes, boarding care homes, sanitariums, group homes, 
and correctional, detention, and detoxification facilities, who 
are required to eat with the patients, residents, or inmates 
residing in them.  Notwithstanding section 297A.25, subdivision 
2, taxable food or meals include, but are not limited to, the 
following:  
    (i) heated food or drinks; 
    (ii) sandwiches prepared by the retailer; 
     (iii) single sales of prepackaged ice cream or ice milk 
novelties prepared by the retailer; 
     (iv) hand-prepared or dispensed ice cream or ice milk 
products including cones, sundaes, and snow cones; 
     (v) soft drinks and other beverages prepared or served by 
the retailer; 
     (vi) gum; 
     (vii) ice; 
     (viii) all food sold in vending machines; 
     (ix) party trays prepared by the retailers; and 
     (x) all meals and single servings of packaged snack food, 
single cans or bottles of pop, sold in restaurants and bars; 
     (d) The granting of the privilege of admission to places of 
amusement, recreational areas, or athletic events and the 
privilege of having access to and the use of amusement devices, 
tanning facilities, reducing salons, steam baths, turkish baths, 
massage parlors, health clubs, and spas or athletic facilities; 
     (e) The furnishing for a consideration of lodging and 
related services by a hotel, rooming house, tourist court, motel 
or trailer camp and of the granting of any similar license to 
use real property other than the renting or leasing thereof for 
a continuous period of 30 days or more; 
     (f) The furnishing for a consideration of electricity, gas, 
water, or steam for use or consumption within this state, or 
local exchange telephone service, intrastate toll service, and 
interstate toll service, if that service originates from and is 
charged to a telephone located in this state; the tax imposed on 
amounts paid for telephone services is the liability of and 
shall be paid by the person paying for the services.  The 
furnishing for a consideration of access to telephone services 
by a hotel to its guests is a sale under this clause.  Sales by 
municipal corporations in a proprietary capacity are included in 
the provisions of this clause.  The furnishing of water and 
sewer services for residential use shall not be considered a 
sale; 
    (g) The furnishing for a consideration of cable television 
services, including charges for basic monthly service, charges 
for monthly premium service, and charges for any other similar 
television services; 
    (h) Notwithstanding subdivision 4, and section 297A.25, 
subdivision 9, the sales of horses including claiming sales and 
fees paid for breeding a stallion to a mare.  This clause 
applies to sales and fees with respect to a horse to be used for 
racing whose birth has been recorded by the Jockey Club or the 
United States Trotting Association or the American Quarter Horse 
Association; 
    (i) The furnishing for a consideration of parking services, 
whether on a contractual, hourly, or other periodic basis, 
except for parking at a meter; 
    (j) The furnishing for a consideration of services listed 
in this paragraph: 
     (i) laundry and dry cleaning services including cleaning, 
pressing, repairing, altering, and storing clothes, linen 
services and supply, cleaning and blocking hats, and carpet, 
drapery, upholstery, and industrial cleaning.  Laundry and dry 
cleaning services do not include services provided by coin 
operated facilities operated by the customer; 
     (ii) motor vehicle washing, waxing, and cleaning services, 
including services provided by coin-operated facilities operated 
by the customer, and rustproofing, undercoating, and towing of 
motor vehicles; 
     (iii) building and residential cleaning, maintenance, and 
disinfecting and exterminating services; 
     (iv) services provided by detective agencies, security 
services, burglar, fire alarm, and armored car services not 
including services performed within the jurisdiction they serve 
by off-duty licensed peace officers as defined in section 
626.84, subdivision 1; 
     (v) pet grooming services; and 
     (vi) lawn care, fertilizing, mowing, spraying and sprigging 
services; garden planting and maintenance; arborist services; 
tree, bush, and shrub planting, pruning, bracing, spraying, and 
surgery; and tree trimming for public utility lines. 
The services listed in this paragraph are taxable under section 
297A.02 if the service is performed wholly within Minnesota or 
if the service is performed partly within and partly without 
Minnesota and the greater proportion of the service is performed 
in Minnesota, based on the cost of performance.  In applying the 
provisions of this chapter, the terms "tangible personal 
property" and "sales at retail" include taxable services and the 
provision of taxable services, unless specifically provided 
otherwise.  Services performed by an employee for an employer 
are not taxable under this paragraph.  Services performed by a 
partnership or association for another partnership or 
association are not taxable under this paragraph if one of the 
entities owns or controls more than 80 percent of the voting 
power of the equity interest in the other entity.  Services 
performed between members of an affiliated group of corporations 
are not taxable.  For purposes of this section, "affiliated 
group of corporations" includes those entities that would be 
classified as a member of an affiliated group under United 
States Code, title 26, section 1504, and who are eligible to 
file a consolidated tax return for federal income tax purposes; 
     (k) A "sale" and a "purchase" includes the transfer of 
computer software, meaning information and directions that 
dictate the function performed by data processing equipment.  A 
"sale" and a "purchase" does not include the design, 
development, writing, translation, fabrication, lease, or 
transfer for a consideration of title or possession of a custom 
computer program; and 
    (l) The granting of membership in a club, association, or 
other organization if: 
    (1) the club, association, or other organization makes 
available for the use of its members sports and athletic 
facilities (without regard to whether a separate charge is 
assessed for use of the facilities); and 
    (2) use of the sports and athletic facilities is not made 
available to the general public on the same basis as it is made 
available to members.  
Granting of membership includes both one-time initiation fees 
and periodic membership dues.  Sports and athletic facilities 
include golf courses, tennis, racquetball, handball and squash 
courts, basketball and volleyball facilities, running tracks, 
exercise equipment, swimming pools, and other similar athletic 
or sports facilities.  The provisions of this paragraph do not 
apply to camps or other recreation facilities owned and operated 
by an exempt organization under section 501(c)(3) of the 
Internal Revenue Code of 1986, as amended through December 31, 
1986, for educational and social activities for young people 
primarily age 18 and under.  
    Sec. 3.  Minnesota Statutes 1988, 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 special tooling, and capital equipment is four 
percent and upon sales of farm machinery is two percent.  
    Sec. 4.  Minnesota Statutes 1988, section 297A.15, 
subdivision 5, is amended to read: 
    Subd. 5.  [REFUND; APPROPRIATION.] Notwithstanding the 
provisions of sections 297A.02, subdivision 2 297A.25, 
subdivision 42, and 297A.257 the tax on sales of capital 
equipment, and construction materials and supplies under section 
297A.257, 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.25, subdivision 42, or 
297A.257 shall be paid to the purchaser.  In the case of 
building materials qualifying under section 297A.257 where the 
tax was paid by a contractor, application must be made by the 
owner for the sales tax paid by all the contractors, 
subcontractors, and builders for the project.  The application 
must include sufficient information to permit the commissioner 
to verify the sales tax paid for the project.  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 297A.25, 
subdivision 42, or capital equipment or construction materials 
and supplies under section 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.  
    The amount to be refunded shall bear interest at the rate 
in section 270.76 from the date the refund claim is filed with 
the commissioner. 
     Sec. 5.  Minnesota Statutes 1988, section 297A.15, is 
amended by adding a subdivision to read: 
    Subd. 6.  [REFUND; APPROPRIATION.] The tax on the gross 
receipts from the sale of items exempt under section 297A.25 
subdivision 43, must be imposed and collected as if the sale 
were taxable and the rate under section 297A.02, subdivision 1, 
applied. 
    Upon application by the owner of the homestead property on 
forms prescribed by the commissioner, a refund equal to the tax 
paid on the gross receipts of the building materials and 
equipment must be paid to the homeowner.  In the case of 
building materials in which the tax was paid by a contractor, 
application must be made by the homeowner for the sales tax paid 
by the contractor.  The application must include sufficient 
information to permit the commissioner to verify the sales tax 
paid for the project.  The contractor must furnish to the 
homeowner a statement of the cost of building materials and the 
sales taxes paid on the materials.  The amount required to make 
the refunds is annually appropriated to the commissioner.  
Interest must be paid on the refund at the rate in section 
270.76 from 60 days after the date the refund claim is filed 
with the commissioner. 
    Sec. 6.  Minnesota Statutes 1988, section 297A.25, 
subdivision 3, is amended to read: 
    Subd. 3.  [MEDICINES; MEDICAL DEVICES.] The gross receipts 
from the sale of prescribed drugs, prescribed medicine and 
insulin, intended for use, internal or external, in the cure, 
mitigation, treatment or prevention of illness or disease in 
human beings are exempt, together with prescription glasses, 
therapeutic, and prosthetic devices.  "Prescribed drugs" or 
"prescribed medicine" includes over-the-counter drugs or 
medicine prescribed by a licensed physician.  "Therapeutic 
devices" includes reusable finger pricking devices for the 
extraction of blood and blood glucose monitoring machines used 
in the treatment of diabetes.  Nonprescription analgesics 
consisting principally (determined by the weight of all 
ingredients) of acetaminophen, acetylsalicylic acid, ibuprofen, 
or a combination thereof are exempt. 
    Sec. 7.  Minnesota Statutes 1988, section 297A.25, is 
amended by adding a subdivision to read:  
    Subd. 42.  [CAPITAL EQUIPMENT.] The gross receipts from the 
sale of capital equipment are exempt.  
     Sec. 8.  Minnesota Statutes 1988, section 297A.25, is 
amended by adding a subdivision to read: 
    Subd. 43.  [CHAIR LIFTS, RAMPS, ELEVATORS.] The gross 
receipts from the sale of chair lifts, ramps, and elevators and 
building materials used to install or construct them are exempt, 
if they are authorized by a physician and installed in or 
attached to the owner's homestead. 
    Sec. 9.  Minnesota Statutes 1988, section 297A.257, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DESIGNATION OF DISTRESSED COUNTIES.] (a) 
The commissioner of trade and economic development shall 
annually on June 1 designate those counties which are 
distressed.  A county is distressed if it satisfies at least one 
of the following 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 jobs and 
training, is dependent upon agriculture; or 
     (3) for counties designated for periods beginning after 
June 30, 1986, but before July 1, 1988, at least 20 percent of 
the county's economy, as determined by the commissioner of jobs 
and training, is dependent upon agriculture and the total market 
value of real and personal property for the entire county for 
taxes payable in 1986, as determined by the commissioner of 
revenue, has decreased by at least 22 percent from the total 
market value of real and personal property for the entire county 
for taxes payable in 1984.  
     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, except that 
designations made effective July 1, 1988, shall remain in effect 
until December 31, 1989, with respect to equipment placed in 
service by December 31, 1989.  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 for designations made effective July 1, 
1988. 
    Sec. 10.  [297A.259] [LOTTERY TICKETS; IN LIEU TAX.] 
    Sales of state lottery tickets are exempt from the tax 
imposed under section 297A.02.  The state lottery division in 
the department of gaming must on or before the 20th day of each 
month transmit to the commissioner of revenue an amount equal to 
the gross receipts from the sale of lottery tickets for the 
previous month multiplied by the tax rate under section 297A.02, 
subdivision 1.  The resulting payment is in lieu of the sales 
tax that otherwise would be imposed by this chapter.  The 
commissioner shall deposit the money transmitted in the general 
fund as provided by section 297A.44 and the money must be 
treated as other proceeds of the sales tax.  Gross receipts for 
purposes of this section mean the proceeds of the sale of 
tickets before deduction of a commission or other compensation 
paid to the vendor or retailer for selling tickets. 
    Sec. 11.  Minnesota Statutes 1988, section 297A.39, is 
amended by adding a subdivision to read: 
    Subd. 9.  [INTENTIONAL DISREGARD OF LAW OR RULES.] If any 
part of any underpayment resulting from an additional assessment 
is due to negligence or intentional disregard of the provisions 
of this chapter or rules of the commissioner of revenue (but 
without intent to defraud), there shall be added to the tax an 
amount equal to ten percent of the additional assessment.  The 
penalty imposed by this subdivision must be collected as part of 
the tax and is in addition to any other penalties provided by 
this chapter.  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. 
    Sec. 12.  [EFFECTIVE DATE.] 
    Sections 1 and 11 are effective for penalties imposed after 
October 31, 1989.  Sections 2 and 6 are effective for sales 
after October 31, 1989.  Sections 3, 4, and 7 are effective for 
sales after September 30, 1989, provided that they do not apply 
to sales made under bona fide contracts that were enforceable 
before October 1, 1989.  Sections 5 and 8 are effective for 
sales after January 1, 1990.  Sections 9 and 10 are effective 
the day following final enactment. 

                               ARTICLE 13

                          LAWFUL GAMBLING TAX 
    Section 1.  Minnesota Statutes 1989 Supplement, section 
349.12, subdivision 11, is amended to read: 
    Subd. 11.  (a) "Lawful purpose" means one or more of the 
following:  
    (1) benefiting persons by enhancing their opportunity for 
religious or educational advancement, by relieving or protecting 
them from disease, suffering or distress, by contributing to 
their physical well-being, by assisting them in establishing 
themselves in life as worthy and useful citizens, or by 
increasing their comprehension of and devotion to the principles 
upon which this nation was founded; 
    (2) initiating, performing, or fostering worthy public 
works or enabling or furthering the erection or maintenance of 
public structures; 
    (3) lessening the burdens borne by government or 
voluntarily supporting, augmenting or supplementing services 
which government would normally render to the people; 
    (4) payment of local taxes imposed authorized under this 
chapter, and other taxes imposed by the state or the United 
States on receipts from lawful gambling; 
    (5) any expenditure by, or any contribution to, a hospital 
or nursing home exempt from taxation under section 501(c)(3) of 
the Internal Revenue Code; or 
    (6) payment of reasonable costs incurred in complying with 
the performing of annual audits required under section 349.19, 
subdivision 9; 
     (7) payment of real estate taxes and assessments on 
licensed gambling premises wholly owned by the licensed 
organization; or 
     (8) if approved by the board, construction, improvement, 
expansion, maintenance, and repair of athletic fields and 
outdoor ice rinks and their appurtenances, owned by the 
organization or a public agency. 
    (b) "Lawful purpose" does not include the erection, 
acquisition, improvement, expansion, repair, or maintenance of 
any real property or capital assets owned or leased by an 
organization, other than a hospital or nursing home exempt from 
taxation under section 501(c)(3) of the Internal Revenue Code, 
unless the board has first specifically authorized the 
expenditures after finding:  (1) that the property or capital 
assets will be used exclusively for one or more of the purposes 
specified in paragraph (a), clauses (1) to (3); or (2) with 
respect to expenditures for repair or maintenance only, that the 
property is or will be used extensively as a meeting place or 
event location by other nonprofit organizations or community or 
service groups and that no rental fee is charged for the use; or 
(3) with respect to expenditures for erection or acquisition 
only, that the erection or acquisition is necessary to replace 
with a comparable building a building owned by the organization 
and destroyed or made uninhabitable by fire or natural disaster, 
provided that the expenditure may be only for that part of the 
replacement cost not reimbursed by insurance.  The board may 
shall by rule adopt procedures and standards to administer this 
subdivision. 
    Sec. 2.  Minnesota Statutes 1988, section 349.12, 
subdivision 19, is amended to read: 
    Subd. 19.  [IDEAL GROSS.] "Ideal gross" means the total 
amount of receipts that would be received if every individual 
ticket in the pull-tab or tipboard deal was sold at its face 
value.  In the calculation of ideal gross and prizes, a free 
play ticket shall be valued at face value. 
    Sec. 3.  Minnesota Statutes 1988, section 349.12, is 
amended by adding a subdivision to read: 
    Subd. 26.  [GROSS RECEIPTS.] "Gross receipts" means all 
receipts derived from lawful gambling activity including, but 
not limited to, the following items: 
    (1) gross sales of bingo cards and sheets before reduction 
for prizes, expenses, shortages, free plays, or any other 
charges or offsets; 
    (2) the ideal gross of pull-tab and tipboard deals or games 
less the value of unsold and defective tickets and before 
reduction for prizes, expenses, shortages, free plays, or any 
other charges or offsets; 
    (3) gross sales of raffle tickets and paddle tickets before 
reduction for prizes, expenses, shortages, free plays, or any 
other charges or offsets; 
    (4) admission, commission, cover, or other charges imposed 
on participants in lawful gambling activity as a condition for 
or cost of participation; and 
    (5) interest, dividends, annuities, profit from 
transactions, or other income derived from the accumulation or 
use of gambling proceeds. 
    Gross receipts does not include proceeds from rental under 
section 349.164 or 349.18, subdivision 3, for duly licensed 
bingo hall lessors. 
    Sec. 4.  Minnesota Statutes 1988, section 349.12, is 
amended by adding a subdivision to read:  
    Subd. 27.  [FISCAL YEAR.] "Fiscal year 1990" means the 
period from October 1, 1989, to June 30, 1990.  For all 
subsequent times, "fiscal year" means the period from July 1 to 
June 30.  
    Sec. 5.  Minnesota Statutes 1988, section 349.12, is 
amended by adding a subdivision to read: 
    Subd. 28.  [FACE VALUE.] "Face value" means the price per 
ticket printed on the ticket or the flare. 
    Sec. 6.  Minnesota Statutes 1988, section 349.12, is 
amended by adding a subdivision to read: 
    Subd. 29.  [FREE PLAY.] "Free play" means a winning ticket 
that is labeled as a free play or its equivalent.  
    Sec. 7.  Minnesota Statutes 1989 Supplement, section 
349.15, is amended to read: 
    349.15 [USE OF GROSS PROFITS.] 
    (a) Gross profits from lawful gambling may be expended only 
for lawful purposes or allowable expenses as authorized at a 
regular meeting of the conducting organization.  Provided that 
no more than 55 percent of the gross profits profit less the tax 
imposed under section 349.212, subdivision 1, from bingo, and no 
more than 45 50 percent for of the gross profit less the taxes 
imposed by section 349.212, subdivisions 1, 4, and 6 from other 
forms of lawful gambling, may be expended for allowable expenses 
related to lawful gambling.  
    (b) The board shall provide by rule for the administration 
of this section, including specifying allowable expenses.  The 
rules must specify that no more than one-third of the annual 
premium on a policy of liability insurance procured by the 
organization may be taken as an allowable expense.  This expense 
shall be allowed by the board only to the extent that it relates 
directly to the conduct of lawful gambling and is verified in 
the manner the board prescribes by rule.  The rules may provide 
a maximum percentage of gross profits which may be expended for 
certain expenses.  
    (c) Allowable expenses also include reasonable costs of 
bank account service charges, and the reasonable costs of an 
audit required by the board, except an audit required under 
section 349.19, subdivision 9. 
    (d) Allowable expenses include reasonable legal fees and 
damages that relate to the conducting of lawful gambling, except 
for legal fees or damages incurred in defending the organization 
against the board, attorney general, United States attorney, 
commissioner of revenue, or a county or city attorney.  
    Sec. 8.  Minnesota Statutes 1988, section 349.16, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [RESTRICTIONS ON LICENSE ISSUANCE.] On and after 
October 1, 1989, the board shall not issue an initial license to 
any organization if the board, in consultation with the 
department of revenue, determines that the organization is 
seeking licensing for the primary purpose of evading or reducing 
the tax imposed by section 349.212, subdivision 6. 
    Sec. 9.  Minnesota Statutes 1989 Supplement, section 
349.161, subdivision 1, is amended to read: 
    Subdivision 1.  [PROHIBITED ACTS; LICENSES REQUIRED.] No 
person may:  
    (1) sell, offer for sale, or furnish gambling equipment for 
use within the state for gambling purposes, other than for 
lawful gambling exempt from licensing under section 349.214, 
except to an organization licensed for lawful gambling; or 
    (2) sell, offer for sale, or furnish gambling equipment to 
an organization licensed for lawful gambling without having 
obtained a distributor license under this section; 
    (3) sell, offer for sale, or furnish gambling equipment for 
use within the state that is not purchased or obtained from a 
manufacturer or distributor licensed under this chapter; or 
    (4) sell, offer for sale, or furnish gambling equipment for 
use within the state that has the same serial number as another 
item of gambling equipment of the same type sold or offered for 
sale or furnished for use in the state by that distributor.  
    No licensed organization may purchase gambling equipment 
from any person not licensed as a distributor under this section.
    Sec. 10.  Minnesota Statutes 1989 Supplement, section 
349.163, subdivision 3, is amended to read: 
    Subd. 3.  [PROHIBITED SALES.] A manufacturer may not: 
    (1) sell gambling equipment to any person not licensed as a 
distributor unless the manufacturer is also a licensed 
distributor; or 
    (2) sell gambling equipment to a distributor in this state 
that has the same serial number as another item of gambling 
equipment of the same type that is sold by that manufacturer for 
use in this state. 
    Sec. 11.  Minnesota Statutes 1989 Supplement, section 
349.19, subdivision 6, is amended to read: 
    Subd. 6.  [PRESERVATION OF RECORDS.] The board may require 
that Records required to be kept by this section must be 
preserved by a licensed organization for at least two 3-1/2 
years and may be inspected by employees of the division and the 
division of gambling enforcement commissioner of revenue, the 
commissioner of gaming, or the commissioner of public safety at 
any reasonable time without notice or a search warrant. 
    Sec. 12.  Minnesota Statutes 1988, section 349.212, 
subdivision 1, is amended to read: 
    Subdivision 1.  [RATE IMPOSITION.] There is hereby imposed 
a tax on all lawful gambling, other than (1) pull-tabs purchased 
and placed into inventory after January 1, 1987, and (2) 
tipboards purchased and placed into inventory after June 30, 
1988, conducted by organizations licensed by the board at the 
rate specified in this subdivision of ten percent on the gross 
receipts as defined in section 349.12, subdivision 26, less 
prizes actually paid.  The tax imposed by this subdivision is in 
lieu of the tax imposed by section 297A.02 and all local taxes 
and license fees except a fee authorized under section 349.16, 
subdivision 4, or a tax authorized under section 349.212, 
subdivision 5. 
    On all lawful gambling, other than (1) pull-tabs purchased 
and placed into inventory after January 1, 1987, and (2) 
tipboards purchased and placed into inventory after June 30, 
1988, the tax imposed under this subdivision is ten percent of 
the gross receipts of a licensed organization from lawful 
gambling less prizes actually paid out, payable by the 
organization or party conducting, directly or indirectly, the 
gambling. 
    Sec. 13.  Minnesota Statutes 1988, section 349.212, 
subdivision 2, is amended to read: 
    Subd. 2.  [COLLECTION; DISPOSITION.] The tax must be paid 
to the board at times and in a manner the board prescribes by 
rule taxes imposed by this section are due and payable to the 
commissioner of revenue at the time when the gambling tax return 
is required to be filed.  Returns covering the taxes imposed 
under this section must be filed with the commissioner of 
revenue on or before the 20th day of the month following the 
close of the previous calendar month.  The proceeds, along with 
the revenue received from all license fees and other fees under 
sections 349.11 to 349.21 and 349.211, 349.212, and 349.213, 
must be paid to the state treasurer for deposit in the general 
fund.  
    Sec. 14.  Minnesota Statutes 1988, section 349.212, 
subdivision 4, is amended to read: 
    Subd. 4.  [PULL-TAB AND TIPBOARD TAX.] (a) There is imposed 
a tax on the sale of each deal of pull-tabs and tipboards sold 
by a licensed distributor to a licensed organization, or to an 
organization holding an exemption identification number.  The 
rate of the tax is ten two percent of the ideal net gross of the 
pull-tab and or tipboard deal.  The tax is payable to the 
commissioner of revenue in the manner prescribed in section 
349.2121 and the rules of the commissioner.  The commissioner 
shall pay the proceeds of the tax to the state treasurer for 
deposit in the general fund.  The sales tax imposed by chapter 
297A on the sale of the pull-tabs and tipboards by the licensed 
distributor to an organization is imposed on the retail sales 
price less the tax imposed by this subdivision.  The retail sale 
of pull-tabs or tipboards by the organization is exempt from 
taxes imposed by chapter 297A if the tax imposed by this 
subdivision has been paid and is exempt from all local taxes and 
license fees except a fee authorized under section 349.16, 
subdivision 4. 
    (b) The liability for the tax imposed by this section is 
incurred when the pull-tabs and tipboards are delivered by the 
distributor to the licensed or exempt organization customer, to 
a common or contract carrier for delivery to the organization 
customer, or when received by the organization's customer's 
authorized representative at the distributor's place of 
business, regardless of the distributor's method of accounting 
or the terms of the sale. 
    The tax imposed by this subdivision is imposed on all sales 
of pull-tabs and tipboards, except the following:  
    (1) sales to the governing body of an Indian tribal 
organization for use on an Indian reservation; 
    (2) sales to distributors licensed under this chapter; 
    (3) sales to distributors licensed under the laws of 
another state or of a Province of Canada, as long as all 
statutory and regulatory requirements are met in the other state 
or province; and 
    (4) sales of promotional tickets as defined in section 
349.12.  
    (c) The exemptions contained in section 349.214, 
subdivision 2, paragraph (b), do not apply to the tax imposed in 
this subdivision.  Pull-tabs and tipboards sold to an 
organization that sells pull-tabs and tipboards under the 
exemption from licensing in section 349.214, subdivision 2, 
paragraph (b), are exempt from the tax imposed by this 
subdivision.  A distributor must require an organization 
conducting exempt gambling to show proof of its exempt status 
before making a tax-exempt sale of pull-tabs or tipboards to 
such an organization.  A distributor shall identify, on all 
reports submitted to the commissioner, all sales of pull-tabs 
and tipboards that are exempt from tax under this subdivision.  
    Sec. 15.  Minnesota Statutes 1988, section 349.212, is 
amended by adding a subdivision to read:  
    Subd. 6.  [COMBINED RECEIPTS TAX.] In addition to the taxes 
imposed under subdivisions 1 and 4, there is imposed a tax on 
the combined receipts of the organization.  As used in this 
section, "combined receipts" is the sum of the organization's 
gross receipts from lawful gambling less gross receipts directly 
derived from the conduct of bingo, raffles, and paddlewheels, as 
defined in section 349.12, subdivision 26, for the fiscal year.  
The combined receipts of an organization are subject to a tax 
computed according to the following schedule: 
     If the combined receipts for the       The tax is: 
     fiscal year are: 
     Not over $500,000                      zero 
     Over $500,000 but not over $700,000    two percent of the 
                                            amount over $500,000 
                                            but not over $700,000
     Over $700,000 but not over $900,000    $4,000 plus four 
                                            percent of the amount
                                            over $700,000 but
                                            not over $900,000
     Over $900,000                          $12,000 plus six
                                            percent of the amount
                                            over $900,000
    Sec. 16.  Minnesota Statutes 1988, section 349.2127, 
subdivision 4, is amended to read: 
    Subd. 4.  [TRANSPORTING UNSTAMPED DEALS.] No person shall 
transport into, or receive, carry, or move from place to place 
in this state, any deals of pull-tabs or tipboards not stamped 
in accordance with this chapter except in the course of 
interstate commerce, unless the deals are moving from one 
distributor to another. 
    Sec. 17.  Minnesota Statutes 1988, section 349.2127, is 
amended by adding a subdivision to read: 
    Subd. 5.  [PROVIDING INFORMATION.] No employee of an 
organization shall provide any information to a player that 
would provide an unfair advantage to the player related to the 
potential winnings of any lawful gambling activity.  For 
purposes of this subdivision, "employee" includes a volunteer. 
    Sec. 18.  Minnesota Statutes 1989 Supplement, section 
349.214, subdivision 2, is amended to read: 
    Subd. 2.  [LAWFUL GAMBLING.] (a) Raffles may be conducted 
by an organization as defined in section 349.12, subdivision 12, 
without complying with sections 349.11 to 349.14 and 349.151 to 
349.213 if the value of all raffle prizes awarded by the 
organization in a calendar year does not exceed $750.  
    (b) Lawful gambling may be conducted by an organization as 
defined in section 349.12, subdivision 12, without complying 
with sections 349.151 to 349.16; 349.171 to 349.21; and 349.212 
if: 
    (1) the organization conducts lawful gambling on five or 
fewer days in a calendar year; 
    (2) the organization does not award more than $50,000 in 
prizes for lawful gambling in a calendar year; 
    (3) the organization pays a fee of $25 to the board, 
notifies the board in writing not less than 30 days before each 
lawful gambling occasion of the date and location of the 
occasion, or 60 days for an occasion held in the case of a city 
of the first class, the types of lawful gambling to be 
conducted, the prizes to be awarded, and receives an exemption 
identification number; 
    (4) the organization notifies the local government unit 30 
days before the lawful gambling occasion, or 60 days for an 
occasion held in a city of the first class; 
    (5) the organization purchases all gambling equipment and 
supplies from a licensed distributor; and 
     (6) the organization reports to the board, on a single page 
form prescribed by the board, within 30 days of each gambling 
occasion, the gross receipts, prizes, expenses, expenditures of 
net profits from the occasion, and the identification of the 
licensed distributor from whom all gambling equipment was 
purchased.  
     (c) If the organization fails to file a timely report as 
required by paragraph (b), clause (3) or (6), a $250 penalty is 
imposed on the organization.  Failure to file a timely report 
does not disqualify the organization as exempt under this 
paragraph if a report is subsequently filed and the penalty paid.
     (d) Merchandise prizes must be valued at their fair market 
value. 
     (e) Unused pull-tab and tipboard deals must be returned to 
the distributor within seven working days after the end of the 
lawful gambling occasion.  The distributor must accept and pay a 
refund for all returns of unopened and undamaged deals returned 
under this paragraph. 
    (f) An organization that is exempt from taxation on 
purchases of pull-tabs and tipboards under section 349.212, 
subdivision 4, paragraph (c), must return to the distributor 
tipboard or pull-tab deal no part of which is used at the lawful 
gambling occasion for which it was purchased by the organization.
    Sec. 19.  [349.215] [EXAMINATIONS.] 
    Subdivision 1.  [EXAMINATION OF TAXPAYER.] To determine the 
accuracy of a return or report, or in fixing liability under 
this chapter, the commissioner of revenue may make reasonable 
examinations or investigations of a taxpayer's place of 
business, tangible personal property, equipment, computer 
systems and facilities, pertinent books, records, papers, 
vouchers, computer printouts, accounts, and documents.  
    Subd. 2.  [ACCESS TO RECORDS OF OTHER PERSONS IN CONNECTION 
WITH EXAMINATION OF TAXPAYER.] When conducting an investigation 
or an audit of a taxpayer, the commissioner of revenue may 
examine, except where privileged by law, the relevant records 
and files of a person, business, institution, financial 
institution, state agency, agency of the United States 
government, or agency of another state where permitted by 
statute, agreement, or reciprocity.  The commissioner of revenue 
may compel production of these records by subpoena.  A subpoena 
may be served directly by the commissioner of revenue. 
    Subd. 3.  [POWER TO COMPEL TESTIMONY.] In the 
administration of this chapter, the commissioner of revenue may: 
    (1) Administer oaths or affirmations and compel by subpoena 
the attendance of witnesses, testimony, and the production of a 
person's pertinent books, records, papers, or other data. 
    (2) Examine under oath or affirmation any person regarding 
the business of a taxpayer concerning a matter relevant to the 
administration of this chapter.  The fees of witnesses required 
by the commissioner of revenue to attend a hearing are equal to 
those allowed to witnesses appearing before courts of this 
state.  The fees must be paid in the manner provided for the 
payment of other expenses incident to the administration of 
state tax law. 
    (3) In addition to other remedies available, bring an 
action in equity by the state against a taxpayer for an 
injunction ordering the taxpayer to file a complete and proper 
return or amended return.  The district courts of this state 
shall have jurisdiction over the action, and disobedience of an 
injunction issued under this clause shall be punished as a 
contempt of district court. 
    Subd. 4.  [THIRD PARTY SUBPOENA WHERE TAXPAYER'S IDENTITY 
IS KNOWN.] An investigation may extend to any person that the 
commissioner of revenue determines has access to information 
that may be relevant to the examination or investigation.  When 
a subpoena requiring the production of records under subdivision 
2 is served on a third-party record keeper, written notice of 
the subpoena must be mailed to the taxpayer and to any other 
person who is identified in the subpoena.  The notices must be 
given within three days of the day on which the subpoena is 
served.  Notice to the taxpayer required by this section is 
sufficient if it is mailed to the last address on record with 
the commissioner of revenue. 
    Subd. 5.  [THIRD PARTY SUBPOENA WHERE TAXPAYER'S IDENTITY 
IS NOT KNOWN.] A subpoena that does not identify the person or 
persons whose tax liability is being investigated may be served 
only if: 
    (1) the subpoena relates to the investigation of a 
particular person or ascertainable group or class of persons; 
    (2) there is a reasonable basis for believing that the 
person or group or class of persons may fail or may have failed 
to comply with tax laws administered by the commissioner of 
revenue; 
    (3) the subpoena is clear and specific concerning 
information sought to be obtained; and 
    (4) the information sought to be obtained is limited solely 
to the scope of the investigation.  
    A party served with a subpoena that does not identify the 
person or persons with respect to whose tax liability the 
subpoena is issued may, within three days after service of the 
subpoena, petition the district court in the judicial district 
in which that party is located for a determination whether the 
commissioner of revenue has complied with all the requirements 
in clauses (1) to (4), and thus, whether the subpoena is 
enforceable.  If no petition is made by the party served within 
the time prescribed, the subpoena has the effect of a court 
order. 
    Subd. 6.  [REQUEST BY TAXPAYER FOR SUBPOENA.] When the 
commissioner of revenue has the power to issue a subpoena for 
investigative or auditing purposes, then the commissioner shall 
honor a reasonable request by the taxpayer to issue a subpoena 
on the taxpayer's behalf, if in connection with the 
investigation or audit. 
    Subd. 7.  [APPLICATION TO COURT FOR ENFORCEMENT OF 
SUBPOENA.] The commissioner of revenue or the taxpayer may apply 
to the district court of the county of the taxpayer's residence, 
place of business, or county where the subpoena can be served as 
with any other case at law, for any order compelling the 
appearance of the subpoenaed witness or the production of the 
subpoenaed records.  Failure to comply with the order of the 
court for the appearance of a witness or the production of 
records may be punished by the court as for contempt.  
    Subd. 8.  [COST OF PRODUCTION OF RECORDS.] The cost of 
producing records of a third party required by a subpoena must 
be paid by the taxpayer, if the taxpayer requests the subpoena 
to be issued, or if the taxpayer has the records available but 
has refused to provide them to the commissioner of revenue.  In 
other cases where the taxpayer is unable to produce records and 
the commissioner of revenue then initiates a subpoena for 
third-party records, the commissioner shall pay the reasonable 
cost of producing the records.  The commissioner of revenue may 
later assess the reasonable costs against the taxpayer if the 
records contribute to the determination of an assessment of tax 
against the taxpayer. 
    Sec. 20.  [349.2151] [ASSESSMENTS.] 
   Subdivision 1.  [GENERALLY.] The commissioner of revenue 
shall make determinations, corrections, and assessments with 
respect to taxes (including interest, additions to taxes, and 
assessable penalties) imposed under this chapter. 
    Subd. 2.  [COMMISSIONER OF REVENUE FILED RETURNS.] If a 
taxpayer fails to file a return required by this chapter, the 
commissioner of revenue may make a return for the taxpayer from 
information in the commissioner's possession or obtainable by 
the commissioner.  The return is prima facie correct and valid. 
    Subd. 3.  [ORDER OF ASSESSMENT; NOTICE AND DEMAND TO 
TAXPAYER.] (a) When a return has been filed and the commissioner 
of revenue determines that the tax disclosed by the return is 
different than the tax determined by the examination, the 
commissioner shall send an order of assessment to the taxpayer.  
The order must explain the basis for the assessment and must 
explain the taxpayer's appeal rights.  An assessment by the 
commissioner of revenue must be made by recording the liability 
of the taxpayer in the office of the commissioner of revenue, 
which may be done by keeping a copy of the order of assessment 
sent to the taxpayer.  An order of assessment is final when made 
but may be reconsidered by the commissioner under section 
349.219. 
    (b) The amount of unpaid tax shown on the order must be 
paid to the commissioner of revenue:  (1) within 60 days after 
notice of the amount and demand for its payment have been mailed 
to the taxpayer by the commissioner of revenue; or (2) if an 
administrative appeal is filed under section 349.219 within 60 
days following the determination or compromise of the appeal. 
    Subd. 4.  [ERRONEOUS REFUNDS.] An erroneous refund is 
considered an underpayment of tax on the date made.  An 
assessment of a deficiency arising out of an erroneous refund 
may be made at any time within two years from the making of the 
refund.  If part of the refund was induced by fraud or 
misrepresentation of a material fact, the assessment may be made 
at any time. 
    Subd. 5.  [ASSESSMENT PRESUMED VALID.] A return or 
assessment made by the commissioner of revenue is prima facie 
correct and valid.  The taxpayer has the burden of establishing 
the incorrectness or invalidity of the return or assessment in 
any action or proceeding in respect to it. 
    Subd. 6.  [AGGREGATE REFUND OR ASSESSMENT.] On examining 
returns of a taxpayer for more than one year or period, the 
commissioner of revenue may issue one order covering the period 
under examination that reflects the aggregate refund or 
additional tax due. 
    Subd. 7.  [SUFFICIENCY OF NOTICE.] An order of assessment 
sent by United States mail, postage prepaid to the taxpayer at 
the taxpayer's last known address, is sufficient even if the 
taxpayer is deceased or is under a legal disability, or, in the 
case of a corporation, has terminated its existence, unless the 
department has been provided with a new address by a party 
authorized to receive notices of assessment. 
    Sec. 21.  [349.2152] [EXTENSIONS FOR FILING RETURNS AND 
PAYING TAXES.] 
    When, in the commissioner of revenue's judgment, good cause 
exists, the commissioner may extend the time for filing tax 
returns and/or paying taxes for not more than six months. 
    Sec. 22.  [349.216] [LIMITATIONS ON TIME FOR ASSESSMENT OF 
TAX.] 
    Subdivision 1.  [GENERAL RULE.] Except as otherwise 
provided in this chapter, the amount of taxes assessable must be 
assessed within 3-1/2 years after the return is filed (whether 
or not the return is filed on or after the date prescribed).  A 
return must 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 and contains sufficient data to identify the 
taxpayer and permit the mathematical verification of the tax 
liability shown on the return. 
    Subd. 2.  [FALSE OR FRAUDULENT RETURN.] Notwithstanding 
subdivision 1, the tax may be assessed at any time if a false or 
fraudulent return is filed or if a taxpayer fails to file a 
return. 
    Subd. 3.  [OMISSION IN EXCESS OF 25 PERCENT.] Additional 
taxes may be assessed within 6-1/2 years after the due date of 
the return or the date the return was filed, whichever is later, 
if the taxpayer omits from a tax return taxes in excess of 25 
percent of the taxes reported in the return. 
    Subd. 4.  [TIME LIMIT FOR REFUNDS.] Unless otherwise 
provided in this chapter, a claim for a refund of an overpayment 
of tax must be filed within 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 two years from the time the tax is paid, whichever period 
expires later.  Interest on refunds must be computed at the rate 
specified in section 270.76 from the date of payment to the date 
the refund is paid or credited.  For purposes of this 
subdivision, the date of payment is the later of the date the 
tax was finally due or was paid. 
    Subd. 5.  [BANKRUPTCY; SUSPENSION OF TIME.] The time during 
which a tax must be assessed or collection proceedings begun is 
suspended during the period from the date of a filing of a 
petition in bankruptcy until 30 days after either:  (1) notice 
to the commissioner of revenue that the bankruptcy proceedings 
have been closed or dismissed, or (2) the automatic stay has 
been ended or has expired, whichever occurs first. 
    The suspension of the statute of limitations under this 
section applies to the person the petition in bankruptcy is 
filed against, and all other persons who may also be wholly or 
partially liable for the tax.  
    Subd. 6.  [EXTENSION AGREEMENT.] If before the expiration 
of time prescribed in subdivisions 1 and 4 for the assessment of 
tax or the filing of a claim for refund, both the commissioner 
of revenue and the taxpayer have consented in writing to the 
assessment or filing of a claim for refund after that time, the 
tax may be assessed or the claim for refund filed at any time 
before the expiration of the agreed upon period.  The period may 
be extended by later agreements in writing before the expiration 
of the period previously agreed upon. 
    Sec. 23.  [349.217] [CIVIL PENALTIES.] 
    Subdivision 1.  [PENALTY FOR FAILURE TO PAY TAX.] If a tax 
is not paid within the time specified for payment, a penalty is 
added to the amount required to be shown as tax.  The penalty is 
three percent of the unpaid tax if the failure is for not more 
than 30 days, with an additional penalty of three percent of the 
amount of tax remaining unpaid during each additional 30 days or 
fraction of 30 days during which the failure continues, not 
exceeding 24 percent in the aggregate. 
    If the taxpayer has not filed a return, for purposes of 
this subdivision the time specified for payment is the final 
date a return should have been filed. 
    Subd. 2.  [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If 
a taxpayer fails to make and file a return within the time 
prescribed or an extension, a penalty is added to the tax.  The 
penalty is three percent of the amount of tax not paid on or 
before the date prescribed for payment of the tax if the failure 
is for not more than 30 days, with an additional five percent of 
the amount of tax remaining unpaid during each additional 30 
days or fraction of 30 days, during which the failure continues, 
not exceeding 23 percent in the aggregate. 
    If a taxpayer fails to file a return within 60 days of the 
date prescribed for filing of the return (determined with regard 
to any extension of time for filing), the addition to tax under 
this subdivision must be at least the lesser of:  (1) $200; or 
(2) the greater of (a) 25 percent of the amount required to be 
shown as tax on the return without reduction for any payments 
made or refundable credits allowable against the tax, or (b) $50.
    Subd. 3.  [COMBINED PENALTIES.] When penalties are imposed 
under subdivisions 1 and 2, except for the minimum penalty under 
subdivision 2, the penalties imposed under both subdivisions 
combined must not exceed 38 percent. 
    Subd. 4.  [PENALTY FOR INTENTIONAL DISREGARD OF LAW OR 
RULES.] If part of an additional assessment is due to negligence 
or intentional disregard of the provisions of this chapter or 
rules of the commissioner of revenue (but without intent to 
defraud), there is added to the tax an amount equal to ten 
percent of the additional assessment.  
    Subd. 5.  [PENALTY FOR FALSE OR FRAUDULENT RETURN; 
EVASION.] If a person files a false or fraudulent return, or 
attempts in any manner to evade or defeat a tax or payment of 
tax, there is imposed on the person a penalty equal to 50 
percent of the tax found due for the period to which the return 
related, less amounts paid by the person on the basis of the 
false or fraudulent return. 
    Subd. 6.  [PENALTY FOR SALES AFTER REVOCATION, SUSPENSION, 
OR EXPIRATION.] A distributor who engages in, or whose 
representative engages in, the offering for sale, sale, 
transport, delivery, or furnishing of gambling equipment to a 
person, firm, or organization, after the distributor's license 
or permit has been revoked or suspended, or has expired, and 
until such license or permit has been reinstated or renewed, is 
liable for a penalty of $1,000 for each day the distributor 
continues to engage in the activity.  This subdivision does not 
apply to the transport of gambling equipment for the purpose of 
returning the equipment to a licensed manufacturer. 
    Subd. 7.  [PAYMENT OF PENALTIES.] The penalties imposed by 
this section must be collected and paid in the same manner as 
taxes.  
    Subd. 8.  [PENALTIES ARE ADDITIONAL.] The civil penalties 
imposed by this section are in addition to the criminal 
penalties imposed by this chapter. 
    Subd. 9.  [ORDER PAYMENTS CREDITED.] All payments received 
may be credited first to the oldest liability not secured by a 
judgment or lien in the discretion of the commissioner of 
revenue, but in all cases must be credited first to penalties, 
next to interest, and then to the tax due. 
    Sec. 24.  [349.2171] [TAX-RELATED CRIMINAL PENALTIES.] 
    Subdivision 1.  [PENALTY FOR FAILURE TO FILE OR PAY.] (a) A 
person required to file a return, report, or other document with 
the commissioner of revenue, who knowingly fails to file it when 
required, is guilty of a gross misdemeanor.  A person required 
to file a return, report, or other document who willfully 
attempts to evade or defeat a tax by failing to file it when 
required is guilty of a felony.  
    (b) A person required to pay or to collect and remit a tax, 
who knowingly fails to do so when required, is guilty of a gross 
misdemeanor.  A person required to pay or to collect and remit a 
tax, who willfully attempts to evade or defeat a tax law by 
failing to do so when required, is guilty of a felony.  
    Subd. 2.  [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A 
person required to file a return, report, or other document with 
the commissioner of revenue, who delivers to the commissioner of 
revenue a return, report, or other document known by the person 
to be fraudulent or false concerning a material matter, is 
guilty of a felony.  
    (b) A person who knowingly aids or assists in, or advises 
in the preparation or presentation of a return, report, or other 
document that is fraudulent or false concerning a material 
matter, whether or not the falsity or fraud committed is with 
the knowledge or consent of the person authorized or required to 
present the return, report, or other document, is guilty of a 
felony.  
    Subd. 3.  [SALES WITHOUT PERMIT; VIOLATIONS.] (a) A person 
who engages in the business of selling pull-tabs or tipboards in 
Minnesota without the licenses or permits required under this 
chapter, or an officer of a corporation who so engages in the 
sales, is guilty of a gross misdemeanor. 
    (b) A person selling gambling equipment in Minnesota after 
revocation of a license or permit under this chapter, when the 
commissioner of revenue or the board has not issued a new 
license or permit, is guilty of a felony. 
    Subd. 4.  [CRIMINAL PENALTIES.] Criminal penalties imposed 
by this section are in addition to civil penalties imposed by 
this chapter.  
    Subd. 5.  [STATUTE OF LIMITATIONS.] Notwithstanding section 
628.26, or other provision of the criminal laws of this state, 
an indictment may be found and filed, or a complaint filed, upon 
a criminal offense specified in this section, in the proper 
court within six years after the offense is committed. 
    Sec. 25.  [349.218] [INTEREST.] 
    Subdivision 1.  [INTEREST RATE.] When an interest 
assessment is required under this section, interest is computed 
at the rate specified in section 270.75. 
    Subd. 2.  [LATE PAYMENT.] If a tax is not paid within the 
time specified by law for payment, the unpaid tax bears interest 
from the date the tax should have been paid until the date the 
tax is paid.  
    Subd. 3.  [EXTENSIONS.] If an extension of time for payment 
has been granted, interest must be paid from the date the 
payment should have been made if no extension had been granted, 
until the date the tax is paid. 
    Subd. 4.  [ADDITIONAL ASSESSMENTS.] If a taxpayer is liable 
for additional taxes because of a redetermination by the 
commissioner of revenue, or for any other reason, the additional 
taxes bear interest from the time the tax should have been paid, 
without regard to any extension allowed, until the date the tax 
is paid. 
    Subd. 5.  [ERRONEOUS REFUNDS.] In the case of an erroneous 
refund, interest accrues from the date the refund was paid 
unless the erroneous refund results from a mistake of the 
department, then no interest or penalty is imposed unless the 
deficiency assessment is not satisfied within 60 days of the 
order. 
    Subd. 6.  [INTEREST ON JUDGMENTS.] Notwithstanding section 
549.09, if judgment is entered in favor of the commissioner of 
revenue with regard to any tax, the judgment bears interest at 
the rate specified in section 270.75 from the date the judgment 
is entered until the date of payment. 
    Subd. 7.  [INTEREST ON PENALTIES.] (a) A penalty imposed 
under section 349.217, subdivision 1, 2, 3, 4, or 5 bears 
interest from the date the return or payment was required to be 
filed or paid (including any extensions) to the date of payment 
of the penalty. 
    (b) A penalty not included in paragraph (a) bears interest 
only if it is not paid within ten days from the date of notice.  
In that case interest is imposed from the date of notice to the 
date of payment. 
    Sec. 26.  [349.219] [ADMINISTRATIVE REVIEW.] 
    Subdivision 1.  [TAXPAYER RIGHT TO RECONSIDERATION.] A 
taxpayer may obtain reconsideration by the commissioner of 
revenue of an order assessing tax, a denial of a request for 
abatement of penalty assessed under section 349.152, subdivision 
1, clause (5), or 349.217, or a denial of a claim for refund of 
money paid to the commissioner of revenue under provisions, 
assessments, or orders under this chapter by filing an 
administrative appeal as provided in subdivision 4.  A taxpayer 
cannot obtain reconsideration if the action taken by the 
commissioner of revenue is the outcome of an administrative 
appeal. 
    Subd. 2.  [APPEAL BY TAXPAYER.] A taxpayer who wishes to 
seek administrative review must follow the procedure provided by 
subdivision 4. 
    Subd. 3.  [NOTICE DATE.] For purposes of this section the 
term "notice date" means the date of the order adjusting the tax 
or order denying a request for abatement, or, in the case of a 
denied refund, the date of the notice of denial. 
    Subd. 4.  [TIME AND CONTENT FOR ADMINISTRATIVE 
APPEAL.] Within 60 days after the notice date, the taxpayer must 
file a written appeal with the commissioner of revenue.  The 
appeal need not be in any particular form but must contain the 
following information:  
    (1) name and address of the taxpayer; 
    (2) if a corporation, the state of incorporation of the 
taxpayer, and the principal place of business of the 
corporation; 
    (3) the Minnesota identification number or social security 
number of the taxpayer; 
    (4) the type of tax involved; 
    (5) the date; 
    (6) the tax years or periods involved and the amount of tax 
involved for each year or period; 
    (7) the findings in the notice that the taxpayer disputes; 
    (8) a summary statement that the taxpayer relies on for 
each exception; and 
    (9) the taxpayer's signature or signature of the taxpayer's 
duly authorized agent. 
    Subd. 5.  [EXTENSIONS.] When requested in writing and 
within the time allowed for filing an administrative appeal, the 
commissioner of revenue may extend the time for filing an appeal 
for a period not to exceed 30 days from the expiration of the 60 
days from the notice date.  
    Subd. 6.  [AUTOMATIC EXTENSION OF STATUTE OF 
LIMITATIONS.] Notwithstanding any statute of limitations to the 
contrary, when the commissioner of revenue has made a 
determination and the taxpayer has authority to file an 
administrative appeal, the period during which the commissioner 
can make further assessments or other determinations does not 
expire before:  
    (1) 90 days after the notice date if no protest is filed 
under subdivision 4; or 
    (2) 90 days after the commissioner of revenue notifies the 
taxpayer of the determination on the appeal. 
    Subd. 7.  [DETERMINATION OF APPEAL.] On the basis of 
applicable law and available information, the commissioner of 
revenue shall determine the validity, if any, in whole or part 
of the appeal and notify the taxpayer of the decision.  This 
notice must be in writing and contain the basis for the 
determination.  
    Subd. 8.  [AGREEMENT DETERMINING TAX LIABILITY.] When it 
appears to be in the best interests of the state, the 
commissioner of revenue may settle taxes, penalties, or interest 
that the commissioner has under consideration by virtue of an 
appeal filed under this section.  An agreement must be in 
writing and signed by the commissioner of revenue and the 
taxpayer or the taxpayer's representative authorized by the 
taxpayer to enter into an agreement.  An agreement must be filed 
in the office of the commissioner of revenue.  
    Subd. 9.  [APPEAL OF AN ADMINISTRATIVE APPEAL.] Following 
the determination or settlement of an appeal, the commissioner 
of revenue must issue an order reflecting that disposition.  
Except in the case of an agreement determining tax under this 
section, the order is appealable to the Minnesota tax court 
under section 271.06. 
    Subd. 10.  [APPEAL WHERE NO DETERMINATION.] If the 
commissioner of revenue does not make a determination within six 
months of the filing of an administrative appeal, the taxpayer 
may elect to appeal to tax court. 
    Subd. 11.  [EXEMPTION FROM ADMINISTRATIVE PROCEDURE 
ACT.] This section is not subject to chapter 14. 
    Sec. 27.  [STATE TO BE SUPPLIER OF GAMBLING EQUIPMENT.] 
    Notwithstanding any other law to the contrary, after June 
30, 1990, the state of Minnesota will be the sole supplier of 
all gambling equipment under Minnesota Statutes, chapter 349.  
The commissioner of revenue shall no later than January 15, 
1990, submit to the legislature a bill making all statutory 
changes required to implement this section including proposing 
the required staff and appropriation.  The bill shall include 
provisions requiring the state to provide an adequate supply and 
variety of gambling equipment and to supply it efficiently.  The 
commissioner of revenue shall provide copies of this bill to the 
chair of the house of representatives tax committee and to the 
chair of the senate committee on taxes and tax laws.  
Notwithstanding any contrary requirements of Minnesota Statutes, 
section 3C.035, subdivision 2, the revisor shall assess the 
commissioner of revenue for the actual cost of bill drafting 
services rendered to the department with respect to the bill 
required by this section. 
    Sec. 28.  [INSTRUCTION TO THE REVISOR.] 
    The revisor of statutes is directed to change the words 
"charitable gambling" wherever they appear in Minnesota Statutes 
to "lawful gambling" in Minnesota Statutes 1990 and subsequent 
editions of the statutes.  
    Sec. 29.  [REPEALER.] 
    (a) Minnesota Statutes 1988, section 349.2121, subdivision 
4, is repealed.  
     (b) Minnesota Rules, part 7860.0010, subpart 11a, is 
repealed. 
    Sec. 30.  [EFFECTIVE DATE.] 
    Sections 1 to 18 and 27 to 29 are effective October 1, 1989.
    Section 23 is effective for tax or reporting periods 
beginning on or after October 1, 1989.  
    Sections 19 to 22, 25, and 26 are effective for returns and 
reports becoming due on or after October 1, 1989.  
    Section 24 is effective for violations occurring on or 
after October 1, 1989. 

                               ARTICLE 14

                         TAX INCREMENT FINANCING
    Section 1.  Minnesota Statutes 1989 Supplement, section 
469.174, subdivision 7, is amended to read: 
    Subd. 7.  [ORIGINAL NET TAX CAPACITY.] (a) Except as 
provided in paragraph (b), "original net tax capacity" means the 
tax capacity of all taxable real property within a tax increment 
financing district as most recently certified by the 
commissioner of revenue as of the date of the request by an 
authority for certification by the county auditor, together with 
subsequent adjustments as set forth in section 469.177, 
subdivisions 1 and 4.  In determining the original net tax 
capacity the net tax capacity of real property exempt from 
taxation at the time of the request shall be zero, except for 
real property which is tax exempt by reason of public ownership 
by the requesting authority and which has been publicly owned 
for less than one year prior to the date of the request for 
certification, in which event the net tax capacity of the 
property shall be the net tax capacity as most recently 
determined by the commissioner of revenue.  
    (b) The original net tax capacity of any designated 
hazardous substance site or hazardous substance subdistrict 
shall be determined on January 2 following as of the date the 
agency or municipality authority certifies to the county auditor 
that the agency or municipality has entered a redevelopment or 
other agreement for the removal actions or remedial actions 
specified in a development response action plan, or otherwise 
provided funds to finance the development response action plan.  
The original net tax capacity equals (i) the net tax capacity of 
the parcel or parcels in the site or subdistrict, as most 
recently determined by the commissioner of revenue, less (ii) 
the estimated reasonable and necessary costs of the removal 
actions and remedial actions as specified in a development 
response action plan to be undertaken with respect to the parcel 
as certified to the county auditor by the municipality or agency 
or parcels, (iii) but not less than zero. 
    (c) The original net tax capacity of a hazardous substance 
site or subdistrict shall be increased by the amount by which it 
was reduced pursuant to paragraph (b), clause (ii), upon 
certification by the municipality that the cost of the removal 
and remedial actions specified in the development response 
action plan, except for long-term monitoring and similar 
activities, have been completed paid or reimbursed. 
    (d) For purposes of this subdivision, "real property" shall 
include any property normally taxable as personal property by 
reason of its location on or over publicly owned property.  
    Sec. 2.  Minnesota Statutes 1988, section 469.174, 
subdivision 10, is amended to read: 
    Subd. 10.  [REDEVELOPMENT DISTRICT.] (a) "Redevelopment 
district" means a type of tax increment financing district 
consisting of a project, or portions of a project, within which 
the authority finds by resolution that one of the following 
conditions, reasonably distributed throughout the district, 
exists: 
    (1) parcels consisting of 70 percent of the parcels in area 
of the district are occupied by buildings, streets, utilities, 
or other improvements and more than 50 percent of the buildings, 
not including outbuildings, are structurally substandard to a 
degree requiring substantial renovation or clearance; or 
    (2) parcels consisting of 70 percent of the parcels in area 
of the district are occupied by buildings, streets, utilities, 
or other improvements and 20 percent of the buildings are 
structurally substandard and an additional 30 percent of the 
buildings are found to require substantial renovation or 
clearance in order to remove such existing conditions as:  
inadequate street layout, incompatible uses or land use 
relationships, overcrowding of buildings on the land, excessive 
dwelling unit density, obsolete buildings not suitable for 
improvement or conversion, or other identified hazards to the 
health, safety, and general well-being of the community; or 
    (3) the property consists of underutilized air rights 
existing over a public street, highway, or right-of-way; or 
    (4) the property consists of vacant, unused, underused, 
inappropriately used, or infrequently used railyards, rail 
storage facilities, or excessive or vacated railroad 
rights-of-way; or 
    (5) the district consists of an existing or proposed 
industrial park no greater in size than 250 acres, which 
contains a sewage lagoon contaminated with polychlorinated 
biphenyls.  
    (b) For purposes of this subdivision, "structurally 
substandard" shall mean containing defects in structural 
elements or a combination of deficiencies in essential utilities 
and facilities, light and ventilation, fire protection including 
adequate egress, layout and condition of interior partitions, or 
similar factors, which defects or deficiencies are of sufficient 
total significance to justify substantial renovation or 
clearance. 
     (c) For purposes of this subdivision, a parcel is not 
occupied by buildings, streets, utilities, or other improvements 
unless 15 percent of the area of the parcel contains 
improvements. 
     (d) For districts consisting of two or more noncontiguous 
areas, each area must qualify as a redevelopment district under 
paragraph (a), clauses (1) to (3), to be included in the 
district, and the entire area of the district must satisfy 
paragraph (a). 
    Sec. 3.  Minnesota Statutes 1988, section 469.174, 
subdivision 16, is amended to read: 
    Subd. 16.  [DESIGNATED HAZARDOUS SUBSTANCE SITE.] 
"Designated hazardous substance site" means any parcel or 
parcels with respect to which the authority or municipality has 
certified to the county auditor that the authority or 
municipality has entered into a redevelopment or other agreement 
providing for the removal actions or remedial actions specified 
in a development response action plan or the municipality or 
authority will use other available money, including without 
limitation tax increments, to finance the removal or remedial 
actions.  A parcel described in the plan or plan amendment may 
be designated for inclusion in the hazardous substance 
subdistrict prior to approval of the development action response 
plan on the basis of the reasonable expectation of the 
municipality.  Such parcel may not be certified as part of the 
subdistrict until the development action response plan has been 
approved. 
    Sec. 4.  Minnesota Statutes 1988, section 469.174, 
subdivision 17, is amended to read: 
    Subd. 17.  [DEVELOPMENT ACTION RESPONSE PLAN.] "Development 
action response plan" means a plan or proposal for removal 
actions or remedial actions if the plan or proposal is submitted 
to the pollution control agency and the actions 
contained recommended in the plan or proposal are approved in 
writing by the commissioner of the agency as reasonable and 
necessary to protect the public health, welfare, and 
environment.  The commissioner shall review the development 
action response plan and approve, modify or reject the 
recommended actions within 60 days after submission of the plan 
(or revised plan) by the authority.  The commissioner shall 
notify the authority in writing of the decision on the 
recommended actions within 30 days after the decision and, if 
the recommended actions are rejected, shall specify the reasons 
for rejection. 
    Sec. 5.  Minnesota Statutes 1988, section 469.174, is 
amended by adding a subdivision to read: 
    Subd. 20.  [INTERNAL REVENUE CODE.] "Internal Revenue Code" 
means the Internal Revenue Code of 1986, as amended through 
December 31, 1988. 
    Sec. 6.  Minnesota Statutes 1989 Supplement, section 
469.175, subdivision 3, is amended to read: 
    Subd. 3.  [MUNICIPALITY APPROVAL.] A county auditor shall 
not certify the original net tax capacity of a tax increment 
financing district until the tax increment financing plan 
proposed for that district has been approved by the municipality 
in which the district is located.  If an authority that proposes 
to establish a tax increment financing district and the 
municipality are not the same, the authority shall apply to the 
municipality in which the district is proposed to be located and 
shall obtain the approval of its tax increment financing plan by 
the municipality before the authority may use tax increment 
financing.  The municipality shall approve the tax increment 
financing plan only after a public hearing thereon after 
published notice in a newspaper of general circulation in the 
municipality at least once not less than ten days nor more than 
30 days prior to the date of the hearing.  This The published 
notice must include a map of the area of the district from which 
increments may be collected and, if the project area includes 
additional area, a map of the project area in which the 
increments may be expended.  The hearing may be held before or 
after the approval or creation of the project or it may be held 
in conjunction with a hearing to approve the project.  Before or 
at the time of approval of the tax increment financing plan, the 
municipality shall make the following findings, and shall set 
forth in writing the reasons and supporting facts for each 
determination: 
    (1) that the proposed tax increment financing district is a 
redevelopment district, a mined underground space development 
district, a housing district, a soils condition district, or an 
economic development district; if the proposed district is a 
redevelopment district, the reasons and supporting facts for the 
determination that the district meets the criteria of section 
469.174, subdivision 10, paragraph (a), clauses (1) to (5), must 
be retained and made available to the public by the authority 
until the district has been terminated. 
      (2) that the proposed development or redevelopment, in the 
opinion of the municipality, would not reasonably be expected to 
occur solely through private investment within the reasonably 
foreseeable future and therefore the use of tax increment 
financing is deemed necessary. 
      (3) that the tax increment financing plan conforms to the 
general plan for the development or redevelopment of the 
municipality as a whole. 
      (4) that the tax increment financing plan will afford 
maximum opportunity, consistent with the sound needs of the 
municipality as a whole, for the development or redevelopment of 
the project by private enterprise. 
      (5) that the municipality elects the method of tax 
increment computation set forth in section 469.177, subdivision 
3, clause (b), if applicable. 
      When the municipality and the authority are not the same, 
the municipality shall approve or disapprove the tax increment 
financing plan within 60 days of submission by the authority, or 
the plan shall be deemed approved.  When the municipality and 
the authority are not the same, the municipality may not amend 
or modify a tax increment financing plan except as proposed by 
the authority pursuant to subdivision 4.  Once approved, the 
determination of the authority to undertake the project through 
the use of tax increment financing and the resolution of the 
governing body shall be conclusive of the findings therein and 
of the public need for the financing. 
    Sec. 7.  Minnesota Statutes 1988, section 469.175, is 
amended by adding a subdivision to read: 
    Subd. 6a.  [REPORTING REQUIREMENTS.] (a) The municipality 
must annually report to the commissioner of revenue the 
following amounts for the entire municipality: 
    (1) the total principal amount of nondefeased tax increment 
financing bonds that are outstanding at the end of the previous 
calendar year; and 
    (2) the total annual amount of principal and interest 
payments that are due for the current calendar year on (i) 
general obligation tax increment financing bonds, and (ii) other 
tax increment financing bonds. 
    (b) The municipality must annually report to the 
commissioner of revenue the following amounts for each tax 
increment financing district located in the municipality: 
    (1) the type of district, whether economic development, 
redevelopment, housing, soils condition, mined underground 
space, or hazardous substance site; 
    (2) the date on which the district is required to be 
decertified; 
    (3) the captured tax capacity of the district, by property 
class as specified by the commissioner of revenue, for taxes 
payable in the current calendar year; 
    (4) the tax increment revenues for taxes payable in the 
current calendar year; 
    (5) whether the tax increment financing plan or other 
governing document permits increment revenues to be expended (i) 
to pay bonds, the proceeds of which were or may be expended on 
activities located outside of the district, (ii) for deposit 
into a common fund from which money may be expended on 
activities located outside of the district, or (iii) to 
otherwise finance activities located outside of the tax 
increment financing district; and 
    (6) any additional information that the commissioner of 
revenue may require.  
    (c) The report required by this subdivision must be filed 
with the commissioner of revenue on or before March 1 of each 
year. 
    (d) This section applies to districts certified before, on, 
and after August 1, 1979. 
    Sec. 8.  Minnesota Statutes 1989 Supplement, section 
469.175, subdivision 7, is amended to read: 
    Subd. 7.  [CREATION OF HAZARDOUS SUBSTANCE SUBDISTRICT; 
RESPONSE ACTIONS.] (a) A municipality or An authority which is 
creating or has created a tax increment financing district may 
establish within the district a hazardous substance subdistrict 
upon the notice and after the discussion, public hearing, and 
findings required for approval of or modification to the 
original plan.  The geographic area of the subdistrict is made 
up of any parcels in the district designated for inclusion by 
the municipality or authority that are designated hazardous 
substance sites, and any additional parcels in the district 
designated for inclusion that are contiguous to the 
hazardous substances substance sites except for the 
interposition of a right-of-way.  Before or at the time of 
approval of the tax increment financing plan or plan 
modification providing for the creation of the hazardous 
substance subdistrict, the municipality authority must make the 
findings under paragraphs (b) to (d), and set forth in writing 
the reasons and supporting facts for each. 
    (b) Development or redevelopment of the site, in the 
opinion of the municipality authority, would not reasonably be 
expected to occur solely through private investment and tax 
increment otherwise available, and therefore the hazardous 
substance district is deemed necessary. 
    (c) Other parcels that are not designated hazardous 
substance sites are expected to be developed together with a 
designated hazardous substance site.  
    (d) The subdistrict is not larger than, and the period of 
time during which increments are elected to be received is not 
longer than, that which is necessary in the opinion of the 
municipality to provide for the additional costs due to the 
designated hazardous substance site. 
    (e) Upon request by a municipality or an authority that has 
incurred expenses for removal or remedial actions to implement a 
development response action plan, the attorney general may: 
    (1) bring a civil action on behalf of the municipality or 
authority to recover the expenses, including administrative 
costs and litigation expenses, under section 115B.04 or other 
law; or 
    (2) assist the municipality or agency authority in bringing 
an action as described in clause (1), by providing legal and 
technical advice, intervening in the action, or other 
appropriate assistance. 
The decision to participate in any action to recover expenses is 
at the discretion of the attorney general. 
    (f) If the attorney general brings an action as provided in 
paragraph (e), clause (1), the municipality or authority shall 
certify its reasonable and necessary expenses incurred to 
implement the development response action plan and shall 
cooperate with the attorney general as required to effectively 
pursue the action.  The certification by the municipality or 
authority is prima facie evidence that the expenses are 
reasonable and necessary.  The attorney general may deduct 
litigation expenses incurred by the attorney general from any 
amounts recovered in an action brought under paragraph (e), 
clause (1).  The municipality or authority shall reimburse the 
attorney general for litigation expenses not recovered in an 
action under paragraph (e), clause (1), and but only from the 
additional tax increment required to be used as described in 
section 469.176, subdivision 4e.  The authority must reimburse 
the attorney general for litigation expenses incurred to assist 
in bringing an action under paragraph (e), clause (2), but only 
from amounts recovered by the authority in an action or, if the 
amounts are insufficient, from the additional tax increment 
required to be used as described in section 469.176, subdivision 
4e.  All money recovered or paid to the attorney general for 
litigation expenses under this paragraph shall be paid to the 
general fund of the state for deposit to the account of the 
attorney general.  For the purposes of this section, "litigation 
expenses" means attorney fees and costs of discovery and other 
preparation for litigation. 
    (g) The municipality or authority shall reimburse the 
pollution control agency for its administrative expenses 
incurred to review and approve a development action response 
plan and associated activities, and.  The authority must 
reimburse the pollution control agency for expenses incurred for 
any services rendered to the attorney general to support the 
attorney general in actions brought or assistance provided under 
paragraph (e), but only from amounts recovered by the 
municipality or authority in an action brought under paragraph 
(e) or from the additional tax increment required to be used as 
described in section 469.176, subdivision 4e.  All money paid to 
the pollution control agency under this paragraph shall be 
deposited in the environmental response, compensation and 
compliance fund. 
    (h) Actions taken by a municipality or an authority 
consistent with a development response action plan are deemed to 
be authorized response actions for the purpose of section 
115B.17, subdivision 12.  A municipality or agency An authority 
that takes actions consistent with a development response action 
plan qualifies for the defenses available under sections 
115B.04, subdivision 11, and 115B.05, subdivision 9. 
    (i) All money recovered by a municipality or an authority 
in an action brought under paragraph (e) in excess of the 
amounts paid to the attorney general and the pollution control 
agency must be treated as excess increments and be distributed 
as provided in section 469.176, subdivision 2, clause (4), to 
the extent the removal and remedial actions were initially 
financed with increment revenues. 
    Sec. 9.  Minnesota Statutes 1989 Supplement, section 
469.176, subdivision 1, is amended to read: 
    Subdivision 1.  [DURATION OF TAX INCREMENT FINANCING 
DISTRICTS.] (a) Subject to the limitations contained in 
paragraphs (b) to (f) (g), any tax increment financing district 
as to which bonds are outstanding, payment for which the tax 
increment and other revenues have been pledged, shall remain in 
existence at least as long as the bonds continue to be 
outstanding.  The municipality may, at the time of approval of 
the initial tax increment financing plan, provide for a shorter 
maximum duration limit than specified in paragraphs (b) to (g).  
The specified limit applies in place of the otherwise applicable 
limit.  
    (b) The tax increment pledged to the payment of the bonds 
and interest thereon may be discharged and the tax increment 
financing district may be terminated if sufficient funds have 
been irrevocably deposited in the debt service fund or other 
escrow account held in trust for all outstanding bonds to 
provide for the payment of the bonds at maturity or date of 
redemption and interest thereon to the maturity or redemption 
date.  
    (c) For bonds issued pursuant to section 469.178, 
subdivisions 2 and 3, the full faith and credit and any taxing 
powers of the municipality or authority shall continue to be 
pledged to the payment of the bonds until the principal of and 
interest on the bonds has been paid in full.  
    (d) No tax increment shall be paid to an authority for a 
tax increment financing district after three years from the date 
of certification of the original net tax capacity of the taxable 
real property in the district by the county auditor or after 
August 1, 1982, for tax increment financing districts authorized 
prior to August 1, 1979, unless within the three-year period (1) 
bonds have been issued pursuant to section 469.178, or in aid of 
a project pursuant to any other law, except revenue bonds issued 
pursuant to sections 469.152 to 469.165, prior to August 1, 
1979, or (2) the authority has acquired property within the 
district, or (3) the authority has constructed or caused to be 
constructed public improvements within the district. 
      (e) No tax increment shall in any event be paid to the 
authority from a redevelopment district after 25 years from date 
of receipt by the authority of the first tax increment, after 25 
years from the date of the receipt for a housing district, after 
25 years from the date of the receipt for a mined underground 
space development district, after 12 years from approval of the 
tax increment financing plan for a soils condition district, and 
after eight years from the date of the receipt, or ten years 
from approval of the tax increment financing plan, whichever is 
less, for an economic development district. 
      For tax increment financing districts created prior to 
August 1, 1979, no tax increment shall be paid to the authority 
after April 1, 2001, or the term of a nondefeased bond or 
obligation outstanding on April 1, 1990, secured by increments 
from the district or project area, whichever time is greater, 
provided that in no case will a tax increment be paid to an 
authority after August 1, 2009, from such a district.  If a 
district's termination date is extended beyond April 1, 2001, 
because bonds were outstanding on April 1, 1990, with maturities 
extending beyond April 1, 2001, the following restrictions 
apply.  No increment collected from the district may be expended 
after April 1, 2001, except to pay or defease (i) bonds issued 
before April 1, 1990, or (ii) bonds issued to refund the 
principal of the outstanding bonds and pay associated issuance 
costs, provided the average maturity of the refunding bonds does 
not exceed the bonds refunded. 
      (f) Modification of a tax increment financing plan pursuant 
to section 469.175, subdivision 4, shall not extend the 
durational limitations of this subdivision. 
      (g) If a parcel of a district is part of a designated 
hazardous substance site or a hazardous substance subdistrict, 
tax increment may be paid to the authority from the parcel for 
longer than the period otherwise provided by this subdivision.  
The extended period for collection of tax increment begins on 
the date of receipt of the first tax increment from the parcel 
that is more than any tax increment received from the parcel 
before the date of the certification under section 469.175, 
subdivision 7, paragraph (b), and received after the date of 
certification to the county auditor described in section 
469.175, subdivision 7, paragraph (b).  The extended period for 
collection of tax increment is the lesser of:  (1) 25 years from 
the date of commencement of the extended period; or (2) the 
period necessary to recover the costs of removal actions or 
remedial actions specified in a development response action plan.
    Sec. 10.  Minnesota Statutes 1988, section 469.176, is 
amended by adding a subdivision to read: 
    Subd. 4j.  [REDEVELOPMENT DISTRICTS.] At least 90 percent 
of the revenues derived from tax increments from a redevelopment 
district must be used to finance the cost of correcting 
conditions that allow designation of redevelopment districts 
under section 469.174, subdivision 10.  These costs include 
acquiring properties containing structurally substandard 
buildings or improvements, acquiring adjacent parcels necessary 
to provide a site of sufficient size to permit development, 
demolition of structures, clearing of the land, and installation 
of utilities, roads, sidewalks, and parking facilities for the 
site.  The allocated administrative expenses of the authority 
may be included in the qualifying costs. 
    Sec. 11.  Minnesota Statutes 1989 Supplement, section 
469.176, subdivision 6, is amended to read: 
    Subd. 6.  [ACTION REQUIRED.] If, after four years from the 
date of certification of the original net tax capacity of the 
tax increment financing district pursuant to section 469.177, no 
demolition, rehabilitation, or renovation of property or other 
site preparation, including qualified improvement of a street 
adjacent to a parcel but not installation of utility service 
including sewer or water systems, has been commenced on a parcel 
located within a tax increment financing district by the 
authority or by the owner of the parcel in accordance with the 
tax increment financing plan, no additional tax increment may be 
taken from that parcel, and the original net tax capacity of 
that parcel shall be excluded from the original net tax capacity 
of the tax increment financing district.  If the authority or 
the owner of the parcel subsequently commences demolition, 
rehabilitation, or renovation or other site preparation on that 
parcel including qualified improvement of a street adjacent to 
that parcel, in accordance with the tax increment financing 
plan, the authority shall certify to the county auditor that the 
activity has commenced, and the county auditor shall certify the 
net tax capacity thereof as most recently certified by the 
commissioner of revenue and add it to the original net tax 
capacity of the tax increment financing district.  The county 
auditor must enforce the provisions of this subdivision.  The 
authority must submit to the county auditor evidence that the 
required activity has taken place for each parcel in the 
district.  The evidence for a parcel must be submitted by 
February 1 of the fifth year following the year in which the 
parcel was certified as included in the district.  For purposes 
of this subdivision, qualified improvements of a street are 
limited to (1) construction or opening of a new street, (2) 
relocation of a street, and (3) substantial reconstruction or 
rebuilding of an existing street. 
    Sec. 12.  [469.1761] [INCOME REQUIREMENTS; HOUSING 
PROJECTS.] 
    Subdivision 1.  [REQUIREMENT IMPOSED.] In order for a tax 
increment financing district to qualify as a housing district, 
the income limitations provided in this section must be 
satisfied.  The requirements imposed by this section apply to 
residential property receiving assistance financed with tax 
increments, including interest reduction, land transfers at less 
than the authority's cost of acquisition, utility service or 
connections, roads, or other subsidies.  The provisions of this 
section do not apply (1) to interest reduction programs, 
provided that the duration of the district is limited to 12 
years from the collection of the first increment or (2) to 
districts located in a targeted area as defined in section 
462C.02, subdivision 9, clause (e). 
    Subd. 2.  [OWNER OCCUPIED HOUSING.] For owner occupied 
residential property, 95 percent of the housing units must be 
initially purchased and occupied by individuals whose family 
income is less than or equal to the income requirements for 
qualified mortgage bond projects under section 143(f) of the 
Internal Revenue Code. 
    Subd. 3.  [RENTAL PROPERTY.] For residential rental 
property, the property must satisfy the income requirements for 
a qualified residential rental project as defined in section 
142(d) of the Internal Revenue Code.  A property also satisfies 
the requirements of section 142(d) if 50 percent of the 
residential units in the project are occupied by individuals 
whose income is 80 percent or less of area median gross income.  
The requirements of this subdivision apply for the duration of 
the tax increment financing district. 
    Subd. 4.  [NONCOMPLIANCE; ENFORCEMENT.] Failure to comply 
with the requirements of this section results in application of 
the duration limits for economic development districts to the 
district.  If at the time of the noncompliance the district has 
exceeded the duration limits for an economic development 
district, the district must be decertified effective for taxes 
assessed in the next calendar year.  The commissioner of revenue 
shall enforce the provisions of this section.  The commissioner 
may waive insubstantial violations.  Appeal of the 
commissioner's orders of noncompliance must be made to the tax 
court in the manner provided in section 271.06. 
    Sec. 13.  Minnesota Statutes 1988, section 469.177, 
subdivision 10, is amended to read: 
    Subd. 10.  [PAYMENT TO SCHOOL FOR REFERENDUM LEVY.] The 
provisions of this subdivision apply to tax increment financing 
districts and projects for which certification was requested 
before May 1, 1988, that are located in a school district in 
which the voters have approved new tax capacity rates or an 
increase in tax capacity rates after the tax increment financing 
district was certified (1) if there are no outstanding bonds on 
May 1, 1988, to which increment from the district is pledged, or 
(2) if the referendum is approved after May 1, 1988, and there 
are no bonds outstanding at the time the referendum is approved, 
that were issued before May 1, 1988, or (3) if the referendum 
increasing the tax capacity rate was approved after the most 
recent issue of bonds to which increment from the district is 
pledged.  If clause (1) or (2) applies, the authority must 
annually pay to the school district an amount of increment equal 
to the increment that is attributable to the increase in the tax 
capacity rate under the referendum.  If clause (3) applies, upon 
approval by a majority vote of the governing body of the 
municipality and the school board, the authority must pay to the 
school district an amount of increment equal to the increment 
that is attributable to the increase in the tax capacity rate 
under the referendum.  The amounts of these increments may be 
expended and must be treated by the school district in the same 
manner as provided for the revenues derived from the referendum 
levy approved by the voters.  The provisions of this subdivision 
apply to projects for which certification was requested before, 
on, and after August 1, 1979. 
    Sec. 14.  Laws 1988, chapter 719, article 12, section 29, 
as amended by Laws 1989, chapters 209, article 1, section 48, 
and 277, article 2, section 69, is amended to read: 
    Sec. 29.  [TRANSITION RULES.] 
    (a) The provisions of sections 3, 6, 10, and 16 do not 
apply to proposed tax increment financing districts for which 
the authority called for a public hearing in a resolution dated 
March 23, 1987, and for which a public hearing was held on April 
28, 1987.  The provisions of Minnesota Statutes 1987 Supplement, 
section 469.174, subdivision 10, and 469.176, subdivision 4, 
apply to such districts. 
    (b) The provisions of sections 3, 6, 10, and 16 do not 
apply to candidate sites identified in the old highway 8 
corridor plan as approved by an authority on October 14, 1986, 
if the requests for certification of the districts are filed 
with the county before January 1, 1998.  The provisions of 
Minnesota Statutes 1987 Supplement, sections 469.174, 
subdivision 10, and 469.176, subdivision 4, apply to such 
districts. 
    (c) The provisions of section 16, subdivision 4c, do not 
apply to an economic development district located in a 
development district approved on November 9, 1987, provided the 
request for certification of the tax increment district is 
submitted to the county by September 30, 1988 October 31, 1989. 
    Sec. 15.  [HOMESTEAD AND AGRICULTURAL CREDIT AID; TIF 
DISTRICTS; FALCON HEIGHTS AND LAUDERDALE.] 
    Subdivision 1.  [PAYMENT OF AID.] The commissioner of 
revenue shall pay the cities of Falcon Heights and Lauderdale 
homestead and agricultural credit aid as provided by this 
section.  The payments must be made at the times provided by 
Minnesota Statutes, section 273.1398. 
    Subd. 2.  [DEFINITIONS.] For purposes of this section, (1) 
the definitions contained in Minnesota Statutes, section 
273.1398 apply, and (2) qualified tax increment financing 
district means a tax increment financing district comprised 
exclusively of class 1 and class 4 property as those classes 
were defined in Minnesota Statutes 1988. 
    Subd. 3.  [CALCULATION OF AID AMOUNT.] (a) Homestead and 
agricultural credit aid for a qualified tax increment financing 
district for taxes payable in 1990 equals the lesser of the 
following: 
    (1) total tax increment revenues for the district for taxes 
payable in 1989, minus the product of (i) the qualified tax 
increment financing district's gross tax capacity rate, (ii) its 
net tax capacity based on payable 1989 market values and net tax 
capacity percentages in effect for taxes payable in 1990, and 
(iii) 0.9767; or 
    (2) 105 percent of the principal and interest, due during 
the calendar year, on bonds that were issued before January 1, 
1989, and to which the qualified district's increment revenues 
are pledged, less the total tax capacity rate for the year 
multiplied by the captured tax capacity of the tax increment 
financing district. 
    (b) For 1991 and later years, the district must receive aid 
equal to the amount it received in 1990 or the amount under 
paragraph (a), clause (2), for the year, whichever is less. 
    Subd. 4.  [APPROPRIATION.] The amount necessary to make the 
payments required by this section is annually appropriated to 
the commissioner of revenue. 
    Subd. 5.  [CITY INFORMATION.] The cities of Falcon Heights 
and Lauderdale must provide the commissioner of revenue with the 
information necessary to make the calculations required under 
subdivision 3, paragraph (a), clause (2). 
    Sec. 16.  [MOORHEAD TAX INCREMENT FINANCING.] 
    In the case of a tax increment financing district in the 
city of Moorhead created prior to August 1, 1979, and used to 
finance a hotel, parking facility, and conference project, the 
date "April 1, 1992" must be substituted for "April 1, 1990" in 
Minnesota Statutes, section 469.176, subdivision 1, paragraph 
(e), each place it occurs. 
    Sec. 17.  [DURATION OF TAX INCREMENT FINANCING DISTRICT.] 
    Notwithstanding Minnesota Statutes, section 469.176, 
subdivision 1, tax increment financing district No. 2 in 
development district No. 1 within the city of Chanhassen may 
continue to receive tax increments through the year 1992, 
provided that any increment received during the years 1990 
through 1992 may only be used to pay development costs 
associated with improvement of those portions of state trunk 
highway No. 101 or 5 within the development district or to pay 
the administrative expenses of the tax increment financing 
district. 
    Sec. 18.  [TRANSITION RULES.] 
    Subdivision 1.  Section 10 does not apply to tax increment 
financing districts established in development districts 
approved by an authority under Minnesota Statutes, sections 
469.124 to 469.134 on April 24, 1989, provided the request for 
certification of the district is submitted to the county before 
June 1, 1991. 
    Subd. 2.  Sections 2 and 10 do not apply to municipal 
redevelopment districts established or enlarged in a development 
district originally approved by an authority on September 1, 
1980, under Minnesota Statutes 1978, chapter 472A, if those 
redevelopment districts are established or enlarged for proposed 
projects identified in exclusive negotiations agreements dated 
March 7, 1989. 
    Subd. 3.  Section 10 does not apply to a redevelopment 
district in the city of Minneapolis that includes the former 
Sheraton Ritz hotel site, provided the request for certification 
of the district is submitted to the county before June 1, 1991. 
    Sec. 19.  [EFFECTIVE DATE.] 
    Sections 2, 6, 9, 10, 11, and 12 are effective for 
districts for which the request for certification was filed with 
the county on or after the day following final enactment.  
Sections 1, 3, 4, 5, 7, 8, 13, 14, 15, and 18, subdivisions 1 
and 2 are effective the day following final enactment.  Section 
16 is effective the day after compliance with Minnesota 
Statutes, section 645.021, by the governing body of the city of 
Moorhead.  Section 17 is effective the day after compliance with 
Minnesota Statutes, section 645.021, by the Chanhassen city 
council.  Section 18, subdivision 3, is effective upon 
compliance by the city council of the city of Minneapolis with 
Minnesota Statutes, section 645.021. 

                               ARTICLE 15 

                             BUDGET RESERVE 
    Section 1.  Minnesota Statutes 1988, 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 shall, as 
authorized from time to time by law, restrict part or all of the 
budgetary balance in the general fund for use as the budget and 
cash flow reserve account.  The commissioner of finance shall 
transfer to the budget and cash flow reserve account such 
amounts as are available to bring the total amount, including 
any existing balance in the account on June 30, 1988 1989, to 
$265,000,000 $550,000,000.  The amounts restricted shall remain 
in the account until drawn down under subdivision 1 or increased 
under section 16A.1541.  
    Sec. 2.  Minnesota Statutes 1989 Supplement, section 
16A.1541, is amended to read:  
    16A.1541 [ADDITIONAL REVENUES; PRIORITY.] 
    If on the basis of a forecast of general fund revenues and 
expenditures the commissioner of finance determines that there 
will be a positive unrestricted budgetary general fund balance 
at the close of the biennium, the commissioner of finance must 
allocate money to the budget and cash flow reserve account until 
the total amount in the account equals five percent of total 
general fund appropriations for the current biennium as 
established by the most recent legislative session after 
reducing the property tax levy recognition percent under section 
121.904, subdivision 4a, to 27 percent.  Beginning in November 
1990, forecast unrestricted budgetary general fund balances are 
first appropriated to reduce the property tax levy recognition 
percent under section 121.904, subdivision 4a, to 27 percent 
before money is allocated to the budget and cash flow reserve 
account under the preceding sentence.  
    The amounts necessary to meet the requirements of this 
section are appropriated from the general fund. 
    Sec. 3.  [EFFECTIVE DATE.] 
    Sections 1 and 2 are effective the day following final 
enactment. 

                               ARTICLE 16

                             HUMAN SERVICES
    Section 1.  [256.025] [PAYMENT PROCEDURES.] 
    Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
section, the following terms have the meanings given them.  
    (b) "Base amount" means the calendar year 1990 county share 
of local agency expenditures for all of the programs specified 
in subdivision 2.  
    (c) "Local agency expenditure" means the total expenditure 
or cost incurred by the county of financial responsibility for 
the benefits and services for each of the programs specified in 
subdivision 2.  The term includes the federal, state, and county 
share of costs for programs in which there is federal financial 
participation.  For programs in which there is no federal 
financial participation, the term includes the state and county 
share of costs.  The term excludes county administrative costs, 
unless otherwise specified.  
    (d) "Nonfederal share" means the sum of state and county 
shares of costs of the programs specified in subdivision 2. 
     (e) The "county share of local agency expenditures growth 
amount" is the amount by which the county share of local agency 
expenditures in calendar years 1991 to 1997 has increased over 
the base amount. 
    Subd. 2.  [COVERED PROGRAMS AND SERVICES.] The procedures 
in this section govern payment of local agency expenditures for 
benefits and services distributed under the following programs: 
    (1) Aid to Families with Dependent Children under sections 
256.82, subdivision 1, and 256.935, subdivision 1; 
    (2) medical assistance under sections 256B.041, subdivision 
5, and 256B.19, subdivision 1; 
    (3) general assistance medical care under section 256D.03, 
subdivision 6; 
    (4) general assistance under section 256D.03, subdivision 
2; 
    (5) work readiness under section 256D.03, subdivision 2; 
    (6) emergency assistance under section 256.871, subdivision 
6; 
    (7) Minnesota supplemental aid under section 256D.36, 
subdivision 1; 
    (8) preadmission screening and alternative care grants 
under section 256B.091; 
    (9) work readiness services under section 256D.051; 
    (10) case management services under section 256.736, 
subdivision 13; 
    (11) general assistance claims processing, medical 
transportation and related costs; and 
    (12) medical assistance, medical transportation and related 
costs. 
    Subd. 3.  [PAYMENT METHODS.] The state shall pay counties, 
according to the reporting cycle established by the 
commissioner, all federal funds available for the services and 
benefits distributed under subdivision 2 together with an amount 
of state funds equal to the state share of expenditures, except 
as provided for in section 256.017.  Beginning July 1, 1991, the 
state will reimburse counties for the county share of local 
agency expenditures for benefits and services distributed under 
subdivision 2 and funded by the human services account 
established under article 3, section 13.  Payments under 
subdivision 4 are only for client benefits and services 
distributed under subdivision 2 and do not include reimbursement 
for county administrative expenses. 
     Subd. 4.  [PAYMENT SCHEDULE.] Beginning July 1, 1991, the 
state will reimburse counties, according to the following 
payment schedule, for the county share of local agency 
expenditures for the programs specified in subdivision 2. 
    (a) Beginning July 1, 1991, the state will reimburse or pay 
the county share of local agency expenditures according to the 
reporting cycle as established by the commissioner, for the 
programs identified in subdivision 2.  Payments for the period 
of January 1, 1991, through July 31, 1991, shall be made 
subsequent to July 1, 1991.  Payments for the period August 1991 
through December 1991 shall be made subsequent to the first of 
each month thereafter through December 31, 1991. 
    (b) Payment for 1/24 of the base amount and the January 
1992 county share of local agency expenditures growth amount for 
the programs identified in subdivision 2 shall be made during 
January 1992.  For the period of February 1, 1992, through July 
31, 1992, payment of the base amount shall be made subsequent to 
July 1, 1992, and payment of the growth amount over the base 
amount shall be made monthly.  Payments for the period August 
1992 through December 1992 shall be made subsequent to the first 
of each month thereafter through December 31, 1992. 
    (c) Payment for the county share of local agency 
expenditures during January 1993 shall be made during January 
1993.  Payment for 1/24 of the base amount and the February 1993 
county share of local agency expenditures growth amount for the 
programs identified in subdivision 2 shall be made during 
February 1993.  For the period of March 1, 1993, through July 
31, 1993, payment of the base amount shall be made subsequent to 
July 1, 1993, and payment of the growth amount over the base 
amount shall be made monthly.  Payments for the period August 
1993 through December 1993 shall be made subsequent to the first 
of each month thereafter through December 31, 1993. 
    (d) Monthly payments for the county share of local agency 
expenditures from January 1994 through February 1994 shall be 
made subsequent to the first of each month through February 
1994.  Payment for 1/24 of the base amount and the March 1994 
county share of local agency expenditures growth amount for the 
programs identified in subdivision 2 shall be made during March 
1994.  For the period of April 1, 1994, through July 31, 1994, 
payment of the base amount shall be made subsequent to July 1, 
1994, and payment of the growth amount over the base amount 
shall be made monthly.  Payments for the period August 1994 
through December 1994 shall be made subsequent to the first of 
each month thereafter through December 31, 1994. 
    (e) Monthly payments for the county share of local agency 
expenditures from January 1995 through March 1995 shall be made 
subsequent to the first of each month through March 1995.  
Payment for 1/24 of the base amount and the April 1995 county 
share of local agency expenditures growth amount for the 
programs identified in subdivision 2 shall be made during April 
1995.  For the period of May 1, 1995, through July 31, 1995, 
payment of the base amount shall be made subsequent to July 1, 
1995, and payment of the growth amount over the base amount 
shall be made monthly.  Payments for the period August 1995 
through December 1995 shall be made subsequent to the first of 
each month thereafter through December 31, 1995. 
    (f) Monthly payments for the county share of local agency 
expenditures from January 1996 through April 1996 shall be made 
subsequent to the first of each month through April 1996.  
Payment for 1/24 of the base amount and the May 1996 county 
share of local agency expenditures growth amount for the 
programs identified in subdivision 2 shall be made during May 
1996.  For the period of June 1, 1996, through July 31, 1996, 
payment of the base amount shall be made subsequent to July 1, 
1996, and payment of the growth amount over the base amount 
shall be made monthly.  Payments for the period August 1996 
through December 1996 shall be made subsequent to the first of 
each month thereafter through December 31, 1996. 
    (g) Monthly payments for the county share of local agency 
expenditures from January 1997 through May 1997 shall be made 
subsequent to the first of each month through May 1997.  Payment 
for 1/24 of the base amount and the June 1997 county share of 
local agency expenditures growth amount for the programs 
identified in subdivision 2 shall be made during June 1997.  For 
the period of June 1, 1997, through July 31, 1997, payment shall 
be made subsequent to July 1, 1997.  Payments for the period 
August 1997 through December 1997 shall be made subsequent to 
the first of each month thereafter through December 31, 1997. 
    (h) Effective January 1, 1998, monthly payments for the 
county share of local agency expenditures shall be made 
subsequent to the first of each month. 
    Payments under this subdivision are subject to the 
provisions of section 256.017.  
    Subd. 5.  [COMPARISON OF EXPENDITURES.] By October 1 of 
each year beginning with 1991, the department shall determine 
actual county share of local agency expenditures reported under 
subdivision 4 for the previous state fiscal year and compare 
these actual county share expenditures to actual state payments 
made under the schedule in subdivision 4 for the same period.  
Adjustment of any difference shall be paid upon the direction of 
the state agency. 
    Sec. 2.  Minnesota Statutes 1988, section 256.736, 
subdivision 13, is amended to read: 
    Subd. 13.  [STATE SHARE.] (a) The state must pay 75 percent 
of the nonfederal share of costs incurred by counties under 
subdivision 11, except that after July 1, 1988, the commissioner 
shall adjust the state share to reflect county performance.  
Factors which the commissioner may consider in adjusting the 
state share must include, but are not limited to, the following: 
    (1) percentage of priority caretakers leaving the AFDC 
program after one year, two years, and three years; 
    (2) percentage of minor parents who finish high school; and 
    (3) percentage of priority caretakers who are in training 
or education and are successfully working toward their 
contracted goals. 
    The commissioner may raise or lower the state share of 
costs by a maximum of ten percent. 
    Beginning July 1, 1991, the state will reimburse counties, 
up to the limit of state appropriations, according to the 
payment schedule in section 1 of this article, for the county 
share of local agency expenditures made under subdivision 11 
from January 1, 1991, on.  Payment to counties under this 
subdivision is subject to the provisions of section 256.017. 
    (b) If the state appropriation is not sufficient to fund 
the cost of case management services for all caretakers 
identified in subdivision 2a, the commissioner must define a 
statewide subgroup of caretakers which includes all caretakers 
in subdivision 2a, clause (1) and as many caretakers as possible 
from subdivision 2a, clauses (2) and (3). 
    Sec. 3.  Minnesota Statutes 1989 Supplement, section 
256.82, subdivision 1, is amended to read: 
    Subdivision 1.  [MONTHLY PAYMENTS.] For the period from 
January 1 to June 30, Based upon estimates submitted by the 
county agency to the state agency, which shall state the 
estimated required expenditures for the succeeding month, upon 
the direction of the state agency, payment shall be made monthly 
in advance by the state to the counties of all federal funds 
available for that purpose for such succeeding month, together 
with.  The state share of the nonfederal portion of local agency 
expenditures shall be 85 percent and the county share shall be 
15 percent.  Payments to counties for costs incurred shall 
include an amount of state funds equal to 85 percent of the 
difference between the total estimated cost and the federal 
funds so available for payments made except as provided for in 
section 256.017.  Adjustment of any overestimate or 
underestimate made by any county shall be made upon the 
direction of the state agency in any succeeding month.  
Subsequent to July 1 of each year, the state agency shall 
reimburse the county agency for the funds expended during the 
January 1 to June 30 period except as provided for in section 
256.017.  For the period from July 1 to December 31 based upon 
the estimates submitted by the county agency to the state 
agency, which shall state the estimated required expenditures 
for the succeeding month, upon the direction of the state 
agency, payment shall be made monthly in advance by the state to 
the counties of all state and federal funds available for that 
purpose for the succeeding month except as provided for in 
section 256.017.  Payment shall be made on the basis of federal 
and state participation rates described in this subdivision.  
Beginning July 1, 1991, the state will reimburse counties 
according to the payment schedule in section 1 of this article 
for the county share of local agency expenditures under this 
subdivision from January 1, 1991, on.  Payment to counties under 
this subdivision is subject to the provisions of section 
256.017.  Adjustment of any overestimate or underestimate made 
by any county shall be made paid upon the direction of the state 
agency in any succeeding month.  Effective January 1, 1990, the 
state rate of participation shall be determined as a percentage 
that equals the difference between 100 percent and the 
percentage rate of federal financial participation. 
    Sec. 4.  Minnesota Statutes 1989 Supplement, section 
256.871, subdivision 6, is amended to read: 
    Subd. 6.  [REPORTS OF ESTIMATED EXPENDITURES; PAYMENTS.] 
The county agency shall submit to the state agency reports 
required under section 256.01, subdivision 2, paragraph (17).  
Fiscal reports shall estimate expenditures for each succeeding 
month in such form as required by the state agency.  For the 
period from January 1 to June 30, Payment shall be made monthly 
in advance by the state agency to the counties, of federal funds 
available for that purpose for each succeeding month, together 
with.  The state share of the nonfederal portion of local agency 
expenditures shall be ten percent and the county share shall be 
90 percent.  Payments to counties for costs incurred shall 
include an amount of state funds equal to ten percent of the 
difference between the total estimated cost and the federal 
funds so available, except as provided for in section 256.017.  
Subsequent to July 1 of each year the state agency shall 
reimburse the county agency for the funds expended during the 
January 1 to June 30 period, except as provided for in section 
256.017.  For the period from July 1 to December 31, payment 
shall be made monthly in advance by the state agency to the 
counties, of all state and federal funds available for that 
purpose for the succeeding month, except as provided for in 
section 256.017.  Payment shall be made on the basis of federal 
and state participation rates described in this subdivision.  
Effective January 1, 1990, the state rate of participation shall 
be determined as a percentage that equals the difference between 
100 percent and the percentage rate of federal financial 
participation.  Beginning July 1, 1991, the state will reimburse 
counties according to the payment schedule set forth in section 
1 of this article for the county share of local agency 
expenditures made under this subdivision from January 1, 1991, 
on.  Payment to counties under this subdivision is subject to 
the provisions of section 256.017.  Adjustment of any 
overestimate or underestimate made by any county shall be made 
paid upon the direction of the state agency in any succeeding 
month. 
    Sec. 5.  Minnesota Statutes 1989 Supplement, section 
256.935, subdivision 1, is amended to read: 
    Subdivision 1.  On the death of any person receiving public 
assistance through aid to dependent children, the county agency 
shall pay an amount for funeral expenses not exceeding $370 and 
actual cemetery charges.  No funeral expenses shall be paid if 
the estate of the deceased is sufficient to pay such expenses or 
if the children, or spouse, who were legally responsible for the 
support of the deceased while living, are able to pay such 
expenses; provided, that the additional payment or donation of 
the cost of cemetery lot, interment, religious service, or for 
the transportation of the body into or out of the community in 
which the deceased resided, shall not limit payment by the 
county agency as herein authorized.  Freedom of choice in the 
selection of a funeral director shall be granted to persons 
lawfully authorized to make arrangements for the burial of any 
such deceased recipient.  In determining the sufficiency of such 
estate, due regard shall be had for the nature and marketability 
of the assets of the estate.  The county agency may grant 
funeral expenses where the sale would cause undue loss to the 
estate.  Any amount paid for funeral expenses shall be a prior 
claim against the estate, as provided in section 524.3-805, and 
any amount recovered shall be reimbursed to the agency which 
paid the expenses.  The commissioner shall specify requirements 
for reports, including fiscal reports, according to section 
256.01, subdivision 2, paragraph (17).  For the period from 
January 1 to June 30, The state share of local agency 
expenditures shall be 50 percent and the county share shall be 
50 percent.  The state shall reimburse the county for 50 percent 
of any payments local agency expenditures made for funeral 
expenses except as provided for in section 256.017.  Subsequent 
to July 1 of each year, the state agency shall reimburse the 
county agency for the funds expended during the January 1 to 
June 30 period.  For the period from July 1 to December 31, the 
state shall reimburse the county for 100 percent of any payments 
made for funeral expenses except as provided for in section 
256.017. 
    Beginning July 1, 1991, the state will reimburse counties 
according to the payment schedule set forth in section 1 of this 
article for the county share of local agency expenditures made 
under this subdivision from January 1, 1991, on.  Payment to 
counties under this subdivision is subject to the provisions of 
section 256.017. 
    Sec. 6.  Minnesota Statutes 1989 Supplement, section 
256B.041, subdivision 5, is amended to read: 
    Subd. 5.  [PAYMENT BY COUNTY TO STATE TREASURER.] If 
required by federal law or rules promulgated thereunder, or by 
authorized rule of the state agency, each county shall pay to 
the state treasurer the portion of medical assistance paid by 
the state for which it is responsible.  Effective January 1, 
1990, the state rate of participation shall be determined as a 
percentage that equals the difference between 100 percent and 
the percentage rate of federal financial participation.  The 
county's share of cost shall be ten percent of that portion not 
met by federal funds. 
    For the period from January 1 to June 30, The county shall 
advance ten percent of that portion of medical assistance costs 
not met by federal funds, based upon estimates submitted by the 
state agency to the county agency, stating the estimated 
expenditures for the succeeding month.  Upon the direction of 
the county agency, payment shall be made monthly by the county 
to the state for the estimated expenditures for each month.  
Adjustment of any overestimate or underestimate based on actual 
expenditures shall be made by the state agency by adjusting the 
estimate for any succeeding month.  Subsequent to July 1 of each 
year, the state agency shall reimburse the county agency for the 
funds expended during the January 1 to June 30 period, except as 
provided for in section 256.017.  For the period from July 1 to 
December 31, payments will be made by the state agency, except 
as provided for in section 256.017, and the county agency will 
be advised of the amounts paid monthly.  
    Beginning July 1, 1991, the state will reimburse counties 
according to the payment schedule in section 1 of this article 
for the county share of local agency expenditures under this 
subdivision from January 1, 1991, on.  Payment to counties under 
this subdivision is subject to the provisions of section 256.017.
    Sec. 7.  Minnesota Statutes 1988, section 256B.091, 
subdivision 8, is amended to read: 
    Subd. 8.  [ALTERNATIVE CARE GRANTS.] The commissioner shall 
provide grants to counties participating in the program to pay 
costs of providing alternative care to individuals screened 
under subdivision 4 and nursing home or boarding care home 
residents who request a screening.  Prior to July of each year, 
the commissioner shall allocate state funds available for 
alternative care grants to each local agency.  This allocation 
must be made as follows:  half of the state funds available for 
alternative care grants must be allocated to each county 
according to the total number of adults in that county who are 
recipients age 65 or older who are reported to the department by 
March 1 of each state fiscal year and half of the state funds 
available for alternative care grants must be allocated to a 
county according to that county's number of Medicare enrollments 
age 65 or older for the most recent statistical report.  Payment 
is available under this subdivision only for individuals (1) for 
whom the screening team would recommend nursing home or boarding 
care home admission, or continued stay if alternative care were 
not available; (2) who are receiving medical assistance or who 
would be eligible for medical assistance within 180 days of 
admission to a nursing home; (3) who need services that are not 
available at that time in the county through other public 
assistance; and (4) who are age 65 or older. 
     The commissioner shall establish by rule, in accordance 
with chapter 14, procedures for determining grant reallocations, 
limits on the rates for payment of approved services, including 
screenings, and submittal and approval of a biennial county plan 
for the administration of the preadmission screening and 
alternative care grants program.  Grants may be used for payment 
of costs of providing care-related supplies, equipment, and 
services such as, but not limited to, foster care for elderly 
persons, day care whether or not offered through a nursing home, 
nutritional counseling, or medical social services, which 
services are provided by a licensed health care provider, a home 
health service eligible for reimbursement under Titles XVIII and 
XIX of the federal Social Security Act, or by persons employed 
by or contracted with by the county board or the local welfare 
agency.  The county agency shall ensure that a plan of care is 
established for each individual in accordance with subdivision 
3, clause (e)(2), and that a client's service needs and 
eligibility is reassessed at least every six months.  The plan 
shall include any services prescribed by the individual's 
attending physician as necessary and follow up services as 
necessary.  The county agency shall provide documentation to the 
commissioner verifying that the individual's alternative care is 
not available at that time through any other public assistance 
or service program and shall provide documentation in each 
individual's plan of care and to the commissioner that the most 
cost-effective alternatives available have been offered to the 
individual and that the individual was free to choose among 
available qualified providers, both public and private.  The 
county agency shall document to the commissioner that the agency 
made reasonable efforts to inform potential providers of the 
anticipated need for services under the alternative care grants 
program, including a minimum of 14 days written advance notice 
of the opportunity to be selected as a service provider and an 
annual public meeting with providers to explain and review the 
criteria for selection, and that the agency allowed potential 
providers an opportunity to be selected to contract with the 
county board.  Grants to counties under this subdivision are 
subject to audit by the commissioner for fiscal and utilization 
control. 
     The county must select providers for contracts or 
agreements using the following criteria and other criteria 
established by the county: 
     (1) the need for the particular services offered by the 
provider; 
     (2) the population to be served, including the number of 
clients, the length of time services will be provided, and the 
medical condition of clients; 
     (3) the geographic area to be served; 
     (4) quality assurance methods, including appropriate 
licensure, certification, or standards, and supervision of 
employees when needed; 
     (5) rates for each service and unit of service exclusive of 
county administrative costs; 
     (6) evaluation of services previously delivered by the 
provider; and 
     (7) contract or agreement conditions, including billing 
requirements, cancellation, and indemnification. 
     The county must evaluate its own agency services under the 
criteria established for other providers.  The county shall 
provide a written statement of the reasons for not selecting 
providers. 
     The commissioner shall establish a sliding fee schedule for 
requiring payment for the cost of providing services under this 
subdivision to persons who are eligible for the services but who 
are not yet eligible for medical assistance.  The sliding fee 
schedule is not subject to chapter 14 but the commissioner shall 
publish the schedule and any later changes in the State Register 
and allow a period of 20 working days from the publication date 
for interested persons to comment before adopting the sliding 
fee schedule in final forms.  
     The commissioner shall apply for a waiver for federal 
financial participation to expand the availability of services 
under this subdivision.  The commissioner shall provide grants 
to counties from the nonfederal share, unless the commissioner 
obtains a federal waiver for medical assistance payments, of 
medical assistance appropriations.  A county agency may use 
grant money to supplement but not supplant services available 
through other public assistance or service programs and shall 
not use grant money to establish new programs for which public 
money is available through sources other than grants provided 
under this subdivision.  A county agency shall not use grant 
money to provide care under this subdivision to an individual if 
the anticipated cost of providing this care would exceed the 
average payment, as determined by the commissioner, for the 
level of care that the recipient would receive if placed in a 
nursing home or boarding care home.  For the period from January 
1 to June 30, The nonfederal share may be used to pay up to 90 
percent of the start-up and service delivery costs of providing 
care under this subdivision.  The state share of the nonfederal 
portion of costs shall be 90 percent and the county share shall 
be ten percent.  Each county agency that receives a grant shall 
pay ten percent of the costs for persons who are eligible for 
the services but who are not yet eligible for medical 
assistance.  Subsequent to July 1 of each year, the state agency 
shall reimburse the county agency for the funds expended during 
the January 1 to June 30 period, except as provided for in 
section 256.017.  For the period from July 1 to December 31, the 
nonfederal share may be used to pay up to 100 percent of the 
start-up and service delivery costs of providing care under this 
subdivision. 
    Beginning July 1, 1991, the state will reimburse counties 
according to the payment schedule in section 1 of this article 
for the county share of costs incurred under this subdivision 
from January 1, 1991, on, for individuals who are receiving 
medical assistance.  
    Beginning July 1, 1991, the state will reimburse counties, 
up to the limit of state appropriations, according to the 
payment schedule in section 1 of this article, for the county 
share of costs incurred under this subdivision from January 1, 
1991, on, for individuals who would be eligible for medical 
assistance within 180 days of admission to a nursing home. 
    The commissioner shall promulgate emergency rules in 
accordance with sections 14.29 to 14.36, to establish required 
documentation and reporting of care delivered. 
    Sec. 8.  Minnesota Statutes 1988, section 256B.19, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DIVISION OF COST.] The cost of medical 
assistance paid by each county of financial responsibility shall 
be borne as follows:  For the period from January 1 to June 30, 
payments shall be made by the state to the county for that 
portion of medical assistance paid by the federal government and 
the state on or before the 20th day of each month for the 
succeeding month upon requisition from the county showing the 
amount required for the succeeding month.  Ninety percent of the 
expense of assistance not paid by federal funds available for 
that purpose shall be paid by the state and ten percent shall be 
paid by the county of financial responsibility, except as 
provided for in section 256.017.  
    For the period from January 1 to June 30, For counties that 
participate in a Medicaid demonstration project under sections 
256B.69 and 256B.71, the division of the nonfederal share of 
medical assistance expenses for payments made to prepaid health 
plans or for payments made to health maintenance organizations 
in the form of prepaid capitation payments, this division of 
medical assistance expenses shall be 95 percent by the state and 
five percent by the county of financial 
responsibility.  Subsequent to July 1 of each year, the state 
agency shall reimburse the county agency for the funds expended 
during the January 1 to June 30 period, except as provided for 
in section 256.017. 
    For the period from July 1 to December 31, except as 
provided for in section 256.017, payments shall be made by the 
state to the county for that portion of medical assistance paid 
by the federal government and the state on or before the 20th 
day of each month for the succeeding month upon requisition from 
the county showing the amount required for the succeeding 
month.  The expense of assistance not paid by federal funds 
available for that purpose shall be paid by the state. 
    Beginning July 1, 1991, the state will reimburse counties 
according to the payment schedule in section 1 of this article 
for the county share of costs incurred under this subdivision 
from January 1, 1991, on.  Payment to counties under this 
subdivision is subject to the provisions of section 256.017. 
    In counties where prepaid health plans are under contract 
to the commissioner to provide services to medical assistance 
recipients, the cost of court ordered treatment ordered without 
consulting the prepaid health plan that does not include 
diagnostic evaluation, recommendation, and referral for 
treatment by the prepaid health plan is the responsibility of 
the county of financial responsibility.  
    Sec. 9.  Minnesota Statutes 1988, section 256B.19, is 
amended by adding a subdivision to read: 
    Subd. 2a.  [DIVISION OF COSTS.] Beginning July 1, 1991, the 
state shall reimburse counties according to the payment schedule 
in section 1 of this article, for the nonfederal share of costs 
incurred for medical assistance common carrier transportation 
and related travel expenses provided for medical purposes to 
medical assistance recipients from January 1, 1991, on.  For 
purposes of this subdivision, transportation shall have the 
meaning given it in Code of Federal Regulations, title 42, 
section 440.170(a), as amended through October 1, 1987, and 
travel expenses shall have the meaning given in Code of Federal 
Regulations, title 42, section 440.170(a)(3), as amended through 
October 1, 1987. 
    The county shall ensure that only the least costly, most 
appropriate transportation and travel expenses are used.  The 
state may enter into volume purchase contracts, or use a 
competitive bidding process, whenever feasible, to minimize the 
costs of transportation services.  If the state has entered into 
a volume purchase contract or used the competitive bidding 
procedures of chapter 16B to arrange for transportation 
services, the county may be required to use such arrangements to 
be eligible for state reimbursement of the 50 percent county 
share of medical assistance common carrier transportation and 
related travel expenses provided for medical purposes. 
    Sec. 10.  Minnesota Statutes 1989 Supplement, section 
256D.03, subdivision 2, is amended to read: 
    Subd. 2.  For the period from January 1 to June 30, state 
aid shall be paid to local agencies for 75 percent of all 
general assistance and work readiness grants up to the standards 
of sections 256D.01, subdivision 1a, and 256D.051, and according 
to procedures established by the commissioner, except as 
provided for under section 256.017.  Subsequent to July 1 of 
each year, the state agency shall reimburse the county agency 
for the funds expended during the January 1 to June 30 period, 
except as provided for in section 256.017. 
    For the period from July 1 to December 31, After December 
31, 1980, state aid shall be paid to local agencies for 100 75 
percent of all general assistance and work readiness grants up 
to the standards of sections 256D.01, subdivision 1a, and 
256D.051, and according to procedures established by the 
commissioner, except as provided for under section 256.017 and 
except that, after December 31, 1988 1987, state aid is reduced 
to 65 percent of all work readiness assistance if the local 
agency does not make occupational or vocational literacy 
training available and accessible to recipients who are eligible 
for assistance under section 256D.051.  
    After December 31, 1988 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. 
    Beginning July 1, 1991, the state will reimburse counties 
according to the payment schedule in section 1 of this article 
for the county share of local agency expenditures made under 
this subdivision from January 1, 1991, on.  Payment to counties 
under this subdivision is subject to the provisions of section 
256.017.  
    Subd. 2a.  [LOCAL AGENCY OPTIONS.] Any local agency may, 
from its own resources, make payments of general assistance and 
work readiness 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, or 256D.051 but for whom the aid would 
further the purposes established in the general assistance or 
work readiness program in accordance with rules adopted by the 
commissioner pursuant to the administrative procedure act. 
    Sec. 11.  Minnesota Statutes 1988, section 256D.03, 
subdivision 6, is amended to read: 
    Subd. 6.  [DIVISION OF COSTS.] The state share of local 
agency expenditures for general assistance medical care shall be 
90 percent and the county share shall be ten percent.  The state 
shall pay 100 percent of the cost of general assistance medical 
care paid pursuant to this section, Payments made under this 
subdivision shall be made in accordance with sections 256B.041, 
subdivision 5, and 256B.19, subdivision 1, except as provided 
for in section 256.017. 
    Beginning July 1, 1991, the state will reimburse counties 
according to the payment schedule in section 1 of this article 
for the county share of costs incurred under this subdivision 
from January 1, 1991, on.  Payment to counties under this 
subdivision is subject to the provisions of section 256.017. 
    Notwithstanding any provision to the contrary, beginning 
July 1, 1991, the state shall pay 100 percent of the costs for 
centralized claims processing by the department of 
administration relative to claims beginning January 1, 1991, and 
submitted on behalf of general assistance medical care 
recipients by vendors in the general assistance medical care 
program. 
    Beginning July 1, 1991, the state shall reimburse counties 
up to the limit of state appropriations for general assistance 
medical care common carrier transportation and related travel 
expenses provided for medical purposes after December 31, 1990.  
Reimbursement shall be provided according to the payment 
schedule set forth in section 1 of this article.  For purposes 
of this subdivision, transportation shall have the meaning given 
it in Code of Federal Regulations, title 42, section 440.170(a), 
as amended through October 1, 1987, and travel expenses shall 
have the meaning given in Code of Federal Regulations, title 42, 
section 440.170(a)(3), as amended through October 1, 1987. 
    The county shall ensure that only the least costly most 
appropriate transportation and travel expenses are used.  The 
state may enter into volume purchase contracts, or use a 
competitive bidding process, whenever feasible, to minimize the 
costs of transportation services.  If the state has entered into 
a volume purchase contract or used the competitive bidding 
procedures of chapter 16B to arrange for transportation 
services, the county may be required to use such arrangements to 
be eligible for state reimbursement for general assistance 
medical care common carrier transportation and related travel 
expenses provided for medical purposes. 
    In counties where prepaid health plans are under contract 
to the commissioner to provide services to general assistance 
medical care recipients, the cost of court ordered treatment 
that does not include diagnostic evaluation, recommendation, or 
referral for treatment by the prepaid health plan is the 
responsibility of the county of financial responsibility. 
    Sec. 12.  Minnesota Statutes 1989 Supplement, section 
256D.051, subdivision 6, is amended to read: 
    Subd. 6.  [SERVICE COSTS.] The commissioner shall reimburse 
92 percent of local agency expenditures for providing work 
readiness services including direct participation expenses and 
administrative costs., except as provided in section 256.017; 
and reimbursement from the state appropriation must not exceed 
an average of $260 each year for each registrant who has 
completed an employment development plan for direct expenses 
incurred by the registrant for transportation, clothes, and 
tools necessary for employment.  Beginning July 1, 1991, the 
state will reimburse counties, up to the limit of state 
appropriations, according to the payment schedule in section 1 
of this article for the county share of costs incurred under 
this subdivision from January 1, 1991, on.  Beginning January 1, 
1991, the average reimbursable cost per recipient must not 
exceed $283 annually.  Payment to counties under this 
subdivision is subject to the provisions of section 256.017. 
After paying direct expenses as needed by individual 
registrants, the local agency may use any remaining money to 
provide additional services as needed by any registrant 
including employability assessments and employability 
development plans, education, orientation, employment search 
assistance, placement, other work experience, on-the-job 
training, and other appropriate activities and the 
administrative costs incurred providing these services.  
    Sec. 13.  Minnesota Statutes 1989 Supplement, section 
256D.36, subdivision 1, is amended to read: 
    Subdivision 1.  [STATE PARTICIPATION.] Commencing January 
1, 1974, the commissioner shall certify to each local agency the 
names of all county residents who were eligible for and did 
receive aid during December, 1973, pursuant to a categorical aid 
program of old age assistance, aid to the blind, or aid to the 
disabled.  Each year for the period from January 1 to June 30, 
From and after January 1, 1980, until January 1, 1981, the state 
shall pay 85 70 percent and the county shall pay 15 30 percent 
of the supplemental aid calculated for each county resident 
certified under this section who is an applicant for or 
recipient of supplemental security income, except as provided 
for in section 256.017.  After June 30 of each year, the state 
agency shall reimburse the county agency for the funds expended 
during the January 1 to June 30 period, except as provided for 
in section 256.017.  For the period from July 1 to December 31, 
the state agency shall pay 100 percent of the supplemental aid 
calculated for each county resident certified under this section 
who is an applicant for or recipient of supplemental security 
income, except as provided for in section 256.017.  After 
December 31, 1980, the state share of aid paid shall be 85 
percent and the county share shall be 15 percent.  The amount of 
supplemental aid for each individual eligible under this section 
shall be calculated according to the formula in title II, 
section 212 (a) (3) of Public Law Number 93-66, as amended. 
    Beginning July 1, 1991, the state will reimburse counties 
according to the payment schedule in section 1 of this article 
for the county share of local agency expenditures for financial 
benefits to individuals under this subdivision from January 1, 
1991, on. Payment to counties under this subdivision is subject 
to the provisions of section 256.017. 
    Sec. 14.  Minnesota Statutes 1988, section 256G.01, 
subdivision 3, is amended to read: 
    Subd. 3.  [PROGRAM COVERAGE.] This chapter applies to all 
programs administered by the commissioner in which residence is 
the determining factor in establishing financial 
responsibility.  These include, but are not limited to:  Aid to 
Families with Dependent Children; medical assistance; general 
assistance; work readiness; general assistance medical care; 
Minnesota supplemental aid; commitment proceedings, including 
voluntary admissions; poor relief funded wholly through local 
agencies; and social services, including title XX, IV-E and 
other components of the community social services act, sections 
256E.01 to 256E.12.  It also applies to service responsibility 
in the income maintenance and health care programs administered 
by the commissioner. 
    Sec. 15.  Minnesota Statutes 1989 Supplement, section 
256G.02, subdivision 4, is amended to read: 
    Subd. 4.  [COUNTY OF FINANCIAL RESPONSIBILITY.] (a) "County 
of financial responsibility" has the meanings in paragraphs (b) 
to (e) (h).  
    (b) For an applicant who resides in the state and is not in 
a facility described in subdivision 6, it means the county in 
which the applicant resides at the time of application.  
    (c) For an applicant who resides in a facility described in 
subdivision 6, it means the county in which the applicant last 
resided in nonexcluded status immediately before entering the 
facility.  
    (d) For an applicant who has not resided in this state for 
any time other than the excluded time, and subject to the 
limitations in section 256G.03, subdivision 2, it means the 
county in which the applicant resides at the time of making 
application.  
    (e) For medical assistance purposes only, and for an infant 
who has resided only in an excluded time facility, it means the 
county that would have been responsible for the infant if 
eligibility had been established, based on that of the birth 
mother, at the time of application. 
    (f) Notwithstanding paragraphs (b) to (d), the county of 
financial responsibility for medical assistance recipients is 
the county from which a recipient is receiving a maintenance 
grant or money payment under the program of Aid to Families with 
Dependent Children or Minnesota supplemental aid. 
    (g) Notwithstanding paragraphs (b) to (f), the county of 
financial responsibility for social services for a person 
receiving Aid to Families with Dependent Children, general 
assistance, general assistance medical care, medical assistance, 
or Minnesota supplemental aid is the county from which that 
person is receiving the aid or assistance.  If more than one 
named program is open concurrently, financial responsibility for 
social services attaches to the program that has the earliest 
date of application and has been open without interruption.  
    (f) (h) Notwithstanding paragraphs (b) to (e) (g), the 
county of financial responsibility for semi-independent living 
services provided under section 252.275, and Minnesota Rules, 
parts 9525.0500 to 9525.0660, is the county of residence in 
nonexcluded status immediately before the placement into or 
request for those services. 
    Sec. 16.  Minnesota Statutes 1988, section 256G.05, is 
amended to read: 
    256G.05 [NON-MINNESOTA RESIDENTS RESPONSIBILITY FOR 
EMERGENCIES.] 
    Subdivision 1.  [RESIDENCE NOT A TEST.] In situations 
involving emergencies verified by a local agency, financial 
responsibility for aid to families with dependent children, 
general assistance, general assistance medical care, and 
Minnesota supplemental aid rests with the county in which an 
otherwise eligible person is physically present when the 
application is filed.  Financial responsibility is limited to 30 
days unless otherwise specified in the context of the program. 
    Subd. 2.  [NON MINNESOTA RESIDENTS.] State residence is not 
required for receiving emergency assistance in the general 
assistance, general assistance medical care, and Minnesota 
supplemental aid programs only. The receipt of emergency 
assistance must not be used as a factor in determining county or 
state residence. 
    Sec. 17.  Minnesota Statutes 1988, section 256G.07, is 
amended to read: 
    256G.07 [MOVING TO ANOTHER COUNTY.] 
    Subdivision 1.  [EFFECT OF MOVING.] Except as provided in 
subdivision 4, A person who has applied for and is receiving 
services or assistance under a program governed by this chapter, 
in any county in this state, and who moves to another county in 
this state, is entitled to continue to receive that assistance 
from the county from which that person has moved until that 
person has resided in nonexcluded status for two full calendar 
months in the county to which that person has moved.  For 
purposes of general assistance and general assistance medical 
care, this time period is, however, one full calendar month. 
    Subd. 2.  [TRANSFER OF RECORDS.] Before the person has 
resided in nonexcluded status for two calendar months or one 
calendar month in the case of general assistance and general 
assistance medical care, in the county to which that person has 
moved, the local agency of the county from which the person has 
moved shall complete an eligibility review and transfer all 
necessary records relating to that person to the local agency of 
the county to which the person has moved. 
    Subd. 3.  [CONTINUATION OF CASE.] When the case is 
terminated for 30 days or less before the recipient reapplies, 
that case remains the financial responsibility of the county 
from which the recipient moved until the residence requirement 
in subdivision 1 is met. 
    Subd. 3a.  [MULTIPLE FINANCIAL RESPONSIBILITY.] When more 
than one county becomes financially responsible for a case 
involving a single assistance unit, under a program covered by 
this chapter, that case must be immediately reconsidered by the 
affected county agencies.  Beginning with the first day of the 
calendar month after that reconsideration, financial 
responsibility for the entire assistance unit belongs to the 
county that was initially responsible for the program with the 
earliest date of application. 
    Subd. 4.  [SOCIAL SERVICE PROVISION.] The types and level 
of social services to be provided in any case governed by this 
chapter are those otherwise provided in the county in which the 
person is physically residing at the time those services are 
provided. 
    Sec. 18.  Minnesota Statutes 1988, section 256G.10, is 
amended to read: 
    256G.10 [DERIVATIVE SETTLEMENT ELIMINATED.] 
    Except as described in section 256G.02, subdivision 4, 
paragraph (e), residence under this chapter must be determined 
independently for each applicant.  The residence of the parent 
or guardian does not determine the residence of the child or 
ward.  Physical or legal custody has no bearing on residence 
determinations.  This section does not, however, apply to 
situations involving another state or limit the application of 
an interstate compact. 
    Sec. 19.  Minnesota Statutes 1988, section 256G.11, is 
amended to read: 
    256G.11 [NO RETROACTIVE EFFECT.] 
    This chapter is not retroactive and does not require the 
retroactive redetermination of financial responsibility for 
cases existing on January 1, 1988.  This chapter applies only to 
applications and redeterminations of eligibility taken or 
routinely made after January 1, 1988. 
    Notwithstanding this section, existing social services 
cases shall be treated in the same manner as cases for those 
programs outlined in section 256G.02, subdivision 4, paragraph 
(g), for which an application is taken or a redetermination is 
made after January 1, 1988. 
    Sec. 20.  Laws 1989, chapter 282, article 5, section 133, 
is amended to read:  
    Sec. 133.  [REPEALER.] 
    Subdivision 1.  [WELFARE REFORM.] Minnesota Statutes 1988, 
sections 256D.051, subdivision 6a, and section 268.86, 
subdivision 7, are is repealed. 
    Subd. 2.  [AFDC AND MSA SIMPLIFICATION.] (a) Sections 
256D.01, subdivision 1c; and 256D.06, subdivisions 3, 4, and 6, 
are repealed. 
    (b) Sections 256D.35, subdivisions 2, 3, 4, and 8; 256D.36, 
subdivision 2; 256D.37, subdivisions 2, 4, 6, 7, 8, 9, 10, 11, 
12, 13, and 14; 256D.38; 256D.39; 256D.41; 256D.42; and 256D.43, 
are repealed. 
    Subd. 3.  [GENERAL ASSISTANCE AND WORK READINESS.] 
Minnesota Statutes 1988, sections 256D.051, subdivision 6a; 
256D.06, subdivisions 3, 4, 6, and 6a; and 256D.052, 
subdivisions 5, 6, and 7, are repealed effective October 1, 1990.
    Sec. 21.  [REPEALER.] 
    Minnesota Statutes 1988, section 245.775, is repealed 
effective July 1, 1990. 
     Sec. 22.  [REENACTMENT.] 
    Minnesota Statutes 1988, section 256D.051, subdivision 6a, 
is reenacted retroactively to July 1, 1989, and its repeal by 
Laws 1989, chapter 282, article 5, section 133, subdivision 1, 
is of no effect. 
    Sec. 23.  [EFFECTIVE DATE.] 
    Sections 1 to 22 are effective the day after final 
enactment. 

                               ARTICLE 17

                             MISCELLANEOUS 
    Section 1.  Minnesota Statutes 1988, section 270.067, 
subdivision 1, is amended to read: 
    Subdivision 1.  [STATEMENT OF PURPOSE.] State governmental 
policy objectives are sought to be achieved both by direct 
expenditure of governmental funds and by the granting of special 
and selective tax relief or tax expenditures.  Both direct 
expenditures of governmental funds and tax expenditures have an 
effect on the ability of the state and local governments to 
lower tax rates or to increase expenditures.  As a result, tax 
expenditures should receive a regular and comprehensive review 
by the legislature as to (a) their total cost, (b) their 
effectiveness in achieving their objectives, (c) their effect on 
the fairness and equity of the distribution of the tax burden, 
and (d) the public and private cost of administering tax 
expenditure financed programs.  This section is intended to 
facilitate a regular review of the state and local tax 
expenditure budget by the legislature by providing for the 
preparation of a regular biennial tax expenditure budget.  
    Sec. 2.  Minnesota Statutes 1988, section 270.067, 
subdivision 2, is amended to read: 
    Subd. 2.  [PREPARATION; SUBMISSION.] The commissioner of 
revenue shall prepare a tax expenditure budget for the 
state every four years.  The tax expenditure budget report shall 
be submitted to the legislature as a supplement to the 
governor's budget and at the same time as provided for 
submission of the budget pursuant to section 16A.11, subdivision 
1, except that the next such report shall be submitted in 1993, 
and every four years thereafter. 
    Sec. 3.  Minnesota Statutes 1988, 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, 
including long distance access charges, of the preceding 
calendar year derived from business within this state: 
    (a) for gross earnings from service to rural subscribers 
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, 1988, four 
percent, 
    for calendar year 1989, three percent, provided that the 
estimated tax payments made on March 15 and June 15, 1989, 
pursuant to section 295.365, must be made as if the tax were 
imposed at a rate of four percent, 
    for calendar year 1990, 1.5 percent, 
    for calendar year 1991, one percent, and 
    for calendar years beginning after December 31, 1991, 
exempt; and 
    (b) for gross earnings derived from all other business 
    for calendar years beginning before December 31, 1988, 
seven percent, 
     for calendar year 1989, 5.5 percent, provided that the 
estimated tax payments made on March 15 and June 15, 1989, 
pursuant to section 295.365, must be made as if the tax were 
imposed at a rate of seven percent, 
     for calendar year 1990, three percent, 
     for calendar year 1991, 2.5 percent, and 
     for calendar years beginning after December 31, 1991, 
exempt. 
     A tax shall not be imposed on the gross earnings of a 
telephone company from business originating or terminating 
outside of Minnesota, except that the gross earnings tax is 
imposed on all long distance access charges allocated to 
interstate service received in payment from a telephone company 
before December 31, 1989.  
     The tax imposed is in lieu of all other taxes, except the 
taxes imposed by chapter 290, property taxes assessed beginning 
in 1989, payable in 1990, and sales and use taxes imposed as a 
result of chapter 297A.  All money 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.  
For the purposes of this section, the population of any 
statutory city shall be considered as that stated in the latest 
federal census. 
    (c) For the period January 1, 1984 through December 31, 
1986, all money paid by a company for connecting fees and 
switching charges, including carriers access charges except that 
portion paid for directory assistance and billing and collection 
services, to any other company must be reported as earnings by 
the company to which they are paid, but are not deemed to be 
earnings of the collecting and paying company. 
    (d) Gross earnings include customer access charges.  
Customer access charges are not gross earnings from business 
originating or terminating outside of Minnesota for purposes of 
the gross earnings tax.  Customer access charges include the 
flat rate monthly charges received by a telephone company from 
its customers, that are authorized by the Federal Communications 
Commission and that compensate a telephone company for the cost 
of a local telephone plant to the extent attributable to 
interstate service.  
    Sec. 4.  [STATEMENT OF PURPOSE.] 
    The purpose of section 3 is to confirm and clarify the 
original intent of the legislature in enacting the exemption for 
gross earnings from business originating or terminating outside 
of Minnesota in Minnesota Statutes, section 295.34.  Section 3 
does not create a new category of earnings subject to the gross 
earnings tax.  It ratifies existing state interpretation of the 
telephone gross earnings tax and Minnesota Statutes, section 
295.34. 
     Sec. 5.  Minnesota Statutes 1989 Supplement, section 
357.021, subdivision 1a, is amended to read: 
    Subd. 1a.  Every person, including the state of Minnesota 
and all bodies politic and corporate, who shall transact any 
business in the district court, shall pay to the court 
administrator of said court the sundry fees prescribed in 
subdivision 2.  When the public authority responsible for child 
support enforcement is a party to any action or proceeding in 
the district court or according to section 518.551, subdivision 
10, no fee is required under this section.  The court 
administrator shall transmit the fees monthly to the county 
treasurer who shall forward the funds to the state treasurer for 
deposit in the state treasury and credit to the general fund.  
    Sec. 6.  Minnesota Statutes 1988, section 373.40, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DEFINITIONS.] For purposes of this 
section, the following terms have the meanings given. 
    (a) "Bonds" means an obligation as defined under section 
475.51. 
    (b) "Capital improvement" means acquisition or betterment 
of public lands, buildings, or other improvements within the 
county for the purpose of a county courthouse, administrative 
building, health or social service facility, correctional 
facility, jail, law enforcement center, hospital, morgue, 
library, park, and roads and bridges.  An improvement must have 
an expected useful life of five years or more to qualify. 
"Capital improvement" does not include light rail transit or any 
activity related to it or a recreation or sports facility 
building (such as, but not limited to, a gymnasium, ice arena, 
racquet sports facility, swimming pool, exercise room or health 
spa), unless the building is part of an outdoor park facility 
and is incidental to the primary purpose of outdoor recreation. 
    (c) "Commissioner" means the commissioner of trade and 
economic development. 
    (d) "Metropolitan county" means a county located in the 
seven-county metropolitan area as defined in section 473.121 or 
a county with a population of 90,000 or more. 
    (e) "Population" means the population established by the 
most recent of the following (determined as of the date the 
resolution authorizing the bonds was adopted): 
    (1) the federal decennial census, 
    (2) a special census conducted under contract by the United 
States Bureau of the Census, or 
    (3) a population estimate made either by the metropolitan 
council or by the state demographer under section 116K.04, 
subdivision 4, clause (10). 
    (f) "Taxable gross Tax capacity" means total taxable gross 
tax capacity, but does not include captured gross tax capacity. 
    Sec. 7.  Minnesota Statutes 1988, section 373.40, 
subdivision 2, is amended to read: 
    Subd. 2.  [APPLICATION OF ELECTION REQUIREMENT.] (a) Bonds 
issued by a county to finance capital improvements under an 
approved capital improvement plan are not subject to the 
election requirements of section 375.18 or 475.58.  The bonds 
must be approved by vote of at least three-fifths of the members 
of the county board.  In the case of a metropolitan county, the 
bonds must be approved by vote of at least two-thirds of the 
members of the county board. 
    (b) Before each issuance of bonds qualifying under this 
section, the county must publish a notice of its intention to 
issue the bonds and the date and time of a hearing to obtain 
public comment on the matter.  The notice must be published in 
the official newspaper of the county or in a newspaper of 
general circulation in the county.  The notice must be published 
at least 14, but not more than 28, days before the date of the 
hearing. 
    (c) A county may issue the bonds only upon obtaining the 
approval of a majority of the voters voting on the question of 
issuing the obligations, if a petition requesting a vote on the 
issuance is signed by voters equal to five percent of the votes 
cast in the county in the last general election and is filed 
with the county auditor within 30 days after the public 
hearing.  The commissioner of revenue shall prepare a suggested 
form of the question to be presented at the election.  
    Sec. 8.  Minnesota Statutes 1988, section 444.075, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DEFINITIONS.] For purposes of this 
section, the term "municipality" means a home rule charter or 
statutory city, wherever located, except a city of the first 
class, or a town located in a metropolitan county as defined in 
section 473.121, subdivision 4 that is not in an orderly 
annexation process on the date of enactment of this act.  The 
term "governing body" means the town board of supervisors with 
respect to towns. 
    Sec. 9.  Minnesota Statutes 1988, section 444.16, is 
amended to read: 
    444.16 [STORM SEWER IMPROVEMENT DISTRICTS; MUNICIPALITY 
DEFINED.] 
    Subdivision 1.  [DEFINITIONS.] For the purposes of Laws 
1974, chapter 206 "municipality" means any city, however 
organized sections 444.16 to 444.21 the terms in this section 
have the meanings given them.  
    Subd. 2.  [MUNICIPALITY.] "Municipality" means a home rule 
charter or statutory city or a town that is not in an orderly 
annexation process on the date of enactment of this act. 
    Subd. 3.  [GOVERNING BODY.] "Governing body" means the city 
council for a city and the town board for a town. 
    Sec. 10.  Minnesota Statutes 1988, section 444.17, is 
amended to read: 
    444.17 [ESTABLISHMENT OF DISTRICT.] 
    The council governing body of a municipality may by 
ordinance adopted by a two-thirds vote of all of its members, 
establish within its corporate territorial limits a storm sewer 
improvement tax district.  The ordinance shall describe with 
particularity the territory or area within the municipality to 
be included within the district.  No such ordinance shall be 
adopted until after a public hearing has been held on the 
question.  A notice of the time, place and purpose of the 
hearing shall be published for two successive weeks in the 
official newspaper of the municipality or in a qualified 
newspaper of general circulation in the municipality and the 
last notice shall be at least seven days prior to the day of the 
hearing.  The ordinance when adopted shall be filed with the 
county auditor and county recorder. 
    Sec. 11.  Minnesota Statutes 1988, section 444.18, is 
amended to read: 
    444.18 [AUTHORITY OF COUNCIL GOVERNING BODY; RECOVERY OF 
COST; IMPROVEMENT PROCEDURES.] 
    Subdivision 1.  Following the adoption of an ordinance 
pursuant to Laws 1974, chapter 206 under sections 444.16 to 
444.21, the council governing body may acquire, construct, 
reconstruct, extend, maintain, and otherwise improve storm sewer 
systems and related facilities within the district.  Storm water 
holding areas and ponds within and without the corporate limits 
municipality may also be acquired, constructed, maintained, and 
improved for the benefit of any such district.  The cost of the 
systems and facilities described in this subdivision may be 
recovered by the tax authorized in section 444.20.  
    Subd. 2.  The procedures of sections 429.031 to 429.081 
shall apply when the council governing body of a municipality 
determines to make an improvement pursuant to this section.  
    Sec. 12.  Minnesota Statutes 1988, section 444.19, is 
amended to read: 
    444.19 [BONDS.] 
    At any time after a contract for the construction of all or 
part of an improvement has been entered into or the work has 
been ordered done by day labor, the council governing body may 
issue obligations in such an amount as it deems necessary to 
defray in whole or in part the expense incurred and estimated to 
be incurred in making the improvement, including every item of 
cost from inception to completion and all fees and expenses 
incurred in connection with the improvement or the financing 
thereof.  The obligations shall be payable primarily out of the 
proceeds of the tax levied pursuant to section 444.20.  
The council governing body may by resolution adopted prior to 
the sale of obligations pledge the full faith, credit and taxing 
power of the municipality to assure payment of the principal and 
interest in the event the proceeds of the tax levy in the 
district are insufficient to pay such the principal and 
interest.  Obligations shall be issued in accordance with 
chapter 475, except that an election is not required, and the 
amount of any such the obligations is not included in 
determining the net indebtedness of the municipality under the 
provisions of any law or charter limiting such indebtedness. 
    Sec. 13.  Minnesota Statutes 1988, section 444.20, is 
amended to read: 
    444.20 [TAXES.] 
    The council governing body of a municipality may levy a tax 
on all taxable property within the district such taxes as are in 
an amount necessary to finance the cost of the improvement, 
including maintenance and to pay the principal and interest on 
obligations issued pursuant to section 444.19.  Such taxes The 
tax shall be collected and paid over as other taxes, but shall 
be spread only upon the property described in the 
ordinance.  Such taxes The tax shall be disbursed by the council 
governing body only for the benefit of district as established 
by the ordinance. 
    Sec. 14.  Minnesota Statutes 1988, section 469.167, 
subdivision 2, is amended to read: 
    Subd. 2.  [DURATION.] The designation of an area as an 
enterprise zone shall be effective for seven years after the 
date of designation, except that enterprise zones in border 
cities eligible to receive allocations for tax reductions under 
section 469.169, subdivisions 7 and 8, and under section 
469.171, subdivision 6a, shall be effective until these 
allocations have been expended. 
    Sec. 15.  Minnesota Statutes 1988, section 469.171, 
subdivision 7, is amended to read: 
    Subd. 7.  [DURATION.] Each tax reduction provided to a 
business pursuant to this subdivision shall terminate not longer 
than five years after the effective date of the tax reduction 
for the business unless the business is located in a border city 
enterprise zone designated under section 469.168, subdivision 4, 
clause (c), that is not a city of the first class.  Each tax 
reduction provided to a business that is located in a border 
city enterprise zone designated under section 469.168, 
subdivision 4, clause (c), that is not located in a city of the 
first class shall terminate not longer than seven years after 
the effective date of the tax reduction for the business, may be 
provided until the allocations provided under subdivision 6a, 
and under section 469.169, subdivisions 7 and 8, have been 
expended.  Subject to the five-year or the seven-year limitation 
in this subdivision, the tax reductions may be provided after 
expiration of the zone's designation.  
    Sec. 16.  Minnesota Statutes 1988, section 474A.061, 
subdivision 1, is amended to read: 
    Subdivision 1.  [APPLICATION.] An issuer may apply for an 
allocation under this section by submitting to the department an 
application on forms provided by the department, accompanied by 
(1) a preliminary resolution, (2) a statement of bond counsel 
that the proposed issue of obligations requires an allocation 
under this chapter, (3) the type of qualified bonds to be 
issued, and (4) an application deposit in the amount of one 
percent of the requested allocation before the last Monday in 
August, or in the amount of two percent of the requested 
allocation on or after the last Monday in August.  An issuer 
applying for an allocation from the multifamily housing pool who 
does not sign an agreement requiring that the project comply 
with the gross rent restrictions of the low-income housing 
credit program under section 42 of the Internal Revenue Code of 
1986, as amended through December 31, 1988, must submit an 
additional application deposit in the amount of two percent of 
the requested allocation before the last Monday in August, or in 
the amount of one percent of the requested allocation on or 
after the last Monday in August.  An entitlement issuer may not 
apply for an allocation from the multifamily housing pool or 
from the public facilities pool unless it has either permanently 
issued bonds equal to the amount of its entitlement allocation 
for the current year plus any amount of bonding authority 
carried forward from previous years or returned for reallocation 
all of its unused entitlement allocation.  For purposes of this 
subdivision, its entitlement allocation includes an amount 
obtained under section 474A.04, subdivision 6. 
    Sec. 17.  Minnesota Statutes 1988, section 474A.061, 
subdivision 2, is amended to read: 
    Subd. 2.  [ALLOCATION PROCEDURE.] From the beginning of the 
calendar year until the last Monday in August, the commissioner 
shall allocate available bonding authority under this section on 
Monday of each week to applications received on or before the 
Monday of the preceding week.  From the beginning of the 
calendar year until the last Monday in July, the commissioner 
shall allocate available bonding authority from the multifamily 
housing pool only to issuers who sign an agreement with the 
commissioner requiring that the project comply with the gross 
rent restrictions of the low-income housing credit program under 
section 42 of the Internal Revenue Code of 1986, as amended 
through December 31, 1988. 
    (a) From the beginning of the calendar year until the last 
Monday in July, if there are two or more qualifying applications 
for residential rental project bonds from the multifamily 
housing pool and there is insufficient bonding authority to 
provide allocations for all projects in any one week after all 
eligible bonding authority has been transferred as provided in 
section 474A.081, the available bonding authority shall be 
awarded by lot unless otherwise agreed to by the respective 
issuers.  
    After the last Monday in July, if there are two or more 
applications for residential rental project bonds from the 
multifamily housing pool and there is insufficient bonding 
authority to provide allocations for all projects in any one 
week after all eligible bonding authority has been transferred 
as provided in section 474A.081, the available bonding authority 
must be awarded to the issuer agreeing to require that the 
project comply with the gross rent restrictions of the 
low-income housing credit program under section 42 of the 
Internal Revenue Code of 1986, as amended through December 31, 
1988.  If all issuers agree to the gross rent restriction 
requirement, the available bonding authority shall be awarded by 
lot unless otherwise agreed to by the respective issuers.  If 
there is additional bonding authority available after 
allocations have been awarded to all issuers agreeing to the 
gross rent restriction requirement and there is insufficient 
bonding authority to provide allocations for all other projects 
in any one week, the available bonding authority shall be 
awarded by lot unless otherwise agreed to by the respective 
issuers. 
    (b) If there are two or more applications for manufacturing 
projects from the manufacturing pool and there is insufficient 
bonding authority to provide allocations for all projects in any 
one week after all eligible bonding authority has been 
transferred as provided in section 474A.081, the available 
bonding authority shall be awarded by lot unless otherwise 
agreed to by the respective issuers. 
    (c) If there are two or more applications for public 
facility bonds from the public facilities pool and there is 
insufficient bonding authority to provide allocations for all 
projects in any one week, the available bonding authority shall 
be awarded by lot unless otherwise agreed to by the respective 
issuers. 
    If an application is rejected, the commissioner must notify 
the applicant and return the application deposit to the 
applicant within 30 days unless the applicant requests in 
writing that the application be resubmitted.  The granting of an 
allocation of bonding authority under this section must be 
evidenced by a certificate of allocation. 
    Sec. 18.  Minnesota Statutes 1988, section 474A.061, 
subdivision 4, is amended to read: 
    Subd. 4.  [RETURN OF ALLOCATION; DEPOSIT REFUND.] (a) If an 
issuer that receives an allocation under this section determines 
that it will not issue obligations equal to all or a portion of 
the allocation received under this section by the end of the 
current year or within the time period permitted by federal tax 
law, the issuer must notify the department.  If the issuer 
notifies the department prior to the last Monday in August, the 
amount of allocation returned must be reallocated through the 
pool from which it was originally allocated.  If the issuer 
notifies the department on or after the last Monday in August, 
the amount of allocation returned must be reallocated through 
the unified pool.  If the issuer notifies the department after 
the last Monday in November, the amount of allocation returned 
must be reallocated to the Minnesota housing finance agency. 
     (b) An issuer that returns for reallocation all or a 
portion of an allocation received under this section shall 
receive within 30 days a refund of all of its application 
deposit deposits equal to:  
     (1) one-half of the amount on deposit for the amount of 
bonding authority returned before the first Monday in November; 
     (2) one-fourth of the amount on deposit for the amount of 
bonding authority returned on or after the first Monday in 
November and before the third Monday in November; and 
     (3) one-eighth of the amount on deposit for the amount of 
bonding authority returned on or after the third Monday in 
November and before the last Monday in November. 
     No refund shall be available for allocations returned on or 
after the last Monday in November. 
    Sec. 19.  Minnesota Statutes 1988, section 474A.091, 
subdivision 2, is amended to read: 
    Subd. 2.  [APPLICATION.] An issuer may apply for an 
allocation under this section by submitting to the department an 
application on forms provided by the department accompanied by 
(1) a preliminary resolution, (2) a statement of bond counsel 
that the proposed issue of obligations requires an allocation 
under this chapter, (3) the type of qualified bonds to be 
issued, and (4) an application deposit in the amount of two 
percent of the requested allocation.  An issuer applying for an 
allocation for residential rental project bonds who does not 
sign an agreement requiring that the project comply with the 
gross rent restrictions of the low-income housing credit program 
under section 42 of the Internal Revenue Code of 1986, as 
amended through December 31, 1988, must submit an additional 
application deposit in the amount of one percent of the 
requested allocation.  An entitlement issuer may not apply for 
an allocation for public facility bonds, residential rental 
project bonds, or mortgage bonds under this section unless it 
has either permanently issued bonds equal to the amount of its 
entitlement allocation for the current year plus any amount 
carried forward from previous years or returned for reallocation 
all of its unused entitlement allocation.  For purposes of this 
subdivision, its entitlement allocation includes an amount 
obtained under section 474A.04, subdivision 6. 
     The Minnesota housing finance agency may not apply for an 
allocation for mortgage bonds under this section until after the 
last Monday in September.  Notwithstanding the restrictions 
imposed on unified pool allocations after October 1 under 
subdivision 3, paragraph (c)(2), the Minnesota housing finance 
agency may be awarded allocations for mortgage bonds from the 
unified pool after October 1. 
    Sec. 20.  Minnesota Statutes 1988, section 474A.091, 
subdivision 3, is amended to read: 
    Subd. 3.  [ALLOCATION PROCEDURE.] (a) The commissioner 
shall allocate available bonding authority under this section on 
the Monday of every other week beginning with the first Monday 
in September through and on the last Monday in November.  
Applications for allocations must be received by the department 
by the Monday preceding the Monday on which allocations are to 
be made.  
     (b) On or before October 1, allocations shall be awarded 
from the unified pool in the following order of priority: 
     (1) applications for small issue bonds, with preference 
given to projects to be located in distressed counties 
designated under section 297A.257; 
    (2) applications for residential rental project bonds, with 
preference given to issuers agreeing to require that the project 
comply with the gross rent restrictions of the low-income 
housing credit program under section 42 of the Internal Revenue 
Code of 1986, as amended through December 31, 1988; 
     (3) applications for public facility bonds; 
     (4) applications for redevelopment bonds; 
     (5) applications for mortgage bonds; and 
     (6) applications for governmental bonds. 
     (c)(1) On the first Monday in October, $20,000,000 of 
bonding authority or an amount equal to the total annual amount 
of bonding authority allocated to the manufacturing pool under 
section 474A.03, subdivision 1, less the amount allocated to 
issuers from the manufacturing pool for that year, whichever is 
less, is reserved within the unified pool for small issue 
bonds.  On the first Monday in October, $5,000,000 of bonding 
authority or an amount equal to the total annual amount of 
bonding authority allocated to the public facilities pool under 
section 474A.03, subdivision 1, less the amount allocated to 
issuers from the public facilities pool for that year, whichever 
is less, is reserved within the unified pool for public facility 
bonds.  If sufficient bonding authority is not available to 
reserve the required amounts for both small issue bonds and 
public facility bonds, three-fourths of the remaining available 
bonding authority is reserved for small issue bonds and 
one-fourth of the remaining available bonding authority is 
issuers.  If an application is rejected, the commissioner must 
notify the applicant and return the application deposit to the 
applicant within 30 days unless the applicant requests in 
writing that the application be resubmitted.  The granting of an 
allocation of bonding authority under this section must be 
evidenced by issuance of a certificate of allocation. 
    Sec. 21.  [KANDIYOHI COUNTY RURAL DEVELOPMENT FINANCE 
AUTHORITY.] 
    Subdivision 1.  [ESTABLISHMENT.] The Kandiyohi county board 
may, by adopting a written enabling resolution, establish a 
county rural development finance authority that, subject to 
subdivision 2, has the following powers:  powers of an economic 
development authority under Minnesota Statutes, sections 469.090 
to 469.107, except for the authority to issue general obligation 
bonds under Minnesota Statutes, section 469.102; and powers of a 
rural development financing authority under sections 469.142 to 
469.151. 
    Subd. 2.  [ECONOMIC DEVELOPMENT AUTHORITY POWERS.] If the 
county rural development finance authority exercises the powers 
of an economic development authority, the county may exercise 
all of the powers relating to an economic development authority 
granted to a city under Minnesota Statutes, sections 469.090 to 
469.108.  The levy imposed by the county board under Minnesota 
Statutes, section 469.107, is not subject to the levy 
limitations in Minnesota Statutes, sections 275.50 to 275.56.  
The county rural development finance authority may create and 
define the boundaries of economic development districts at any 
place or places within the county.  Minnesota Statutes, section 
469.174, subdivision 10, and the contiguity requirement 
specified under Minnesota Statutes, section 469.101, subdivision 
1, do not apply to limit the areas that may be designated as 
county economic development districts. 
    Subd. 3.  [LIMIT OF POWERS.] (a) The enabling resolution 
may impose the following limits on the actions of the authority: 
    (1) that the authority may not exercise any of the powers 
contained in subdivision 1 unless those powers are specifically 
authorized in the enabling resolution; and 
    (2) any other limitation or control established by the 
county board by the enabling resolution. 
    (b) The enabling resolution may be modified at any time, 
but may not be applied in a manner that impairs contracts 
executed before the modification is made.  All modifications to 
the enabling resolution must be by written resolution. 
    (c) Before the commencement of a project by the authority, 
the governing body of the municipality in which the project is 
to be located or the Kandiyohi county board, if the project is 
outside municipal corporate limits, shall by majority vote 
approve the project as recommended by the authority. 
    Subd. 4.  [BOARD OF DIRECTORS.] (a) The authority consists 
of a board of seven directors.  The directors shall be appointed 
by the Kandiyohi county board.  Each director shall be appointed 
to serve for three years or until a successor is appointed and 
qualified.  No director may serve more than two consecutive 
terms.  The initial appointment of directors must be made so 
that no more than one-third of the directors' positions will 
require appointment in any one year due to fulfillment of their 
three-year appointment.  The appointment of directors must be 
made to reflect representation of the entire county by 
population, appointing one director to represent each of the 
five county commissioner districts.  The other two directors 
must be representatives of various county-based economic 
development organizations or be directors at-large.  No more 
than two directors may reside in any one county commissioner 
district. 
    (b) Two of the directors initially appointed shall serve 
for terms of one year, two for two years, and three for three 
years.  Each vacancy must be filled for the unexpired term in 
the manner in which the original appointment was made.  A 
vacancy occurs if a director no longer resides in the county.  
No director shall be an officer, employee, director, 
shareholder, or member of any corporation, firm, or association 
with which the authority has entered into any operating lease, 
or other agreement.  The directors may be removed by the county 
for the reasons and in the manner provided under Minnesota 
Statutes, section 469.010, and shall receive no compensation 
other than reimbursement for expenses incurred in the 
performance of their duties.  Directors shall have no personal 
liability for obligations of the authority or the methods of 
enforcement and collection of the obligations. 
    Sec. 22.  [TOWN OF OTSEGO; ECONOMIC DEVELOPMENT.] 
    Subdivision 1.  [ECONOMIC DEVELOPMENT AUTHORITY.] The town 
of Otsego may establish an economic development authority.  The 
town may establish the authority in the manner provided in 
Minnesota Statutes, sections 469.091 to 469.101, and may impose 
the limits on the authority enumerated in Minnesota Statutes, 
section 469.092.  An authority established under this 
subdivision has all the powers and duties granted to or imposed 
upon economic development authorities under Minnesota Statutes, 
sections 469.090 to 469.106 and 469.174 to 469.178. 
    Subd. 2.  [POWERS OF A CITY OR MUNICIPALITY.] The town of 
Otsego and its governing body have all the powers and duties 
granted to or imposed upon (1) a city and the governing body of 
a city under Minnesota Statutes, sections 469.090 to 469.107, 
including the power to levy a tax subject to referendum under 
Minnesota Statutes, section 469.107; and (2) a municipality and 
the governing body of a municipality under Minnesota Statutes, 
sections 469.174 to 469.178 with respect to a project undertaken 
by an economic development authority under subdivision 1.  
General obligation bonds may be issued and a tax imposed to pay 
the principal and interest on the bonds only if the issuance and 
the tax are approved by a vote of the electors of the town at a 
regular town meeting.  A tax may be levied under Minnesota 
Statutes, section 469.107, only if approved by a vote of the 
electors of the town at a regular town meeting. 
    Sec. 23.  [CONTINUATION OF PRODUCTION TAX LIABILITY.] 
    Notwithstanding Minnesota Statutes, section 298.25, or any 
other law to the contrary, the provisions of Minnesota Statutes, 
section 298.24, will continue to apply to a taconite production 
facility that has ceased production in 1986 for production years 
1989 and 1990 if ownership of that facility is transferred in 
1989 to a new owner that intends to resume taconite production 
at that facility no later than December 31, 1991.  The new owner 
must provide evidence to the commissioner of revenue of its 
intent and ability to do so.  If the new owner fails to resume 
taconite production at the facility by December 31, 1991, the 
property shall become subject to ad valorem taxes for the 1991 
levy year, taxes payable in 1992, and thereafter, and an 
additional tax equal to the amount of ad valorem tax that would 
have been payable on the property for taxes payable in 1990 and 
1991, less any taxes paid under Minnesota Statutes, section 
298.24, during 1990 and 1991, shall also be extended against the 
property on the tax list for 1992. 
    Sec. 24.  [SPENDING REDUCTION RECOMMENDATIONS.] 
    The governor shall make recommendations for consideration 
by the legislature in its 1990 session of at least $50,000,000 
of budget reductions or savings for fiscal year 1991 and at 
least $100,000,000 of budget reductions or savings for the 
1992-1993 biennium. 
     Sec. 25.  [NORTH PINE AREA HOSPITAL DISTRICT.] 
    Notwithstanding Minnesota Statutes, section 447.31, 
subdivision 2, the North Pine area hospital district shall 
include any city or town located in Pine county that, at any 
time after April 1, 1989, has elected or does elect to be a part 
of the hospital district. 
    Sec. 26.  [APPROPRIATIONS.] 
    There is appropriated from the general fund to the 
commissioner of revenue the following amounts for the 
administration of this act. 
                               Fiscal Year 1990  
Total                              $922,300
Summary by purpose
Truth in Taxation                  $128,800          
Charitable Gambling                $107,500          
Property Tax Refunds               $ 94,000          
Systems                            $250,000 
Tax Samples                        $ 76,000
Commercial-Industrial Refund       $266,000
    The appropriation for systems is available until June 30, 
1991. 
    Sec. 27.  [APPROVED COMPLEMENT.] 
    The approved complement of the department of revenue is 
increased by seven for fiscal year 1990. 
     Sec. 28.  [FEES; DRAFTING SERVICES.] 
    Notwithstanding any contrary requirements of Minnesota 
Statutes, section 3C.035, subdivision 2, the revisor of statutes 
shall assess the commissioner of revenue for the actual cost of 
bill drafting services rendered to the department after October 
31, 1989, but before February 15, 1990, if the services are 
required because of (1) a provision of this act requiring the 
commissioner to prepare legislation in the legislative session 
beginning February 12, 1990, or (2) clarifying, administrative, 
or technical changes that are proposed by the commissioner to 
implement a provision of this act. 
    Sec. 29.  [EFFECTIVE DATE.] 
    Sections 1, 2, 4, 5, 14, 15, 16 to 20, 23, 24, and 28 are 
effective the day following final enactment.  Section 3 is 
effective retroactive to January 1, 1986.  Sections 6 and 7 are 
effective November 1, 1989, and for bonds issued after October 
31, 1989.  Sections 8 to 13 are effective January 1, 1990.  
Section 21 is effective the day after compliance with Minnesota 
Statutes, section 645.021, subdivision 3, by the county board of 
Kandiyohi county.  Section 22 is effective the day following 
compliance with Minnesota Statutes, section 645.021, subdivision 
3, by the town board of the town of Otsego.  Sections 26 and 27 
are effective October 1, 1989.  Section 25 is effective the day 
following final enactment.  

                               ARTICLE 18 

                  RECYCLING REQUIREMENTS AND PROGRAMS 
    Section 1.  [16B.121] [PURCHASE OF RECYCLED, REPAIRABLE, 
AND DURABLE MATERIALS.] 
    The commissioner shall take the recycled content and 
recyclability of commodities to be purchased into consideration 
in bid specifications.  The commissioner shall apply weighting 
factors to the recycled content and recyclability criteria in 
order to give a preferential treatment to those criteria.  State 
agencies shall purchase recycled materials when specifications 
allow the practical use of the recycled materials and the price 
does not exceed the price of nonrecycled materials by more than 
ten percent.  If possible, state agencies should purchase 
materials recycled from waste generated in this state. 
    Sec. 2.  [16B.122] [PURCHASE OF PAPER STOCK.] 
    Subdivision 1.  [DEFINITIONS.] The definitions in this 
subdivision apply to this section. 
    (a) "Office paper" means notepads, loose-leaf fillers, 
tablets, and other paper commonly used in offices. 
    (b) "Practicable" means capable of being used, consistent 
with performance, in accordance with applicable specifications, 
and availability within a reasonable time. 
    (c) "Printing paper" means paper designed for printing, 
other than newsprint, such as offset and publication paper. 
    (d) "Public agency" means the state, an office, agency, or 
institution of the state, a county, a statutory or home rule 
charter city, a town, a school district, another special taxing 
district, or any contractor acting pursuant to a contract with a 
public agency. 
    (e) "Uncoated" means not coated with plastic, clay, or 
other material used to create a glossy finish. 
    Subd. 2.  [PURCHASE REQUIRED.] A public agency shall 
purchase uncoated office paper and printing paper whenever 
practicable. 
    Sec. 3.  Minnesota Statutes 1988, section 115A.03, 
subdivision 25a, is amended to read: 
    Subd. 25a.  "Recyclable materials" means materials that are 
separated from mixed municipal solid waste for the purpose of 
recycling, including paper, glass, plastics, metals, automobile 
oil, and batteries.  Refuse derived fuel or other material that 
is destroyed by incineration is not a recyclable material. 
    Sec. 4.  Minnesota Statutes 1989 Supplement, section 
115A.12, subdivision 1, is amended to read: 
    Subdivision 1.  [SOLID AND HAZARDOUS WASTE MANAGEMENT.] (a) 
The chair of the board director shall establish a solid waste 
management advisory council, a hazardous waste management 
planning council, and a market development coordinating council, 
that are broadly representative of the geographic areas and 
interests of the state.  The councils shall have not less than 
nine nor more than 18 members each.  
    (b) The solid waste council shall have not less than nine 
nor more than 21 members.  The membership of the solid waste 
council shall consist of one-third citizen representatives, 
one-third representatives from local government units, and 
one-third representatives from private solid waste management 
firms.  The solid waste council shall contain at least three 
members experienced in the private recycling industry and at 
least one member experienced in each of the following areas:  
state and municipal finance; solid waste collection, processing, 
and disposal; and solid waste reduction and resource recovery. 
    (c) The hazardous waste council shall have not less than 
nine nor more than 18 members.  The membership of the hazardous 
waste advisory council shall consist of one-third citizen 
representatives, one-third representatives from local government 
units, and one-third representatives of hazardous waste 
generators and private hazardous waste management firms.  
    (d) The market development coordinating council shall have 
not less than nine nor more than 18 members and shall consist of 
one representative from the department of trade and economic 
development, the department of administration, the pollution 
control agency, the Greater Minnesota Corporation, the 
metropolitan council, and the legislative commission on waste 
management.  The other members shall represent local government 
units, private recycling markets, and private recycling 
collectors.  The market development coordinating council expires 
June 30, 1994. 
    (e) The chairs of the advisory councils shall be appointed 
by the chair of the board director.  The chair of the board 
director shall provide administrative and staff services for the 
advisory councils.  The advisory councils shall have such duties 
as are assigned by law or the chair of the board director.  The 
solid waste advisory council shall make recommendations to 
the board office on its solid waste management activities.  The 
hazardous waste advisory council shall make recommendations to 
the board office on its activities under sections 115A.08, 
115A.09, 115A.10, 115A.11, 115A.20, 115A.21, and 115A.24.  
Members of the advisory councils shall serve without 
compensation but shall be reimbursed for their reasonable 
expenses as determined by the chair of the board director.  The 
solid waste management advisory council and the hazardous waste 
management planning council expire June 30, 1994. 
    Sec. 5.  Minnesota Statutes 1988, section 115A.15, 
subdivision 5, is amended to read: 
    Subd. 5.  [REPORTS.] (a) By January 1 of each odd-numbered 
year, the commissioner of administration shall submit a report 
to the governor and to the legislative commission summarizing 
past activities and proposed goals of the program for the 
following biennium.  The report shall include at least: 
    (1) a summary list of product and commodity purchases that 
contain recycled materials; 
    (2) the results of any performance tests conducted on 
recycled products and agencies' experience with recycled 
products used; 
    (3) a list of all organizations participating in and using 
the cooperative purchasing program; and 
    (4) a list of products and commodities purchased for their 
recyclability and of recycled products reviewed for purchase. 
    (b) By July 1 of each even-numbered year commissioner of 
the pollution control agency and the commissioner of public 
service shall submit recommendations to the commissioner 
regarding the operation of the program. 
    Sec. 6.  Minnesota Statutes 1988, section 115A.15, is 
amended by adding a subdivision to read: 
    Subd. 7.  [WASTE REDUCTION PROCUREMENT MODEL.] To reduce 
the amount of solid waste generated by the state and to provide 
a model for other public and private procurement systems, the 
commissioner, in cooperation with the director of the office of 
waste management, shall develop waste reduction procurement 
programs, including an expanded life cycle costing system for 
procurement of durable and repairable items.  On implementation 
of the model procurement system, the commissioner, in 
cooperation with the director, shall develop and distribute 
informational materials for the purpose of promoting the 
procurement model to other public and private entities under 
article 21, section 1, subdivision 4. 
    Sec. 7.  Minnesota Statutes 1988, section 115A.15, is 
amended by adding a subdivision to read: 
    Subd. 8.  [RECYCLED MATERIALS PURCHASING.] The commissioner 
of administration shall develop and implement a cooperative 
purchasing program under section 471.59 to include state 
agencies, local governmental units, and, where feasible, other 
state governments and the federal government, for the purpose of 
purchasing materials made from recycled materials.  By July 1, 
1991, the commissioner shall develop a program to promote the 
cooperative purchasing program to those units of government and 
other persons. 
    Sec. 8.  Minnesota Statutes 1988, section 115A.15, is 
amended by adding a subdivision to read: 
    Subd. 9.  [RECYCLING GOAL.] By December 31, 1993, the 
commissioner shall recycle at least 40 percent by weight of the 
solid waste generated by state offices and other operations 
located in the metropolitan area.  The commissioner must keep 
records of the recycling and composting operation and share them 
annually with the metropolitan council and counties to assist 
the council and the counties in their data collection efforts. 
    Sec. 9.  [115A.151] [STATE AND LOCAL FACILITIES.] 
    By January 1, 1991, a state agency or local unit of 
government or school district in the metropolitan area or by 
January 1, 1993, a state agency or local unit of government or 
school district outside of the metropolitan area shall: 
    (1) ensure that facilities under its control, from which 
mixed municipal solid waste is collected, have containers for at 
least three recyclable materials; and 
    (2) transfer all recyclable materials collected to a 
recycler. 
    Sec. 10.  Minnesota Statutes 1988, section 115A.48, 
subdivision 3, is amended to read: 
    Subd. 3.  [PUBLIC PROCUREMENT.] The board office shall 
provide technical assistance and advice to political 
subdivisions and other public agencies to encourage solid waste 
reduction and development of markets for recyclable materials 
and compost through procurement policies and 
practices.  Political subdivisions, educational institutions, 
and other public agencies shall aggressively pursue procurement 
practices that encourage solid waste reduction, recycling, and 
development of markets for recyclable materials and compost and 
shall, whenever practical, procure products containing recycled 
materials. 
    Sec. 11.  Minnesota Statutes 1988, section 115A.48, is 
amended by adding a subdivision to read: 
    Subd. 5.  [RECYCLABLE MATERIAL MARKET DEVELOPMENT.] (a) The 
office shall make grants and loans and shall provide technical 
assistance to persons for research and development or for the 
acquisition and betterment of projects that develop markets or 
end uses for recyclable materials.  At least 50 percent of all 
funds appropriated under article 24 for market development 
efforts must be used to support county market development 
efforts.  Grants to counties for market development must be made 
available to those counties that achieve significant land 
disposal abatement through use of source separation of 
recyclable materials.  The office may use any means specified in 
section 115A.52 to provide technical assistance. 
    (b) A project may receive a loan for up to 50 percent of 
the capital cost of the project or $2,000,000, whichever is less.
    (c) A project may receive a grant for up to 25 percent of 
the capital cost of the project or $500,000, whichever is less. 
    (d) The office shall adopt rules for the program. 
    Sec. 12.  [115A.551] [RECYCLING.] 
    Subdivision 1.  [DEFINITION.] (a) For the purposes of this 
section, "recycling" means, in addition to the meaning given in 
section 115A.03, subdivision 25b, yard waste composting and 
recycling that occurs through mechanical or hand separation of 
materials that are then delivered for reuse in their original 
form or for use in manufacturing processes that do not cause the 
destruction of recyclable materials in a manner that precludes 
further use. 
    (b) For the purposes of this section, "total solid waste 
generation" means the total by weight of: 
    (1) materials separated for recycling; 
    (2) materials separated for yard waste composting; and 
    (3) mixed municipal solid waste plus yard waste, used oil, 
tires, lead acid batteries, and major appliances. 
    Subd. 2.  [COUNTY RECYCLING GOALS.] By December 31, 1993, 
each county outside of the metropolitan area will have as a goal 
to recycle a minimum of 25 percent by weight of total solid 
waste generation; and by December 31, 1993, each county within 
the metropolitan area will have as a goal to recycle a minimum 
of 35 percent by weight of total solid waste generation.  Each 
county will develop and implement or require political 
subdivisions within the county to develop and implement 
programs, practices, or methods designed to meet its recycling 
goal.  Nothing in this section or in any other law may be 
construed to prohibit a county from establishing a higher 
recycling goal. 
    Subd. 3.  [INTERIM GOALS; NONMETROPOLITAN COUNTIES.] The 
office shall establish interim recycling goals for the 
nonmetropolitan counties to assist them in meeting the goals 
established in subdivision 2. 
    Subd. 4.  [INTERIM MONITORING.] The office, for counties 
outside of the metropolitan area, and the metropolitan council, 
for counties within the metropolitan area, shall monitor the 
progress of each county toward meeting the recycling goal in 
subdivision 2 and shall report to the legislative commission on 
waste management on the progress of the counties by November 1 
of each year.  If the office or the council finds that a county 
is not progressing toward the goal in subdivision 2, it shall 
negotiate with the county to develop and implement solid waste 
management techniques designed to assist the county in meeting 
the goal, such as organized collection, curbside collection of 
source-separated materials, and volume-based pricing. 
    Subd. 5.  [FAILURE TO MEET GOAL.] (a) A county failing to 
meet the interim goals in subdivision 3 shall, as a minimum: 
    (1) notify county residents of the failure to achieve the 
goal and why the goal was not achieved; and 
    (2) provide county residents with information on recycling 
programs offered by the county. 
    (b) If, based on the recycling monitoring described in 
subdivision 4, the office or the metropolitan council finds that 
a county will be unable to meet the recycling goal established 
in subdivision 2, the office or council shall, after 
consideration of the reasons for the county's inability to meet 
the goal, recommend legislation for consideration by the 
legislative commission on waste management to establish 
mandatory recycling standards and to authorize the office or 
council to mandate appropriate solid waste management techniques 
designed to meet the standards in those counties that are unable 
to meet the goal. 
    Subd. 6.  [COUNTY SOLID WASTE PLANS.] (a) Each county shall 
include in its solid waste management plan described in section 
115A.46, or its solid waste master plan described in section 
473.803, a plan for implementing the recycling goal established 
in subdivision 2 along with mechanisms for providing financial 
incentives to solid waste generators to reduce the amount of 
waste generated and to separate recyclable materials from the 
waste stream.  The recycling plan must include detailed 
recycling implementation information to form the basis for the 
strategy required in subdivision 7.  
    (b) Each county required to submit its plan to the office 
under section 115A.46 shall amend its plan to comply with this 
subdivision within one year after the effective date of this 
section. 
    Subd. 7.  [RECYCLING IMPLEMENTATION STRATEGY.] Within one 
year of office approval of the portion of the plan required in 
subdivision 6, each nonmetropolitan county shall submit for 
office approval a local recycling implementation strategy.  The 
local recycling implementation strategy must: 
    (1) be consistent with the approved county solid waste 
management plan; 
    (2) identify the materials that are being and will be 
recycled in the county to meet the goals under this section and 
the parties responsible and methods for recycling the material; 
and 
    (3) define the need for funds to ensure continuation of 
local recycling, methods of raising and allocating such funds, 
and permanent sources and levels of local funding for recycling. 
    Sec. 13.  [115A.552] [OPPORTUNITY TO RECYCLE.] 
    Subdivision 1.  [COUNTY REQUIREMENT.] Counties shall ensure 
that residents have an opportunity to recycle.  At least one 
recycling center shall be available in each county.  Opportunity 
to recycle means availability of recycling and curbside pickup 
or collection centers for recyclable materials at sites that are 
convenient for persons to use.  Counties shall also provide for 
the recycling of problem materials and major appliances.  
Counties shall assess the operation of existing and proposed 
recycling centers and shall give due consideration to those 
centers in ensuring the opportunity to recycle. 
    Subd. 2.  [RECYCLING OPPORTUNITIES.] An opportunity to 
recycle must include:  
    (1) a local recycling center in the county and sites for 
collecting recyclable materials that are located in areas 
convenient for persons to use them; 
    (2) curbside pickup, centralized drop-off, or a local 
recycling center for at least four kinds of recyclable materials 
in cities with a population of 5,000 or more persons; and 
    (3) monthly pickup of at least four recyclable materials in 
cities of the first and second class and cities with 5,000 or 
more population in the metropolitan area. 
    Subd. 3.  [RECYCLING INFORMATION, EDUCATION, AND 
PROMOTION.] (a) Each county shall provide information on how, 
when, and where materials may be recycled, including a 
promotional program that publishes notices at least once every 
three months and encourages source separation of residential, 
commercial, industrial, and institutional materials.  
    (b) The office shall develop materials for counties to use 
in providing information on and promotion of recycling. 
    (c) The office shall provide technical assistance to 
counties to help counties implement recycling programs. 
    Sec. 14.  [115A.553] [COLLECTION AND TRANSPORTATION OF 
RECYCLABLE MATERIALS.] 
    Subdivision 1.  [COLLECTION CENTERS AND TRANSPORTATION 
REQUIRED.] Each county must ensure alone or in conjunction with 
other counties that materials separated for recycling are taken 
to markets for sale or to recyclable material processing 
centers.  An action may not be taken by a county under this 
section to preclude a person generating or collecting solid 
waste from delivering recyclable materials to a recycling 
facility of the generator's or collector's choice. 
    Subd. 2.  [LICENSING OF RECYCLABLE MATERIALS 
COLLECTION.] Counties may require county or municipal licenses 
for collection of recyclable materials. 
    Subd. 3.  [TRANSPORTATION SYSTEMS.] The office and the 
commissioner of transportation shall develop an efficient 
transportation system for recyclable materials to reach markets 
and processing centers that may be used by counties.  The system 
may include regional collection centers. 
    Sec. 15.  [115A.554] [AUTHORITY OF SANITARY DISTRICTS.] 
    A sanitary district with the authority to regulate solid 
waste has the authority and duty of counties within the 
district's boundary for purposes of sections 12, 13, and 14; 
article 20, sections 8, 14, 18, 24, and 25; and sections 
115A.46, subdivision 4; 115A.919; 115A.96, subdivision 6; 
375.18, subdivision 14; and 400.08, subdivision 5. 
    Sec. 16.  [115A.555] [RECYCLING CENTER DESIGNATION.] 
    The agency shall designate recycling centers for the 
purpose of section 18.  To be designated as a recycling center, 
a recycling facility must be open a minimum of 12 operating 
hours each week, 12 months each year, and must accept for 
recycling at least four different materials such as paper, 
glass, plastic, and metal. 
    Sec. 17.  Minnesota Statutes 1988, section 116K.04, is 
amended by adding a subdivision to read: 
    Subd. 6.  [MODEL ZONING CRITERIA.] The commissioner shall, 
in consultation with the advisory council on state and local 
relations, develop and disseminate model zoning criteria for use 
by local units of government in siting recycling facilities. 
    Sec. 18.  [173.086] [RECYCLING CENTER SIGNS.] 
    Subdivision 1.  [AUTHORITY TO ERECT.] A recycling facility 
that has complied with the permitting rules of the pollution 
control agency and has been designated a recycling center by the 
agency under section 16 may erect a recycling center sign upon 
payment of a fee to the department of transportation or to the 
local road authority required to cover all costs of fabrication 
and installation of the signs. 
    Subd. 2.  [SIGN STANDARDS.] The department of 
transportation shall design and manufacture the recycling center 
sign to specifications not contrary to other federal and state 
highway sign standards.  The sign must contain the international 
three arrow recycling symbol followed by the words "recycling 
center." 
    Subd. 3.  [LOCATION.] Each local road authority shall 
permit recycling center signs to be located on roads in its 
jurisdiction, subject to sign placement and distance 
requirements of the local authority in conformance with standard 
policies for placement of signs for other traffic generators. 
    Sec. 19.  [REPORT ON RECYCLING IN PUBLIC BUILDINGS.] 
    The commissioner of administration and the commissioner of 
public safety shall review the availability of the opportunity 
to recycle in buildings, including those in the capitol area, 
and address barriers to recycling systems that may be caused by 
building, safety, and fire codes and historical preservation.  
The commissioners shall prepare a report on the barriers to 
recycling systems and the progress in overcoming the barriers 
and submit it to the legislative commission on waste management 
by November 1, 1990. 
    Sec. 20.  [EFFECTIVE DATE.] 
    Section 13 is effective October 1, 1990. 
     Sections 1 to 12 and 14 to 19 are effective the day 
following final enactment. 

                              ARTICLE 19 

             REVENUE FOR RECYCLING AND SOLID WASTE PROGRAMS 
    Section 1.  [115A.557] [COUNTY WASTE REDUCTION AND 
RECYCLING FUNDING.] 
    Subdivision 1.  [DISTRIBUTION; FORMULA.] Any funds 
appropriated to the office for the purpose of distribution to 
counties under this section must be distributed each fiscal year 
by the office based on population, except a county may not 
receive less than $55,000 in a fiscal year.  For purposes of 
this subdivision, "population" has the definition given in 
section 477A.011, subdivision 3.  A county that participates in 
a multicounty district that manages solid waste and that has 
responsibility for recycling programs as authorized in article 
18, section 13, must pass through to the districts funds 
received by the county in excess of the $55,000 annual base 
under this section in proportion to the population of the county 
served by that district. 
    Subd. 2.  [PURPOSES FOR WHICH MONEY MAY BE SPENT.] A county 
receiving money distributed by the office under this section may 
use the money only for the development and implementation of 
programs to: 
    (1) reduce the amount of solid waste generated; 
    (2) recycle the maximum amount of solid waste technically 
feasible; 
    (3) create and support markets for recycled products; 
    (4) remove problem materials from the solid waste stream 
and develop proper disposal options for them; 
    (5) inform and educate all sectors of the public about 
proper solid waste management procedures; 
    (6) provide technical assistance to public and private 
entities to ensure proper solid waste management; and 
    (7) provide educational, technical, and financial 
assistance for litter prevention. 
    Subd. 3.  [ELIGIBILITY TO RECEIVE MONEY.] (a) To be 
eligible to receive money distributed by the office under this 
section, a county shall within one year of the effective date of 
this section: 
    (1) create a separate account in its general fund to credit 
the money; and 
    (2) set up accounting procedures to ensure that money in 
the separate account is spent only for the purposes in 
subdivision 2. 
    (b) In each following year, each county shall also: 
    (1) have in place an approved solid waste management plan 
or master plan including a recycling implementation strategy 
under article 18, section 12, subdivision 7, or section 473.803, 
subdivision 1e, and a household hazardous waste management plan 
under section 115A.96, subdivision 6, by the dates specified in 
those provisions; 
    (2) submit a report by August 1 of each year to the office 
detailing how the money was spent and the resulting gains 
achieved in solid waste management practices during the previous 
fiscal year; and 
    (3) provide evidence to the office that local revenue equal 
to 25 percent of the money sought for distribution under this 
section will be spent for the purposes in subdivision 2. 
     (c) The office shall withhold all or part of the funds to 
be distributed to a county under this section if the county 
fails to comply with this subdivision and subdivision 2. 
    Subd. 4.  [REPORT.] By November 1 of each year, the office 
shall report on how the money was spent and the resulting 
statewide improvements in solid waste management to the house of 
representatives and senate appropriations and finance committees 
and the legislative commission on waste management. 
    Sec. 2.  Minnesota Statutes 1988, section 275.50, 
subdivision 5, is amended to read: 
    Subd. 5.  Notwithstanding any other law to the contrary for 
taxes levied in 1988 1989 payable in 1989 1990 and subsequent 
years, "special levies" means those portions of ad valorem taxes 
levied by governmental subdivisions to: 
    (a) 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.  
Effective with taxes levied in 1989, the portion of this special 
levy for income maintenance programs identified in section 
273.1398, subdivision 1, paragraph (i), is eliminated; 
    (b) pay the costs of principal and interest on bonded 
indebtedness except on bonded indebtedness issued under section 
471.981, subdivisions 4 to 4c 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; 
    (c) 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; 
     (d) 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; 
     (e) provide for the bonded indebtedness portion of payments 
made to another political subdivision of the state of Minnesota; 
     (f) 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; 
     (g) 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; 
    (h) 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; 
    (i) to compensate the state for the cost of a reassessment 
ordered by the commissioner of revenue pursuant to section 
270.16; and 
    (j) pay the debt service on tax increment financing revenue 
bonds to the extent that revenue to pay the bonds or to maintain 
reserves for the bonds is insufficient as a result of the 
provisions of Laws 1988, chapter 719, article 5; and 
    (k) pay an amount of up to 25 percent of the money sought 
for distribution and approved under section 1, subdivision 3, 
paragraph (b), clause (3). 
    Sec. 3.  Minnesota Statutes 1988, section 297A.01, 
subdivision 3, is amended to read: 
    Subd. 3.  A "sale" and a "purchase" includes, but is not 
limited to, each of the following transactions: 
    (a) Any transfer of title or possession, or both, of 
tangible personal property, whether absolutely or conditionally, 
and the leasing of or the granting of a license to use or 
consume tangible personal property other than manufactured homes 
used for residential purposes for a continuous period of 30 days 
or more, for a consideration in money or by exchange or barter; 
    (b) The production, fabrication, printing or processing of 
tangible personal property for a consideration for consumers who 
furnish either directly or indirectly the materials used in the 
production, fabrication, printing, or processing; 
    (c) The furnishing, preparing, or serving for a 
consideration of food, meals or drinks, not including meals or 
drinks served to patients, inmates, or persons residing at 
hospitals, sanitariums, nursing homes, senior citizens homes, 
and correctional, detention, and detoxification facilities, 
meals or drinks purchased for and served exclusively to 
individuals who are 60 years of age or over and their spouses or 
to the handicapped and their spouses by governmental agencies, 
nonprofit organizations, agencies, or churches or pursuant to 
any program funded in whole or part through 42 USCA sections 
3001 through 3045, wherever delivered, prepared or served, meals 
and lunches served at public and private schools, universities 
or colleges.  "Sales" also includes meals furnished by employers 
to employees at less than fair market value, except meals 
furnished at no charge to employees of hospitals, nursing homes, 
boarding care homes, sanitariums, group homes, and correctional, 
detention, and detoxification facilities, who are required to 
eat with the patients, residents, or inmates residing in them.  
Notwithstanding section 297A.25, subdivision 2, taxable food or 
meals include, but are not limited to, the following:  
     (i) heated food or drinks; 
     (ii) sandwiches prepared by the retailer; 
     (iii) single sales of prepackaged ice cream or ice milk 
novelties prepared by the retailer; 
     (iv) hand-prepared or dispensed ice cream or ice milk 
products including cones, sundaes, and snow cones; 
     (v) soft drinks and other beverages prepared or served by 
the retailer; 
     (vi) gum; 
     (vii) ice; 
     (viii) all food sold in vending machines; 
     (ix) party trays prepared by the retailers; and 
     (x) all meals and single servings of packaged snack food, 
single cans or bottles of pop, sold in restaurants and bars; 
     (d) The granting of the privilege of admission to places of 
amusement, recreational areas, or athletic events and the 
privilege of having access to and the use of amusement devices, 
tanning facilities, reducing salons, steam baths, turkish baths, 
massage parlors, health clubs, and spas or athletic facilities; 
     (e) The furnishing for a consideration of lodging and 
related services by a hotel, rooming house, tourist court, motel 
or trailer camp and of the granting of any similar license to 
use real property other than the renting or leasing thereof for 
a continuous period of 30 days or more; 
     (f) The furnishing for a consideration of electricity, gas, 
water, or steam for use or consumption within this state, or 
local exchange telephone service, intrastate toll service, and 
interstate toll service, if that service originates from and is 
charged to a telephone located in this state; the tax imposed on 
amounts paid for telephone services is the liability of and 
shall be paid by the person paying for the services.  Sales by 
municipal corporations in a proprietary capacity are included in 
the provisions of this clause.  The furnishing of water and 
sewer services for residential use shall not be considered a 
sale; 
     (g) The furnishing for a consideration of cable television 
services, including charges for basic monthly service, charges 
for monthly premium service, and charges for any other similar 
television services; 
     (h) Notwithstanding subdivision 4, and section 297A.25, 
subdivision 9, the sales of horses including claiming sales and 
fees paid for breeding a stallion to a mare.  This clause 
applies to sales and fees with respect to a horse to be used for 
racing whose birth has been recorded by the Jockey Club or the 
United States Trotting Association or the American Quarter Horse 
Association; 
     (i) The furnishing for a consideration of parking services, 
whether on a contractual, hourly, or other periodic basis, 
except for parking at a meter; 
     (j) The furnishing for a consideration of services listed 
in this paragraph: 
     (i) laundry and dry cleaning services including cleaning, 
pressing, repairing, altering, and storing clothes, linen 
services and supply, cleaning and blocking hats, and carpet, 
drapery, upholstery, and industrial cleaning.  Laundry and dry 
cleaning services do not include services provided by coin 
operated facilities operated by the customer; 
     (ii) motor vehicle washing, waxing, and cleaning services, 
including services provided by coin-operated facilities operated 
by the customer, and rustproofing, undercoating, and towing of 
motor vehicles; 
     (iii) building and residential cleaning, maintenance, and 
disinfecting and exterminating services; 
     (iv) services provided by detective agencies, security 
services, burglar, fire alarm, and armored car services not 
including services performed within the jurisdiction they serve 
by off-duty licensed peace officers as defined in section 
626.84, subdivision 1; 
    (v) pet grooming services; and 
    (vi) lawn care, fertilizing, mowing, spraying and sprigging 
services; garden planting and maintenance; arborist services; 
tree, bush, and shrub planting, pruning, bracing, spraying, and 
surgery; and tree trimming for public utility lines. 
The services listed in this paragraph are taxable under section 
297A.02 if the service is performed wholly within Minnesota or 
if the service is performed partly within and partly without 
Minnesota and the greater proportion of the service is performed 
in Minnesota, based on the cost of performance.  In applying the 
provisions of this chapter, the terms "tangible personal 
property" and "sales at retail" include taxable services and the 
provision of taxable services, unless specifically provided 
otherwise.  Services performed by an employee for an employer 
are not taxable under this paragraph.  Services performed by a 
partnership or association for another partnership or 
association are not taxable under this paragraph if one of the 
entities owns or controls more than 80 percent of the voting 
power of the equity interest in the other entity.  Services 
performed between members of an affiliated group of corporations 
are not taxable.  For purposes of this section, "affiliated 
group of corporations" includes those entities that would be 
classified as a member of an affiliated group under United 
States Code, title 26, section 1504, and who are eligible to 
file a consolidated tax return for federal income tax 
purposes; and 
     (vii) solid waste collection and disposal services as 
described in section 7; 
     (k) A "sale" and a "purchase" includes the transfer of 
computer software, meaning information and directions that 
dictate the function performed by data processing equipment.  A 
"sale" and a "purchase" does not include the design, 
development, writing, translation, fabrication, lease, or 
transfer for a consideration of title or possession of a custom 
computer program; and 
    (l) The granting of membership in a club, association, or 
other organization if: 
    (1) the club, association, or other organization makes 
available for the use of its members sports and athletic 
facilities (without regard to whether a separate charge is 
assessed for use of the facilities); and 
    (2) use of the sports and athletic facilities is not made 
available to the general public on the same basis as it is made 
available to members.  
Granting of membership includes both one-time initiation fees 
and periodic membership dues.  Sports and athletic facilities 
include golf courses, tennis, racquetball, handball and squash 
courts, basketball and volleyball facilities, running tracks, 
exercise equipment, swimming pools, and other similar athletic 
or sports facilities.  The provisions of this paragraph do not 
apply to camps or other recreation facilities owned and operated 
by an exempt organization under section 501(c)(3) of the 
Internal Revenue Code of 1986, as amended through December 31, 
1986, for educational and social activities for young people 
primarily age 18 and under.  
    Sec. 4.  Minnesota Statutes 1989 Supplement, section 
297A.25, subdivision 11, is amended to read: 
    Subd. 11.  [SALES TO GOVERNMENT.] 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, the University of Minnesota, 
state universities, community colleges, technical institutes, 
state academies, the Minnesota center for arts education, and 
political subdivisions of the state are exempt.  Sales exempted 
by this subdivision include sales under section 297A.01, 
subdivision 3, clause (f), but do not include sales under 
section 297A.01, subdivision 3, paragraph (j), clause (vii).  
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.  
This exemption does not apply to the leasing of a motor vehicle 
as defined in section 297B.01, subdivision 5, except for leases 
entered into by the United States or its agencies or 
instrumentalities. 
    Sec. 5.  Minnesota Statutes 1989 Supplement, section 
297A.25, subdivision 16, is amended to read: 
    Subd. 16.  [SALES TO NONPROFIT GROUPS.] 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, are exempt.  
Sales exempted by this subdivision include sales pursuant to 
section 297A.01, subdivision 3, clauses (d) and (f), but do not 
include sales under section 297A.01, subdivision 3, paragraph 
(j), clause (vii).  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.  This exemption does not apply to the 
leasing of a motor vehicle as defined in section 297B.01, 
subdivision 5. 
    Sec. 6.  Minnesota Statutes 1989 Supplement, section 
297A.44, subdivision 1, is amended to read: 
    Subdivision 1.  (a) Except as provided in paragraphs (b) 
and, (c), and (d), all revenues, including interest and 
penalties, derived from the excise and use taxes imposed by 
sections 297A.01 to 297A.44 shall be deposited by the 
commissioner in the state treasury and credited to the general 
fund.  
    (b) All excise and use taxes derived from sales and use of 
property and services purchased for the construction and 
operation of an agricultural resource project, from and after 
the date on which a conditional commitment for a loan guaranty 
for the project is made pursuant to section 41A.04, subdivision 
3, shall be deposited in the Minnesota agricultural and economic 
account in the special revenue fund.  The commissioner of 
finance shall certify to the commissioner the date on which the 
project received the conditional commitment.  The amount 
deposited in the loan guaranty account shall be reduced by any 
refunds and by the costs incurred by the department of revenue 
to administer and enforce the assessment and collection of the 
taxes.  
    (c) All revenues, including interest and penalties, derived 
from the excise and use taxes imposed on sales and purchases 
included in section 297A.01, subdivision 3, paragraphs (d) and 
(l), clauses (1) and (2), must be deposited by the commissioner 
in the state treasury, and credited as follows: 
    (1) first to the general obligation special tax bond debt 
service account in each fiscal year the amount required by 
section 16A.661, subdivision 3, paragraph (b); and 
    (2) after the requirements of clause (1) have been met, the 
balance must be credited to the general fund. 
    (d) The revenues, including interest and penalties, derived 
from the taxes imposed on solid waste collection services as 
described in section 7 shall be deposited by the commissioner in 
the state treasury and credited to the general fund to be used 
for funding solid waste reduction and recycling programs. 
    Sec. 7.  [297A.45] [SOLID WASTE COLLECTION AND DISPOSAL 
SERVICES.] 
    Subdivision 1.  [DEFINITIONS.] The definitions in sections 
115A.03 and 297A.01 apply to this section. 
    Subd. 2.  [APPLICATION.] The tax imposed by section 297A.02 
applies to all public and private mixed municipal solid waste 
collection and disposal services.  Notwithstanding section 
297A.25, subdivision 11, a political subdivision that purchases 
collection or disposal services on behalf of its citizens shall 
pay the tax.  If a political subdivision provides collection or 
disposal services to its residents at a cost in excess of the 
total direct charge to the residents for the service, the 
political subdivision shall pay the tax based on its cost of 
providing the service in excess of the direct charges.  A person 
who transports mixed municipal solid waste generated by that 
person or by another person without compensation shall pay the 
tax at the disposal or resource recovery facility based on the 
disposal charge or tipping fee. 
    Subd. 3.  [EXEMPTIONS.] (a) The cost of a service or the 
portion of a service to collect and manage recyclable materials 
separated from mixed municipal solid waste by the waste 
generator is exempt from the tax imposed in section 297A.02. 
     (b) The amount of a surcharge or fee imposed under section 
115A.919, 115A.921, 115A.923, or 473.843 is exempt from the tax 
imposed in section 297A.02. 
    (c) Waste from a recycling facility that separates or 
processes recyclable materials and that reduces the volume of 
the waste by at least 85 percent is exempt from the tax imposed 
in section 297A.02.  To qualify for the exemption under this 
paragraph, the waste exempted must be collected and disposed of 
separately from other solid waste. 
    Subd. 4.  [CITY SALES TAX MAY NOT BE IMPOSED.] 
Notwithstanding any other law or charter provision to the 
contrary, a home rule charter or statutory city that imposes a 
general sales tax may not impose the sales tax on solid waste 
disposal and collection services that are subject to the tax 
under this section. 
    Sec. 8.  [REVENUE REPORT.] 
    By November 1, 1990, the commissioner of revenue shall 
estimate the amount of revenue to be collected from the tax 
imposed on solid waste collection and disposal services 
described in section 7 for fiscal years 1990 and 1991 and shall 
report that amount to the office of waste management, to the 
house of representatives and senate appropriations and finance 
committees, and to the legislative commission on waste 
management. 
    Sec. 9.  [EFFECTIVE DATE.] 
    Sections 3 to 7 are effective for sales made after December 
31, 1989.  Sections 1, 2, and 8 are effective the day following 
final enactment.  

                              ARTICLE 20 

                   SOLID WASTE COLLECTION AND DISPOSAL
    Section 1.  Minnesota Statutes 1988, section 115A.03, is 
amended by adding a subdivision to read: 
    Subd. 17a.  [MAJOR APPLIANCES.] "Major appliances" means 
clothes washers and dryers, dishwashers, hot water heaters, 
garbage disposals, trash compactors, conventional ovens, ranges 
and stoves, air conditioners, refrigerators, and freezers. 
    Sec. 2.  Minnesota Statutes 1988, section 115A.03, is 
amended by adding a subdivision to read: 
    Subd. 24a.  [PROBLEM MATERIAL.] "Problem material" means a 
material that, when it is processed or disposed of with mixed 
municipal solid waste, contributes to one of the following 
results: 
    (1) the release of a hazardous substance, or pollutant or 
contaminant, as defined in section 115B.02, subdivisions 8, 13, 
and 15; 
    (2) pollution of water as defined in section 115.01, 
subdivision 5; 
    (3) air pollution as defined in section 116.06, subdivision 
3; or 
    (4) a significant threat to the safe or efficient operation 
of a solid waste processing facility. 
    Sec. 3.  Minnesota Statutes 1989 Supplement, section 
115A.46, subdivision 2, is amended to read:  
    Subd. 2.  [CONTENTS.] (a) The plans shall describe existing 
collection, processing, and disposal systems, including 
schedules of rates and charges, financing methods, environmental 
acceptability, and opportunities for improvements in the systems.
    (b) The plans shall include an estimate of the land 
disposal capacity in acre-feet which will be needed through the 
year 2000, on the basis of current and projected waste 
generation practices.  In assessing the need for additional 
capacity for resource recovery or land disposal, the plans shall 
take into account the characteristics of waste stream components 
and shall give priority to waste reduction, separation, and 
recycling.  
    (c) The plans shall require the most feasible and prudent 
reduction of the need for and practice of land disposal of mixed 
municipal solid waste.  
    (d) The plans shall address at least waste reduction, 
separation, recycling, and other resource recovery options, and 
shall include specific and quantifiable objectives, immediately 
and over specified time periods, for reducing the land disposal 
of mixed municipal solid waste and for the implementation of 
feasible and prudent reduction, separation, recycling, and other 
resource recovery options.  These objectives shall be consistent 
with statewide objectives as identified in statute.  The plans 
shall describe methods for identifying the portions of the waste 
stream such as leaves, grass, clippings, tree and plant residue, 
and paper for application and mixing into the soil and use in 
agricultural practices.  The plans shall describe specific 
functions to be performed and activities to be undertaken to 
achieve the abatement, reduction, separation, recycling, and 
other resource recovery objectives and shall describe the 
estimated cost, proposed manner of financing, and timing of the 
functions and activities.  The plans shall describe proposed 
mechanisms for complying with the recycling requirements of 
article 18, section 12, and the household hazardous waste 
management requirements of section 115A.96, subdivision 6.  
    (e) The plans shall include a comparison of the costs of 
the activities to be undertaken, including capital and operating 
costs, and the effects of the activities on the cost to 
generators and on persons currently providing solid waste 
collection, processing, and disposal services.  The plans shall 
include alternatives which could be used to achieve the 
abatement objectives if the proposed functions and activities 
are not established.  
    (f) The plans shall designate how public education shall be 
accomplished.  The plans shall, to the extent practicable and 
consistent with the achievement of other public policies and 
purposes, encourage ownership and operation of solid waste 
facilities by private industry.  For solid waste facilities 
owned or operated by public agencies or supported primarily by 
public funds or obligations issued by a public agency, the plans 
shall include criteria and standards to protect comparable 
private and public facilities already existing in the area from 
displacement unless the displacement is required in order to 
achieve the waste management objectives identified in the plan.  
    (g) The plans shall establish a siting procedure and 
development program to assure the orderly location, development, 
and financing of new or expanded solid waste facilities and 
services sufficient for a prospective ten-year period, including 
estimated costs and implementation schedules, proposed 
procedures for operation and maintenance, estimated annual costs 
and gross revenues, and proposals for the use of facilities 
after they are no longer needed or usable.  
    (h) The plans shall describe existing and proposed county 
and municipal ordinances and license and permit requirements 
relating to solid waste management and shall describe existing 
and proposed regulation and enforcement procedures. 
    Sec. 4.  Minnesota Statutes 1988, section 115A.46, is 
amended by adding a subdivision to read: 
    Subd. 4.  [DELEGATION OF SOLID WASTE RESPONSIBILITIES.] A 
county or a solid waste management district established under 
sections 115A.62 to 115A.72 may not delegate to another 
governmental unit or other person any portion of its 
responsibility for solid waste management unless it establishes 
a funding mechanism to assure the ability of the entity to which 
it delegates responsibility to adequately carry out the 
responsibility delegated. 
    Sec. 5.  [115A.55] [SOLID WASTE REDUCTION.] 
    Subdivision 1.  [OFFICE COORDINATION.] The office shall 
develop and coordinate solid waste reduction programs to include 
at least public education, promotion of waste reduction, and 
technical and financial assistance to solid waste generators. 
    Subd. 2.  [TECHNICAL ASSISTANCE.] The office shall provide 
technical assistance to solid waste generators to enable the 
waste generators to implement programs or methods to reduce the 
amount of solid waste generated.  The office may use any means 
specified in section 115A.52 to provide technical assistance. 
    Subd. 3.  [FINANCIAL ASSISTANCE.] (a) The office shall make 
loans and grants to any person for the purpose of developing and 
implementing projects or practices to prevent or reduce the 
generation of solid waste including those that involve reuse of 
items in their original form or in manufacturing processes that 
do not cause the destruction of recyclable materials in a manner 
that precludes further use, or involve procuring, using, or 
producing products with long useful lives.  Grants may be used 
to fund studies needed to determine the technical and financial 
feasibility of a waste reduction project or practice or for the 
cost of implementation of a waste reduction project or practice 
that the office has determined is technically and financially 
feasible. 
    (b) In making grants or loans, the office shall give 
priority to waste reduction projects or practices that have 
broad application in the state and that have the potential for 
significant reduction of the amount of waste generated. 
    (c) All information developed as a result of a grant or 
loan shall be made available to other solid waste generators 
through the public information program established in 
subdivision 2. 
    (d) The office shall adopt rules for the administration of 
this program.  Office rules must prescribe the level or levels 
of matching funds required for grants or loans under this 
subdivision. 
    Sec. 6.  Minnesota Statutes 1988, section 115A.915, is 
amended to read: 
    115A.915 [LEAD ACID BATTERIES; LAND DISPOSAL PROHIBITED.] 
    A person may not place a lead acid battery in mixed 
municipal solid waste or dispose of a lead acid battery after 
January 1, 1988.  A person who violates this section is guilty 
of a misdemeanor.  This section may be enforced by the agency 
pursuant to section 115.071. 
    Sec. 7.  [115A.9152] [TRANSPORTATION OF USED LEAD ACID 
BATTERIES.] 
    (a) A person who transports used lead acid batteries from a 
retailer must deliver the batteries to a recycling facility. 
    (b) A person who violates paragraph (a) is guilty of a 
misdemeanor.  The failure to deliver each used lead acid battery 
to a recycler is a separate violation. 
    Sec. 8.  [115A.93] [LICENSING OF SOLID WASTE COLLECTION.] 
    Subdivision 1.  [LICENSE REQUIRED.] A person may not 
collect mixed municipal solid waste for hire without a license 
from the jurisdiction where the mixed municipal solid waste is 
collected. 
    Subd. 2.  [LICENSING.] (a) Each city and town may issue 
licenses for persons to collect mixed municipal solid waste for 
hire within their jurisdictions.  
    (b) County boards shall by resolution adopt the licensing 
authority of a city or town that does not issue licenses.  A 
county may delegate its licensing authority to a consortium of 
counties or to municipalities to license collection of mixed 
municipal solid waste within the county.  
    Subd. 3.  [LICENSE REQUIREMENTS.] (a) A licensing authority 
shall require to the extent possible that charges for collection 
of mixed municipal solid waste vary with the volume or weight of 
the waste collected.  
    (b) A licensing authority may impose requirements that are 
consistent with the county's solid waste policies as a condition 
of receiving and maintaining a license.  
    Sec. 9.  [115A.945] [VISIBLE SOLID WASTE MANAGEMENT COSTS.] 
    Any political subdivision that provides or pays for the 
costs of collection or disposal of solid waste shall, through a 
billing or other system, make the prorated share of those costs 
for each solid waste generator visible and obvious to the 
generator. 
    Sec. 10.  [115A.952] [RETAIL SALE OF PROBLEM MATERIALS; 
UNIFORM LABELING AND CONSUMER INFORMATION.] 
    Subdivision 1.  [DUTIES OF AGENCY; RULES.] The agency may 
adopt rules to identify products that are used primarily for 
personal, family, or household purposes and that constitute a 
problem material or contain a problem material as defined in 
section 115A.03, subdivision 24a.  The rules may also prescribe 
a uniform label to be affixed by retailers of identified 
products as provided in subdivision 4.  Packaging that is 
recyclable or made from recycled material shall not constitute a 
problem material. 
    Subd. 2.  [DUTIES OF COMMISSIONER OF AGRICULTURE.] The 
commissioner of agriculture may adopt rules to provide consumer 
information and retail handling practices for pesticides, as 
defined in section 18B.01, subdivision 18; fertilizers, plant 
amendments, and soil amendments, as defined in section 18C.005, 
subdivisions 11, 25, and 33; and wood preservatives. 
    Subd. 3.  [PREPARATION AND SUPPLY OF MATERIALS.] The agency 
and the commissioner of agriculture shall prepare and the agency 
shall supply to retailers, without charge to the retailers, the 
labels and informational materials required to comply with 
subdivision 4.  Informational materials must include specific 
instructions on environmentally sound ways to use identified 
products and to handle them when the products or their 
containers are discarded. 
    Subd. 4.  [DUTIES OF RETAILERS.] A person who sells or 
offers for sale at retail any product that is identified 
pursuant to rules of the agency adopted under subdivision 1 or 
under rules of the commissioner of agriculture under subdivision 
2 shall: 
    (1) affix a uniform label as prescribed by the rules in a 
prominent location upon or near the display area of the 
product.  If the adjacent display area is a shelf, the label 
shall be affixed to the price information for the product on the 
shelf; 
    (2) maintain and prominently display informational 
materials supplied by the agency at the location where 
identified products covered by the materials are sold or offered 
for sale; and 
    (3) comply with the handling practices required under 
subdivision 2. 
    Sec. 11.  [115A.953] [IDENTIFICATION OF ENVIRONMENTALLY 
SOUND MATERIALS.] 
    The office shall prepare and submit a report to the 
legislature and the legislative commission on waste management 
by June 30, 1991, on a mechanism to indicate that products are 
environmentally sound. 
    Sec. 12.  [115A.956] [SOLID WASTE DISPOSAL PROBLEM 
MATERIALS.] 
    Subdivision 1.  [PROBLEM MATERIAL PROCESSING AND DISPOSAL 
PLAN.] The office shall develop a plan that designates problem 
materials and available capacity for processing and disposal of 
problem materials including household hazardous waste that 
should not be in mixed municipal solid waste.  
    Subd. 2.  [PROBLEM MATERIAL SEPARATION AND COLLECTION 
PLAN.] After the office certifies that sufficient processing and 
disposal capacity is available, the office shall develop a plan 
for separating problem materials from mixed municipal solid 
waste, collecting the problem materials, and transporting the 
problem materials to a processing or disposal facility and may 
by rule prohibit the disposal of the designated problem 
materials in mixed municipal solid waste.  
    Sec. 13.  [115A.9561] [MAJOR APPLIANCES.] 
    A person may not place major appliances in mixed municipal 
solid waste or dispose of major appliances in a solid waste 
processing or disposal facility after July 1, 1990.  The agency 
may enforce this section pursuant to section 115.071. 
     Sec. 14.  [115A.961] [HOUSEHOLD BATTERIES; COLLECTION, 
PROCESSING, AND DISPOSAL.] 
    Subdivision 1.  [DEFINITION.] For the purposes of this 
section, "household batteries" means disposable or rechargeable 
dry cells commonly used as power sources for household or 
consumer products including, but not limited to, nickel-cadmium, 
alkaline, mercuric oxide, silver oxide, zinc oxide, lithium, and 
carbon-zinc batteries, but excluding lead acid batteries. 
    Subd. 2.  [PROGRAM.] (a) The office, in consultation with 
other state agencies, political subdivisions, and 
representatives of the household battery industry, may develop 
household battery programs.  The office must coordinate its 
programs with the legislative commission on Minnesota resources 
study on batteries.  
    (b) The office shall investigate options and develop 
guidelines for collection, processing, and disposal of household 
batteries.  The options the office may investigate include: 
    (1) establishing a grant program for counties to plan and 
implement household battery collection, processing, and disposal 
projects; 
    (2) establishing collection and transportation systems; 
    (3) developing and disseminating educational materials 
regarding environmentally sound battery management; and 
    (4) developing markets for materials recovered from the 
batteries. 
    (c) The office may also distribute funds to political 
subdivisions to develop battery management plans and implement 
those plans. 
    Subd. 3.  [PARTICIPATION.] A political subdivision, on its 
own or in cooperation with others, may implement a program to 
collect, process, or dispose of household batteries.  A 
political subdivision may provide financial incentives to any 
person, including public or private civic groups, to collect the 
batteries. 
    Subd. 4.  [REPORT.] By November 1, 1991, the office shall 
report to the legislative commission on waste management on its 
activities under this section with recommendations for 
legislation necessary to address management of household 
batteries. 
    Sec. 15.  Minnesota Statutes 1988, section 115A.96, 
subdivision 2, is amended to read: 
    Subd. 2.  [MANAGEMENT PROGRAM.] (a) The agency shall 
establish a statewide program to manage household hazardous 
wastes.  The program must include: 
    (1) the establishment and operation of collection sites; 
and 
    (2) the provision of information, education, and technical 
assistance regarding proper management of household hazardous 
wastes. 
    (b) The agency shall report on its progress on establishing 
permanent collection sites to the legislative commission on 
waste management by November 1, 1991. 
    Sec. 16.  Minnesota Statutes 1988, section 115A.96, is 
amended by adding a subdivision to read: 
    Subd. 6.  [HOUSEHOLD HAZARDOUS WASTE MANAGEMENT PLANS.] (a) 
Each county shall include in its solid waste management plan 
required in section 115A.46, or its solid waste master plan 
required in section 473.803, a household hazardous waste 
management plan.  The plan must at least: 
    (1) include a broad based public education component; 
    (2) include a strategy for reduction of household hazardous 
waste; and 
    (3) address separation of household hazardous waste from 
mixed municipal solid waste and the collection, storage, and 
disposal of that waste. 
    (b) Each county required to submit its plan to the office 
under section 115A.46 shall amend its plan to comply with this 
subdivision within one year after the effective date of this 
section. 
    (c) Each county in the state shall implement its household 
hazardous waste management plan by June 30, 1992. 
    Sec. 17.  [115A.99] [LITTER PENALTIES AND DAMAGES.] 
    Subdivision 1.  [CIVIL PENALTY.] (a) A person who 
unlawfully places any portion of solid waste in or on public or 
private lands, shorelands, roadways, or waters is subject to a 
civil penalty of not less than twice nor more than five times 
the amount of cost incurred by a state agency or political 
subdivision to remove, process, and dispose of the waste.  
    (b) A state agency or political subdivision that incurs 
cost as described in this section may bring an action to recover 
the civil penalty, related legal, administrative, and court 
costs, and damages for injury to or pollution of the lands, 
shorelands, roadways, or waters where the waste was placed if 
owned or managed by the entity bringing the action. 
    Subd. 2.  [DEPOSIT OF PENALTIES.] Civil penalties collected 
under this section must be deposited in the general fund of the 
jurisdiction enforcing the penalties. 
    Subd. 3.  [PRIVATE ACTION FOR DAMAGES.] A private person 
may join an action by the state or a political subdivision to 
recover a civil penalty to allow the person to recover damages 
for waste unlawfully placed on the person's property.  
    Sec. 18.  [115A.991] [LITTER GRANTS.] 
    The office may make grants to each county that has included 
in its solid waste plan required in section 115A.46, or its 
solid waste master plan required in section 473.803, programs to 
prevent, control, or abate litter.  The office shall establish 
eligibility criteria for grants including the required level of 
matching funds from applicants. 
    Sec. 19.  Minnesota Statutes 1988, section 116.07, is 
amended by adding a subdivision to read: 
    Subd. 4k.  [HOUSEHOLD HAZARDOUS WASTE MANAGEMENT.] (a) The 
agency shall adopt rules to require the owner or operator of a 
solid waste disposal facility or resource recovery facility to 
submit a management plan for the separation of household 
hazardous waste from solid waste prior to disposal or processing 
and for the proper disposal of the waste.  The plan must include:
    (1) participation in public education activities on 
household hazardous waste management in the facility's service 
area; 
    (2) a strategy for reduction of household hazardous waste 
entering the facility; and 
    (3) a plan for the storage and disposal of separated 
household hazardous waste. 
    (b) After June 30, 1992, the agency may not grant or renew 
a permit for a facility that has not submitted a household 
hazardous waste management plan. 
    Sec. 20.  [325E.035] [UNIFORM LABELING AND PACKAGING 
REQUIRED.] 
    It is the policy of this state to manage packaging and 
labeling in a uniform manner throughout the state.  Political 
subdivisions may not adopt, and are preempted from adopting or 
enforcing, labeling or packaging requirements that are different 
from state law.  
    Sec. 21.  Minnesota Statutes 1988, section 325E.115, 
subdivision 1, is amended to read: 
    Subdivision 1.  [SURCHARGE; COLLECTION; NOTICE.] (a) A 
person selling lead acid batteries at retail or offering lead 
acid batteries for retail sale in this state shall: 
    (1) accept, at the point of transfer, lead acid batteries 
from customers; and 
    (2) charge a fee of $5 per battery sold unless the customer 
returns a used battery to the retailer; and 
    (3) post written notice, which must be at least 8-1/2 
inches by 11 inches in size and must contain the universal 
recycling symbol and the following language: 
    (i) "It is illegal to put a motor vehicle battery in the 
garbage."; 
    (ii) "Recycle your used batteries."; and 
    (iii) "State law requires us to accept motor vehicle 
batteries for recycling." 
    (b) Any person selling lead acid batteries at wholesale or 
offering lead acid batteries for sale at wholesale must accept, 
at the point of transfer, lead acid batteries from customers. 
    Sec. 22.  [325E.1151] [LEAD ACID BATTERY PURCHASE AND 
RETURN.] 
    Subdivision 1.  [PURCHASERS MUST RETURN BATTERY OR PAY 
$5.] (a) A person who purchases a lead acid battery at retail 
must: 
    (1) return a lead acid battery to the retailer; or 
    (2) pay the retailer a $5 surcharge. 
    (b) A person who has paid a $5 surcharge under paragraph (a)
must receive a $5 refund from the retailer if the person returns 
a lead acid battery with a receipt for the purchase of a new 
battery from that retailer within 30 days after purchasing a new 
lead acid battery. 
    (c) A retailer may keep the unrefunded surcharges for lead 
acid batteries not returned within 30 days. 
    Subd. 2.  [RETAILERS MUST ACCEPT BATTERIES.] (a) A person 
who sells lead acid batteries at retail must accept lead acid 
batteries from consumers and may not charge to receive the lead 
acid batteries.  A consumer may not deliver more than five lead 
acid batteries to a retailer at one time. 
    (b) A retailer of lead acid batteries must recycle the lead 
acid batteries received from consumers. 
    (c) A retailer who violates paragraph (b) is guilty of a 
misdemeanor.  Each lead acid battery that is not recycled is a 
separate violation. 
    Subd. 3.  [RETAILERS MUST POST NOTICES.] (a) A person who 
sells lead acid batteries at retail must post the notice in 
paragraph (b) in a manner clearly visible to a consumer making 
purchasing decisions. 
    (b) The notice must be at least 8-1/2 inches by 11 inches 
and contain the universal recycling symbol and state: 
"NOTICE:  USED BATTERIES
    This retailer is required to accept your used lead acid 
batteries, EVEN IF YOU DO NOT PURCHASE A BATTERY.  When you 
purchase a new battery, you will be charged an additional $5 
unless you return a used battery within 30 days. 
    Improper disposal of a lead acid battery is a crime." 
    Subd. 4.  [NOTICES REQUIRED IN NEWSPAPER 
ADVERTISEMENTS.] (a) An advertisement for sale of new lead acid 
batteries at retail in newspapers published in this state must 
contain the notice in paragraph (b). 
    (b) The notice must state: 
 "$5 additional charge unless a used lead acid battery is 
returned.  Improper disposal of a lead acid battery is a 
crime." 
    Sec. 23.  Minnesota Statutes 1988, section 368.01, 
subdivision 14, is amended to read: 
    Subd. 14.  [HEALTH.] (a) The town board of supervisors 
shall have power by ordinance: 
    (1) to prohibit or regulate slaughterhouses; 
    (2) to prevent the bringing, depositing, or leaving within 
the town of any unwholesome substance or deposit of solid waste 
within the town not otherwise authorized by law, to require the 
owners or occupants of lands to remove unwholesome substances 
therefrom or the unauthorized deposit of solid waste and in 
default thereof if it is not removed to provide for its removal 
at the expense of the owner or occupant, which expense shall be 
a lien upon the property and may be collected as a special 
assessment; 
    (3) to provide for or regulate the disposal of sewage, 
garbage, and other refuse,; and 
    (4) to provide for the cleaning of, and removal of 
obstructions from, any waters in the town and to prevent their 
obstruction or pollution. 
    (b) The town board may establish a board of health under 
section 145A.07, subdivision 2, with all the powers of such 
boards under the general laws.  
    Sec. 24.  Minnesota Statutes 1988, section 375.18, is 
amended by adding a subdivision to read: 
    Subd. 14.  [UNAUTHORIZED DEPOSIT OF SOLID WASTE.] Each 
county board may by ordinance:  
    (1) prohibit the deposit of solid waste within the county 
not otherwise authorized by law; 
    (2) require the owners or occupants of property to remove 
the unauthorized deposit of solid waste; 
    (3) if it is not removed, provide for removal of the solid 
waste at the owner's or occupant's expense; and 
    (4) provide for the expense to be a lien on the property 
and collected as a special assessment.  
    Sec. 25.  Minnesota Statutes 1988, section 400.08, is 
amended by adding a subdivision to read: 
    Subd. 5.  [FINANCIAL INCENTIVES TO RECYCLE.] A county may:  
    (1) charge or may require any person who collects solid 
waste in the county to charge solid waste generators rates for 
collection or disposal that vary depending on the volume of 
waste generated; 
    (2) require collectors to provide financial incentives to 
solid waste generators who separate recyclable materials from 
their waste; or 
    (3) require use of any other mechanism to provide 
encouragement or rewards to solid waste generators who reduce 
their waste generation or who separate recyclable materials from 
their waste. 
    Sec. 26.  Minnesota Statutes 1988, section 412.221, 
subdivision 22, is amended to read: 
    Subd. 22.  [HEALTH.] (a) The council shall have power by 
ordinance: 
    (1) to prohibit or regulate slaughterhouses; 
    (2) to prevent the bringing, depositing, or leaving within 
the city of any unwholesome substance or deposit of solid waste 
within the city not otherwise authorized by law, to require the 
owners or occupants of lands to remove unwholesome 
substances therefrom or the unauthorized deposit of solid waste 
and in default thereof if it is not removed to provide for its 
removal at the expense of the owner or occupant, which expense 
shall be a lien upon the property and may be collected as a 
special assessment; 
    (3) to provide for or regulate the disposal of sewage, 
garbage, and other refuse,; and 
    (4) to provide for the cleaning of, and removal of 
obstructions from, any waters in the city and to prevent their 
obstruction or pollution. 
    (b) The council may establish a board of health as defined 
in section 145A.02, subdivision 2, with all the powers of such 
boards under the general laws.  
    Sec. 27.  Minnesota Statutes 1988, section 473.149, 
subdivision 1, is amended to read: 
    Subdivision 1.  [POLICY PLAN; GENERAL REQUIREMENTS.] The 
metropolitan council shall prepare and by resolution adopt as 
part of its development guide a long range policy plan for solid 
waste management in the metropolitan area.  When adopted, the 
plan shall be followed in the metropolitan area.  The plan shall 
address the state policies and purposes expressed in section 
115A.02.  The plan shall substantially conform to all policy 
statements, purposes, goals, standards, maps and plans in 
development guide sections and plans adopted by the council, 
provided that no land shall be thereby excluded from 
consideration as a solid waste facility site except land 
determined by the agency to be intrinsically unsuitable for such 
use.  The plan shall include goals and policies for solid waste 
management, including recycling consistent with article 18, 
section 12, and household hazardous waste management consistent 
with section 115A.96, subdivision 6, in the metropolitan area 
and, to the extent appropriate, statements and information 
similar to that required under section 473.146, subdivision 1.  
The plan shall include criteria and standards for solid waste 
facilities and solid waste facility sites respecting the 
following matters:  general location; capacity; operation; 
processing techniques; environmental impact; effect on existing, 
planned, or proposed collection services and waste facilities; 
and economic viability.  The plan shall, to the extent 
practicable and consistent with the achievement of other public 
policies and purposes, encourage ownership and operation of 
solid waste facilities by private industry.  For solid waste 
facilities owned or operated by public agencies or supported 
primarily by public funds or obligations issued by a public 
agency, the plan shall include additional criteria and standards 
to protect comparable private and public facilities already 
existing in the area from displacement unless the displacement 
is required in order to achieve the waste management objectives 
identified in the plan.  In developing the plan the council 
shall consider the orderly and economic development, public and 
private, of the metropolitan area; the preservation and best and 
most economical use of land and water resources in the 
metropolitan area; the protection and enhancement of 
environmental quality; the conservation and reuse of resources 
and energy; the preservation and promotion of conditions 
conducive to efficient, competitive, and adaptable systems of 
waste management; and the orderly resolution of questions 
concerning changes in systems of waste management.  Criteria and 
standards for solid waste facilities shall be consistent with 
rules adopted by the pollution control agency pursuant to 
chapter 116 and shall be at least as stringent as the 
guidelines, regulations, and standards of the federal 
environmental protection agency. 
    Sec. 28.  Minnesota Statutes 1988, section 473.803, 
subdivision 1, is amended to read: 
    Subdivision 1.  [COUNTY MASTER PLANS; GENERAL 
REQUIREMENTS.] Each metropolitan county, following adoption or 
revision of the council's solid waste policy plan and in 
accordance with the dates specified therein, and after 
consultation with all affected local government units, shall 
prepare and submit to the council for its approval, a county 
solid waste master plan to implement the policy plan.  The 
master plan shall be revised and resubmitted at such times as 
the council's policy plan may require.  The master plan shall 
describe county solid waste activities, functions, and 
facilities; the existing system of solid waste generation, 
collection, and processing, and disposal within the county; 
proposed mechanisms for complying with the recycling 
requirements of article 18, section 12, and the household 
hazardous waste management requirements of section 115A.96, 
subdivision 6; existing and proposed county and municipal 
ordinances and license and permit requirements relating to solid 
waste facilities and solid waste generation, collection, and 
processing, and disposal; existing or proposed municipal, 
county, or private solid waste facilities and collection 
services within the county together with schedules of existing 
rates and charges to users and statements as to the extent to 
which such facilities and services will or may be used to 
implement the policy plan; and any solid waste facility which 
the county owns or plans to acquire, construct, or improve 
together with statements as to the planned method, estimated 
cost and time of acquisition, proposed procedures for operation 
and maintenance of each facility; an estimate of the annual cost 
of operation and maintenance of each facility; an estimate of 
the annual gross revenues which will be received from the 
operation of each facility; and a proposal for the use of each 
facility after it is no longer needed or usable as a waste 
facility.  The master plan shall, to the extent practicable and 
consistent with the achievement of other public policies and 
purposes, encourage ownership and operation of solid waste 
facilities by private industry.  For solid waste facilities 
owned or operated by public agencies or supported primarily by 
public funds or obligations issued by a public agency, the 
master plan shall contain criteria and standards to protect 
comparable private and public facilities already existing in the 
area from displacement unless the displacement is required in 
order to achieve the waste management objectives identified in 
the plan. 
    Sec. 29.  [473.804] [HOUSEHOLD HAZARDOUS WASTE MANAGEMENT.] 
    By June 30, 1992, each metropolitan county shall develop 
and implement a permanent program to manage household hazardous 
waste.  Each program must include at least quarterly collection 
of wastes.  Each program must be consistent with the council's 
policy plan and must be described as part of each county's solid 
waste master plan revision as required under section 473.803, 
subdivision 1.  
     Sec. 30.  [REPEALER.] 
    Section 20 is repealed effective June 30, 1990. 
     Sec. 31.  [EFFECTIVE DATE.] 
    This article is effective the day following final enactment.

                              ARTICLE 21 

                            WASTE EDUCATION 
    Section 1.  Minnesota Statutes 1988, section 115A.072, is 
amended to read: 
    115A.072 [PUBLIC EDUCATION ON WASTE MANAGEMENT.] 
    Subdivision 1.  [WASTE EDUCATION; COALITION.] (a) The board 
office shall provide for the development and implementation of a 
program of general public education on waste management in 
cooperation and coordination with the pollution control agency, 
metropolitan council, department of education, department of 
agriculture, state planning agency, environmental quality board, 
environmental education board, educational institutions, and 
other public agencies with responsibility for waste management 
or public education, and three other persons who represent 
private industry and who have knowledge of or expertise in 
recycling and solid waste management issues.  The objectives of 
the program are to:  develop increased public awareness of and 
interest in environmentally sound waste management methods; 
encourage better informed decisions on waste management issues 
by business, industry, local governments, and the public; and 
disseminate practical information about ways in which households 
and other institutions and organizations can improve the 
management of waste. 
    (b) The office shall appoint an advisory task force, to be 
called the waste education coalition, of up to 18 members to 
advise the office in carrying out its responsibilities under 
this section and whose membership represents the agencies and 
entities listed in this subdivision. 
    Subd. 2.  [OFFICE DUTIES.] In addition to its general 
duties established in subdivision 1, the office shall: 
    (1) develop a statewide waste management public education 
campaign with materials that may be easily adapted by political 
subdivisions to meet their program needs; and 
    (2) develop and make available to schools educational 
curricula on waste education for grades kindergarten to 12 to 
address at least waste reduction, recycling, litter, and proper 
management and disposal of problem materials. 
    Subd. 3.  [EDUCATION GRANTS.] (a) The office shall provide 
grants to persons for the purpose of developing and distributing 
waste education information. 
    (b) The office shall provide grants and technical 
assistance to formal and informal education facilities to 
develop and implement a model program to incorporate waste 
reduction, recycling, litter prevention, and proper management 
of problem materials into educational operations. 
    (c) The office shall provide grants or awards to formal and 
informal education facilities to develop or implement ongoing 
waste reduction, recycling, litter prevention, and proper 
management of problem materials programs. 
    Subd. 4.  [EDUCATION, PROMOTION, AND PROCUREMENT.] The 
office shall include waste reduction as an element of its 
program of public education on waste management required under 
section 115A.072.  The waste reduction education program must 
include dissemination of information and may include an award 
program for model waste reduction efforts.  Waste reduction 
educational efforts must also include provision of information 
about and promotion of the model procurement program developed 
by the commissioner of administration under section 115A.15, 
subdivision 7, or any other model procurement program that 
results in significant waste reduction. 
    Sec. 2.  [WASTE EDUCATION CURRICULUM.] 
    The state board of education shall amend its rules adopted 
pursuant to Laws 1984, chapter 463, article 7, section 26, 
subdivisions 1 and 2, to require a waste education component 
developed pursuant to section 115A.072, subdivision 2, clause 
(2), as part of the minimum comprehensive educational programs 
for both secondary and elementary levels.  The amended rules 
adopted by the state board must go into effect beginning in the 
1991-1992 school year. 
     Sec. 3.  [EFFECTIVE DATE.] 
    This article is effective the day following final enactment.

                               ARTICLE 22 

                             WASTE SPENDING 
    Section 1.  [MAJOR APPLIANCE DISPOSAL REPORT.] 
    The office of waste management shall prepare and submit a 
report to the legislature and the legislative commission on 
waste management by July 15, 1990, on how major appliances in 
the state are being disposed of and should be disposed of. 
    Sec. 2.  [115A.558] [SAFETY GUIDE.] 
    The pollution control agency, in cooperation with the 
office of waste management and the metropolitan council, shall 
prepare and distribute to all interested persons a guide for 
operation of a recycling or yard waste composting facility to 
protect the environment and public health. 
    Sec. 3.  [SOLID WASTE COMPOSITION STUDY.] 
    The pollution control agency, in cooperation with the 
office of waste management and the metropolitan council, shall 
study and comprehensively analyze the composition of solid waste 
on a statewide and regional basis during each of the four 
seasons of the year.  The study must include and not duplicate 
existing waste composition information previously gathered and 
must provide information on recyclables and noncombustibles in 
the waste, generation of the waste, and other solid waste 
characteristics.  The pollution control agency shall present its 
findings to the legislative commission on waste management by 
November 1, 1992. 
    Sec. 4.  [STUDY; PURCHASE AND USE OF RECYCLED MATERIALS.] 
    The commissioner of administration shall conduct a study 
and evaluation of practices, procedures, and methods to ensure 
that state contracts and purchasing be structured to encourage 
the procurement and use of recycled materials and to meet the 
requirements of section 115A.15, subdivision 7. 
    By July 1, 1991, the commissioner shall develop a plan and 
implementation strategy based on the study and shall present it, 
along with any proposals for legislative action, to the 
legislative commission on waste management. 
    Sec. 5.  [PLASTICS STUDY.] 
    The office of waste management shall conduct a study on 
appropriate waste management of plastic material.  The study 
shall analyze for the different types of plastic, based on resin 
grade: 
    (1) the trends in use and new plastics being developed; 
    (2) the impacts on waste processing technologies; 
    (3) the material composition, including heavy metals and 
additives; 
    (4) opportunities for reduction and recycling; and 
    (5) market development.  
    The study shall also analyze and make recommendations on 
the impact from the use of degradable plastics on reuse and 
recycling opportunities.  The office shall report its findings 
and recommendations to the legislature by January 1, 1991. 
     Sec. 6.  [EFFECTIVE DATE.] 
    This article is effective the day following final enactment.

                               ARTICLE 23 

                       OFFICE OF WASTE MANAGEMENT
    Section 1.  [OFFICE OF WASTE MANAGEMENT; OPERATIONS.] 
    $2,650,000 is appropriated from the general fund to the 
office of waste management created by section 115A.055, for its 
general operations and management.  $500,000 is for fiscal year 
1990 and $2,150,000 is for fiscal year 1991.  The approved 
complement of the office of waste management is increased by 16 
positions in fiscal year 1990 and 28 positions in fiscal year 
1991.  These appropriations must be added to the appropriations 
to the office of waste management in Laws 1989, chapter 335, 
article 1, section 24.  
    Sec. 2.  [EFFECTIVE DATE.] 
    This article is effective the day following final enactment.

                               ARTICLE 24 

                             APPROPRIATIONS 
    Section 1.  [AGENCY APPROPRIATIONS.] 
    Subdivision 1.  [GENERAL APPROPRIATIONS.] $7,687,000 is 
appropriated from the general fund to the agencies and for the 
purposes indicated, to be available for the fiscal year ending 
June 30 in the years indicated.  If the appropriation for either 
year is insufficient, the appropriation for the other year is 
available for it. 
     Subd. 2.  [OFFICE OF WASTE            1990         1991
MANAGEMENT.]
(a) Solid waste reduction programs      $  175,000   $  350,000
(b) Solid waste recycling programs         250,000      500,000
(c) Market development programs            800,000    1,600,000
(d) Litter prevention, control,
and abatement grants                        50,000      100,000
(e) Public education programs              250,000      500,000
(f) Problem materials collection 
and disposal                                75,000      150,000
The approved complement of the office 
of waste management is increased by 12 
positions. 
     Subd. 3.  [POLLUTION CONTROL 
AGENCY.]                                   
(a) Problem materials management           500,000    1,000,000
(b) Recycling programs                     300,000      750,000
The approved complement of the 
pollution control agency is increased 
by seven positions. 
     Subd. 4.  [DEPARTMENT OF 
ADMINISTRATION.]                            
Waste reduction, procurement, and
recycling                                  100,000      200,000
The approved complement of the 
department of administration is 
increased by three positions. 
     Subd. 5.  [DEPARTMENT OF 
REVENUE.]           
Tax administration                          37,000        -0-
    Sec. 2.  [COUNTY BLOCK GRANTS.] 
    Subdivision 1.  [GENERAL FUND APPROPRIATION.] $22,281,000 
is appropriated from the general fund to the office of waste 
management for distribution as provided in article 19, section 
1, subdivisions 1 to 3, except as otherwise provided in this 
section.  $6,731,000 is appropriated for fiscal year 1990 and 
$15,550,000 is appropriated for fiscal year 1991.  Any 
unencumbered balance remaining in the first year does not cancel 
and is available for the second year.  
    Subd. 2.  [DISTRIBUTION.] The distribution for fiscal year 
1990 is subject to a minimum payment to each county of $27,500 
rather than $55,000 under article 19, section 1, subdivision 1.  
The distribution for fiscal year 1991 shall be in two payments 
with the second payment made after November 1, 1990.  
    Subd. 3.  [REDUCTION FOR DEFICIENT REVENUES.] If the amount 
of revenue estimated by the commissioner of revenue and reported 
to the office of waste management under article 19, section 8, 
is less than $29,968,000, 75 percent of the difference between 
the amount estimated and $29,968,000 must be subtracted from the 
appropriation in subdivision 1, and the distribution to be made 
after November 1, 1990, must be reduced by the same amount.  
    Subd. 4.  [ADDITIONAL GRANTS WITH EXCESS REVENUES.] (a) If 
the amount of revenue estimated by the commissioner of revenue 
and reported to the office of waste management under article 19, 
section 8, is greater than $29,968,000, 75 percent of the 
difference between the amount estimated and $29,968,000 is 
appropriated to the office of waste management to be distributed 
to counties after November 1, 1990, as provided in this 
subdivision and is subject to article 19, section 1, 
subdivisions 2 and 3.  No more than $5,000,000 shall be 
appropriated for distribution to counties under this subdivision.
    (b) Notwithstanding article 19, section 1, subdivision 1, 
the appropriation in this subdivision must be distributed to 
counties to provide that in fiscal years 1990 and 1991 each 
county receives at least 50 percent of the revenue generated in 
that county by the tax on solid waste collection and disposal 
services imposed in article 19.  The office of waste management 
shall distribute the appropriation so that the county or 
counties receiving the smallest percentage of grant received to 
revenue generated is increased to the percentage of the county 
or counties with the next smallest percentage of grant received 
to revenue generated until the appropriation is spent or each 
county has received a grant of at least 50 percent of the 
revenue generated in the county.  Any remainder must be 
distributed among all counties in proportion to their 
population.  For purposes of this paragraph, the commissioner of 
revenue must estimate the amount of revenue generated in each 
county.  
    (c) A county that participates in a multicounty district 
that manages solid waste must pass through money to the district 
in proportion to the district's population.  
    Sec. 3.  [EFFECTIVE DATE.] 
    This article is effective the day following final enactment.
    Presented to the governor October 2, 1989 
    Signed by the governor October 3, 1989, 4:05 p.m. 

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