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Minnesota Session Laws - 1993, Regular Session

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

  
    Laws of Minnesota 1993 

                        CHAPTER 375-H.F.No. 427 
           An act relating to the financing and operation of 
          state and local government; revising the operation of 
          the local government trust fund; modifying the 
          administration, computation, collection, and 
          enforcement of taxes; changing tax rates, bases, 
          credits, exemptions, withholding, and payments; 
          modifying property tax provisions relating to 
          procedures, valuation, levies, classifications, 
          exemptions, notices, hearings, and assessors; 
          adjusting formulas of state aids to local governments; 
          providing for the establishment and operation of 
          special service districts; authorizing establishment 
          of an ambulance district; modifying definitions in the 
          property tax refund law and providing a source of 
          funding for the refunds; authorizing and changing 
          requirements for special assessments; modifying 
          provisions governing the establishment and operation 
          of tax increment financing districts; establishing a 
          process by which local governments may obtain waivers 
          of state rules and laws establishing procedures; 
          establishing a board of government innovation and 
          cooperation and authorizing it to provide grants to 
          encourage cooperation and innovation by local 
          governments; authorizing imposition of local taxes; 
          imposing a sports bookmaking tax; changing certain 
          bonding and local government finance provisions; 
          enacting provisions relating to certain cities, 
          counties, and special taxing districts; imposing a tax 
          on contaminated property and providing for use of the 
          proceeds; conforming with changes in the federal 
          income tax law; clarifying an income tax apportionment 
          formula; modifying taconite production tax provisions, 
          and increasing the distribution of the proceeds to the 
          taconite economic development fund; modifying the 
          availability of tax incentives and preferences; 
          providing additional allocations to border city 
          enterprise zones; providing for a budget reserve and 
          cash flow account transfer; revising penalty, 
          notification, and publication provisions of the unfair 
          cigarette sales act; defining terms and changing 
          definitions; establishing advisory councils; requiring 
          reports and studies; classifying data; making 
          technical corrections, clarifications, and 
          administrative changes to various taxes and to tax 
          administration and enforcement; changing and imposing 
          penalties; appropriating money; amending Minnesota 
          Statutes 1992, sections 16A.15, subdivision 6, as 
          amended; 16A.1541, as amended; 16A.712; 17A.03, 
          subdivision 5; 31.51, subdivision 9; 31A.02, 
          subdivisions 4 and 10; 31B.02, subdivision 4; 35.821, 
          subdivision 4; 60A.15, subdivisions 2a, 9a, and by 
          adding a subdivision; 60A.198, subdivision 3; 60A.199, 
          subdivision 4, and by adding a subdivision; 82.19, by 
          adding a subdivision; 82B.035, by adding a 
          subdivision; 84.82, subdivision 10; 86B.401, 
          subdivision 12; 97A.061, subdivisions 2 and 3; 
          103B.635, subdivision 2; 115B.22, subdivision 7; 
          134.001, by adding a subdivision; 134.35, subdivision 
          1; 134.351, subdivision 4; 204D.19, by adding a 
          subdivision; 205.10, by adding a subdivision; 205A.05, 
          subdivision 1; 239.785; 243.23, subdivision 3; 
          256E.06, subdivision 12; 270.06; 270.07, subdivision 
          3; 270.071, subdivision 2; 270.072, subdivision 2; 
          270.41; 270.66, by adding a subdivision; 270.70, 
          subdivision 1; 270A.03, subdivision 7; 270A.10; 
          270B.01, subdivision 8; 270B.12, by adding a 
          subdivision; 270B.14, subdivision 8; 271.06, 
          subdivision 1; 271.09, subdivision 3; 272.01, 
          subdivision 3; 272.02, subdivisions 1 and 4; 272.025, 
          subdivision 1; 272.115, subdivisions 1 and 4; 272.12; 
          273.03, subdivision 2; 273.061, subdivisions 1 and 8; 
          273.11, subdivisions 1, 5, 6a, 13, and by adding 
          subdivisions; 273.112, subdivision 3, and by adding a 
          subdivision; 273.121; 273.124, subdivisions 1, 9, 13, 
          and by adding subdivisions; 273.13, subdivisions 23, 
          24, 25, and 33; 273.1318, subdivision 1; 273.135, 
          subdivision 2; 273.138, subdivision 5; 273.1398, 
          subdivisions 1, 2, 3, 5b, and by adding a subdivision; 
          273.1399, subdivision 1; 273.33, subdivision 2; 
          274.13, subdivision 1; 274.18; 275.065, subdivisions 
          3, 5a, 6, and by adding a subdivision; 275.07, 
          subdivisions 1, 4, and by adding a subdivision; 
          275.28, subdivision 3; 275.295; 276.02; 276.04, 
          subdivision 2; 277.01, subdivision 2; 277.15; 277.17; 
          278.01, subdivision 1; 278.02; 278.03; 278.04; 278.08; 
          278.09; 279.025; 279.37, subdivision 1a; 287.21, 
          subdivision 4; 287.22; 289A.08, subdivisions 3, 10, 
          and 15; 289A.09, subdivision 1, and by adding a 
          subdivision; 289A.11, subdivisions 1 and 3; 289A.12, 
          subdivisions 2, 3, 4, 7, 8, 9, 10, 11, 12, and 14; 
          289A.18, subdivisions 1 and 4; 289A.20, subdivisions 2 
          and 4; 289A.25, subdivisions 1, 2, 5a, 6, 8, 10, and 
          12; 289A.26, subdivisions 1, 4, 6, and 7; 289A.36, 
          subdivisions 3 and 7; 289A.40, by adding a 
          subdivision; 289A.50, subdivision 5; 289A.56, 
          subdivision 3; 289A.60, subdivisions 1, 2, 15, and by 
          adding subdivisions; 289A.63, subdivision 3; 290.01, 
          subdivisions 7, 19, 19a, and 19c; 290.0671, 
          subdivision 1; 290.091, subdivisions 2 and 6; 
          290.0921, subdivision 3; 290.191, subdivision 4; 
          290A.03, subdivisions 3, 7, and 8; 290A.04, 
          subdivisions 1, 2h, and by adding a subdivision; 
          290A.23; 294.03, subdivisions 1, 2, and by adding a 
          subdivision; 296.01, by adding subdivisions; 296.02, 
          subdivision 8; 296.14, subdivisions 1 and 2; 296.18, 
          subdivision 1; 297.03, subdivision 6; 297.07, 
          subdivisions 1 and 4; 297.35, subdivisions 1 and 5; 
          297.43, subdivisions 1, 2, and by adding a 
          subdivision; 297A.01, subdivisions 3, 6, 13, 15, and 
          16; 297A.04; 297A.06; 297A.07, subdivision 1; 297A.11; 
          297A.136; 297A.14, subdivision 1; 297A.25, 
          subdivisions 3, 7, 11, 16, 34, 41, and by adding a 
          subdivision; 297B.01, subdivision 5; 297B.03; 297C.03, 
          subdivision 1; 297C.04; 297C.05, subdivision 2; 
          297C.14, subdivisions 1, 2, and by adding a 
          subdivision; 298.227; 298.27; 298.28, subdivisions 4, 
          7, 9a, and 10; 298.75, subdivisions 4 and 5; 299F.21, 
          subdivision 2; 299F.23, subdivision 2, and by adding a 
          subdivision; 319A.11, subdivision 1; 325D.33, by 
          adding a subdivision; 325D.37, subdivision 3; 347.10; 
          348.04; 349.212, subdivision 4; 349.217, subdivisions 
          1, 2, and by adding a subdivision; 375.192, 
          subdivision 2; 429.061, subdivision 1, and by adding a 
          subdivision; 465.80, subdivisions 1, 2, 4, and 5; 
          465.81, subdivision 2; 465.82, subdivision 1; 465.83; 
          465.87, subdivision 1, and by adding a subdivision; 
          469.012, subdivision 1; 469.040, subdivision 3; 
          469.169, by adding a subdivision; 469.174, 
          subdivisions 19, 20, and by adding a subdivision; 
          469.175, subdivisions 1, 5, and by adding 
          subdivisions; 469.176, subdivisions 1, 4, 4c, 4e, and 
          4g; 469.177, subdivisions 1 and 8; 469.1831, 
          subdivision 4; 473.13, subdivision 1; 473.1623, 
          subdivision 3; 473.167, subdivision 4; 473.249, 
          subdivision 2; 473.446, subdivision 8; 473.711, 
          subdivision 5; 473.843, subdivision 3; 473H.10, 
          subdivision 3; 477A.011, subdivisions 1a, 20, and by 
          adding subdivisions; 477A.013, subdivision 1, and by 
          adding subdivisions; 477A.03, subdivision 1; and 
          477A.14; Laws 1953, chapter 387, section 1; Laws 1969, 
          chapter 561, section 1; Laws 1971, chapters 373, 
          sections 1 and 2; and 455, section 1; and Laws 1985, 
          chapter 302, sections 1, subdivision 3; 2, subdivision 
          1; and 4; Laws 1992, chapter 511, article 2, section 
          61; proposing coding for new law in Minnesota 
          Statutes, chapters 17; 116J; 134; 270; 272; 273; 289A; 
          296; 297; 297A; 325D; 349; 383A; 465; 469; and 473; 
          repealing Minnesota Statutes 1992, sections 60A.13, 
          subdivision 1a; 115B.24, subdivision 10; 272.115, 
          subdivision 1a; 273.124, subdivision 16; 273.1398, 
          subdivision 5; 273.49; 274.19; 274.20; 275.03; 275.07, 
          subdivision 3; 277.011; 289A.08, subdivisions 9 and 
          12; 297A.258; 325D.33, subdivision 7; 348.03; 383C.78; 
          477A.011, subdivisions 3a, 15, 16, 17, 18, 22, 23, 25, 
          and 26; 477A.013, subdivisions 2, 3, and 5; Laws 1953, 
          chapter 387, section 2; Laws 1963, chapter 603, 
          section 1; and Laws 1969, chapter 592, sections 1, 2, 
          and 3. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                               ARTICLE 1 

                       SALES AND USE TAX TECHNICAL
    Section 1.  Minnesota Statutes 1992, section 84.82, 
subdivision 10, is amended to read: 
    Subd. 10.  [PROOF OF SALES TAX PAYMENT.] A person applying 
for initial registration of a snowmobile must provide a 
snowmobile purchaser's certificate, showing a complete 
description of the snowmobile, the seller's name and address, 
the full purchase price of the snowmobile, and the trade-in 
allowance, if any.  The certificate must include information 
showing either (1) that the sales and use tax under chapter 297A 
was paid or (2) the purchase was exempt from tax under chapter 
297A.  The commissioner of public safety, in consultation with 
the commissioner and the commissioner of revenue, shall 
prescribe the form of the certificate. 
    The certificate is not required if the applicant provides a 
receipt, invoice, or other document that shows the snowmobile 
was purchased from a retailer maintaining a place of business in 
this state as defined in section 297A.21, subdivision 1.  
    Sec. 2.  Minnesota Statutes 1992, section 86B.401, 
subdivision 12, is amended to read: 
    Subd. 12.  [PROOF OF SALES TAX PAYMENT.] A person applying 
for initial licensing of a watercraft must provide a watercraft 
purchaser's certificate, showing a complete description of the 
watercraft, the seller's name and address, the full purchase 
price of the watercraft, and the trade-in allowance, if any.  
The certificate must include information showing either (1) that 
the sales and use tax under chapter 297A was paid or (2) the 
purchase was exempt from tax under chapter 297A.  The 
commissioner of public safety, in consultation with the 
commissioner and the commissioner of revenue, shall prescribe 
the form of the certificate. 
    The certificate is not required if the applicant provides a 
receipt, invoice, or other document that shows the watercraft 
was purchased from a retailer maintaining a place of business in 
this state as defined in section 297A.21, subdivision 1. 
    Sec. 3.  Minnesota Statutes 1992, section 289A.20, 
subdivision 4, is amended to read: 
    Subd. 4.  [SALES AND USE TAX.] (a) The taxes imposed by 
chapter 297A are due and payable to the commissioner monthly on 
or before the 20th day of the month following the month in which 
the taxable event occurred or following another reporting period 
as the commissioner prescribes, except that use taxes due on an 
annual use tax return as provided under section 289A.11, 
subdivision 1, are payable by April 15 following the close of 
the calendar year. 
     (b) A vendor having a liability of $1,500 or more in May of 
a year must remit the June liability in the following manner: 
     (1) On or before June 20 of the year, the vendor must remit 
the actual May liability and one-half of the estimated June 
liability to the commissioner.  
     (2) On or before August 20 of the year, the vendor must pay 
any additional amount of tax not remitted in June. 
     (3) If the vendor is required to remit by means of funds 
transfer as provided in paragraph (d), the vendor may remit the 
May liability as provided for in paragraph (e), but must remit 
one-half of the estimated June liability on or before June 14.  
The remaining amount of the June liability is due on August 14. 
     (c) When a retailer located outside of a city that imposes 
a local sales and use tax collects use tax to be remitted to 
that city, the retailer is not required to remit the tax until 
the amount collected reaches $10. 
     (d) A vendor having a liability of $240,000 or more during 
a fiscal year ending June 30 must remit all liabilities in the 
subsequent calendar year by means of a funds transfer as defined 
in section 336.4A-104, paragraph (a).  The funds transfer 
payment date, as defined in section 336.4A-401, must be on or 
before the date the tax is due the 14th day of the month 
following the month in which the taxable event occurred, except 
for the one-half of the estimated June liability, which is due 
with the May liability on June 14.  The remaining amount of the 
June liability is due on August 14.  If the date the tax is due 
is not a funds transfer business day, as defined in section 
336.4A-105, paragraph (a), clause (4), the payment date must be 
on or before the funds transfer business day next following the 
date the tax is due. 
    (e) If the vendor required to remit by electronic funds 
transfer as provided in paragraph (d) is unable due to 
reasonable cause to determine the actual sales and use tax due 
on or before the due date for payment, the vendor may remit an 
estimate of the tax owed using one of the following options: 
    (1) 100 percent of the tax reported on the previous month's 
sales and use tax return; 
    (2) 100 percent of the tax reported on the sales and use 
tax return for the same month in the previous calendar year; or 
    (3) 95 percent of the actual tax due. 
    Any additional amount of tax that is not remitted on or 
before the due date for payment, must be remitted with the 
return.  A vendor must notify the commissioner of the option 
that will be used to estimate the tax due, and must obtain 
approval from the commissioner to switch to another option.  If 
a vendor fails to remit the actual liability or does not remit 
using one of the estimate options by the due date for payment, 
the vendor must remit actual liability as provided in paragraph 
(d) in all subsequent periods.  This paragraph does not apply to 
the June sales and use liability. 
    Sec. 4.  Minnesota Statutes 1992, 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.  "Sale" does not 
include: 
     (1) meals or drinks served to patients, inmates, or persons 
residing at hospitals, sanitariums, nursing homes, senior 
citizens homes, and correctional, detention, and detoxification 
facilities; 
     (2) 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; or 
     (3) meals and lunches served at public and private schools, 
universities, or colleges.  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, except a 
world championship football game sponsored by the national 
football league, and the privilege of having access to and the 
use of amusement devices, tanning facilities, reducing salons, 
steam baths, turkish baths, 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.  Telephone service 
includes paging services and private communication service, as 
defined in United States Code, title 26, section 4252(d), except 
for private communication service purchased by an agent acting 
on behalf of the state lottery.  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.  
The sale of natural gas to be used as a fuel in vehicles 
propelled by natural gas shall not be considered a sale for the 
purposes of this section; 
    (g) The furnishing for a consideration of cable television 
services, including charges for basic monthly service, charges 
for monthly premium service, and any other charges for any other 
pay-per-view, monthly, or similar television services; 
    (h) Notwithstanding subdivision 4, and section 
297A.25, subdivision subdivisions 9 and 12, the sales of horses 
racehorses including claiming sales and fees paid for breeding a 
stallion to a mare.  This clause applies to sales and fees with 
respect to racehorses or horses previously used for racing shall 
be considered a "sale" and a "purchase."  "Racehorse" means a 
horse that is or is intended to be used for racing and whose 
birth has been recorded by the Jockey Club or the United States 
Trotting Association or the American Quarter Horse Association.  
"Sale" does not include fees paid for breeding horses that are 
not racehorses; 
    (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; 
     (vi) lawn care, fertilizing, mowing, spraying and sprigging 
services; garden planting and maintenance; arborist services; 
tree, bush, and shrub pruning, bracing, spraying, and surgery; 
and tree trimming for public utility lines.  Services performed 
under a construction contract for the installation of shrubbery, 
plants, sod, trees, bushes, and similar items are not taxable; 
     (vii) solid waste collection and disposal services as 
described in section 297A.45; 
     (viii) massages, except when provided by a licensed health 
care facility or professional or upon written referral from a 
licensed health care facility or professional for treatment of 
illness, injury, or disease; and 
     (ix) the furnishing for consideration of lodging, board and 
care services for animals in kennels and other similar 
arrangements, but excluding veterinary and horse boarding 
services. 
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. 5.  Minnesota Statutes 1992, section 297B.01, 
subdivision 5, is amended to read: 
    Subd. 5.  [MOTOR VEHICLE.] "Motor vehicle" means any 
self-propelled vehicle not operated exclusively upon railroad 
tracks and any vehicle propelled or drawn by a self-propelled 
vehicle for which registration is required by chapter 168.  
Motor vehicle includes vehicles known as trackless trolleys 
which are propelled by electric power obtained from overhead 
trolley wires but not operated upon rails and motor vehicles 
that are purchased on Indian reservations where the tribal 
council has entered into a motor vehicle excise tax refund 
agreement with the state of Minnesota.  Motor vehicle does not 
include snowmobiles, travel trailers, or manufactured homes.  
For purposes of taxation only under this section, "motor 
vehicle" includes a park trailer as defined in section 168.011, 
subdivision 8, paragraph (b). 
    Sec. 6.  Minnesota Statutes 1992, section 297B.03, is 
amended to read: 
     297B.03 [EXEMPTIONS.] 
     There is specifically exempted from the provisions of this 
chapter and from computation of the amount of tax imposed by it 
the following:  
     (1) Purchase or use, including use under a lease purchase 
agreement or installment sales contract made pursuant to section 
465.71, of any motor vehicle by the United States and its 
agencies and instrumentalities and by any person described in 
and subject to the conditions provided in section 297A.25, 
subdivision 18.  
     (2) Purchase or use of any motor vehicle by any person who 
was a resident of another state at the time of the purchase and 
who subsequently becomes a resident of Minnesota, provided the 
purchase occurred more than 60 days prior to the date such 
person began residing in the state of Minnesota.  
     (3) Purchase or use of any motor vehicle by any person 
making a valid election to be taxed under the provisions of 
section 297A.211.  
     (4) Purchase or use of any motor vehicle previously 
registered in the state of Minnesota by any corporation or 
partnership when such transfer constitutes a transfer within the 
meaning of section 351 or 721 of the Internal Revenue Code of 
1986, as amended through December 31, 1988.  
    (5) Purchase or use of any vehicle owned by a resident of 
another state and leased to a Minnesota based private or for 
hire carrier for regular use in the transportation of persons or 
property in interstate commerce provided the vehicle is titled 
in the state of the owner or secured party, and that state does 
not impose a sales or motor vehicle excise tax on motor vehicles 
used in interstate commerce.  
    (6) Purchase or use of a motor vehicle by a private 
nonprofit or public educational institution for use as an 
instructional aid in automotive training programs operated by 
the institution.  "Automotive training programs" includes motor 
vehicle body and mechanical repair courses but does not include 
driver education programs.  
    (7) Purchase of a motor vehicle for use as an ambulance by 
an ambulance service licensed under section 144.802. 
    Sec. 7.  [REPEALER.] 
    Minnesota Statutes 1992, section 297A.258, is repealed.  
    Sec. 8.  [EFFECTIVE DATE.] 
    Sections 1 and 2 are effective for purchases made on or 
after July 1, 1993.  
    Sections 4, 5, and 6 are effective July 1, 1993.  
    Sections 3 and 7 are effective the day following final 
enactment.  

                               ARTICLE 2 

                         MISCELLANEOUS TECHNICAL
    Section 1.  Minnesota Statutes 1992, section 275.28, 
subdivision 3, is amended to read: 
    Subd. 3.  [DESIGNATION OF YEAR OF TAX.] Beginning with 
property taxes payable in 1980, Taxes on real and personal 
property shall be related to and designated on the property tax 
statement by the year in which they become payable but the liens 
shall relate back to the assessment date preceding except as 
otherwise provided.  For cash basis taxpayers, taxes on real and 
personal property shall relate to the year in which they become 
payable.  For accrual basis taxpayers, taxes on real and 
personal property shall relate to the year in which the lien 
arose.  
    Sec. 2.  [289A.07] [ELECTRONICALLY FILED RETURNS; 
SIGNATURES.] 
    For purposes of this chapter, the name of the taxpayer, the 
name of the taxpayer's authorized agent, or the taxpayer's 
identification number, will constitute a signature when 
transmitted as part of the return information on returns filed 
by electronic means by the taxpayer or at the taxpayer's 
direction.  "Electronic means" includes, but is not limited to, 
the use of a touch-tone telephone to transmit return information 
in a manner prescribed by the commissioner.  
    Sec. 3.  Minnesota Statutes 1992, section 289A.08, 
subdivision 3, is amended to read: 
    Subd. 3.  [CORPORATIONS.] A corporation that is subject to 
the state's jurisdiction to tax under section 290.014, 
subdivision 5, must file a return, except that a foreign 
operating corporation as defined in section 290.01, subdivision 
6b, is not required to file a return.  The return must be signed 
by a person designated by the corporation.  The commissioner 
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.  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 change or rescind 
the election by filing the form required by the commissioner.  
    Sec. 4.  Minnesota Statutes 1992, section 289A.08, 
subdivision 10, is amended to read: 
    Subd. 10.  [FILING OF PROPER RETURN.] The return must 
specifically set forth the items of gross income, deductions, 
credits against the tax, and any other data necessary for 
computing the amount of any item required for determining the 
amount of the net income tax liability.  The return must 
be filed in the form and manner the commissioner prescribes.  
The filing of a return required under this section is considered 
an assessment.  The return must be signed by the taxpayer in the 
case of an individual's return, by both spouses in the case of a 
joint return, by someone designated by the corporation, 
partnership, entertainment entity, or mining company in the case 
of a corporate, composite income, entertainment, or occupation 
tax return, and by the trustee, receiver, or other fiduciary in 
the case of a fiduciary's return.  
    Sec. 5.  Minnesota Statutes 1992, section 289A.08, 
subdivision 15, is amended to read: 
    Subd. 15.  [MINING COMPANIES.] A mining company must file 
an annual return signed by a person designated by the mining 
company. 
    Sec. 6.  Minnesota Statutes 1992, section 289A.09, 
subdivision 1, is amended to read: 
    Subdivision 1.  [RETURNS.] (a) An employer who is required 
to deduct and withhold tax under section 290.92, subdivision 2a 
or 3, and a person required to deduct and withhold tax under 
section 290.923, subdivision 2, must file a return with the 
commissioner for each quarterly period unless otherwise 
prescribed by the commissioner.  
    (b) A person or corporation required to make deposits under 
section 290.9201, subdivision 8, must file an entertainer 
withholding tax return with the commissioner. 
    (c) A person required to withhold an amount under section 
290.9705, subdivision 1, must file a return. 
    (d) A partnership required to deduct and withhold tax under 
section 290.92, subdivision 4b, must file a return. 
    (e) An S corporation required to deduct and withhold tax 
under section 290.92, subdivision 4c, must also file a return.  
    (f) Returns must be filed in the form and manner, and 
contain the information prescribed by the commissioner.  Every 
return for taxes withheld must contain a written declaration 
that it is correct and complete, and a confession of judgment 
for the amount of tax shown due, to the extent not timely 
paid be signed by the employer, entertainment entity, contract 
payor, partnership, or S corporation, or a designee. 
    Sec. 7.  Minnesota Statutes 1992, section 289A.11, 
subdivision 1, is amended to read: 
    Subdivision 1.  [RETURN REQUIRED.] Except as provided in 
section 289A.18, subdivision 4, for the month in which taxes 
imposed by sections 297A.01 to 297A.44 are payable, or for which 
a return is due, a return for the preceding reporting period 
must be filed with the commissioner in the form and manner the 
commissioner prescribes.  The return must be verified by a 
written declaration that it is made under the criminal penalties 
for making a false return, and in addition must contain a 
confession of judgment for the amount of the tax shown due to 
the extent not timely paid.  A person making sales at retail at 
two or more places of business may file a consolidated return 
subject to rules prescribed by the commissioner.  
    Notwithstanding this subdivision, a person who is not 
required to hold a sales tax permit under chapter 297A and who 
makes annual purchases of less than $5,000 that are subject to 
the use tax imposed by section 297A.14, may file an annual use 
tax return on a form prescribed by the commissioner.  If a 
person who qualifies for an annual use tax reporting period is 
required to obtain a sales tax permit or makes use tax purchases 
in excess of $5,000 during the calendar year, the reporting 
period must be considered ended at the end of the month in which 
the permit is applied for or the purchase in excess of $5,000 is 
made and a return must be filed for the preceding reporting 
period. 
    Sec. 8.  Minnesota Statutes 1992, section 289A.11, 
subdivision 3, is amended to read: 
    Subd. 3.  [WHO MUST FILE RETURN.] For purposes of the sales 
tax, a return must be filed by a retailer who is required to 
hold a permit.  For the purposes of the use tax, a return must 
be filed by a retailer required to collect the tax and by a 
person buying any items, the storage, use or other consumption 
of which is subject to the use tax, who has not paid the use tax 
to a retailer required to collect the tax.  The returns must be 
signed by the person filing the return or by the person's agent 
duly authorized in writing.  The signature requirement can be 
waived by agreement, in writing, between the commissioner and 
the person required to file the returns for a period not to 
exceed one year from the date of the agreement.  The agreement 
must contain an admission of liability by the taxpayer for the 
taxes reported on all returns filed by the taxpayer without a 
signature during the period of the waiver, to the extent such 
taxes are not timely paid. 
    Sec. 9.  Minnesota Statutes 1992, section 289A.12, 
subdivision 2, is amended to read: 
    Subd. 2.  [RETURNS REQUIRED OF BANKS; COMMON TRUST FUNDS.] 
The commissioner may by notice and demand require a bank 
maintaining a common trust fund must make to file with the 
commissioner a return for a taxable year, stating specifically 
with respect to the fund, the items of gross income and 
deductions provided by section 290.281, subdivision 1.  The 
return must include the names and addresses of the participants 
entitled to share the net income if distributed and the amount 
of the proportionate share of each participant.  
    Sec. 10.  Minnesota Statutes 1992, section 289A.12, 
subdivision 3, is amended to read: 
    Subd. 3.  [RETURNS OR REPORTS BY PARTNERSHIPS, FIDUCIARIES, 
AND S CORPORATIONS.] (a) Partnerships must make file a 
return with the commissioner for each taxable year.  The return 
must conform to the requirements of section 290.31, and must 
include the names and addresses of the partners entitled to a 
distributive share in their taxable net income, gain, loss, or 
credit, and the amount of the distributive share to which each 
is entitled.  The return must contain a written declaration that 
it is correct and complete.  A partnership required to file a 
return for a partnership taxable year must furnish a copy of the 
information required to be shown on the return to a person who 
is a partner at any time during the taxable year, on or before 
the day on which the return for the taxable year was filed. 
    (b) The fiduciary of an estate or trust making the return 
required to be filed under section 289A.08, subdivision 2, for a 
taxable year must give a beneficiary who receives a distribution 
from the estate or trust with respect to the taxable year or to 
whom any item with respect to the taxable year is allocated, a 
statement containing the information required to be shown on the 
return, on or before the date on which the return was filed. 
    (c) An S corporation must make file a return with the 
commissioner for a taxable year during which an election under 
section 290.9725 is in effect, stating specifically the names 
and addresses of the persons owning stock in the corporation at 
any time during the taxable year, the number of shares of stock 
owned by a shareholder at all times during the taxable year, the 
shareholder's pro rata share of each item of the corporation for 
the taxable year, and other information the commissioner 
requires.  An S corporation required to file a return under this 
paragraph for any taxable year must furnish a copy of the 
information shown on the return to the person who is a 
shareholder at any time during the taxable year, on or before 
the day on which the return for the taxable year was filed. 
    (d) The partnership or S corporation return must be signed 
by someone designated by the partnership or S corporation.  
    Sec. 11.  Minnesota Statutes 1992, section 289A.12, 
subdivision 4, is amended to read: 
    Subd. 4.  [RETURNS BY PERSONS, CORPORATIONS, COOPERATIVES, 
GOVERNMENTAL ENTITIES, OR SCHOOL DISTRICTS.] The commissioner 
may by notice and demand require to the extent required by 
section 6041 of the Internal Revenue Code of 1986, as amended 
through December 31, 1991, a person, corporation, or 
cooperative, the state of Minnesota and its political 
subdivisions, and a city, county, and school district in 
Minnesota, making payments in the regular course of a trade or 
business during the taxable year to any person or corporation of 
$600 or more on account of rents or royalties, or of $10 or more 
on account of interest, or $10 or more on account of dividends 
or patronage dividends, or $600 or more on account of either 
wages, salaries, commissions, fees, prizes, awards, pensions, 
annuities, or any other fixed or determinable gains, profits or 
income, not otherwise reportable under section 289A.09, 
subdivision 2, or on account of earnings of $10 or more 
distributed to its members by savings, building and loan 
associations or credit unions chartered under the laws of this 
state or the United States, (1) must make to file with the 
commissioner a return (except in cases where a valid agreement 
to participate in the combined federal and state information 
reporting system has been entered into, and the return is filed 
only with the commissioner of internal revenue under the 
applicable filing and informational reporting requirements of 
the Internal Revenue Code of 1986, as amended through December 
31, 1991) with respect to the payments in excess of the amounts 
named, giving the names and addresses of the persons to whom the 
payments were made, the amounts paid to each, and (2) must to 
make a return with respect to the total number of payments and 
total amount of payments, for each category of income named, 
which were in excess of the amounts named.  This subdivision 
does not apply to the payment of interest or dividends to a 
person who was a nonresident of Minnesota for the entire year.  
    A person, corporation, or cooperative required to file 
returns under this subdivision must file the returns on magnetic 
media if magnetic media was used to satisfy the federal 
reporting requirement under section 6011(e) of the Internal 
Revenue Code of 1986, as amended through December 31, 1991, 
unless the person establishes to the satisfaction of the 
commissioner that compliance with this requirement would be an 
undue hardship.  
    Sec. 12.  Minnesota Statutes 1992, section 289A.12, 
subdivision 7, is amended to read: 
    Subd. 7.  [RETURNS FOR REAL PROPERTY HOLDINGS OF ALIENS.] 
The commissioner may by notice and demand require a person or 
corporation required to make a return under section 6039C 
(relating to information return on a foreign person holding a 
United States real property interest) of the Internal Revenue 
Code of 1986, as amended through December 31, 1991, must to make 
a similar return for the commissioner for foreign persons 
holding a Minnesota real property interest.  
    Sec. 13.  Minnesota Statutes 1992, section 289A.12, 
subdivision 8, is amended to read: 
    Subd. 8.  [RETURNS FOR UNEMPLOYMENT COMPENSATION.] The 
commissioner may by notice and demand require a person who makes 
payments of unemployment compensation totaling $10 or more to 
any individual during a calendar year and who is required to 
make and file a return under section 6050B of the Internal 
Revenue Code of 1986, as amended through December 31, 1991, must 
to file a copy of the return with the commissioner. 
    Sec. 14.  Minnesota Statutes 1992, section 289A.12, 
subdivision 9, is amended to read: 
    Subd. 9.  [RETURNS FOR PAYMENTS OF REMUNERATION FOR 
SERVICES AND DIRECT SALES.] The commissioner may by notice and 
demand require a person who is required to make a return under 
section 6041A (relating to information returns regarding 
payments of remuneration for services and direct sales) of the 
Internal Revenue Code of 1986, as amended through December 31, 
1991, must to file a copy of the return containing the 
information required under that section with the commissioner.  
The provisions of that section govern the requirements of a 
statement that must be given to persons with respect to whom 
information is required to be given.  
    Sec. 15.  Minnesota Statutes 1992, section 289A.12, 
subdivision 10, is amended to read: 
    Subd. 10.  [RETURNS RELATING TO SOCIAL SECURITY BENEFITS.] 
The commissioner may by notice and demand require the 
appropriate federal official who is required to make a return 
under section 6050F (relating to social security benefits) of 
the Internal Revenue Code of 1986, as amended through December 
31, 1991, shall to file a copy of the return containing the 
information required under that section with the commissioner.  
    Sec. 16.  Minnesota Statutes 1992, section 289A.12, 
subdivision 11, is amended to read: 
    Subd. 11.  [RETURNS BY TRUSTEES.] The commissioner may by 
notice and demand require the trustee of an individual 
retirement account and the issuer of an endowment contract or an 
individual retirement annuity who is required to make a report 
under section 408(i) of the Internal Revenue Code of 1986, as 
amended through December 31, 1991, must to file with the 
commissioner a copy of that report containing the information 
required under that subsection.  The provisions of that 
subsection govern when the reports are to be filed and the 
requirements of a statement that must be given to persons with 
respect to whom information must be given.  
    Sec. 17.  Minnesota Statutes 1992, section 289A.12, 
subdivision 12, is amended to read: 
    Subd. 12.  [STATEMENTS TO PAYEES.] A person making who can 
be required to file a return with the commissioner under 
subdivisions 4 to 10 must furnish to a person whose name is set 
forth in the return a written statement showing the name and 
address of the person making the return, and the aggregate 
amount of payments to the person shown on the return.  
    This written statement must be given to the person on or 
before January 31 of the year following the calendar year for 
which the return was made.  A duplicate of this written 
statement, along with a reconciliation of all the statements for 
the calendar year in the form the commissioner prescribes, must 
be furnished to the commissioner on or before February 28 of the 
year following the calendar year for which the return was made.  
    Sec. 18.  Minnesota Statutes 1992, section 289A.12, 
subdivision 14, is amended to read: 
    Subd. 14.  [REGULATED INVESTMENT COMPANIES; REPORTING 
EXEMPT-INTEREST DIVIDENDS.] (a)  a regulated investment company 
paying $10 or more in exempt-interest dividends to an individual 
who is a resident of Minnesota must make a return indicating the 
amount of the exempt-interest dividends, the name, address, and 
social security number of the recipient, and any other 
information that the commissioner specifies.  A copy of The 
return must be provided to the shareholder no later than 30 days 
after the close of the taxable year.  The copy of the return 
provided to the shareholder must include a clear statement, in 
the form prescribed by the commissioner, that the 
exempt-interest dividends must be included in the computation of 
Minnesota taxable income.  The commissioner may by notice and 
demand require the regulated investment company to file a copy 
of the return with the commissioner. 
    (b) This subdivision applies to regulated investment 
companies required to register under chapter 80A. 
    (c) For purposes of this subdivision, the following 
definitions apply. 
    (1) "Exempt-interest dividends" mean exempt-interest 
dividends as defined in section 852(b)(5) of the Internal 
Revenue Code of 1986, as amended through December 31, 1991, but 
does not include the portion of exempt-interest dividends that 
are not required to be added to federal taxable income under 
section 290.01, subdivision 19a, clause (1)(ii). 
    (2) "Regulated investment company" means regulated 
investment company as defined in section 851(a) of the Internal 
Revenue Code of 1986, as amended through December 31, 1991, or a 
fund of the regulated investment company as defined in section 
851(h) of the Internal Revenue Code of 1986, as amended through 
December 31, 1991. 
    Sec. 19.  [289A.13] [RETURNS; WHERE FILED.] 
    Returns required to be filed under this chapter must be 
filed at the commissioner's office in St. Paul, or such other 
place as the commissioner may designate.  
    Sec. 20.  Minnesota Statutes 1992, section 289A.18, 
subdivision 1, is amended to read: 
    Subdivision 1.  [INDIVIDUAL INCOME, FIDUCIARY INCOME, 
CORPORATE FRANCHISE, AND ENTERTAINMENT TAXES; PARTNERSHIP AND S 
CORPORATION RETURNS; INFORMATION RETURNS; MINING COMPANY 
RETURNS.] The returns required to be made under sections 289A.08 
and 289A.12 must be filed at the following times: 
    (1) returns made on the basis of the calendar year must be 
filed on April 15 following the close of the calendar year, 
except that returns of corporations must be filed on March 15 
following the close of the calendar year; 
    (2) returns made on the basis of the fiscal year must be 
filed on the 15th day of the fourth month following the close of 
the fiscal year, except that returns of corporations must be 
filed on the 15th day of the third month following the close of 
the fiscal year; 
    (3) returns for a fractional part of a year must be filed 
on the 15th day of the fourth month following the end of the 
month in which falls the last day of the period for which the 
return is made, except that the returns of corporations must be 
filed on the 15th day of the third month following the end of 
the month in which falls the last day of the period for which 
the return is made; 
    (4) in the case of a final return of a decedent for a 
fractional part of a year, the return must be filed on the 15th 
day of the fourth month following the close of the 12-month 
period that began with the first day of that fractional part of 
a year; 
    (5) in the case of the return of a cooperative association, 
returns must be filed on or before the 15th day of the ninth 
month following the close of the taxable year; 
    (6) if a corporation has been divested from a unitary group 
and files a return for a fractional part of a year in which it 
was a member of a unitary business that files a combined report 
under section 290.34, subdivision 2, the divested corporation's 
return must be filed on the 15th day of the third month 
following the close of the common accounting period that 
includes the fractional year; 
    (7) returns of entertainment entities must be filed on 
April 15 following the close of the calendar year; 
    (8) returns required to be filed under section 289A.08, 
subdivision 4, must be filed on the 15th day of the fifth month 
following the close of the taxable year; and 
    (9) returns of mining companies must be filed on May 1 
following the close of the calendar year; and 
    (10) returns required to be filed with the commissioner 
under section 289A.12, subdivision 2, 4 to 10, or 14, must be 
filed within 30 days after being demanded by the commissioner. 
    Sec. 21.  Minnesota Statutes 1992, section 289A.18, 
subdivision 4, is amended to read: 
    Subd. 4.  [SALES AND USE TAX RETURNS.] (a) Sales and use 
tax returns must be filed on or before the 20th day of the month 
following the close of the preceding reporting period, except 
that annual use tax returns provided for under section 289A.11, 
subdivision 1, must be filed by April 15 following the close of 
the calendar year, and annual sales tax returns must be filed by 
February 5 following the close of the calendar year.  In 
addition, on or before June 20 of a year, a retailer who has a 
May liability of $1,500 or more must file a return with the 
commissioner for one-half of the estimated June liability, in 
addition to filing a return for the May liability.  On or before 
August 20 of a year, the retailer must file a return showing the 
actual June liability.  
    (b) Returns filed by retailers required to remit 
liabilities by means of funds transfer under section 289A.20, 
subdivision 4, paragraph (d), are due on or before the 25th day 
of the month following the close of the preceding reporting 
period.  Returns filed under the second sentence of paragraph 
(a) by a retailer required to remit by means of funds transfer 
are due on June 25, and on or before August 25 of a year, the 
retailer must file a return showing the actual June liability. 
    Sec. 22.  Minnesota Statutes 1992, section 289A.25, 
subdivision 1, is amended to read: 
    Subdivision 1.  [REQUIREMENTS TO PAY.] An individual, 
trust, or partnership must, when prescribed in subdivision 3, 
paragraph (b), make payments of estimated tax.  The term 
"estimated tax" means the amount the individual taxpayer 
estimates is the sum of the taxes imposed by chapter 290 for the 
taxable year.  If the individual is an infant or incompetent 
person, the payments must be made by the individual's guardian.  
If joint payments on estimated tax are made but a joint return 
is not made for the taxable year, the estimated tax for that 
year may be treated as the estimated tax of either the husband 
or the wife or may be divided between them. 
    Notwithstanding the provisions of this section, no payments 
of estimated tax are required if the estimated tax, as defined 
in this subdivision, less the credits allowed against the tax, 
is less than $500.  
    Sec. 23.  Minnesota Statutes 1992, section 289A.25, 
subdivision 2, is amended to read: 
    Subd. 2.  [ADDITIONS TO TAX FOR UNDERPAYMENT.] (a) In the 
case of any underpayment of estimated tax by an individual a 
taxpayer, except as provided in subdivision 6 or 7, there must 
be added to and become a part of the taxes imposed by chapter 
290, for the taxable year an amount determined at the rate 
specified in section 270.75 upon the amount of the underpayment 
for the period of the underpayment. 
    (b) For purposes of paragraph (a), the amount of 
underpayment shall be the excess of 
    (1) the amount of the installment required to be paid, over 
    (2) the amount, if any, of the installment paid on or 
before the last day prescribed for the payment. 
    Sec. 24.  Minnesota Statutes 1992, section 289A.25, 
subdivision 5a, is amended to read: 
    Subd. 5a.  [MODIFICATION TO INDIVIDUAL OR TRUST ESTIMATED 
TAX REQUIREMENTS.] (a) If an individual or trust meets the 
requirements of section 6654(d)(1)(C) to (F), of the Internal 
Revenue Code, the amount of the required installments under 
subdivision 5 must be computed as provided in this subdivision.  
In determining the amount of the required installment, the 
following requirement is substituted for subdivision 5, clauses 
(2) and (3):  "(2) the greater of (i) 100 percent of the tax 
shown on the return of the individual for the preceding taxable 
year, or (ii) 90 percent of the tax shown on the return for the 
current year, determined by taking into account the adjustments 
under section 6654(d)(1)(D) of the Internal Revenue Code." 
    (b) Paragraph (a) does not apply for purposes of 
determining the amount of the first required installment in any 
taxable year under subdivision 3, paragraph (b).  A reduction in 
an installment under this paragraph must be recaptured by 
increasing the amount of the first succeeding required 
installment by the amount of the reduction, unless the 
individual meets the requirements of paragraph (c). 
    (c) This subdivision does not apply to any required 
installment if the individual qualifies for an annualization 
exception as computed under section 6654(d)(1)(C)(iv) of the 
Internal Revenue Code.  A reduction in an installment under this 
paragraph must be recaptured by increasing the amount of the 
first succeeding required installment (with respect to which the 
requirements of section 6654(d)(1)(C)(iv) are not met) by the 
amount of the reduction. 
    (d) All references to the Internal Revenue Code in this 
section are to the Internal Revenue Code of 1986, as amended 
through December 31, 1991.  For purposes of meeting the 
requirements of or making adjustments under section 6654 of the 
Internal Revenue Code in this subdivision: 
    (1) (i) for an individual who is not a Minnesota resident 
for the entire year, the terms "adjusted gross income" and 
"modified adjusted gross income" mean the Minnesota share of 
that income apportioned to Minnesota under section 290.06, 
subdivision 2c, paragraph (e); and, or 
    (ii) for a trust the terms "adjusted gross income" and 
"modified adjusted gross income" mean the income assigned to 
Minnesota under section 290.17; and 
    (2) "tax" means the sum of the taxes imposed by chapter 290 
for a taxable year. 
    (e) This subdivision does not apply to individuals who 
compute and pay estimated taxes under subdivision 10. 
    (f) This subdivision does not apply to any taxable year 
beginning after December 31, 1996. 
    (g) In the case of a trust to which this subdivision 
applies, section 289A.25, subdivision 5, clause (3), item (i), 
shall be applied by substituting "ending before the date one 
month before the due date for the installment" for "ending 
before the month in which the installment is required to be 
paid."  
    Sec. 25.  Minnesota Statutes 1992, section 289A.25, 
subdivision 6, is amended to read: 
    Subd. 6.  [EXCEPTION TO ADDITION TO TAX.] No addition to 
the tax shall be imposed under this section for any taxable year 
if:  
    (1) the individual taxpayer did not have liability for tax 
for the preceding taxable year, 
    (2) the preceding taxable year was a taxable year of 12 
months, and 
    (3) the individual or trust was a resident of Minnesota 
throughout the preceding taxable year.  
    Sec. 26.  Minnesota Statutes 1992, section 289A.25, 
subdivision 8, is amended to read: 
    Subd. 8.  [APPLICATION OF SECTION; TAX WITHHELD ON WAGES.] 
For purposes of this section, the estimated tax must be computed 
without reduction for the amount that the individual taxpayer 
estimates as the individual's taxpayer's credit under section 
290.92, subdivision 12 (relating to tax withheld at source on 
wages), and any other refundable credits allowed against income 
tax liability, and the amount of those credits for the taxable 
year is considered a payment of estimated tax, and an equal part 
of those amounts is considered paid on the installment date, 
determined under subdivision 3, paragraph (b), for that taxable 
year, unless the taxpayer establishes the dates on which the 
amounts were actually withheld, in which case the amounts so 
withheld are considered payments of estimated tax on the dates 
on which the amounts were actually withheld. 
    Sec. 27.  Minnesota Statutes 1992, section 289A.25, 
subdivision 10, is amended to read: 
    Subd. 10.  [SPECIAL RULE FOR FARMERS AND FISHERMEN.] For 
purposes of this section, if an individual is a farmer or 
fisherman as defined in section 6654(f)(2) 6654(i)(2) of the 
Internal Revenue Code of 1986, as amended through December 
31, 1991 1992, for a taxable year, only one installment is 
required for the taxable year, the due date of which is January 
15 of the following taxable year, the amount of which is equal 
to the required annual payment determined under subdivision 5 by 
substituting "66-2/3 percent" for "90 percent," and subdivision 
9 shall be applied by substituting "March 1" for "January 31," 
and by treating the required installment described as the fourth 
required installment. 
    Sec. 28.  Minnesota Statutes 1992, section 289A.25, 
subdivision 12, is amended to read: 
    Subd. 12.  [TRUSTS AND ESTATES.] The provisions of this 
section do not apply to an estate or trust. 
    Sec. 29.  Minnesota Statutes 1992, section 289A.26, 
subdivision 1, is amended to read: 
    Subdivision 1.  [MINIMUM LIABILITY.] A corporation, 
partnership, or trust subject to taxation under chapter 290 
(excluding section 290.92) or an entity subject to taxation 
under section 290.05, subdivision 3, must make payment of 
estimated tax for the taxable year if its tax liability so 
computed can reasonably be expected to exceed $500, or in 
accordance with rules prescribed by the commissioner for an 
affiliated group of corporations electing to file one return as 
permitted under section 289A.08, subdivision 3. 
    Sec. 30.  Minnesota Statutes 1992, section 289A.26, 
subdivision 4, is amended to read: 
    Subd. 4.  [UNDERPAYMENT OF ESTIMATED TAX.] If there is an 
underpayment of estimated tax by a corporation, partnership, or 
trust, there shall be added to the tax for the taxable year an 
amount determined at the rate in section 270.75 on the amount of 
the underpayment, determined under subdivision 5, for the period 
of the underpayment determined under subdivision 6.  This 
subdivision does not apply in the first taxable year that a 
corporation is subject to the tax imposed under section 290.02. 
    Sec. 31.  Minnesota Statutes 1992, section 289A.26, 
subdivision 6, is amended to read: 
    Subd. 6.  [PERIOD OF UNDERPAYMENT.] The period of the 
underpayment runs from the date the installment was required to 
be paid to the earlier of the following dates: 
    (1) the 15th day of the third month following the close of 
the taxable year for corporations, the 15th day of the fourth 
month following the close of the taxable year for partnerships 
or trusts, and the 15th day of the fifth month following the 
close of the taxable year for entities subject to tax under 
section 290.05, subdivision 3; or 
    (2) with respect to any part of the underpayment, the date 
on which that part is paid.  For purposes of this clause, a 
payment of estimated tax shall be credited against unpaid 
required installments in the order in which those installments 
are required to be paid. 
     Sec. 32.  Minnesota Statutes 1992, section 290A.04, 
subdivision 1, is amended to read: 
    Subdivision 1.  A refund shall be allowed each claimant in 
the amount that property taxes payable or rent constituting 
property taxes exceed the percentage of the household income of 
the claimant specified in subdivision 2 or 2a in the year for 
which the taxes were levied or in the year in which the rent was 
paid as specified in subdivision 2 or 2a.  If the amount of 
property taxes payable or rent constituting property taxes is 
equal to or less than the percentage of the household income of 
the claimant specified in subdivision 2 or 2a in the year for 
which the taxes were levied or in the year in which the rent was 
paid, the claimant shall not be eligible for a state refund 
pursuant to this section. 
    Sec. 33.  Minnesota Statutes 1992, section 290A.04, 
subdivision 2h, is amended to read: 
    Subd. 2h.  (a) If the gross property taxes payable on a 
homestead increase more than 12 percent over the net property 
taxes payable in the prior year on the same property that is 
owned and occupied by the same owner in on January 2 of both 
years, and the amount of that increase is $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 of the increase over 
the greater of 12 percent of the prior year's net property taxes 
payable or $80 for taxes payable in 1993, and 75 percent of the 
amount of the increase over the greater of 12 percent of the 
prior year's net property taxes payable or $100 for taxes 
payable in 1994.  This subdivision shall not apply to any 
increase in the gross property taxes payable attributable to 
improvements made to the homestead after the assessment date for 
the prior year's taxes. 
    In the case of refunds for property taxes payable in 1993 
and thereafter, the maximum refund allowed under this 
subdivision is $1,500. 
    (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 under sections 273.13, 
subdivisions 22 and 23; 273.135; 273.1391; and 273.42, 
subdivision 2, and any other state paid property tax credits and 
after the deduction of tax minus 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, 1993, 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 for taxes payable 
in 1994 exceed $5,500,000, the commissioner shall increase the 
$100 amount of tax increase which must occur before a taxpayer 
qualifies for a refund, and increase by an equal amount the $100 
threshold used in determining the amount of the refund, so that 
the estimated total refund claims do not exceed $5,500,000. 
     The determinations of the revised thresholds by the 
commissioner are not rules subject to chapter 14. 
    Sec. 34.  Minnesota Statutes 1992, section 296.14, 
subdivision 2, is amended to read: 
    Subd. 2.  [CREDIT OR REFUND OF TAX PAID.] The commissioner 
shall allow the distributor credit or refund of the tax paid on 
gasoline and special fuel: 
    (1) exported or sold for export from the state, other than 
in the supply tank of a motor vehicle or of an aircraft; 
    (2) sold to the United States government to be used 
exclusively in performing its governmental functions and 
activities or to any "cost plus a fixed fee" contractor employed 
by the United States government on any national defense project; 
    (3) sold to another licensed distributor; 
    (4) destroyed by accident while in the possession of the 
distributor; 
    (5) in error; 
    (6) sold for storage in an on-farm bulk storage tank, if 
the tax was not collected on the sale; 
    (7) in such other cases as the commissioner may permit, not 
inconsistent with the provisions of this chapter and other laws 
relating to the gasoline and special fuel excise taxes.  
    Sec. 35.  [297.032] [CLAIMS FOR REFUNDS.] 
    Subdivision 1.  [GENERAL RIGHT TO REFUND.] If cigarettes 
upon which the tax imposed by sections 297.01 to 297.13 has been 
reported and paid, are shipped or transported by the distributor 
to consumers to be consumed outside the state, or to retailers 
or subjobbers outside the state to be sold by those retailers, 
or subjobbers outside the state, or are returned to the 
manufacturer by the distributor or destroyed by the distributor, 
refund of such tax or credit may be made to the distributor.  
Any overpayment of the tax imposed under section 297.02 may be 
made to the taxpayer.  The commissioner of finance shall pay the 
refund out of the state treasury.  The refunds are apportioned 
to the same accounts and funds in the state treasury to which 
the tax payments were deposited, except no refunds may be 
apportioned to the general obligation special tax bond debt 
service account. 
    An amount sufficient to pay the refunds authorized under 
this section is appropriated from the respective funds and 
accounts of the state treasury.  
    Subd. 2.  [TIME LIMIT; GENERALLY.] 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 in full, whichever 
period expires later.  
    Sec. 36.  [REPEALER.] 
    Minnesota Statutes 1992, sections 60A.13, subdivision 1a; 
and 289A.08, subdivisions 9 and 12, are repealed.  
    Sec. 37.  [EFFECTIVE DATE.] 
    Section 1 is effective for property taxes payable in 1993.  
    Sections 2 to 8, 10, 19, 27, 32, 34, and 36 are effective 
the day following final enactment.  
    Sections 9, 11 to 18, and 20 are effective for tax returns 
due after December 31, 1992.  
    Section 21 is effective for tax returns due for the 
calendar year 1993, and thereafter. 
    Sections 22 to 26 and 28 to 31 are effective for tax years 
beginning after December 31, 1992. 
    Section 33 is effective beginning with refunds based on 
gross property taxes payable in 1989, and thereafter. 
    Section 35 is effective for overpayments of taxes or other 
payments first becoming due on or after August 1, 1993, and for 
claims for refund arising before that date, the running of the 
time in which to make a claim will commence August 1, 1993. 

                                ARTICLE 3

                        PROPERTY TAXES TECHNICAL
    Section 1.  Minnesota Statutes 1992, section 82B.035, is 
amended by adding a subdivision to read: 
    Subd. 4.  [DEPARTMENT OF REVENUE.] This chapter does not 
require persons employed by, or under contract to, the 
department of revenue to be licensed in order to perform, 
conduct, or assist in, an appraisal done within the scope of 
their employment or contract duties. 
    Sec. 2.  Minnesota Statutes 1992, section 270.071, 
subdivision 2, is amended to read: 
    Subd. 2.  [AIR COMMERCE.] (a) "Air commerce" means the 
transportation by aircraft of persons or property for hire in 
interstate, intrastate, or international transportation on 
regularly scheduled flights or on intermittent or irregularly 
timed flights by airline companies operating under authorization 
from the United States Department of Transportation. 
    (b) "Air commerce" also includes but is not limited to an 
intermittent or irregularly timed flight, a flight arranged at 
the convenience of an airline and the person contracting for the 
transportation, or a charter flight.  It includes an any airline 
company making three or more flights in or out of Minnesota 
during a calendar year. 
    (c) "Air commerce" does not include casual transportation 
for hire by aircraft commonly owned and used for private 
airflight purposes if the person furnishing the transportation 
does not hold out to be engaged regularly in transportation for 
hire. 
    Sec. 3.  Minnesota Statutes 1992, section 270.072, 
subdivision 2, is amended to read: 
    Subd. 2.  [ASSESSMENT OF FLIGHT PROPERTY.] The flight 
property of all air carriers airline companies operating in 
Minnesota under a certificate of public convenience and 
necessity or under authorization from the United States 
Department of Transportation shall be assessed annually by the 
commissioner in the manner prescribed by sections 270.071 to 
270.079.  Aircraft with a gross weight of less than 30,000 
pounds and used on intermittent or irregularly timed flights 
shall be excluded from the provisions of sections 270.071 to 
270.079. 
     Sec. 4.  Minnesota Statutes 1992, section 270.41, is 
amended to read: 
    270.41 [BOARD OF ASSESSORS.] 
    (a) Subdivision 1.  [CREATION; PURPOSE; POWERS.] A board of 
assessors is hereby created.  The board shall be for the purpose 
of establishing, conducting, reviewing, supervising, 
coordinating or approving establish, conduct, review, supervise, 
coordinate, and approve courses in assessment practices, and 
establishing establish criteria for determining assessor's 
qualifications.  The board shall also have authority and 
responsibility to consider other matters relating to assessment 
administration brought before it by the commissioner of 
revenue.  The board may grant, renew, suspend, or revoke an 
assessor's license.  
    Subd. 2.  [MEMBERS.] The board shall consist of nine 
members, who shall be appointed by the commissioner of revenue, 
in the manner provided herein.  The members shall include:  
    1. Two (1) two from the department of revenue,; 
    2. Two (2) two county assessors,; 
    3. Two (3) two assessors who are not county assessors, one 
of whom shall be a township assessor, and; 
    4. One (4) one from the private appraisal field holding a 
professional appraisal designation,; and 
    5. Two (5) two public members as defined by section 214.02. 
    The appointment provided in 2 and 3 clauses (2) and (3) may 
be made from two lists of not less than three names each, one 
submitted to the commissioner of revenue by the Minnesota 
association of assessing officers or its successor organization 
containing recommendations for the appointment of appointees 
described in 2 clause (2), and one by the Minnesota association 
of assessors, inc. or its successor organization containing 
recommendations for the appointees described in 3 clause (3).  
The lists must be submitted 30 days before the commencement of 
the term.  In the case of a vacancy, a new list shall be 
furnished to the commissioner by the respective organization 
immediately.  A member of the board who shall is no longer be 
engaged in the capacity listed above shall automatically be is 
disqualified from membership in the board. 
    The board shall annually elect a chair and a secretary of 
the board. 
    (b) Subd. 3.  [LICENSES; REFUSAL OR REVOCATION.] The board 
may refuse to grant or renew, or may suspend or revoke, a 
license of an applicant or licensee for any of the following 
causes or acts: 
    (1) failure to complete required training; 
    (2) inefficiency or neglect of duty; 
    (3) "unprofessional conduct" which means knowingly 
neglecting to perform a duty required by law, or violation of 
the laws of this state relating to the assessment of property or 
unlawfully exempting property or knowingly and intentionally 
listing property on the tax list at substantially less than its 
market value or the level required by law in order to gain favor 
or benefit, or knowingly and intentionally misclassifying 
property in order to gain favor or benefit; or 
    (4) conviction of a crime involving moral turpitude; or 
    (5) any other cause or act that in the board's opinion 
warrants a refusal to issue or suspension or revocation of a 
license. 
    (c) Subd. 4.  [RULES.] The board of assessors may adopt 
rules under chapter 14, defining or interpreting grounds for 
refusing to grant or renew, and for suspending or revoking a 
license under this section.  An action of the board of assessors 
in refusing to grant or renew a license or in suspending or 
revoking a license is subject to review in accordance with 
chapter 14.  
    Subd. 5.  [PROHIBITED ACTIVITY.] An assessor, deputy 
assessor, assistant assessor, appraiser, or other person 
employed by an assessment jurisdiction or contracting with an 
assessment jurisdiction for the purpose of valuing or 
classifying property for property tax purposes is prohibited 
from making appraisals or analyses, accepting an appraisal 
assignment, or preparing an appraisal report as defined in 
section 82B.02, subdivisions 2 to 5, on any property within the 
assessment jurisdiction where the individual is employed or 
performing the duties of the assessor under contract.  Violation 
of this prohibition shall result in immediate revocation of the 
individual's license to assess property for property tax 
purposes.  This prohibition must not be construed to prohibit an 
individual from carrying out any duties required for the proper 
assessment of property for property tax purposes. 
    Sec. 5.  Minnesota Statutes 1992, section 271.06, 
subdivision 1, is amended to read: 
    Subdivision 1.  [MANNER.] Except as otherwise provided in 
section 270.07, subdivision 1, paragraph (a), or any other law, 
an appeal to the tax court may be taken, in the manner herein 
provided, from any official order of the commissioner of revenue 
respecting any tax, fee, or assessment, or any matter pertaining 
thereto, including the imposition of interest and penalty, or 
any matter over which the court is granted jurisdiction under 
section 271.01, subdivision 5, by any person directly interested 
therein or affected thereby, or by any political subdivision of 
the state, directly or indirectly, interested therein or 
affected thereby, or by the attorney general in behalf of the 
state, or by any resident taxpayer of the state in behalf of the 
state in case the attorney general, upon request, shall refuse 
to appeal.  Notwithstanding subdivision 2, when an appeal is 
taken to the tax court in any case dealing with property 
valuation, assessment, or taxation for property tax purposes, 
the provisions of section 274.19, subdivisions 4 and 5, section 
277.011, and chapter 278 shall apply as if the appeal had been 
taken to the district court. 
    Sec. 6.  Minnesota Statutes 1992, section 271.09, 
subdivision 3, is amended to read: 
    Subd. 3.  [TAX DUE OBLIGATION.] At the time of the taking 
of an appeal to the tax court, the taxpayer shall pay at least 
the amount of the tax or other obligation conceded by the 
taxpayer to be due, if any, when it becomes due provided that 
this shall not relieve the taxpayer from complying with any 
other requirements of law.  The provisions of sections 274.19, 
subdivision 5, 277.011, subdivision 3, and 278.03 shall govern 
the filing with the tax court of an appeal dealing with property 
valuation, assessment, or taxation for property tax purposes, as 
if the appeal had been taken to the district court. 
    Sec. 7.  Minnesota Statutes 1992, 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, including 
storage sheds, decks, and similar removable improvements 
constructed on the site of a manufactured home, sectional 
structure, park trailer or travel trailer as provided in section 
274.19 273.125, subdivision 8, paragraph (f); and 
    (f) flight property as defined in section 270.071.  
    (9) Personal property used primarily for the abatement and 
control of air, water, or land pollution to the extent that it 
is so used, and real property which is used primarily for 
abatement and control of air, water, or land pollution as part 
of an agricultural operation, as a part of a centralized 
treatment and recovery facility operating under a permit issued 
by the Minnesota pollution control agency pursuant to chapters 
115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 
and 7045.0020 to 7045.1260, as a wastewater treatment facility 
and for the treatment, recovery, and stabilization of metals, 
oils, chemicals, water, sludges, or inorganic materials from 
hazardous industrial wastes, 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 real property or 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:  (i) land described in section 103G.005, 
subdivision 18; (ii) 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; or (iii) land in a wetland preservation area 
under sections 103F.612 to 103F.616.  "Wetlands" under items (i) 
and (ii) include adjacent land which is not suitable for 
agricultural purposes due to the presence of the wetlands, but 
do 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 
103G.535. 
       (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 clause (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 
have passed from the date of the transmittal by the governing 
body to the board of the information on the fiscal impact, 
whichever occurs first. 
       (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 individuals, 
couples, or families.  (ii) It has the purpose of reuniting 
families and enabling parents or individuals 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 
three 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 owned and operated or under lease from a unit 
of government or governmental agency under a property 
disposition program and operated by one or more organizations 
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. 
      (20) Real and personal property, including leasehold or 
other personal property interests, owned and operated by a 
corporation if more than 50 percent of the total voting power of 
the stock of the corporation is owned collectively by:  (i) the 
board of regents of the University of Minnesota, (ii) the 
University of Minnesota Foundation, an organization exempt from 
federal income taxation under section 501(c)(3) of the Internal 
Revenue Code of 1986, as amended through December 31, 1990, and 
(iii) a corporation organized under chapter 317A, which by its 
articles of incorporation is prohibited from providing pecuniary 
gain to any person or entity other than the regents of the 
University of Minnesota; which property is used primarily to 
manage or provide goods, services, or facilities utilizing or 
relating to large-scale advanced scientific computing resources 
to the regents of the University of Minnesota and others. 
    (21) Wind energy conversion systems, as defined in section 
216C.06, subdivision 12, installed after January 1, 1991, and 
used as an electric power source. 
    (22) Containment tanks, cache basins, and that portion of 
the structure needed for the containment facility used to 
confine agricultural chemicals as defined in section 18D.01, 
subdivision 3, as required by the commissioner of agriculture 
under chapter 18B or 18C. 
    (23) Photovoltaic devices, as defined in section 216C.06, 
subdivision 13, installed after January 1, 1992, and used to 
produce or store electric power. 
    (24) 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 for an ice arena or ice rink, and used 
primarily for youth and high school programs. 
    (25) Manure pits and appurtenances, which may include 
slatted floors and pipes, installed or operated in accordance 
with a permit, order, or certificate of compliance issued by the 
Minnesota pollution control agency.  The exemption shall 
continue for as long as the permit, order, or certificate issued 
by the Minnesota pollution control agency remains in effect. 
    Sec. 8.  Minnesota Statutes 1992, section 272.02, 
subdivision 4, is amended to read: 
    Subd. 4.  [CONVERSION TO EXEMPT OR TAXABLE USES.] (a) Any 
property exempt from taxation on January 2 of any year which, 
due to sale or other reason, loses its exemption prior to July 1 
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 July 
1, the intended use of the property, determined by the county 
assessor, based upon all relevant facts. 
    (b) Property subject to tax on January 2 that is acquired 
by a governmental entity, church, or educational institution 
before July 1 of the year is exempt for that assessment year if 
(1) the property is to be used for an exempt purpose under 
subdivision 1, clauses (1) to (7), and (2) the property is not 
subject to the filing requirement under section 272.025. 
    (c) Property which forfeits to the state for nonpayment of 
real estate taxes on or before December 31 in an assessment 
year, shall be removed from the assessment rolls for that 
assessment year.  Forfeited property that is repurchased, or 
sold at a public or private sale, on or before December 31 of an 
assessment year shall be placed on the assessment rolls for that 
year's assessment. 
    Sec. 9.  Minnesota Statutes 1992, section 272.025, 
subdivision 1, is amended to read: 
    Subdivision 1.  (a) Except as in the case of churches and 
houses of worship, property solely used for educational purposes 
by academies, colleges, universities or seminaries of learning, 
property owned by the state of Minnesota or any political 
subdivision thereof, and property exempt from taxation under 
section 272.02, subdivision 1, clauses (8), (9), (12), (14), 
(17), (19), and (21) to (25), and at the times provided in 
subdivision 3, a taxpayer claiming an exemption from taxation on 
property described in section 272.02, subdivision 1, clauses (1) 
to (7), (10), (11), (13), (15), (16), (18), and (20), 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.  
    In the case of (b) A taxpayer claiming an exemption from 
taxation on property described in section 272.02, subdivision 1, 
clause (9), the taxpayer 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.  
    (c) 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. 
    (d) The commissioner of revenue shall prescribe the form 
and contents of the statement of exemption. 
    Sec. 10.  Minnesota Statutes 1992, section 272.12, is 
amended to read: 
    272.12 [CONVEYANCES, TAXES PAID BEFORE RECORDING.] 
    When a deed or other instrument conveying land, or a plat 
of any town site or addition thereto, or a survey required 
pursuant to section 508.47, is presented to the county auditor 
for transfer, the auditor shall ascertain from the records if 
there be taxes delinquent upon the land described therein, or if 
it has been sold for taxes.  An assignment of a sheriff's or 
referee's certificate of sale, when the certificate of sale 
describes real estate, and certificates of redemption from 
mortgage or lien foreclosure sales, when the certificate of 
redemption encompasses real estate and is issued to a junior 
creditor, are considered instruments conveying land for the 
purposes of this section and section 272.121.  If there are 
taxes delinquent, the auditor shall certify to the same; and 
upon payment of such taxes, or in case no taxes are delinquent, 
shall transfer the land upon the books of the auditor's office, 
and note upon the instrument, over official signature, the 
words, "no delinquent taxes and transfer entered," or, if the 
land described has been sold or assigned to an actual purchaser 
for taxes, the words "paid by sale of land described within;" 
and, unless such statement is made upon such instrument, the 
county recorder or the registrar of titles shall refuse to 
receive or record the same; provided, that sheriff's or 
referees' certificates of sale on execution or foreclosure of a 
lien or mortgage, certificates of redemption from mortgage or 
lien foreclosure sales issued to the redeeming mortgagor or 
lienee, deeds of distribution made by a personal representative 
in probate proceedings, decrees and judgments, receivers 
receipts, patents, and copies of town or statutory city plats, 
in case the original plat filed in the office of the county 
recorder has been lost or destroyed, and the instruments 
releasing, removing and discharging reversionary and forfeiture 
provisions affecting title to land and instruments releasing, 
removing or discharging easement rights in land or building or 
other restrictions, may be recorded without such certificate; 
and, provided that instruments conveying land and, as 
appurtenant thereto an easement over adjacent tract or tracts of 
land, may be recorded without such certificate as to the land 
covered by such easement; and provided further, that any 
instrument granting an easement made in favor of any public 
utility or pipe line for conveying gas, liquids or solids in 
suspension, in the nature of a right of way over, along, across 
or under a tract of land may be recorded without such 
certificate as to the land covered by such easement.  Any 
instrument amending or restating the declarations, bylaws, or 
other enabling documents governing homeowners associations of 
condominiums, townhouses, and other planned unit developments 
may be recorded without the auditor's certificate. 
     A deed of distribution made by a personal representative in 
a probate proceeding, a decree, or a judgment that conveys land 
shall be presented to the county auditor, who shall transfer the 
land upon the books of the auditor's office and note upon the 
instrument, over official signature, the words, "transfer 
entered", and the instrument may then be recorded.  A decree or 
judgment that affects title to land but does not convey land may 
be recorded without presentation to the auditor. 
    A violation of this section by the county recorder or the 
registrar of titles shall be a gross misdemeanor, and, in 
addition to the punishment therefor, the recorder or registrar 
shall be liable to the grantee of any instrument so recorded for 
the amount of any damages sustained. 
    When, as a condition to permitting the recording of deed or 
other instrument affecting the title to real estate previously 
forfeited to the state under the provisions of sections 281.16 
to 281.27, county officials, after such real estate has been 
purchased or repurchased, have required the payment of taxes 
erroneously assumed to have accrued against such real estate 
after forfeiture and before the date of purchase or repurchase, 
the sum required to be so paid shall be refunded to the persons 
entitled thereto out of moneys in the funds in which the sum so 
paid was placed.  Delinquent taxes are those taxes deemed 
delinquent under section 279.02. 
    Sec. 11.  Minnesota Statutes 1992, section 273.03, 
subdivision 2, is amended to read: 
    Subd. 2.  Any county in this state which employs a county 
assessor who maintains a unit card ledger system or similar 
system of real estate and the market value and net tax 
capacities ascertained by the assessor affecting such real 
estate, and which county has established an electronic data 
processing system or similar system to perform the processing of 
assessment and tax accounting, may discontinue the preparation 
of assessment books as provided in subdivision 1.  The election 
to discontinue the preparation of assessment books as defined in 
subdivision 1 shall be made by the county auditor with the 
written approval of the commissioner of revenue.  
    Sec. 12.  Minnesota Statutes 1992, section 273.061, 
subdivision 8, is amended to read: 
    Subd. 8.  [POWERS AND DUTIES.] The county assessor shall 
have the following powers and duties: 
    (1) To call upon and confer with the township and city 
assessors in the county, and advise and give them the necessary 
instructions and directions as to their duties under the laws of 
this state, to the end that a uniform assessment of all real 
property in the county will be attained. 
    (2) To assist and instruct the local assessors in the 
preparation and proper use of land maps and record cards, in the 
property classification of real and personal property, and in 
the determination of proper standards of value. 
    (3) To keep the local assessors in the county advised of 
all changes in assessment laws and all instructions which the 
assessor receives from the commissioner of revenue relating to 
their duties. 
    (4) To have authority to require the attendance of groups 
of local assessors at sectional meetings called by the assessor 
for the purpose of giving them further assistance and 
instruction as to their duties. 
    (5) To immediately commence the preparation of a large 
scale topographical land map of the county, in such form as may 
be prescribed by the commissioner of revenue, showing thereon 
the location of all railroads, highways and roads, bridges, 
rivers and lakes, swamp areas, wooded tracts, stony ridges and 
other features which might affect the value of the land.  
Appropriate symbols shall be used to indicate the best, the 
fair, and the poor land of the county.  For use in connection 
with the topographical land map, the assessor shall prepare and 
keep available in the assessor's office tables showing fair 
average minimum and maximum market values per acre of 
cultivated, meadow, pasture, cutover, timber and waste lands of 
each township.  The assessor shall keep the map and tables 
available in the office for the guidance of town assessors, 
boards of review, and the county board of equalization. 
    (6) To also prepare and keep available in the office for 
the guidance of town assessors, boards of review and the county 
board of equalization, a land valuation map of the county, in 
such form as may be prescribed by the commissioner of revenue.  
This map, which shall include the bordering tier of townships of 
each county adjoining, shall show the average market value per 
acre, both with and without improvements, as finally equalized 
in the last assessment of real estate, of all land in each town 
or unorganized township which lies outside the corporate limits 
of cities.  
    (7) To regularly examine all conveyances of land outside 
the corporate limits of cities of the first and second class, 
filed with the county recorder of the county, and keep a file, 
by descriptions, of the considerations shown thereon.  From the 
information obtained by comparing the considerations shown with 
the market values assessed, the assessor shall make 
recommendations to the county board of equalization of necessary 
changes in individual assessments or aggregate valuations. 
    (8) To prepare annually and keep available in the 
assessor's office for the guidance of boards of review and the 
county board of equalization, a table showing the market value 
per capita of all personal property in each assessment district 
in the county as finally equalized in the last previous 
assessment of personal property.  For the guidance of the county 
board of equalization, the assessor shall also add to the table 
the market value per capita of all personal property of each 
assessment district for the current year as equalized by the 
local board of review. 
    (9) To become familiar with the values of the different 
items of personal property so as to be in a position when called 
upon to advise the boards of review and the county board of 
equalization concerning property, market values thereof. 
    (10) (9) While the county board of equalization is in 
session, to give it every possible assistance to enable it to 
perform its duties.  The assessor shall furnish the board with 
all necessary charts, tables, comparisons, and data which it 
requires in its deliberations, and shall make whatever 
investigations the board may desire. 
    (11) (10) At the request of either the board of county 
commissioners or the commissioner of revenue, to investigate 
applications for reductions of valuation and abatements and 
settlements of taxes, examine the real or personal property 
involved, and submit written reports and recommendations with 
respect to the applications, in such form as may be prescribed 
by the board of county commissioners and commissioner of revenue.
    (12) (11) To make diligent search each year for real and 
personal property which has been omitted from assessment in the 
county, and report all such omissions to the county auditor. 
    (13) (12) To regularly confer with county assessors in all 
adjacent counties about the assessment of property in order to 
uniformly assess and equalize the value of similar properties 
and classes of property located in adjacent counties.  The 
conference shall emphasize the assessment of agricultural and 
commercial and industrial property or other properties that may 
have an inadequate number of sales in a single county. 
    (14) (13) To render such other services pertaining to the 
assessment of real and personal property in the county as are 
not inconsistent with the duties set forth in this section, and 
as may be required by the board of county commissioners or by 
the commissioner of revenue. 
    Sec. 13.  Minnesota Statutes 1992, section 273.124, 
subdivision 9, is amended to read: 
    Subd. 9.  [HOMESTEAD ESTABLISHED AFTER ASSESSMENT DATE.] 
Any property that was not used for the purpose of a homestead on 
the assessment date, but which was used for the purpose of a 
homestead by June 1 of a year, constitutes class 1 or class 2a. 
    Any taxpayer meeting the requirements of this subdivision 
must notify the county assessor, or the assessor who has the 
powers of the county assessor under section 273.063, in writing, 
prior to June December 15 of the year of occupancy in order to 
qualify under this subdivision.  The assessor must not deny full 
homestead treatment to a property that is partially homesteaded 
on January 2 but occupied for the purpose of a full homestead by 
June 1 of a year.  
    The county assessor and the county auditor may make the 
necessary changes on their assessment and tax records to provide 
for proper homestead classification as provided in this 
subdivision. 
    If homestead classification has not been requested as of 
December 15, the assessor will classify the property as 
nonhomestead for the current assessment year for taxes payable 
in the following year, provided that the owner of any property 
qualifying under this subdivision, which has not been accorded 
the benefits of this subdivision, may be entitled to receive 
homestead classification by proper application as provided in 
section 375.192.  
    The county assessor shall publish in a newspaper of general 
circulation within the county no later than June 1 of each year 
a notice informing the public of the requirement to file an 
application for homestead prior to June December 15. 
    Sec. 14.  Minnesota Statutes 1992, section 273.124, 
subdivision 13, is amended to read: 
    Subd. 13.  [HOMESTEAD APPLICATION.] On or before January 2, 
1993, each county assessor shall mail a homestead application to 
the owner of each parcel of property within the county which was 
classified as homestead for the 1992 assessment year.  The 
format and contents of a uniform homestead application shall be 
prescribed by the commissioner of revenue.  The commissioner 
shall consult with the chairs of the house and senate tax 
committees on the contents of the homestead application form.  
The application must clearly inform the taxpayer that this 
application must be signed by all owners of who occupy the 
property or by the qualifying relative and returned to the 
county assessor in order for the property to continue receiving 
homestead treatment.  The envelope containing the homestead 
application shall clearly identify its contents and alert the 
taxpayer of its necessary immediate response. 
     Every four years after the initial homestead application 
has been filed under this subdivision, a county shall mail a 
homestead application to the owner of each parcel of property to 
verify the continued eligibility for homestead status for all 
properties classified as homestead within the county in the 
prior year's assessment.  The homestead application and 
procedures shall be done in the same manner as contained in this 
subdivision for the 1993 homestead application. 
    On the homestead application each owner shall disclose the 
location of any other residential property in the state in which 
the owner holds full or partial ownership and for which 
homestead status has been granted or has been applied for at the 
time of the application.  Each owner must also disclose the name 
and social security number of any relative occupying a property 
qualifying as a homestead under subdivision 1, paragraph (c).  
Failure to disclose the information required under this 
paragraph may result in the imposition of the penalty provided 
under this subdivision. 
     Every property owner applying for homestead classification 
must furnish to the county assessor the social security number 
of each person occupant who is listed as an owner of the 
property listed on the homestead application, and the name and 
address of each owner who does not occupy the property.  If the 
social security number is not provided, the county assessor 
shall classify the property as nonhomestead.  The social 
security numbers of the property owners are private data on 
individuals as defined by section 13.02, subdivision 12, but, 
notwithstanding that section, the private data may be disclosed 
to the commissioner of revenue. 
     If residential real estate is occupied and used for 
purposes of a homestead by a relative of the owner and qualifies 
for a homestead under subdivision 1, paragraph (c), in order for 
the property to receive homestead status, a homestead 
application must be filed with the assessor.  The social 
security number of each relative occupying the property and the 
social security number of each owner who is related to an 
occupant of the property shall be required on the homestead 
application filed under this subdivision.  If a different 
relative of the owner subsequently occupies the property, the 
owner of the property must notify the assessor within 30 days of 
the change in occupancy.  The social security number of a 
relative occupying the property is private data on individuals 
as defined by section 13.02, subdivision 12, but may be 
disclosed to the commissioner of revenue. 
    The homestead application shall also notify the property 
owners that the application filed under this section will not be 
mailed annually and that if the property is granted homestead 
status for the 1993 assessment, or any assessment year 
thereafter, that same property shall remain classified as 
homestead until the property is sold or transferred to another 
person, or the owners or the relatives no longer use the 
property as their homestead.  Upon the sale or transfer of the 
homestead property, a certificate of value must be timely filed 
with the county auditor as provided under section 272.115.  
Failure to notify the county assessor within 30 days that the 
property has been sold, transferred, or that the owner or the 
relative is no longer occupying the property as a homestead, 
shall result in the penalty provided under this subdivision and 
the property will lose its current homestead status. 
    If the initial homestead application is not returned within 
30 days, the county will send a second application to the 
present owners of record.  The notice of proposed property taxes 
prepared under section 275.065, subdivision 3, shall reflect the 
property's classification.  Beginning with assessment year 1993 
for all properties, if a homestead application has not been 
filed with the county by December 15, the assessor shall 
classify the property as nonhomestead for the current assessment 
year for taxes payable in the following year, provided that the 
owner may be entitled to receive the homestead classification by 
proper application under section 375.192. 
    At the request of the commissioner, each county must give 
the commissioner a list that includes the name and social 
security number of each property owner, or relative of a 
property owner, applying for homestead classification under this 
subdivision.  The commissioner shall use the information 
provided on the lists as appropriate under the law, including 
for the detection of improper claims by owners, or relatives of 
owners, under chapter 290A. 
    If, in comparing the lists supplied by the counties, the 
commissioner finds that a property owner is claiming more than 
one homestead, the commissioner shall notify the appropriate 
counties.  Within 90 days of the notification, the county 
assessor shall investigate to determine if the homestead 
classification was properly claimed.  If the property owner does 
not qualify, the county assessor shall notify the county auditor 
who will determine the amount of homestead benefits that had 
been improperly allowed.  For the purpose of this section, 
"homestead benefits" means the tax reduction resulting from the 
classification as a homestead under section 273.13, the taconite 
homestead credit under section 273.135, and the supplemental 
homestead credit under section 273.1391.  The county auditor 
shall send a notice to the owners of the affected property, 
demanding reimbursement of the homestead benefits plus a penalty 
equal to 100 percent of the homestead benefits.  The property 
owners may appeal the county's determination by filing a notice 
of appeal with the Minnesota tax court within 60 days of the 
date of the notice from the county. 
    If the amount of homestead benefits and penalty is not paid 
within 60 days, and if no appeal has been filed, the county 
auditor shall certify the amount of taxes and penalty to the 
succeeding year's tax list to be collected as part of the 
property taxes. 
    Any amount of homestead benefits recovered by the county 
from the property owner shall be distributed to the county, city 
or town, and school district where the property is located in 
the same proportion that each taxing district's levy was to the 
total of the three taxing districts' levy for the current year.  
Any amount recovered attributable to taconite homestead credit 
shall be transmitted to the St. Louis county auditor to be 
deposited in the taconite property tax relief account.  The 
total amount of penalty collected must be deposited in the 
county general fund. 
    If a property owner has applied for more than one homestead 
and the county assessors cannot determine which property should 
be classified as homestead, the county assessors will refer the 
information to the commissioner.  The commissioner shall make 
the determination and notify the counties within 60 days. 
    In addition to lists of homestead properties, the 
commissioner may ask the counties to furnish lists of all 
properties and the record owners. 
    Sec. 15.  [273.125] [ASSESSMENT OF MANUFACTURED HOMES.] 
    Subdivision 1.  [VALUATION; NOTICE.] Subdivisions 1 to 7 
apply to manufactured homes that are assessed under subdivision 
8, paragraph (c).  Each manufactured home must be valued each 
year by the assessor and assessed with reference to its value on 
January 2 of that year.  Notice of the value must be mailed to 
the person to be assessed at least ten days before the meeting 
of the local board of review or equalization.  The notice must 
contain the amount of valuation in terms of market value, the 
assessor's office address, and the date, place, and time set for 
the meeting of the local board of review or equalization and the 
county board of equalization. 
    Subd. 2.  [RETURN ASSESSMENT BOOKS; SET TAX.] On or before 
May 1, the assessor shall return to the county auditor the 
assessment books relating to the assessment of manufactured 
homes.  After receiving the assessment books, the county auditor 
shall determine the tax to be due by applying the rate of levy 
of the preceding year and shall send a list of the taxes to the 
county treasurer by May 30. 
    Subd. 3.  [TAX STATEMENTS; PENALTIES; COLLECTIONS.] Not 
later than July 15 in the year of assessment the county 
treasurer shall mail to the taxpayer a statement of tax due on a 
manufactured home.  The taxes are due on the last day of August, 
or 20 days after the postmark date on the envelope containing 
the property tax statement, whichever is later, except that if 
the tax exceeds $50, one-half of the amount due may be paid on 
August 31, or 20 days after the postmark date on the envelope 
containing the property tax statement, whichever is later, and 
the remainder on November 15.  Taxes remaining unpaid after the 
due date are delinquent, and a penalty of eight percent must be 
assessed and collected as part of the unpaid taxes.  
    Subd. 4.  [PETITIONS OF GRIEVANCE.] A person who claims 
that the person's manufactured home has been unfairly or 
unequally assessed, or that the property has been assessed at a 
valuation greater than its real or actual value, or that the tax 
levied against it is illegal, in whole or in part, or has been 
paid, or that the property is exempt from the tax so levied, may 
have the validity of the claim, defense, or objection determined 
in court.  The determination must be made by the district court 
of the county in which the tax is levied or by the tax court.  A 
person can request the determination by filing a petition for it 
in the office of the court administrator of the district court 
on or before September 1 of the year in which the tax becomes 
payable.  A petition for determination under this section may be 
transferred by the district court to the tax court. 
    Subd. 5.  [CONTINUING WITH PETITION.] The right to continue 
prosecution of the petition is conditioned upon the payment of 
the tax when due unless the court permits the petitioner to 
continue without payment, or with a reduced payment, under 
section 278.03, subdivision 2.  Upon ten days' notice to the 
county attorney and to the county auditor, given at least ten 
days before the last day of August, the petitioner may apply to 
the court for permission to continue prosecution of the petition 
without payment or with a reduced payment. 
    Subd. 6.  [CORRECTING TAX.] If the local board of review or 
equalization or the county board of equalization changes the 
assessor's valuation of a manufactured home, the change must be 
sent to the county auditor.  The auditor shall immediately 
recompute the tax and advise the treasurer of the corrected 
tax.  If the property is entitled to homestead classification, 
the auditor shall reduce the tax accordingly. 
    Subd. 7.  [PERSONAL PROPERTY.] The tax assessed on 
manufactured homes is a personal property tax.  Laws relating to 
assessment, review, and collection of personal property taxes 
apply to this tax, if consistent with this section. 
    Subd. 8.  [MANUFACTURED HOMES; SECTIONAL STRUCTURES.] (a) 
In this section, "manufactured home" means a structure 
transportable in one or more sections, which is built on a 
permanent chassis, and designed to be used as a dwelling with or 
without a permanent foundation when connected to the required 
utilities, and contains the plumbing, heating, air conditioning, 
and electrical systems in it.  Manufactured home includes any 
accessory structure that is an addition or supplement to the 
manufactured home and, when installed, becomes a part of the 
manufactured home.  
    (b) A manufactured home that meets each of the following 
criteria must be valued and assessed as an improvement to real 
property, the appropriate real property classification applies, 
and the valuation is subject to review and the taxes payable in 
the manner provided for real property:  
    (1) the owner of the unit holds title to the land on which 
it is situated; 
    (2) the unit is affixed to the land by a permanent 
foundation or is installed at its location in accordance with 
the manufactured home building code in sections 327.31 to 
327.34, and rules adopted under those sections, or is affixed to 
the land like other real property in the taxing district; and 
    (3) the unit is connected to public utilities, has a well 
and septic tank system, or is serviced by water and sewer 
facilities comparable to other real property in the taxing 
district.  
    (c) A manufactured home that meets each of the following 
criteria must be assessed at the rate provided by the 
appropriate real property classification but must be treated as 
personal property, and the valuation is subject to review and 
the taxes payable in the manner provided in this section: 
    (1) the owner of the unit is a lessee of the land under the 
terms of a lease; 
    (2) the unit is affixed to the land by a permanent 
foundation or is installed at its location in accordance with 
the manufactured homes building code contained in sections 
327.31 to 327.34, and the rules adopted under those sections, or 
is affixed to the land like other real property in the taxing 
district; and 
    (3) the unit is connected to public utilities, has a well 
and septic tank system, or is serviced by water and sewer 
facilities comparable to other real property in the taxing 
district.  
    (d) Sectional structures must be valued and assessed as an 
improvement to real property if the owner of the structure holds 
title to the land on which it is located or is a qualifying 
lessee of the land under section 273.19.  In this paragraph 
"sectional structure" means a building or structural unit that 
has been in whole or substantial part manufactured or 
constructed at an off-site location to be wholly or partially 
assembled on-site alone or with other units and attached to a 
permanent foundation.  
    (e) The commissioner of revenue may adopt rules under the 
administrative procedure act to establish additional criteria 
for the classification of manufactured homes and sectional 
structures under this subdivision. 
    (f) A storage shed, deck, or similar improvement 
constructed on property that is leased or rented as a site for a 
manufactured home, sectional structure, park trailer, or travel 
trailer is taxable as provided in this section.  The property is 
taxable as personal property to the lessee of the site if it is 
not owned by the owner of the site.  The property is taxable as 
real estate if it is owned by the owner of the site.  As a 
condition of permitting the owner of the manufactured home, 
sectional structure, park trailer, or travel trailer to 
construct improvements on the leased or rented site, the owner 
of the site must obtain the permanent home address of the lessee 
or user of the site.  The site owner must provide the name and 
address to the assessor upon request. 
    Sec. 16.  Minnesota Statutes 1992, 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 class rate of 3.5 percent of market value for taxes 
payable in 1992, and 3.4 percent of market value for taxes 
payable in 1993 and thereafter. 
     (b) Class 4b includes: 
     (1) residential real estate containing less than four 
units, other than seasonal residential, and recreational; 
     (2) manufactured homes not classified under any other 
provision; 
     (3) a dwelling, garage, and surrounding one acre of 
property on a nonhomestead farm classified under subdivision 23, 
paragraph (b).  
     Class 4b property has a class rate of 2.8 percent of market 
value for taxes payable in 1992, 2.5 percent of market value for 
taxes payable in 1993, and 2.3 percent of market value for taxes 
payable in 1994 and thereafter. 
     (c) Class 4c property includes: 
     (1) a structure that is:  
     (i) situated on real property that is used for housing for 
the elderly or for low- and moderate-income families as defined 
in Title II, as amended through December 31, 1990, of the 
National Housing Act or the Minnesota housing finance agency law 
of 1971, as amended, or rules promulgated by the agency and 
financed by a direct federal loan or federally insured loan made 
pursuant to Title II of the Act; or 
     (ii) situated on real property that is used for housing the 
elderly or for low- and moderate-income families as defined by 
the Minnesota housing finance agency law of 1971, as amended, or 
rules adopted by the agency pursuant thereto and financed by a 
loan made by the Minnesota housing finance agency pursuant to 
the provisions of the act.  
     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 as defined in section 
42(c)(2) of the Internal Revenue Code of 1986, as amended 
through December 31, 1990, that (i) receives a low-income 
housing credit under section 42 of the Internal Revenue Code of 
1986, as amended through December 31, 1990; or (ii) meets the 
requirements of that section and receives public financing, 
except financing provided under sections 469.174 to 469.179, 
which contains terms restricting the rents; or (iii) meets the 
requirements of section 273.1317.  Classification pursuant to 
this clause is limited 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 unless the owner of the property 
elects to have the property assessed under Laws 1991, chapter 
291, article 1, section 55.  If the owner of the property elects 
to have the market value determined on the basis of the actual 
restricted rents, as provided in Laws 1991, chapter 291, article 
1, section 55, the property will be assessed at the rate 
provided for class 4a or class 4b property, as appropriate.  
Properties described in clauses (1)(ii), (3), and (4) may apply 
to the assessor for valuation under Laws 1991, chapter 291, 
article 1, section 55.  The land on which these structures are 
situated has the class rate given in paragraph (b) if the 
structure contains fewer than four units, and the class rate 
given in paragraph (a) if the structure contains four or more 
units.  This clause applies only to the property of a nonprofit 
or limited dividend entity.  
      (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 
317A; 
       (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 250 days in the year preceding the year of 
assessment.  For purposes of this clause, property is devoted to 
a commercial purpose on a specific day if any portion of the 
property is used for residential occupancy, and a fee is charged 
for residential occupancy.  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 250 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 this clause also includes the remainder 
of class 1c resorts.  Owners of real property devoted to 
temporary and seasonal residential occupancy for recreation 
purposes and all or a portion of which was devoted to commercial 
purposes for not more than 250 days in the year preceding the 
year of assessment desiring classification as class 1c or 4c, 
must submit a declaration to the assessor designating the cabins 
or units occupied for 250 days or less in the year preceding the 
year of assessment by January 15 of the assessment year.  Those 
cabins or units and a proportionate share of the land on which 
they are located will be designated class 1c or 4c as otherwise 
provided.  The remainder of the cabins or units and a 
proportionate share of the land on which they are located will 
be designated as class 3a.  The first $100,000 of the market 
value of the remainder of the cabins or units and a 
proportionate share of the land on which they are located shall 
have a class rate of three percent.  The owner of property 
desiring designation as class 1c or 4c property must provide 
guest registers or other records demonstrating that the units 
for which class 1c or 4c designation is sought were not occupied 
for more than 250 days in the second year preceding the 
assessment if so requested.  The portion of a property operated 
as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 
nonresidential facility operated on a commercial basis not 
directly related to temporary and seasonal residential occupancy 
for recreation purposes shall not qualify for class 1c or 4c; 
     (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, 1990.  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 3.2 
percent 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; 
     (7) post-secondary student housing of not more than one 
acre of land that is owned by a nonprofit corporation organized 
under chapter 317A and is used exclusively by a student 
cooperative, sorority, or fraternity for on-campus housing or 
housing located within two miles of the border of a college 
campus; and 
     (8) manufactured home parks as defined in section 327.14, 
subdivision 3. 
     Class 4c property has a class rate of 2.3 percent of market 
value, except that (i) each parcel of seasonal residential 
recreational property not used for commercial purposes under 
clause (5) has a class rate of 2.2 percent of market value for 
taxes payable in 1992, and for taxes payable in 1993 and 
thereafter, the first $72,000 of market value on each parcel has 
a class rate of two percent and the market value of each parcel 
that exceeds $72,000 has a class rate of 2.5 percent, and (ii) 
manufactured home parks assessed under clause (8) have a class 
rate of two percent for taxes payable in 1993 only.  
     (d) Class 4d property includes: 
     (1) a structure that is: 
     (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 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.  For property for which 
application is made for 4c or 4d classification for taxes 
payable in 1994 and thereafter, and which was not classified 4c 
or 4d for taxes payable in 1993, 4c or 4d classification is 
available only for those units meeting the requirements of 
section 273.1318. 
     Classification under this clause is only available to 
property of a nonprofit or limited dividend entity. 
     (2) For taxes payable in 1992, 1993 and 1994, only, 
buildings and appurtenances, together with the land upon which 
they are located, leased by the occupant under the community 
lending model lease-purchase mortgage loan program administered 
by the Federal National Mortgage Association, provided the 
occupant's income is no greater than 60 percent of the county or 
area median income, adjusted for family size and the building 
consists of existing single family or duplex housing.  The lease 
agreement must provide for a portion of the lease payment to be 
escrowed as a nonrefundable down payment on the housing.  To 
qualify under this clause, the taxpayer must apply to the county 
assessor by May 30 of each year.  The application must be 
accompanied by an affidavit or other proof required by the 
assessor to determine qualification under this clause. 
     (3) Qualifying buildings and appurtenances, together with 
the land upon which they are located, leased for a period of up 
to five years by the occupant under a lease-purchase program 
administered by the Minnesota housing finance agency or a 
housing and redevelopment authority authorized under sections 
469.001 to 469.047, provided the occupant's income is no greater 
than 80 percent of the county or area median income, adjusted 
for family size, and the building consists of two or less 
dwelling units.  The lease agreement must provide for a portion 
of the lease payment to be escrowed as a nonrefundable down 
payment on the housing.  The administering agency shall verify 
the occupants income eligibility and certify to the county 
assessor that the occupant meets the income criteria under this 
paragraph.  To qualify under this clause, the taxpayer must 
apply to the county assessor by May 30 of each year.  For 
purposes of this section, "qualifying buildings and 
appurtenances" shall be defined as one or two unit residential 
buildings which are unoccupied and have been abandoned and 
boarded for at least six months. 
     Class 4d property has a class rate of two percent of market 
value. 
     (e) Residential rental property that would otherwise be 
assessed as class 4 property under paragraph (a); paragraph (b), 
clauses (1) and (3); paragraph (c), clause (1), (2), (3), or 
(4), 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.  Residential rental 
property that would otherwise be assessed as class 4 property 
under paragraph (d) is assessed at 2.3 percent of market value 
if it is found to be a substandard building under section 
273.1316. 
    Sec. 17.  Minnesota Statutes 1992, section 273.138, 
subdivision 5, is amended to read: 
    Subd. 5.  The commissioner of revenue shall calculate the 
aids pursuant to subdivisions 2 and 3, basing all necessary 
calculations on the abstracts of assessment of real property for 
assessment year 1972 transmitted to the commissioner of revenue 
pursuant to section 270.11 as equalized by the state board of 
equalization pursuant to sections 270.11 and 270.12, and the 
1973 abstracts of tax lists transmitted by the county auditors 
pursuant to section 275.29.  The commissioner shall pay directly 
to the affected taxing authorities their total payment for the 
year at the time distributions are made pursuant to section 
273.13, subdivision 15a 477A.015. 
    Sec. 18.  Minnesota Statutes 1992, 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 local tax rates. 
     (c) "Gross tax capacity" means the product of the gross 
class rates and 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, (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.  Gross tax capacity cannot be 
less than zero. 
     (d) "Net tax capacity" means the product of (i) the 
appropriate net class rates for the year in which the aid is 
payable, except that for aids payable in 1992 the class rate 
applied to class 4b property shall be 2.9 percent; the class 
rate applied to class 4a property shall be 3.55 percent; the 
class rate applied to noncommercial seasonal recreational 
residential property shall be 2.25 percent; and the class rates 
applied to portions of class 1a, 1b, and 2a property shall be 2 
percent for the market value between $68,000 and $110,000 and 
2.5 percent for the market value over $110,000; for aid payable 
in 1993 the class rate applicable to class 4a shall be 3.5 
percent; and the class rate applicable to class 4b shall be 2.65 
percent; and for aid payable in 1994 the class rate applicable 
to class 4b shall be 2.4 percent, and (ii) estimated market 
values for the assessment two years prior to that in which aid 
is payable.  The reclassification of mobile home parks as class 
4c shall not be considered in determining net tax capacity for 
purposes of this paragraph for aids payable in 1991 or 1992.  
Any reclassification of property by Laws 1991, chapter 291, 
shall not be considered in determining net tax capacity for aids 
payable in 1992.  "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, (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 shall 
be multiplied by 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) "Previous net tax capacity" means the product of the 
appropriate net class rates for the year previous to the year in 
which the aid is payable, and estimated market values for the 
assessment two years prior to that in which aid is payable.  
"Total previous net tax capacity" means the previous net tax 
capacities for all property within the unique taxing 
jurisdiction.  The total previous net tax capacity shall be 
reduced by the sum of (1) the unique taxing jurisdiction's 
previous 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, (2) the 
previous net tax capacity of the captured value of tax increment 
financing districts as defined in section 469.177, subdivision 
2, and (3) the previous net tax capacity of transmission lines 
deducted from a local government's total net tax capacity under 
section 273.425.  Previous net tax capacity cannot be less than 
zero. 
    (f) "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.  The equalized market values 
shall equal the unequalized market values divided by the 
assessment sales ratio. 
    (g) "1989 local tax rate" means 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 subdivision 2a.  For 
purposes of computation of the local tax rate only, gross taxes 
shall not be adjusted by inflation or household growth. 
    (h) "Current local tax rate" means the quotient derived by 
dividing the taxes levied within a unique taxing jurisdiction 
for taxes payable in the year prior to that for which aids are 
being calculated by the total previous net tax capacity of the 
unique taxing jurisdiction. 
    (i) 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 1989 local tax rate; (ii) its total net tax 
capacity; and (iii) 0.9767. 
    (j) 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," "gross taxes," or "taxes 
levied" means the total 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.  Gross taxes levied on all properties or gross 
taxes are before reduction by any credits for taxes payable in 
1989.  "Gross taxes" are before any reduction for disparity 
reduction aid but "taxes levied" are after any reduction for 
disparity reduction aid.  Gross taxes levied or taxes levied 
cannot be less than zero.  
    "Taxes levied" excludes actual amounts levied for purposes 
listed in subdivision 2a. 
     (k) "Human services aids" means: 
     (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; 
      (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. 
      (l) "Cost-of-living adjustment factor" means the greater of 
one or one plus the percentage increase in the consumer price 
index minus .36 percent.  In no case may the cost of living 
adjustment factor exceed 1.0394.  
      (m) The percentage increase in the consumer price index 
means 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.  
      (n) "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.  
      (o) "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. 
      (p) "Household adjustment factor" means the number of 
households for the second most recent year preceding that in 
which the aids are payable divided by the number of households 
for the third most recent year.  The household adjustment factor 
cannot be less than one.  
      (q) "Growth adjustment factor" means the household 
adjustment factor in the case of counties, cities, and towns.  
In the case of school districts the growth adjustment factor 
means the average daily membership of the school district under 
section 124.17, subdivision 2, for the school year ending in the 
second most recent year preceding that in which the aids are 
payable divided by the average daily membership for the third 
most recent year.  In the case of special taxing districts, the 
growth adjustment factor equals one.  The growth adjustment 
factor cannot be less than one.  
     (r) For aid payable in 1992 and subsequent years, 
"homestead and agricultural credit base" means the previous 
year's certified homestead and agricultural credit aid 
determined under subdivision 2 less any permanent aid reduction 
in the previous year to homestead and agricultural credit aid 
under section 477A.0132, plus, for aid payable in 1992, fiscal 
disparity homestead and agricultural credit aid under 
subdivision 2b.  
     (s) "Net tax capacity adjustment" means (1) the total 
previous net tax capacity minus the total net tax capacity, 
multiplied by (2) the unique taxing jurisdiction's current local 
tax rate.  The net tax capacity adjustment cannot be less than 
zero. 
     (t) "Fiscal disparity adjustment" means the difference 
between (1) a taxing jurisdiction's fiscal disparity 
distribution levy under section 473F.08, subdivision 3, clause 
(a), for taxes payable in the year prior to that for which aids 
are being calculated, and (2) the same distribution levy 
multiplied by the ratio of the highest class rate for class 3 
property for taxes payable in the year prior to that for which 
aids are being calculated to the highest class rate for class 3 
property for taxes payable in the second prior year to that for 
which aids are being calculated.  In the case of school 
districts, the fiscal disparity distribution levy shall exclude 
that part of the levy attributable to equalized school levies as 
defined in subdivision 2a. 
    Sec. 19.  Minnesota Statutes 1992, section 273.1398, 
subdivision 3, is amended to read: 
    Subd. 3.  [DISPARITY REDUCTION AID.] (a) For taxes payable 
in 1990, and subsequent years, the amount of disparity aid 
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, provided 
that the class rates for the portion of class 1a, 1b, and 2a 
property shall be 2 percent for the market value between $68,000 
and $110,000 and 2.5 percent for the market value over $110,000, 
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.  For taxes payable in 1992 
and subsequent years, the amount of disparity aid certified to 
each taxing jurisdiction shall be reduced by any reductions 
required in the current year or permanent reductions required in 
previous years under section 477A.0132. 
    (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. 
    Sec. 20.  Minnesota Statutes 1992, section 273.1398, 
subdivision 5b, is amended 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) (k).  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) (k), 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 subdivision 1, paragraph (i) (k), 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.  [273.166] [MANUFACTURED HOME HOMESTEAD AND 
AGRICULTURAL CREDIT AID.] 
    Subdivision 1.  [DEFINITIONS.] (a) "Current local tax rate" 
has the meaning given it in section 273.1398, subdivision 1.  
    (b) "Growth adjustment factor" means the growth adjustment 
factor used in the calculation of homestead and agricultural 
credit aid for the payable year in which the manufactured home 
homestead and agricultural credit aid is payable.  
    (c) "Net tax capacity" means the product of (1) the 
appropriate net class rates for the year in which the aid is 
payable, except that for aids payable in 1993 the class rate 
applicable to class 4a shall be 3.5 percent; and the class rate 
applicable to class 4b shall be 2.65 percent; and for aid 
payable in 1994 the class rate applicable to class 4b shall be 
2.4 percent, and (2) estimated market values of manufactured 
homes assessed under section 273.125 for the assessment one year 
prior to that in which the aid is payable.  "Total net tax 
capacity" means the net tax capacities for all manufactured 
homes within the taxing district assessed under section 
273.125.  Net tax capacity cannot be less than zero.  
    (d) "Net tax capacity adjustment" means (1) the total 
previous net tax capacity minus the total net tax capacity, 
multiplied by (2) the taxing district's current local tax rate.  
The net tax capacity adjustment cannot be less than zero.  
    (e) "Previous net tax capacity" means the product of the 
appropriate net class rates for the year previous to the year in 
which the aid is payable, and estimated market values of 
manufactured homes assessed under section 273.125 for the 
assessment one year prior to that in which the aid is payable.  
"Total previous net tax capacity" means the previous net tax 
capacities for all manufactured homes within the taxing district 
assessed under section 273.125.  Previous net tax capacity 
cannot be less than zero.  
    Subd. 2.  [MANUFACTURED HOME HOMESTEAD AND AGRICULTURAL 
CREDIT AID.] For each calendar year, the manufactured home 
homestead and agricultural credit aid for each taxing 
jurisdiction equals the taxing jurisdiction's manufactured home 
homestead and agricultural credit aid determined under this 
subdivision for the preceding aid payable year times the growth 
adjustment factor for the jurisdiction plus the net tax capacity 
adjustment for the jurisdiction.  Except for education districts 
and secondary cooperatives that receive revenue according to 
section 124.2721 or 124.575, payment will not be made to any 
taxing jurisdiction that has ceased to levy a property tax. 
    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 education a sum 
sufficient to pay the aids provided under this section for 
school districts, intermediate school districts, or any group of 
school districts levying as a single taxing entity.  There is 
annually appropriated from the local government trust fund to 
the commissioner of revenue a sum sufficient to pay the aids 
provided under this section to counties, cities, towns, and 
special taxing districts. 
    Sec. 22.  Minnesota Statutes 1992, section 274.13, 
subdivision 1, is amended to read: 
    Subdivision 1.  [MEMBERS; MEETINGS; RULES FOR EQUALIZING 
ASSESSMENTS.] The county commissioners, or a majority of them, 
with the county auditor, or, if the auditor cannot be present, 
the deputy county auditor, or, if there is no deputy, the court 
administrator of the district court, shall form a board for the 
equalization of the assessment of the property of the county, 
including the property of all cities whose charters provide for 
a board of equalization.  The board shall meet annually, on the 
date specified in section 274.14, at the office of the auditor.  
Each member shall take an oath to fairly and impartially perform 
duties as a member.  The board shall examine and compare the 
returns of the assessment of property of the towns or districts, 
and equalize them so that each tract or lot of real property and 
each article or class of personal property is entered on the 
assessment list at its market value, subject to the following 
rules: 
     (1) The board shall raise the valuation of each tract or 
lot of real property which in its opinion is returned below its 
market value to the sum believed to be its market value.  The 
board must first give notice of intention to raise the valuation 
to the person in whose name it is assessed, if the person is a 
resident of the county.  The notice must fix a time and place 
for a hearing.  
     (2) The board shall reduce the valuation of each tract or 
lot which in its opinion is returned above its market value to 
the sum believed to be its market value. 
    (3) The board shall raise the valuation of each class of 
personal property which in its opinion is returned below its 
market value to the sum believed to be its market value.  It 
shall raise the aggregate value of the personal property of 
individuals, firms, or corporations, when it believes that the 
aggregate valuation, as returned, is less than the market value 
of the taxable personal property possessed by the individuals, 
firms, or corporations, to the sum it believes to be the market 
value.  The board must first give notice to the persons of 
intention to do so.  The notice must set a time and place for a 
hearing. 
    (4) The board shall reduce the valuation of each class of 
personal property listed in section 273.49 that is returned 
above its market value to the sum it believes to be its market 
value.  Upon complaint of a party aggrieved, the board shall 
reduce the aggregate valuation of the individual's personal 
property, or of any class of personal property for which the 
individual is assessed, which in its opinion has been assessed 
at too large a sum, to the sum it believes was the market value 
of the individual's personal property of that class.  
    (5) The board must not reduce the aggregate value of all 
the property of its county, as submitted to the county board of 
equalization, with the additions made by the auditor under this 
chapter, by more than one percent of its whole valuation.  The 
board may raise the aggregate valuation of real property, and of 
each class of personal property, of the county, or of any town 
or district of the county, when it believes it is below the 
market value of the property, or class of property, to the 
aggregate amount it believes to be its market value. 
     (6) The board shall change the classification of any 
property which in its opinion is not properly classified. 
    Sec. 23.  Minnesota Statutes 1992, section 274.18, is 
amended to read: 
    274.18 [ABSTRACT OF REALTY ASSESSMENT ROLL TO TOWN CLERKS.] 
    On or before the first Tuesday of March, in Once each year, 
the county auditor shall make out and send to each town clerk in 
the county who has requested it, a certified copy or abstract of 
the latest available real estate assessment roll of the town, as 
equalized by the county and state boards of equalization. 
    Sec. 24.  Minnesota Statutes 1992, section 275.065, 
subdivision 5a, is amended to read: 
    Subd. 5a.  [PUBLIC ADVERTISEMENT.] (a) A city that has a 
population of more than 1,000, county, or school district shall 
advertise in a newspaper a notice of its intent to adopt a 
budget and property tax levy or, in the case of a school 
district, to review its current budget and proposed property 
taxes payable in the following year, at a public hearing.  The 
notice must be published not less than two business days nor 
more than six business days before the hearing. 
    For a city that has a population of more than 1,000 but 
less than 2,500 the advertisement must be at least one-eighth 
page in size of a standard-size or a tabloid-size newspaper.  
The first headline in the advertisement stating the notice of 
proposed property taxes and the notice of public hearing must be 
in a type no smaller than 14-point, and the second headline must 
be in a type no smaller than 12-point.  The text of the 
advertisement must be no smaller than 10-point, except that the 
property tax amounts and percentages may be in 9-point type. 
    For a city that has a population of 2,500 or more, a county 
or a school district, the first headline in the advertisement 
stating the notice of proposed property taxes and the notice of 
public hearing must be in a type no smaller than 30-point, and 
the second headline must be in a type no smaller than 22-point.  
The text of the advertisement must be no smaller than 14-point, 
except that the property tax amounts and percentages may be in 
12-point type. 
     The advertisement must not be placed in the part of the 
newspaper where legal notices and classified advertisements 
appear.  The advertisement must be published in an official 
newspaper of general circulation in the taxing authority.  The 
newspaper selected must be one of general interest and 
readership in the community, and not one of limited subject 
matter.  The advertisement must appear in a newspaper that is 
published at least once per week.  
     (b) The advertisement must be in the following form, except 
that the notice for a school district may include references to 
the current budget in regard to proposed property taxes. 

                               "NOTICE OF

                         PROPOSED PROPERTY TAXES

               (City/County/School District) of .........
The governing body of ........ will soon hold budget hearings 
and vote on the property taxes for (city/county services that 
will be provided in 199_/school district services that will be 
provided in 199_ and 199_). 

                        NOTICE OF PUBLIC HEARING:
All concerned citizens are invited to attend a public hearing 
and express their opinions on the proposed (city/county/school 
district) budget and property taxes, or in the case of a school 
district, its current budget and proposed property taxes, 
payable in the following year.  The hearing will be held on 
(Month/Day/Year) at (Time) at (Location, Address). 
    (c) A city with a population of 1,000 or less must 
advertise by posted notice as defined in section 645.12, 
subdivision 1.  The advertisement must be posted at the time 
provided in paragraph (a).  It must be in the form required in 
paragraph (b). 
    (d) For purposes of this subdivision, the population of a 
city is the most recent population as determined by the state 
demographer under section 4A.02. 
     Sec. 25.  Minnesota Statutes 1992, section 275.07, 
subdivision 1, is amended to read: 
    Subdivision 1.  The taxes voted by cities, counties, school 
districts, and special districts shall be certified by the 
proper authorities to the county auditor on or before five 
working days after December 20 in each year.  A town must 
certify the levy adopted by the town board to the county auditor 
by September 1 15 each year.  If the town board modifies the 
levy at a special town meeting after September 1 15, the town 
board must recertify its levy to the county auditor on or before 
five working days after December 20.  The taxes certified shall 
not be adjusted by the aid received under sections 273.1398, 
subdivisions 2 and 3, and 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. 
    Sec. 26.  Minnesota Statutes 1992, section 275.07, 
subdivision 4, is amended to read: 
    Subd. 4.  [REPORT TO COMMISSIONER.] On or before 
September 15 30 for taxes levied payable in 1990 1994, 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. 27.  Minnesota Statutes 1992, section 275.295, is 
amended to read: 
    275.295 [WETLANDS EXEMPTION; REPLACEMENT OF REVENUE.] 
    Subdivision 1.  [CERTIFICATION.] The total amount of 
revenue lost as a result of the exemption provided in section 
272.02, subdivision 1, paragraph (10), clause (iii), must be 
certified by the county auditor to the commissioner of revenue 
and submitted to the commissioner as part of the abstract of tax 
lists to be filed with the commissioner under the provisions of 
section 275.29.  The amount of revenue lost as a result of the 
exemption must be computed each year by applying the 
current local tax rates of the taxing jurisdictions in which the 
wetlands are located to the assessed valuation net tax capacity 
of the wetlands.  Payment to the county for lost revenue must 
not be less than the revenue that would have been received in 
taxes if the wetlands had an assessed value of $5 a net tax 
capacity of 50 cents per acre.  The commissioner of revenue 
shall review the certification for accuracy and may make 
necessary changes or return the certification to the county 
auditor for corrections. 
    Subd. 2.  [PAYMENT.] Based on current year tax data 
reported in the abstracts of tax lists, the commissioner of 
revenue shall annually determine the taxing district 
distribution of the amounts certified under subdivision 1.  The 
commissioner shall pay to each taxing district, other than 
school districts, its total payment for the year in equal 
installments on or before July 15 and December 15 of each 
year at the time distributions are made under section 473H.10. 
    Subd. 3.  [APPROPRIATION.] There is appropriated from the 
general fund to the commissioner of revenue the amount necessary 
to make the payments required in subdivision 2. 
     Sec. 28.  Minnesota Statutes 1992, section 276.02, is 
amended to read: 
    276.02 [TREASURER TO BE COLLECTOR.] 
    The county treasurer shall collect all taxes extended on 
the tax lists of the county and the fines, forfeitures, or 
penalties received by any person or officer for the use of the 
county.  The treasurer shall collect the taxes according to law 
and credit them to the proper funds.  This section does not 
apply to fines and penalties accruing to municipal corporations 
for the violation of their ordinances that are recoverable 
before a city justice.  Taxes, fines, interest, and penalties 
must be paid with United States currency or by check or money 
order drawn on a bank or other financial institution in the 
United States.  The county board may by resolution authorize the 
treasurer to impose a charge for any dishonored checks. 
    Sec. 29.  Minnesota Statutes 1992, section 277.01, 
subdivision 2, is amended to read: 
    Subd. 2.  [PARTIAL PAYMENTS.] 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 277.011 278.03 or any other law, nor does it affect the 
order of payment of delinquent taxes under section 280.39. 
    Sec. 30.  Minnesota Statutes 1992, section 277.15, is 
amended to read: 
    277.15 [INTEREST.] 
    When a judgment has heretofore been entered and docketed, 
or shall hereafter be entered and docketed, for the recovery of 
taxes, except in the case of real estate tax judgments provided 
for in section 279.19, the same shall bear interest until paid 
at the rate of six percent per annum until January 1, 1981, and 
at the rate determined under section 549.09 until January 1, 
1991.  Thereafter interest will be payable at the rate provided 
in section 279.03, subdivision 1a. 
    Beginning with the taxes payable year 1992, all personal 
property tax amounts not paid as of July 1, 1993, or January 1 
of the year following the year in which they were due, whichever 
is later, shall, until paid, bear interest at the rate provided 
in section 279.03, regardless of whether or not a judgment for 
those taxes is obtained and entered. 
    Sec. 31.  Minnesota Statutes 1992, section 277.17, is 
amended to read: 
    277.17 [ESCROW REQUIREMENT FOR DELINQUENCIES ON 
MANUFACTURED HOMES.] 
    Subdivision 1.  [CERTIFICATION NOTIFICATION TO MANUFACTURED 
HOME OWNER.] On or before October 15 of each year, the county 
auditor shall send a letter to each owner of a manufactured home 
for which the personal property taxes due on August 31 are 
delinquent as of September 30.  On or before December 31 of each 
year, At least once in each calendar year, the county auditor 
shall treasurer must send a letter to each owner of a 
manufactured home for which the taxes due on August 31 were not 
delinquent but the personal property taxes due on November 15 
are delinquent as of December 15 in that calendar year have not 
been fully paid.  The first letter must inform the owner sent, 
in regard to any specific delinquent amount, must contain a 
notification that if the delinquent taxes are not paid in full 
within 90 days of the date of issuance of the notice one of the 
following may occur: 
    (1) the owner may be required under state law to begin 
making monthly payments of delinquent property taxes, and the 
property taxes will also be escrowed for payment of property 
taxes the following year; or 
    (2) the county will notify the lender of the tax 
delinquency and request the lender to initiate the process 
provided under section 47.209.  The form and content of the 
notice to the owner shall be specified by the commissioner of 
revenue.  
    Unless the collection of the tax is in jeopardy and the 
treasurer is proceeding under the authority of section 277.21, 
subdivision 2, the county may not levy and seize property of the 
taxpayer until 90 days after the postmark date of the letter 
containing the notification required under this subdivision. 
    Subd. 2.  [ESTABLISHMENT OF TAX ESCROW ACCOUNTS.] The 
county auditor treasurer may establish a tax escrow account for 
delinquent property taxes for an owner who receives a notice 
under subdivision 1 if the county does not initiate the process 
provided under section 47.209.  If an escrow account is 
established for an owner who receives a notice regarding taxes 
due August 31, the treasurer shall determine an amount the owner 
must pay an additional amount each month equal to ten percent of 
such that by the following August 31, the owner will have paid 
the delinquent manufactured home personal property taxes, 
penalties, and interest due, plus ten percent of the estimated 
manufactured home personal property tax that will become due and 
payable in the year following calendar the year of delinquency.  
If the owner fails to pay the any manufactured home personal 
property tax that becomes due on November 15 prior to the 
following August 31, the additional amount of tax due but 
unpaid, plus penalty and interest, will be added to the 
delinquent property taxes payable by installment under this 
section.  If an escrow account is established for an owner who 
receives a notice regarding taxes due November 15, the owner 
must pay an additional amount each month equal to 15 percent of 
the delinquent taxes, penalties, and interest due, plus 12 
percent of the tax payable in the following calendar year.  
    Subd. 3.  [COUNTY ESCROW.] Within 30 days of receipt of 
notice from the county auditor treasurer under subdivision 2, 
the owner must make the first monthly payment under subdivision 
2 to the county auditor treasurer.  The commissioner of revenue 
shall prescribe the procedures to be used for monthly 
collections of the delinquent and current tax payments.  If an 
owner is making the payments at the time required under this 
section, no action may be taken under section 277.20 277.21 with 
respect to the manufactured home for which the property taxes 
are being paid into the escrow account. 
    Sec. 32.  Minnesota Statutes 1992, section 278.01, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DETERMINATION OF VALIDITY.] Any person 
having personal property, or any estate, right, title, or 
interest in or lien upon any parcel of land, who claims that 
such property has been partially, unfairly, or unequally 
assessed in comparison with other property in the (1) city, or 
(2) county, or (3) in the case of a county containing a city of 
the first class, the portion of the county excluding the first 
class city, or that the parcel has been assessed at a valuation 
greater than its real or actual value, or that the tax levied 
against the same is illegal, in whole or in part, or has been 
paid, or that the property is exempt from the tax so levied, may 
have the validity of the claim, defense, or objection determined 
by the district court of the county in which the tax is levied 
or by the tax court by serving one copy of a petition for such 
determination upon the county auditor, one copy on the county 
attorney, one copy on the county treasurer, and three copies on 
the county assessor.  The county assessor shall immediately 
forward one copy of the petition to the appropriate governmental 
authority in a home rule charter or statutory city or town in 
which the property is located if that city or town employs its 
own certified assessor.  A copy of the petition shall also be 
forwarded by the assessor to the school board of the school 
district in which the property is located. 
    In counties where the office of county treasurer has been 
combined with the office of county auditor, the county may elect 
to require the petitioner to serve the number of copies as 
determined by the county.  The county assessor shall immediately 
forward one copy of the petition to the appropriate governmental 
authority in a home rule charter or statutory city or town in 
which the property is located if that city or town employs its 
own certified assessor.  A list of petitioned properties, 
including the name of the petitioner, the identification number 
of the property, and the estimated market value, shall be sent 
on or before the first day of July by the county 
auditor/treasurer to the school board of the school district in 
which the property is located. 
     For all counties, the petitioner must file the copies with 
proof of service, in the office of the court administrator of 
the district court before the 16th day of May of the year in 
which the tax becomes payable.  A petition for determination 
under this section may be transferred by the district court to 
the tax court.  An appeal may also be taken to the tax court 
under chapter 271 at any time following receipt of the valuation 
notice required by section 273.121 but prior to May 16 of the 
year in which the taxes are payable. 
    Sec. 33.  Minnesota Statutes 1992, section 278.02, is 
amended to read: 
    278.02 [PETITION MAY INCLUDE SEVERAL PARCELS.] 
    Such petition need not be in any particular form, but shall 
clearly identify the items of personal property, or the land 
involved, the assessment date, and shall set forth in concise 
language the claim, defense, or objection asserted.  No petition 
shall include more than one assessment date.  Several items of 
personal property and several parcels of land in or upon which 
the petitioner has an estate, right, title, interest, or lien 
may be included in the same petition, but only if they are in 
the same city or town, except that contiguous property 
overlapping city or town boundaries may be included in one 
petition.  
    Sec. 34.  Minnesota Statutes 1992, section 278.03, is 
amended to read: 
    278.03 [PAYMENT OF TAX.] 
    Subdivision 1.  [REAL PROPERTY.] In the case of real 
property, if the proceedings instituted by the filing of the 
petition have not been completed before the 16th day of May next 
following the filing, the petitioner shall pay to the county 
treasurer 50 percent of the tax levied for such year against the 
property involved, unless permission to continue prosecution of 
the petition without such payment is obtained as herein provided.
If the proceedings instituted by the filing of the petition have 
not been completed by the next October 16, or, in the case of 
class 1b agricultural homestead, class 2a agricultural 
homestead, and class 2b(2) agricultural nonhomestead property, 
November 16, the petitioner shall pay to the county treasurer 50 
percent of the unpaid balance of the taxes levied for the year 
against the property involved if the unpaid balance is $2,000 or 
less and 80 percent of the unpaid balance if the unpaid balance 
is over $2,000, unless permission to continue prosecution of the 
petition without payment is obtained as herein provided.  The 
petitioner, upon ten days notice to the county attorney and to 
the county auditor, given at least ten days prior to the 16th 
day of May or the 16th day of October, or, in the case of class 
1b agricultural homestead, class 2a agricultural homestead, and 
class 2b(2) agricultural nonhomestead property, the 16th day of 
November, may apply to the court for permission to continue 
prosecution of the petition without payment; and, if it is made 
to appear 
     (1) that the proposed review is to be taken in good faith; 
     (2) that there is probable cause to believe that the 
property may be held exempt from the tax levied or that the tax 
may be determined to be less than 50 percent of the amount 
levied; and 
     (3) that it would work a hardship upon petitioner to pay 
the taxes due, 
     the court may permit the petitioner to continue prosecution 
of the petition without payment, or may fix a lesser amount to 
be paid as a condition of continuing the prosecution of the 
petition. 
     Failure to make payment of the amount required when due 
shall operate automatically to dismiss the petition and all 
proceedings thereunder unless the payment is waived by an order 
of the court permitting the petitioner to continue prosecution 
of the petition without payment.  The petition shall be 
automatically reinstated upon payment of the entire tax plus 
interest and penalty if the payment is made within one year of 
the dismissal.  The county treasurer shall, upon request of the 
petitioner, issue duplicate receipts for the tax payment, one of 
which shall be filed by the petitioner in the proceeding. 
    Subd. 2.  [PERSONAL PROPERTY.] In the case of personal 
property, if the proceedings instituted by the filing of the 
petition have not been completed before May 16 next following 
the filing of the petition, the petitioner shall pay to the 
county treasurer 50 percent of the tax levied for the year 
against the property involved, unless permission to file the 
petition without payment is obtained as provided in this 
subdivision.  The petitioner, upon ten days' notice to the 
county attorney and to the county auditor, given at least ten 
days before May 16, may apply to the court for permission to 
file the petition without such payment; and, if it is made to 
appear: 
    (1) that the proposed review is to be taken in good faith; 
    (2) that there is probable cause to believe that the 
property may be held exempt from the tax levied or that the tax 
may be determined to be less than 50 percent of the amount 
levied; and 
    (3) that it would work a hardship upon petitioner to pay 50 
percent of the tax. 
    The court may permit the petitioner to continue to 
prosecute the petition without payment, or may fix a lesser 
amount to be paid as a condition to the right to continue to 
prosecute the same.  Payment of the amount so fixed shall be 
endorsed on the order by the county treasurer. 
    Sec. 35.  Minnesota Statutes 1992, section 278.04, is 
amended to read: 
    278.04 [TREASURER MUST STAMP TAX LISTS.] 
    Upon the filing of such petition, the county treasurer 
shall write or stamp opposite the description of such items of 
personal property or parcel on the tax list the notation, 
"Petition for review filed," and such parcel shall not be 
included in the delinquent tax list for such year.  
    Sec. 36.  Minnesota Statutes 1992, section 278.08, is 
amended to read: 
    278.08 [INTEREST.] 
    Subdivision 1.  [INTEREST; PENALTY.] In the case of real 
property, the judgment must include the following interest: 
    (1) if the tax is sustained in full, interest on the unpaid 
part of the tax computed under section 279.03; 
    (2) if the tax is increased, interest on the unpaid part of 
the tax as originally assessed computed under section 279.03; 
    (3) if the tax is reduced, interest on the difference 
between the tax as recomputed and the amount previously paid 
computed under section 279.03.  
    If the tax is sustained or increased, penalty on the unpaid 
part of the tax as originally assessed computed under section 
279.01 must be included in the judgment.  
    Subd. 2.  [REFUND.] In the case of real property, if the 
petitioner has overpaid the tax determined or stipulated to be 
due, the county auditor shall compute interest on the 
overpayment from the date of the filing of the petition for 
review or from the date of payment of the tax, whichever is 
later, until the date of issuance of the refund warrant.  
Interest shall be calculated on the overpayment at the rate 
provided in section 279.03 for delinquent property taxes for the 
levy year involved originally due and payable in the same year 
as the tax which was overpaid.  
    Sec. 37.  Minnesota Statutes 1992, section 278.09, is 
amended to read: 
    278.09 [CERTIFIED COPIES TO AUDITOR AND TREASURER.] 
    Upon entry of judgment a certified copy thereof shall be 
delivered to the county auditor and to the county treasurer if 
the tax list be still in the treasurer's possession, who shall 
correct the tax list and assessment rolls in accordance with the 
judgment, writing or stamping opposite such parcel or item of 
personal property in the tax list a notation "judgment entered" 
and the date thereof.  
    Sec. 38.  Minnesota Statutes 1992, section 279.025, is 
amended to read: 
    279.025 [PAYMENT OF DELINQUENT PROPERTY TAXES, SPECIAL 
ASSESSMENTS.] 
    Payment of delinquent property tax and related interest and 
penalties and special assessments shall be paid to the county 
auditor with United States currency or by check or money order 
drawn on a bank or other financial institution in the United 
States. 
    Sec. 39.  Minnesota Statutes 1992, section 287.21, 
subdivision 4, is amended to read: 
    Subd. 4.  [TAX-FORFEITED LAND.] Before a state deed for 
tax-forfeited land may be issued, the deed tax must be paid by 
purchasers the purchaser of tax-forfeited land whether the 
purchase is the result of a public auction or private sale, 
persons who redeem repurchase tax-forfeited land, or state 
agencies and local units of government that apply for use or 
purchase of acquire tax-forfeited land by purchase or any other 
means. 
    Sec. 40.  Minnesota Statutes 1992, section 287.22, is 
amended to read: 
    287.22 [EXCEPTIONS.] 
    The tax imposed by section 287.21 shall not apply to: 
    A.  Any executory contract for the sale of land under which 
the vendee is entitled to or does take possession thereof, or 
any assignment or cancellation thereof.  
    B.  Any mortgage or any assignment, extension, partial 
release, or satisfaction thereof.  
    C.  Any will.  
    D.  Any plat.  
    E.  Any lease.  
    F.  Any deed, instrument, or writing in which the United 
States or any agency or instrumentality thereof is the grantor, 
assignor, transferor, conveyor, grantee or assignee. 
    G.  Deeds for cemetery lots.  
    H.  Deeds of distribution by personal representatives.  
    I.  Deeds to or from coowners partitioning undivided 
interests in the same piece of property. 
    J.  Any deed or other instrument of conveyance issued 
pursuant to a land exchange under section 92.121 and related 
laws.  
    K.  A referee's or sheriff's certificate of sale in a 
mortgage or lien foreclosure sale. 
    L.  A referee's or sheriff's certificate of redemption from 
a mortgage or lien foreclosure sale issued to the redeeming 
mortgagor or lienee. 
    Sec. 41.  Minnesota Statutes 1992, section 347.10, is 
amended to read: 
    347.10 [OWNERS OF DOGS AND KENNELS LISTED BY ASSESSORS; 
LICENSES.] 
    Every assessor shall annually ascertain by diligent inquiry 
the dogs owned, harbored, or kept within the assessor's 
assessment district.  Every person shall answer frankly and 
fully all questions asked by the assessor relative to the 
ownership or keeping of dogs within the assessor's district.  
The assessor shall prepare and file with the town or statutory 
city clerk a list containing the names and addresses of all 
owners of dogs in the district, and the number and sex of dogs 
owned, harbored or kept.  The assessor shall make a list of the 
names of persons owning and operating kennels and the number of 
dogs kept in each.  The term "kennel" shall mean any 
establishment where dogs are kept for the purpose of breeding, 
sale or sporting purposes.  Any person who keeps or operates a 
kennel may, in lieu of the license for each dog required by 
sections 347.08 to 347.21, apply to the town or city treasurer 
for a kennel license for the keeping or operating of such 
kennel.  For such a kennel license the person shall pay a fee of 
$10 for the license year.  With the kennel license the clerk 
shall issue a number of metal tags equal to the number of dogs 
kept in the kennel.  The tags shall be made in a form so that 
they may be readily distinguishable from the individual license 
tags for the same year.  The licensee of a kennel shall at all 
times keep one of such tags attached to the collar of each dog 
over six months old kept under a kennel license.  The tags may 
be transferred from one dog to another within the kennel 
whenever any dog is removed from the kennel.  The list shall be 
filed with the town or city clerk at the time the assessor 
delivers to the clerk the assessment roll.  The clerk may 
appoint a deputy or deputies to issue such licenses.  The clerk 
shall receive ten cents for each license issued, to be paid by 
the town out of the revenue fund.  
    A license shall be issued by the clerk or the clerk's 
deputy upon application being made therefor and upon payments 
made as herein provided.  The license shall be in the form 
prescribed by the county auditor and shall be executed by the 
proper town, or city clerk or deputy.  The license shall state 
the year for which it was issued, shall bear a serial number, 
the owner's name and address, and the name, sex, breed, and 
color of the dog licensed.  When information is furnished that 
any dog on the assessor's list is dead, the clerk shall so 
indicate on the list. 
    Sec. 42.  Minnesota Statutes 1992, section 348.04, is 
amended to read: 
    348.04 [PROOFS SENT TO COMMISSIONER OF NATURAL RESOURCES.] 
    Before August 1 the county auditor shall compare examine 
the proofs furnished by the claimant with the assessor's report, 
and, if they correspond appear correct in substance, the county 
auditor shall immediately forward to the commissioner of natural 
resources the original proofs of claim and a certified list of 
all plats filed. 
    Sec. 43.  Minnesota Statutes 1992, section 469.175, 
subdivision 5, is amended to read: 
    Subd. 5.  [ANNUAL DISCLOSURE.] For all tax increment 
financing districts, whether created prior or subsequent to 
August 1, 1979, on or before July 1 of each year, the authority 
shall submit to the county board, the county auditor, the school 
board, the commissioner of revenue and, if the authority is 
other than the municipality, the governing body of the 
municipality, a report of the status of the district.  The 
report shall include the following information:  the amount and 
the source of revenue in the account, the amount and purpose of 
expenditures from the account, the amount of any pledge of 
revenues, including principal and interest on any outstanding 
bonded indebtedness, the original net tax capacity of the 
district, the captured net tax capacity retained by the 
authority, the captured net tax capacity shared with other 
taxing districts, the tax increment received, and any additional 
information necessary to demonstrate compliance with any 
applicable tax increment financing plan.  An annual statement 
showing the tax increment received and expended in that year, 
the original net tax capacity, captured net tax capacity, amount 
of outstanding bonded indebtedness, and any additional 
information the authority deems necessary shall be published in 
a newspaper of general circulation in the municipality. 
    Sec. 44.  Minnesota Statutes 1992, 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 net 
tax capacity of those properties by applying the appropriate 
class rates.  When computing the rate of tax pursuant to section 
275.08, the county auditor shall include the net 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 net tax capacity times the total local tax 
rate for all purposes as provided in clause (a).  
     (c) The county auditor shall then compute the tax on lands 
valued according to subdivision 2 and nonresidential buildings 
by multiplying the net tax capacity times the total local tax 
rate for all purposes as provided in clause (a), subtracting 
$1.50 per acre of land in the preserve.  
     (d) 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 net tax capacity 
times 105 percent of the previous year's statewide average local 
tax rate levied on property located within townships for all 
purposes.  
     (e) 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 (c) or (d), whichever is 
less.  The state shall reimburse the taxing jurisdictions for 
the amount of the difference between the net tax determined 
under this clause and the gross tax in clause (b).  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.  Payment shall be made by the state on December 15 26 
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. 45.  Minnesota Statutes 1992, section 477A.013, 
subdivision 1, is amended to read: 
    Subdivision 1.  [TOWNS.] In calendar year 1990, each town 
that had levied for taxes payable in the prior year a local tax 
rate of at least .008 shall receive a distribution equal to 106 
percent of the amount received in 1989 under this subdivision.  
In calendar years 1991 and 1992, each town that had levied for 
taxes payable in the prior year a local tax rate of at least 
.008 shall receive a distribution equal to the amount it 
received in the previous year under this subdivision less any 
permanent reductions made under section 477A.0132.  In 1993 and 
thereafter, each town that had levied for taxes payable in the 
prior year a local tax rate of at least .008 shall receive a 
distribution equal to the amount it received in 1992 under this 
subdivision before any nonpermanent reductions made under 
section 477A.0132 plus $1 per capita based on the town's 
population. 
     Sec. 46.  Laws 1992, chapter 511, article 2, section 61, is 
amended to read: 
    Sec. 61.  [EFFECTIVE DATE.] 
    Sections 2 to 4, 9, 13, 17, 18, 20, 25, 35, 36, 40, and 60, 
paragraph (a), are effective for property taxes levied in 1992, 
payable in 1993, and thereafter, except that the part of section 
17 which strikes the number 225 and inserts the number 250 is 
effective for taxes levied in 1991, payable in 1992, and 
thereafter. 
    Section 5 is effective beginning with the 1992 sales ratio 
study. 
    Sections 6, 10, 11, 15, 16, 31, 45, and 46 are effective 
for property taxes levied in 1993, payable in 1994, and 
thereafter. 
    Sections 7, 8, 24 and 60, paragraph (b), are effective for 
hearings scheduled by the court after January 1, 1993. 
    Section 14 is effective the day following final enactment 
and applies to property taxes payable in 1993 and thereafter by 
property for which leasehold cooperative status had been claimed 
before or after the effective date. 
    Section 18 is effective for assessment year 1992 and 
thereafter, for taxes payable in 1993 and thereafter, provided 
that for the assessment year 1992, for taxes payable in 1993, 
the January 15, 1992, certification date in section 18 is 
extended to June 15, 1992. 
    Section 22 is effective for referenda for taxes payable in 
1993 and thereafter. 
    Sections 27 to 29, 39, 43, 49 to 51, 54 to 58 and 60, 
paragraph (c), are effective the day following final enactment. 
    Section 34 is effective for abatements granted in 1992 and 
thereafter. 
    Sections 41 and 42 are effective for collections made July 
1, 1992, and thereafter. 
    Section 59 is effective the day following final enactment 
and applies as provided in that section. 
    Sec. 47.  [REPEALER.] 
    (a) Minnesota Statutes 1992, section 273.49, is repealed. 
    (b) Minnesota Statutes 1992, sections 274.19 and 274.20, 
are repealed. 
    (c) Minnesota Statutes 1992, section 275.03, is repealed. 
    (d) Minnesota Statutes 1992, section 277.011, is repealed. 
    (e) Minnesota Statutes 1992, section 348.03, is repealed. 
    Sec. 48.  [INSTRUCTIONS TO REVISOR.] 
    Subdivision 1.  In the next edition of Minnesota Statutes, 
the revisor shall change the headings for chapters 277 and 278 
to reflect that personal property and real property ad valorem 
valuation and tax objections are handled under chapter 278. 
    Subd. 2.  In the next edition of Minnesota Statutes, the 
revisor shall replace the phrase "section 274.19" as it appears 
in sections 168.012, subdivision 9; 271.06, subdivision 1; 
271.09, subdivision 3; 273.123, subdivision 1; 277.01, 
subdivision 1; 290A.04, subdivision 3; and 290A.07, subdivision 
2a; with the phrase "section 273.125."  This instruction applies 
even if the phrase "section 274.19" is a part of a larger 
citation or reference in the above-listed sections of the 
statutes. 
    Sec. 49.  [EFFECTIVE DATE.] 
    Sections 1, 10, 11, 39 to 43, 47, paragraph (e), and 48, 
are effective the day following final enactment.  Section 46 is 
effective for taxes payable in 1992 and thereafter.  Sections 2, 
3, 12, 22, 24, 31, and 47, paragraph (a), are effective for 
taxes payable in 1993 and thereafter.  Sections 5, 6, 7, 9, 13 
to 16, 26, 27, 29, 32 to 37, and 47, paragraph (d), are 
effective for taxes payable in 1994 and thereafter.  Section 23 
is effective July 1, 1993.  Section 30 is effective July 1, 
1993, for taxes payable in 1992 and thereafter.  Sections 17, 
20, and 44 are effective for aids payable in 1992 and thereafter.
Sections 18 and 19 are effective for aids payable in 1993 and 
thereafter.  Section 21 is effective for aids payable in 1994 
and thereafter.  Section 8 is effective for forfeitures, tax 
sales, and repurchases occurring on or after January 1, 1994. 
Section 47, paragraph (b), is effective for taxes and aids 
payable in 1994 and thereafter. 

                                ARTICLE 4

                               LOCAL AIDS
    Section 1.  Minnesota Statutes 1992, section 16A.712, is 
amended to read: 
    16A.712 [LOCAL GOVERNMENT TRUST; APPROPRIATIONS IN FISCAL 
YEAR 1993 AND SUBSEQUENT YEARS.] 
    (a) The amounts necessary to make the following payments in 
fiscal year 1993 and subsequent years are appropriated from the 
local government trust fund to the commissioner of revenue 
unless otherwise specified: 
    (1) attached machinery aid to counties under section 
273.138; 
    (2) in fiscal year 1993 only, supplemental homestead credit 
under section 273.1391; 
    (3) $560,000 in fiscal year 1993 and $300,000 annually in 
fiscal years 1994 and 1995 for tax administration; 
    (4) $105,000 annually to the commissioner of finance in 
fiscal years 1993, 1994, and 1995 to administer the trust fund; 
    (5) $25,000 annually to the advisory commission on 
intergovernmental relations in fiscal years 1993, 1994, and 1995 
to pay nonlegislative members' per diem expenses and such other 
expenses as the commission deems appropriate; 
    (6) $350,000 in fiscal year 1993 and $1,200,000 annually in 
fiscal years 1994 and year 1995 to the intergovernmental 
information systems advisory council to develop a local 
government financial reporting system, with the participation 
and ongoing oversight of the legislative commission on planning 
and fiscal policy; and 
     (7) in fiscal year 1993 only, the transition credit under 
section 273.1398, subdivision 5, and the disparity reduction 
credit under section 273.1398, subdivision 4, for school 
districts.  The school districts' transition credit and 
disparity reduction credit shall be appropriated to the 
commissioner of education. 
     (b) In addition, the legislature shall appropriate the rest 
of the trust fund receipts for fiscal year 1993 and subsequent 
years to finance intergovernmental aid formulas or programs 
prescribed by law. 
    Sec. 2.  Minnesota Statutes 1992, section 256E.06, 
subdivision 12, is amended to read: 
    Subd. 12.  [APPROPRIATION.] $51,566,000 is appropriated 
from the local government trust fund in fiscal year 1993 and 
$53,113,000 annually, $50,762,000 in fiscal years year 1994, 
and $49,499,000 in fiscal year 1995, and thereafter to the 
commissioner of human services for payment of aid under this 
section.  Notwithstanding subdivisions 1 and 2, the increased 
appropriation available in fiscal year 1994 and thereafter shall 
be used to increase each county's aid proportionately over the 
aid received in calendar year 1992.  For calendar year 1993 
only, each county's aid will be adjusted appropriately to 
reflect the increase that is dictated to occur in the second 
half of the calendar year. 
    Sec. 3.  Minnesota Statutes 1992, 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 local tax rates. 
    (c) "Gross tax capacity" means the product of the gross 
class rates and 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, (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.  Gross tax capacity cannot be 
less than zero. 
    (d) "Net tax capacity" means the product of (i) the 
appropriate net class rates for the year in which the aid is 
payable, except that for aids payable in 1992 the class rate 
applied to class 4b property shall be 2.9 percent; the class 
rate applied to class 4a property shall be 3.55 percent; the 
class rate applied to noncommercial seasonal recreational 
residential property shall be 2.25 percent; and the class rates 
applied to portions of class 1a, 1b, and 2a property shall be 2 
percent for the market value between $68,000 and $110,000 and 
2.5 percent for the market value over $110,000; for aid payable 
in 1993 the class rate applicable to class 4a shall be 3.5 
percent; and the class rate applicable to class 4b shall be 2.65 
percent; and for aid payable in 1994 the class rate applicable 
to class 4b shall be 2.4 percent, and (ii) estimated market 
values for the assessment two years prior to that in which aid 
is payable.  The reclassification of mobile home parks as class 
4c shall not be considered in determining net tax capacity for 
purposes of this paragraph for aids payable in 1991 or 1992.  
Any reclassification of property by Laws 1991, chapter 291, 
shall not be considered in determining net tax capacity for aids 
payable in 1992.  "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, (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 shall 
be multiplied by 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) (d) "Previous net tax capacity" means the product of 
the appropriate net class rates for the year previous to the 
year in which the aid is payable, and estimated market values 
for the assessment two years prior to that in which aid is 
payable.  "Total previous net tax capacity" means the previous 
net tax capacities for all property within the unique taxing 
jurisdiction.  The total previous net tax capacity shall be 
reduced by the sum of (1) the unique taxing jurisdiction's 
previous 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, (2) the 
previous net tax capacity of the captured value of tax increment 
financing districts as defined in section 469.177, subdivision 
2, and (3) the previous net tax capacity of transmission lines 
deducted from a local government's total net tax capacity under 
section 273.425.  Previous net tax capacity cannot be less than 
zero. 
    (f) (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.  The equalized market values 
shall equal the unequalized market values divided by the 
assessment sales ratio. 
    (g) "1989 local tax rate" means 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 subdivision 2a.  For 
purposes of computation of the local tax rate only, gross taxes 
shall not be adjusted by inflation or household growth. 
    (h) (f) "Equalized school levies" means the amounts levied 
for: 
    (1) general education under section 124A.23, subdivision 2; 
    (2) supplemental revenue under section 124A.22, subdivision 
8a; 
    (3) capital expenditure facilities revenue under section 
124.243, subdivision 3; 
    (4) capital expenditure equipment revenue under section 
124.244, subdivision 2; and 
    (5) basic transportation under section 124.226, subdivision 
1. 
    (g) "Current local tax rate" means the quotient derived by 
dividing the taxes levied within a unique taxing jurisdiction 
for taxes payable in the year prior to that for which aids are 
being calculated by the net tax capacity of the unique taxing 
jurisdiction.  
    (i) 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 1989 local tax rate; (ii) its total net tax 
capacity; and (iii) 0.9767. 
    (j) (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," "gross 
taxes," or "taxes levied" means the total 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.  Gross taxes levied on all properties or gross 
taxes are before reduction by any credits for taxes payable in 
1989.  "Gross taxes" are before any reduction for disparity 
reduction aid but "taxes levied" are after any reduction for 
disparity reduction aid.  Gross taxes levied or taxes levied 
cannot be less than zero.  
    "Taxes levied" excludes actual amounts levied for purposes 
listed in subdivision 2a equalized school levies. 
    (k) (i) "Human services aids" means: 
    (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; 
    (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. 
    (l) "Cost-of-living adjustment factor" means the greater of 
one or one plus the percentage increase in the consumer price 
index minus .36 percent.  In no case may the cost of living 
adjustment factor exceed 1.0394.  
    (m) The percentage increase in the consumer price index 
means 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.  
    (n) "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.  
    (o) "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. 
    (p) (j) "Household adjustment factor" means the number of 
households for the second most recent year preceding that in 
which the aids are payable divided by the number of households 
for the third most recent year.  The household adjustment factor 
cannot be less than one.  
    (q) (k) "Growth adjustment factor" means the household 
adjustment factor in the case of counties, cities, and towns.  
In the case of school districts the growth adjustment factor 
means the average daily membership of the school district under 
section 124.17, subdivision 2, for the school year ending in the 
second most recent year preceding that in which the aids are 
payable divided by the average daily membership for the third 
most recent year.  In the case of cities, towns, school 
districts, and special taxing districts, the growth adjustment 
factor equals one.  The growth adjustment factor cannot be less 
than one.  
    (r) (l) For aid payable in 1992 and subsequent years, 
"homestead and agricultural credit base" means the previous 
year's certified homestead and agricultural credit aid 
determined under subdivision 2 less any permanent aid reduction 
in the previous year to homestead and agricultural credit aid 
under section 477A.0132, plus, for aid payable in 1992, fiscal 
disparity homestead and agricultural credit aid under 
subdivision 2b.  
    (s) (m) "Net tax capacity adjustment" means (1) the total 
previous net tax capacity minus the total net tax capacity, 
multiplied by (2) the unique taxing jurisdiction's current local 
tax rate.  The net tax capacity adjustment cannot be less than 
zero. 
    (t) (n) "Fiscal disparity adjustment" means the difference 
between (1) a taxing jurisdiction's fiscal disparity 
distribution levy under section 473F.08, subdivision 3, clause 
(a), for taxes payable in the year prior to that for which aids 
are being calculated, and (2) the same distribution levy 
multiplied by the ratio of the highest class rate for class 3 
property for taxes payable in the year prior to that for which 
aids are being calculated to the highest class rate for class 3 
property for taxes payable in the second prior year to that for 
which aids are being calculated.  In the case of school 
districts, the fiscal disparity distribution levy shall exclude 
that part of the levy attributable to equalized school levies as 
defined in subdivision 2a. 
    Sec. 4.  Minnesota Statutes 1992, section 273.1398, 
subdivision 2, is amended to read: 
    Subd. 2.  [HOMESTEAD AND AGRICULTURAL CREDIT AID.] (a) For 
aid payable in 1991, Homestead and agricultural credit aid for 
each unique taxing jurisdiction equals the total gross taxes 
levied on all properties, minus the unique taxing jurisdiction's 
subtraction factor.  The commissioner of revenue may, in 
computing the amount of the homestead and agricultural credit 
aid paid in 1990 and subsequent years, 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.  
    (b)(1) The 1990 and 1991 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.  The net tax capacity 
adjustment is allocated to each local government levying taxes 
in the unique taxing jurisdiction in the proportion that the 
local government's taxes levied bears to the total taxes levied 
in 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. 
    (c) 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 
1991 shall be reduced by the amount provided in section 
477A.012, subdivisions 3, paragraph (d), 4, paragraph (d), and 5.
    (e) Payments under this subdivision to towns in 1990 and 
1991 shall be reduced by the amount of the homestead and 
agricultural credit aid adjustment, if any, determined for 1990 
under section 477A.013, subdivision 6. 
    (f) Payments under this subdivision to cities in 1990 and 
1991 shall be reduced by the amount of the homestead and 
agricultural credit aid adjustment, if any, determined for 1990 
under section 477A.013, subdivisions 6 and 7. 
    (g) Payments under this subdivision to special taxing 
districts, excluding hospital districts and the regional transit 
board defined in section 473.373, in 1990 and 1991 shall be 
reduced by an amount equal to 2.35 percent of the amount levied 
for taxes payable in 1990, before reduction for homestead and 
agricultural credit aid and disparity reduction aid.  Payments 
under this subdivision to the regional transit board in 1990 and 
1991 shall be reduced by $450,000.  
    (h) Payments under this subdivision to all taxing 
jurisdictions in 1992 and subsequent years are equal to the 
product of (1) the homestead and agricultural credit aid base, 
and (2) the growth adjustment factor, plus the net tax capacity 
adjustment and the fiscal disparity adjustment.  
    Sec. 5.  Minnesota Statutes 1992, section 273.1398, is 
amended by adding a subdivision to read: 
    Subd. 3a.  [DISPARITY REDUCTION AID TO CITIES.] 
Notwithstanding the provisions of subdivision 3 or section 
275.08, subdivision 1d, the amount of disparity reduction aid 
for a city for aid payable in calendar year 1994 and thereafter 
is zero, and the local tax rate for taxes payable in 1994 and 
thereafter for a city shall not be adjusted under section 
275.08, subdivision 1d.  For purposes of this subdivision, city 
means a statutory or home rule charter city. 
    Sec. 6.  Minnesota Statutes 1992, section 275.07, 
subdivision 1, is amended to read: 
    Subdivision 1.  The taxes voted by cities, counties, school 
districts, and special districts shall be certified by the 
proper authorities to the county auditor on or before five 
working days after December 20 in each year.  A town must 
certify the levy adopted by the town board to the county auditor 
by September 1 each year.  If the town board modifies the levy 
at a special town meeting after September 1, the town board must 
recertify its levy to the county auditor on or before five 
working days after December 20.  The taxes certified shall not 
be adjusted reduced by the aid received under sections 273.1398, 
subdivisions 2 and 3, and 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.  
    Sec. 7.  Minnesota Statutes 1992, section 275.07, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [APPLICATION OF LIMITATIONS.] Any limitation 
upon the amount that may be levied by a local taxing 
jurisdiction shall apply to the sum of the levy as certified 
under subdivision 1 plus the certified homestead and 
agricultural credit aid amount under section 273.1398, 
subdivision 2, unless the commissioner of revenue certifies to 
the county auditor that the limitation applies to the levy under 
subdivision 1 only. 
    Sec. 8.  Minnesota Statutes 1992, 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 are not eligible to be treated 
as cities for purposes of aid payable under section 477A.013, 
subdivision 5, or the aid adjustment under section 477A.013, 
subdivision 7. 
    Sec. 9.  Minnesota Statutes 1992, section 477A.011, 
subdivision 20, is amended to read: 
    Subd. 20.  [CITY NET TAX CAPACITY.] "City net 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, and the market values for aids payable in 1990 
and the net tax capacity rates listed in Minnesota Statutes 1989 
Supplement, 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, taxes payable in the year prior to the aid 
distribution plus (2) a city's levy on the fiscal disparities 
distribution tax capacity under section 473F.08, subdivision 3 
2, paragraph (a) (b), for taxes payable in the year prior to 
that for which aids are being calculated.  The market value 
utilized in computing city 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 city net tax capacity will be 
computed using equalized market values.  
    Sec. 10.  Minnesota Statutes 1992, section 477A.011, is 
amended by adding a subdivision to read: 
    Subd. 30.  [PRE-1940 HOUSING PERCENTAGE.] "Pre-1940 housing 
percentage" for a city is 100 times the most recent federal 
census count of all housing units in the city built before 1940, 
divided by the total number of all housing units in the city.  
Housing units includes both occupied and vacant housing units as 
defined by the federal census. 
    Sec. 11.  Minnesota Statutes 1992, section 477A.011, is 
amended by adding a subdivision to read: 
    Subd. 31.  [POPULATION DECLINE PERCENTAGE.] "Population 
decline percentage" for a city is the percent decline in a 
city's population for the last ten years, based on the most 
recently available population estimate from the state 
demographer or a federal census.  A city's population decline 
percentage cannot be less than zero. 
    Sec. 12.  Minnesota Statutes 1992, section 477A.011, is 
amended by adding a subdivision to read: 
    Subd. 32.  [COMMERCIAL INDUSTRIAL PERCENTAGE.] "Commercial 
industrial percentage" for a city is 100 times the sum of the 
estimated market values of all real property in the city 
classified as class 3 under section 273.13, subdivision 24, 
excluding public utility property, to the total market value of 
all taxable real and personal property in the city.  The market 
values are the amounts computed before any adjustments for 
fiscal disparities under section 473F.08.  The market values 
used for this subdivision are not equalized. 
    Sec. 13.  Minnesota Statutes 1992, section 477A.011, is 
amended by adding a subdivision to read: 
    Subd. 33.  [TRANSFORMED POPULATION.] "Transformed 
population" for a city is the city population raised to the 
.3308 power, times 30.5485. 
    Sec. 14.  Minnesota Statutes 1992, section 477A.011, is 
amended by adding a subdivision to read: 
    Subd. 34.  [CITY REVENUE NEED.] (a) For a city with a 
population equal to or greater than 2,500, "city revenue need" 
is the sum of (1) 3.462312 times the pre-1940 housing 
percentage; plus (2) 2.093826 times the commercial industrial 
percentage; plus (3) 6.862552 times the population decline 
percentage; plus (4) .00026 times the city population; plus (5) 
152.0141. 
    (b) For a city with a population less than 2,500, "city 
revenue need" is the sum of (1) 1.795919 times the pre-1940 
housing percentage; plus (2) 1.562138 times the commercial 
industrial percentage; plus (3) 4.177568 times the population 
decline percentage; plus (4) 1.04013 times the transformed 
population; minus (5) 107.475. 
    (c) The city revenue need cannot be less than zero. 
    (d) For calendar year 1995 and subsequent years, the city 
revenue need for a city, as determined in paragraphs (a) to (c), 
is multiplied by the ratio of the annual implicit price deflator 
for state and local government purchases, as prepared by the 
United States Department of Commerce, for the most recently 
available year to the 1993 implicit price deflator for state and 
local government purchases. 
    Sec. 15.  Minnesota Statutes 1992, section 477A.011, is 
amended by adding a subdivision to read: 
    Subd. 35.  [TAX EFFORT RATE.] "Tax effort rate" means the 
sum of the net levy for all cities divided by the sum of the 
city net tax capacity for all cities.  For purposes of this 
section, "net levy" means the city levy, after all adjustments, 
used for calculating the local tax rate under section 275.08 for 
taxes payable in the year prior to the aid distribution.  The 
fiscal disparity distribution levy is included in net levy. 
    Sec. 16.  Minnesota Statutes 1992, section 477A.011, is 
amended by adding a subdivision to read: 
    Subd. 36.  [CITY AID BASE.] "City aid base" means, for each 
city, the sum of the local government aid and equalization aid 
it was originally certified to receive in calendar year 1993 
under Minnesota Statutes 1992, section 477A.013, subdivisions 3 
and 5, and the amount of disparity reduction aid it received in 
calendar year 1993 under Minnesota Statutes 1992, section 
273.1398, subdivision 3. 
    Sec. 17.  Minnesota Statutes 1992, section 477A.011, is 
amended by adding a subdivision to read: 
    Subd. 37.  [BASE REDUCTION PERCENTAGE.] "Base reduction 
percentage" is (1) the difference between the amount available 
for city aid under section 477A.03 for the year for which aid is 
being calculated and the amount available for city aid under 
section 477A.03 for calendar year 1994, (2) divided by the sum 
of the city aid base for all cities and (3) multiplied by 100.  
The reduction percentage for any year may not be less than the 
reduction percentage from the previous year.  For aid paid in 
calendar year 1994, the reduction percentage is zero.  The 
reduction percentage may not be more than 100 percent. 
    Sec. 18.  Minnesota Statutes 1992, section 477A.013, is 
amended by adding a subdivision to read: 
    Subd. 8.  [CITY AID INCREASE.] (a) In calendar year 1994 
and subsequent years, the aid increase for a city is equal to 
the need increase percentage multiplied by the difference 
between (1) the city's revenue need multiplied by its 
population, and (2) the city's net tax capacity multiplied by 
the tax effort rate. The need increase percentage must be the 
same for all cities and must be calculated by the department of 
revenue so that the total of the aid under subdivision 9 equals 
the total amount available for aid under section 477A.03, 
subdivision 1.  
    (b) The percentage aid increase for a first class city in 
calendar year 1994 must not exceed the percentage increase in 
the sum of calendar year 1994 city aids under this section 
compared to the sum of the city aid base for all cities.  The 
aid increase for any other city in 1994 must not exceed five 
percent of the city's net levy for taxes payable in 1993. 
    (c) The aid increase in calendar year 1995 and subsequent 
years for any city must not exceed the sum of (1) ten percent of 
the city's net levy for the year prior to the aid distribution 
plus (2) its city aid base multiplied by the base reduction 
percentage. 
    Sec. 19.  Minnesota Statutes 1992, section 477A.013, is 
amended by adding a subdivision to read: 
    Subd. 9.  [CITY AID DISTRIBUTION.] In calendar year 1994 
and thereafter, each city shall receive an aid distribution 
equal to the sum of (1) the city aid increase under subdivision 
8, and (2) its city aid base multiplied by a percentage equal to 
100 minus the base reduction percentage. 
    Sec. 20.  Minnesota Statutes 1992, section 477A.03, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ANNUAL APPROPRIATION.] A sum sufficient to 
discharge the duties imposed by sections 477A.011 to 477A.014 is 
annually appropriated from the local government trust fund to 
the commissioner of revenue.  For aids payable in 1993 and 
thereafter, the total amount of equalization aid paid under 
section 477A.013, subdivision 5, is limited to $20,011,000.  For 
aid payable in 1994 and thereafter, the total aid paid to cities 
under section 477A.013, subdivision 9, is limited to 
$330,636,900. 
    In 1993 and subsequent years, $8,400,000 per year is 
appropriated from the local government trust fund to make 
payments under section 477A.0121.  
    Sec. 21.  [REPEALER.] 
    Minnesota Statutes 1992, sections 273.1398, subdivision 5; 
and 275.07, subdivision 3, are repealed. 
    Minnesota Statutes 1992, sections 477A.011, subdivisions 
3a, 15, 16, 17, 18, 22, 23, 25, and 26; and 477A.013, 
subdivisions 2, 3, and 5, are repealed. 
    Sec. 22.  [EFFECTIVE DATE.] 
    Section 2 is effective July 1, 1993.  Sections 3 to 21 are 
effective for property taxes and aids payable in 1994, and 
thereafter. 

                               ARTICLE 5 

                            PROPERTY TAXES 
    Section 1.  Minnesota Statutes 1992, section 82.19, is 
amended by adding a subdivision to read: 
    Subd. 9.  [DISCLOSURE OF VALUATION EXCLUSION.] No real 
estate broker or salesperson shall sell or offer for sale 
property that, for purposes of property taxation, has an 
exclusion from market value for home improvements under section 
273.11, subdivision 16, without disclosing to the buyer the 
existence of the excluded valuation and informing the buyer that 
the exclusion will end upon the sale of the property and that 
the property's estimated market value for property tax purposes 
will increase accordingly. 
    Sec. 2.  Minnesota Statutes 1992, section 272.01, 
subdivision 3, is amended to read: 
    Subd. 3.  The provisions of subdivision 2 shall not apply 
to: 
    (a) Federal property for which payments are made in lieu of 
taxes in amounts equivalent to taxes which might otherwise be 
lawfully assessed; 
    (b) Real estate exempt from ad valorem taxes and taxes in 
lieu thereof which is leased, loaned, or otherwise made 
available to telephone companies or electric, light and power 
companies upon which personal property consisting of 
transmission and distribution lines is situated and assessed 
pursuant to sections 273.37, 273.38, 273.40 and 273.41, or upon 
which are situated the communication lines of express, railway, 
telephone or telegraph companies, and or pipelines used for the 
transmission and distribution of petroleum products, or the 
equipment items of a cable communications company subject to 
sections 238.35 to 238.42; 
    (c) Property presently owned by any educational institution 
chartered by the territorial legislature; 
    (d) Indian lands; 
    (e) Property of any corporation organized as a tribal 
corporation under the Indian Reorganization Act of June 18, 
1934, (Statutes at Large, volume 48, page 984); 
     (f) Real property owned by the state and leased pursuant to 
section 161.23 or 161.431, and acts amendatory thereto; 
     (g) Real property owned by a seaway port authority on June 
1, 1967, upon which there has been constructed docks, 
warehouses, tank farms, administrative and maintenance 
buildings, railroad and ship terminal facilities and other 
maritime and transportation facilities or those directly related 
thereto, together with facilities for the handling of passengers 
and baggage and for the handling of freight and bulk liquids, 
and personal property owned by a seaway port authority used or 
usable in connection therewith, when said property is leased to 
a private individual, association or corporation, but only when 
such lease provides that the said facilities are available to 
the public for the loading and unloading of passengers and their 
baggage and the handling, storage, care, shipment, and delivery 
of merchandise, freight and baggage and other maritime and 
transportation activities and functions directly related 
thereto, but not including property used for grain elevator 
facilities; it being the declared policy of this state that such 
property when so leased is public property used exclusively for 
a public purpose, notwithstanding the one-year limitation in the 
provisions of section 273.19; 
     (h) Notwithstanding the provisions of clause (g), when the 
annual rental received by a seaway port authority in any 
calendar year for such leased property exceeds an amount 
reasonably required for administrative expense of the authority 
per year, plus promotional expense for the authority not to 
exceed the sum of $100,000 per year, to be expended when and in 
the manner decided upon by the commissioners, plus an amount 
sufficient to pay all installments of principal and interest 
due, or to become due, during such calendar year and the next 
succeeding year on any revenue bonds issued by the authority, 
plus 25 percent of the gross annual rental to be retained by the 
authority for improvement, development, or other contingencies, 
the authority shall make a payment in lieu of real and personal 
property taxes of a reasonable portion of the remaining annual 
rental to the county treasurer of the county in which such 
seaway port authority is principally located.  Any such payments 
to the county treasurer shall be disbursed by the treasurer on 
the same basis as real estate taxes are divided among the 
various governmental units, but if such port authority shall 
have received funds from the state of Minnesota and funds from 
any city and county pursuant to Laws 1957, chapters 648, 831, 
and 849 and acts amendatory thereof, then such disbursement by 
the county treasurer shall be on the same basis as real estate 
taxes are divided among the various governmental units, except 
that the portion of such payments which would otherwise go to 
other taxing units shall be divided equally among the state of 
Minnesota and said county and city. 
    Sec. 3.  Minnesota Statutes 1992, 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), other than those that qualify for 
exemption under clause (25); 
    (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, including 
storage sheds, decks, and similar removable improvements 
constructed on the site of a manufactured home, sectional 
structure, park trailer or travel trailer as provided in section 
274.19, subdivision 8, paragraph (f); and 
     (f) flight property as defined in section 270.071.  
     (9) Personal property used primarily for the abatement and 
control of air, water, or land pollution to the extent that it 
is so used, and real property which is used primarily for 
abatement and control of air, water, or land pollution as part 
of an agricultural operation, as a part of a centralized 
treatment and recovery facility operating under a permit issued 
by the Minnesota pollution control agency pursuant to chapters 
115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 
and 7045.0020 to 7045.1260, as a wastewater treatment facility 
and for the treatment, recovery, and stabilization of metals, 
oils, chemicals, water, sludges, or inorganic materials from 
hazardous industrial wastes, 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 real property or 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:  (i) land described in section 103G.005, 
subdivision 18; (ii) 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; or (iii) land in a wetland preservation area 
under sections 103F.612 to 103F.616.  "Wetlands" under items (i) 
and (ii) include adjacent land which is not suitable for 
agricultural purposes due to the presence of the wetlands, but 
do 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 
103G.535. 
       (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 clause (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 
have passed from the date of the transmittal by the governing 
body to the board of the information on the fiscal impact, 
whichever occurs first. 
       (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 individuals, 
couples, or families.  (ii) It has the purpose of reuniting 
families and enabling parents or individuals 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 
three 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 owned and operated or under lease from a unit 
of government or governmental agency under a property 
disposition program and operated by one or more organizations 
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. 
      (20) Real and personal property, including leasehold or 
other personal property interests, owned and operated by a 
corporation if more than 50 percent of the total voting power of 
the stock of the corporation is owned collectively by:  (i) the 
board of regents of the University of Minnesota, (ii) the 
University of Minnesota Foundation, an organization exempt from 
federal income taxation under section 501(c)(3) of the Internal 
Revenue Code of 1986, as amended through December 31, 1990, and 
(iii) a corporation organized under chapter 317A, which by its 
articles of incorporation is prohibited from providing pecuniary 
gain to any person or entity other than the regents of the 
University of Minnesota; which property is used primarily to 
manage or provide goods, services, or facilities utilizing or 
relating to large-scale advanced scientific computing resources 
to the regents of the University of Minnesota and others. 
    (21) Wind energy conversion systems, as defined in section 
216C.06, subdivision 12, installed after January 1, 1991, and 
used as an electric power source. 
    (22) Containment tanks, cache basins, and that portion of 
the structure needed for the containment facility used to 
confine agricultural chemicals as defined in section 18D.01, 
subdivision 3, as required by the commissioner of agriculture 
under chapter 18B or 18C. 
    (23) Photovoltaic devices, as defined in section 216C.06, 
subdivision 13, installed after January 1, 1992, and used to 
produce or store electric power. 
    (24) 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 for an ice arena or ice rink, and used 
primarily for youth and high school programs. 
    (25) A structure that is situated on real property that is 
used for: 
     (i) housing for the elderly or for low- and moderate-income 
families as defined in Title II of the National Housing Act, as 
amended through December 31, 1990, and funded by a direct 
federal loan or federally insured loan made pursuant to Title II 
of the act; or 
     (ii) 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 which meets each of 
the following criteria: 
    (A) is owned by an entity which is operated as a nonprofit 
corporation organized under chapter 317A; 
    (B) is owned by an entity which has not entered into a 
housing assistance payments contract under section 8 of the 
United States Housing Act of 1937, or, if the entity which owns 
the structure has entered into a housing assistance payments 
contract under section 8 of the United States Housing Act of 
1937, the contract provides assistance for less than 90 percent 
of the dwelling units in the structure, excluding dwelling units 
intended for management or maintenance personnel; 
    (C) operates an on-site congregate dining program in which 
participation by residents is mandatory, and provides assisted 
living or similar social and physical support services for 
residents; and 
    (D) was not assessed and did not pay tax under chapter 273 
prior to the 1991 levy, while meeting the other conditions of 
this clause. 
    An exemption under this clause remains in effect for taxes 
levied in each year or partial year of the term of its permanent 
financing. 
    (26) Real and personal property that is located in the 
Superior National Forest, and owned or leased and operated by a 
nonprofit organization that is exempt from federal income 
taxation under section 501(c)(3) of the Internal Revenue Code of 
1986, as amended through December 31, 1992, and primarily used 
to provide recreational opportunities for disabled veterans and 
their families. 
    Sec. 4.  Minnesota Statutes 1992, section 272.02, 
subdivision 4, is amended to read: 
    Subd. 4.  [CONVERSION TO EXEMPT OR TAXABLE USES.] (a) Any 
property exempt from taxation on January 2 of any year which, 
due to sale or other reason, loses its exemption prior to July 1 
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 July 
1, the intended use of the property, determined by the county 
assessor, based upon all relevant facts. 
    (b) Property subject to tax on January 2 that is acquired 
by a governmental entity, institution of purely public charity, 
church, or educational institution before July 1 of the year is 
exempt for that assessment year if (1) the property is to be 
used for an exempt purpose under subdivision 1, clauses (1) to 
(7), and (2) the property is not subject to the filing 
requirement under section 272.025. 
    Sec. 5.  Minnesota Statutes 1992, section 272.115, 
subdivision 1, is amended to read: 
    Subdivision 1.  Except as provided in subdivision 1a, 
Whenever any real estate is sold 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 when the deed or other 
document is presented for recording.  Contract for deeds are 
subject to recording under section 507.235, subdivision 1.  
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. 6.  Minnesota Statutes 1992, section 272.115, 
subdivision 4, is amended to read: 
    Subd. 4.  No real estate sold or transferred on or after 
January 1, 1993, under subdivision 1a 1 shall be classified as a 
homestead, unless a certificate of value has been filed with the 
county auditor in accordance with this section. 
    This subdivision shall apply to any real estate taxes that 
are payable the year or years following the sale or transfer of 
the property. 
    Sec. 7.  Minnesota Statutes 1992, section 273.061, 
subdivision 8, is amended to read: 
    Subd. 8.  [POWERS AND DUTIES.] The county assessor shall 
have the following powers and duties: 
    (1) To call upon and confer with the township and city 
assessors in the county, and advise and give them the necessary 
instructions and directions as to their duties under the laws of 
this state, to the end that a uniform assessment of all real 
property in the county will be attained. 
    (2) To assist and instruct the local assessors in the 
preparation and proper use of land maps and record cards, in the 
property classification of real and personal property, and in 
the determination of proper standards of value. 
    (3) To keep the local assessors in the county advised of 
all changes in assessment laws and all instructions which the 
assessor receives from the commissioner of revenue relating to 
their duties. 
    (4) To have authority to require the attendance of groups 
of local assessors at sectional meetings called by the assessor 
for the purpose of giving them further assistance and 
instruction as to their duties. 
    (5) To immediately commence the preparation of a large 
scale topographical land map of the county, in such form as may 
be prescribed by the commissioner of revenue, showing thereon 
the location of all railroads, highways and roads, bridges, 
rivers and lakes, swamp areas, wooded tracts, stony ridges and 
other features which might affect the value of the land.  
Appropriate symbols shall be used to indicate the best, the 
fair, and the poor land of the county.  For use in connection 
with the topographical land map, the assessor shall prepare and 
keep available in the assessor's office tables showing fair 
average minimum and maximum market values per acre of 
cultivated, meadow, pasture, cutover, timber and waste lands of 
each township.  The assessor shall keep the map and tables 
available in the office for the guidance of town assessors, 
boards of review, and the county board of equalization. 
    (6) To also prepare and keep available in the office for 
the guidance of town assessors, boards of review and the county 
board of equalization, a land valuation map of the county, in 
such form as may be prescribed by the commissioner of revenue.  
This map, which shall include the bordering tier of townships of 
each county adjoining, shall show the average market value per 
acre, both with and without improvements, as finally equalized 
in the last assessment of real estate, of all land in each town 
or unorganized township which lies outside the corporate limits 
of cities.  
    (7) To regularly examine all conveyances of land outside 
the corporate limits of cities of the first and second class, 
filed with the county recorder of the county, and keep a file, 
by descriptions, of the considerations shown thereon.  From the 
information obtained by comparing the considerations shown with 
the market values assessed, the assessor shall make 
recommendations to the county board of equalization of necessary 
changes in individual assessments or aggregate valuations. 
    (8) To prepare annually and keep available in the 
assessor's office for the guidance of boards of review and the 
county board of equalization, a table showing the market value 
per capita of all personal property in each assessment district 
in the county as finally equalized in the last previous 
assessment of personal property.  For the guidance of the county 
board of equalization, the assessor shall also add to the table 
the market value per capita of all personal property of each 
assessment district for the current year as equalized by the 
local board of review. 
    (9) To become familiar with the values of the different 
items of personal property so as to be in a position when called 
upon to advise the boards of review and the county board of 
equalization concerning property, market values thereof. 
    (10) While the county board of equalization is in session, 
to give it every possible assistance to enable it to perform its 
duties.  The assessor shall furnish the board with all necessary 
charts, tables, comparisons, and data which it requires in its 
deliberations, and shall make whatever investigations the board 
may desire. 
    (11) At the request of either the board of county 
commissioners or the commissioner of revenue, to investigate 
applications for reductions of valuation and abatements and 
settlements of taxes, examine the real or personal property 
involved, and submit written reports and recommendations with 
respect to the applications, in such form as may be prescribed 
by the board of county commissioners and commissioner of revenue.
    (12) To make diligent search each year for real and 
personal property which has been omitted from assessment in the 
county, and report all such omissions to the county auditor. 
    (13) To regularly confer with county assessors in all 
adjacent counties about the assessment of property in order to 
uniformly assess and equalize the value of similar properties 
and classes of property located in adjacent counties.  The 
conference shall emphasize the assessment of agricultural and 
commercial and industrial property or other properties that may 
have an inadequate number of sales in a single county. 
    (14) To render such other services pertaining to the 
assessment of real and personal property in the county as are 
not inconsistent with the duties set forth in this section, and 
as may be required by the board of county commissioners or by 
the commissioner of revenue. 
    (15) To maintain a record, in conjunction with other county 
offices, of all transfers of property to assist in determining 
the proper classification of property, including but not limited 
to, transferring homestead property and name changes on 
homestead property. 
    (16) To determine if a homestead application is required 
due to the transfer of homestead property or an owner's name 
change on homestead property. 
    Sec. 8.  Minnesota Statutes 1992, section 273.11, 
subdivision 1, is amended to read: 
    Subdivision 1.  [GENERALLY.] Except as provided in 
subdivisions 6, 8, 9, 11, and 14 this section or section 273.17, 
subdivision 1, all property shall be valued at its market 
value.  The market value as determined pursuant to this section 
shall be stated such that any amount under $100 is rounded up to 
$100 and any amount exceeding $100 shall be rounded to the 
nearest $100.  In estimating and determining such value, the 
assessor shall not adopt a lower or different standard of value 
because the same is to serve as a basis of taxation, nor shall 
the assessor adopt as a criterion of value the price for which 
such property would sell at a forced sale, or in the aggregate 
with all the property in the town or district; but the assessor 
shall value each article or description of property by itself, 
and at such sum or price as the assessor believes the same to be 
fairly worth in money.  The assessor shall take into account the 
effect on the market value of property of environmental factors 
in the vicinity of the property.  In assessing any tract or lot 
of real property, the value of the land, exclusive of structures 
and improvements, shall be determined, and also the value of all 
structures and improvements thereon, and the aggregate value of 
the property, including all structures and improvements, 
excluding the value of crops growing upon cultivated land.  In 
valuing real property upon which there is a mine or quarry, it 
shall be valued at such price as such property, including the 
mine or quarry, would sell for a fair, voluntary sale, for 
cash.  In valuing real property which is vacant, platted 
property shall be assessed as provided in subdivision 14.  All 
property, or the use thereof, which is taxable under section 
272.01, subdivision 2, or 273.19, shall be valued at the market 
value of such property and not at the value of a leasehold 
estate in such property, or at some lesser value than its market 
value. 
    Sec. 9.  Minnesota Statutes 1992, section 273.11, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [LIMITED MARKET VALUE.] In the case of all 
property classified as agricultural homestead or nonhomestead, 
residential homestead or nonhomestead, or noncommercial seasonal 
recreational residential, the assessor shall compare the value 
with that determined in the preceding assessment.  The amount of 
the increase entered in the current assessment shall not exceed 
the greater of (1) ten percent of the value in the preceding 
assessment, or (2) one-third of the difference between the 
current assessment and the preceding assessment.  This 
limitation shall not apply to increases in value due to 
improvements.  For purposes of this subdivision, the term 
"assessment" means the value prior to any exclusion under 
section 273.11, subdivision 16. 
    The provisions of this subdivision shall be in effect only 
for assessment years 1993 through 1998. 
    For purposes of the assessment/sales ratio study conducted 
under section 124.2131, and the computation of state aids paid 
under chapters 124, 124A, and 477A, market values and net tax 
capacities determined under this subdivision and section 273.11, 
subdivision 16, shall be used. 
    Sec. 10.  Minnesota Statutes 1992, section 273.11, 
subdivision 5, is amended to read: 
    Subd. 5.  Notwithstanding any other provision of law to the 
contrary, the limitation contained in subdivision subdivisions 1 
and 1a shall also apply to the authority of the local board of 
review as provided in section 274.01, the county board of 
equalization as provided in section 274.13, the state board of 
equalization and the commissioner of revenue as provided in 
sections 270.11, 270.12 and 270.16. 
    Sec. 11.  Minnesota Statutes 1992, section 273.11, 
subdivision 6a, is amended to read: 
    Subd. 6a.  [RESIDENTIAL FIRE-SAFETY SPRINKLER SYSTEMS.] For 
purposes of property taxation, the market value of automatic 
fire-safety sprinkler systems installed in existing buildings 
after January 1, 1992, meeting the standards of the Minnesota 
fire code shall be excluded from the market value of (1) 
existing multifamily 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 and (2) existing 
real estate containing four or more contiguous residential units 
for use by customers of the owner, such as hotels, motels, and 
lodging houses and (3) existing office buildings or mixed use 
commercial-residential buildings, in which at least one story 
capable of occupancy is at least 75 feet above the ground.  The 
market value exclusion under this section shall expire if the 
property is sold. 
    Sec. 12.  Minnesota Statutes 1992, section 273.11, is 
amended by adding a subdivision to read: 
    Subd. 15.  [VACANT HOSPITALS.] In valuing a hospital, as 
defined in section 144.50, subdivision 2, that is located 
outside of a metropolitan county, as defined in section 473.121, 
subdivision 4, and that on the date of sale is vacant and not 
used for hospital purposes or for any other purpose, the 
assessor's estimated market value for taxes levied in the year 
of the sale shall be no greater than the sales price of the 
property, including both the land and the buildings, as adjusted 
for terms of financing.  If the sale is made later than December 
15, the market value as determined under this subdivision shall 
be used for taxes levied in the following year.  This 
subdivision applies only if the sales price of the property was 
determined under an arms length transaction. 
    Sec. 13.  Minnesota Statutes 1992, section 273.11, is 
amended by adding a subdivision to read: 
    Subd. 16.  [VALUATION EXCLUSION FOR CERTAIN 
IMPROVEMENTS.] Improvements to homestead property made before 
January 2, 2003, shall be fully or partially excluded from the 
value of the property for assessment purposes provided that the 
house is at least 35 years old at the time of the improvement.  
In the case of an owner-occupied duplex or triplex, the 
improvement is eligible regardless of which portion of the 
property was improved. 
    If the property lies in a jurisdiction which is subject to 
a building permit process, a building permit must have been 
issued covering the improvement.  If the property lies in a 
jurisdiction which is not subject to a building permit process, 
the improvement must add at least $1,000 to the value of the 
property.  Only improvements to the structure which is the 
residence of the qualifying homesteader or the garage qualify 
for the provisions of this subdivision. 
    Whenever a building permit is issued for property currently 
classified as homestead, the issuing jurisdiction shall notify 
the assessor of the possibility of valuation exclusion under 
this subdivision.  The assessor may require an application 
process and documentation of the age of the house from the 
owner, if unknown. 
    The assessor shall note the qualifying value of each 
improvement on the property's record, and the sum of those 
amounts shall be subtracted from the value of the property in 
each year for ten years after the improvement has been made, at 
which time an amount equal to 20 percent of the qualifying value 
shall be added back in each of the five subsequent assessment 
years.  The valuation exclusion shall terminate whenever (1) the 
property is sold, or (2) the property is reclassified to a class 
which does not qualify for treatment under this subdivision. 
    The total qualifying value for a homestead may not exceed 
$50,000.  The total qualifying value for a homestead with a 
house that is less than 70 years old may not exceed $25,000.  
The term "qualifying value" means the increase in estimated 
market value resulting from the improvement if the improvement 
occurs when the house is at least 70 years old, or one-half of 
the increase in estimated market value resulting from the 
improvement otherwise.  The $25,000 and $50,000 maximum 
qualifying value under this section may result from up to three 
separate improvements to the homestead. 
    Sec. 14.  Minnesota Statutes 1992, section 273.112, 
subdivision 3, is amended to read: 
    Subd. 3.  Real estate shall be entitled to valuation and 
tax deferment under this section only if it is: 
    (a) actively and exclusively devoted to golf, skiing, or 
archery or firearms range recreational use or uses and other 
recreational uses carried on at the establishment; 
    (b) five acres in size or more, except in the case of an 
archery or firearms range; 
    (c)(1) operated by private individuals and open to the 
public; or 
    (2) operated by firms or corporations for the benefit of 
employees or guests; or 
    (3) operated by private clubs having a membership of 50 or 
more, provided that the club does not discriminate in membership 
requirements or selection on the basis of sex or marital status; 
and 
    (d) made available, in the case of real estate devoted to 
golf, for use without discrimination on the basis of sex during 
the time when the facility is open to use by the public or by 
members, except that use for golf may be restricted on the basis 
of sex no more frequently than one, or part of one, weekend each 
calendar month for each sex and no more than two, or part of 
two, weekdays each week for each sex.  
    If a golf club membership allows use of golf course 
facilities by more than one adult per membership, the use must 
be equally available to all adults entitled to use of the golf 
course under the membership, except that use may be restricted 
on the basis of sex as permitted in this section.  Memberships 
that permit play during restricted times may be allowed only if 
the restricted times apply to all adults using the membership.  
A golf club may not offer a membership or golfing privileges to 
a spouse of a member that provides greater or less access to the 
golf course than is provided to that person's spouse under the 
same or a separate membership in that club, except that the 
terms of a membership may provide that one spouse may have no 
right to use the golf course at any time while the other spouse 
may have either limited or unlimited access to the golf course.  
     A golf club may have or create an individual membership 
category which entitles a member for a reduced rate to play 
during restricted hours as established by the club.  The club 
must have on record a written request by the member for such 
membership.  
     A golf club that has food or beverage facilities or 
services must allow equal access to those facilities and 
services for both men and women members in all membership 
categories at all times.  Nothing in this paragraph shall be 
construed to require service or access to facilities to persons 
under the age of 21 years or require any act that would violate 
law or ordinance regarding sale, consumption, or regulation of 
alcoholic beverages. 
     For purposes of this subdivision and subdivision 7a, 
discrimination means a pattern or course of conduct and not 
linked to an isolated incident. 
    Sec. 15.  Minnesota Statutes 1992, section 273.112, is 
amended by adding a subdivision to read: 
    Subd. 4a.  Real estate devoted to golf and operated by a 
private club that does not meet the requirements of subdivision 
3, and is not eligible for valuation and deferment under this 
section, must be valued for ad valorem tax purposes by the 
assessor as if it were converted to commercial, industrial, 
residential, or seasonal residential use and were platted and 
available for sale as individual parcels. 
    Sec. 16.  Minnesota Statutes 1992, section 273.121, is 
amended to read: 
    273.121 [VALUATION OF REAL PROPERTY, NOTICE.] 
    Any county assessor or city assessor having the powers of a 
county assessor, valuing or classifying taxable real property 
shall in each year notify those persons whose property is to be 
assessed or reclassified that year if the person's address is 
known to the assessor, otherwise the occupant of the property.  
The notice shall be in writing and shall be sent by ordinary 
mail at least ten days before the meeting of the local board of 
review or equalization.  It shall contain:  (1) the amount of 
the valuation in terms of market value, (2) the limited market 
value under section 273.11, subdivision 1a, (3) the qualifying 
amount of any improvements under section 273.11, subdivision 16, 
(4) the market value subject to taxation after subtracting the 
amount of any qualifying improvements, (5) the new 
classification, (6) the assessor's office address, and (7) the 
dates, places, and times set for the meetings of the local board 
of review or equalization and the county board of equalization.  
If the assessment roll is not complete, the notice shall be sent 
by ordinary mail at least ten days prior to the date on which 
the board of review has adjourned.  The assessor shall attach to 
the assessment roll a statement that the notices required by 
this section have been mailed.  Any assessor who is not provided 
sufficient funds from the assessor's governing body to provide 
such notices, may make application to the commissioner of 
revenue to finance such notices.  The commissioner of revenue 
shall conduct an investigation and, if satisfied that the 
assessor does not have the necessary funds, issue a 
certification to the commissioner of finance of the amount 
necessary to provide such notices.  The commissioner of finance 
shall issue a warrant for such amount and shall deduct such 
amount from any state payment to such county or municipality.  
The necessary funds to make such payments are hereby 
appropriated.  Failure to receive the notice shall in no way 
affect the validity of the assessment, the resulting tax, the 
procedures of any board of review or equalization, or the 
enforcement of delinquent taxes by statutory means. 
    Sec. 17.  Minnesota Statutes 1992, section 273.124, 
subdivision 1, is amended to read: 
    Subdivision 1.  [GENERAL RULE.] (a) Residential real estate 
that is occupied and used for the purposes of a homestead by its 
owner, who must be a Minnesota resident, is a residential 
homestead.  
    Agricultural land, as defined in section 273.13, 
subdivision 23, that is occupied and used as a homestead by its 
owner, who must be a Minnesota resident, is an agricultural 
homestead. 
    Dates for establishment of a homestead and homestead 
treatment provided to particular types of property are as 
provided in this section.  
    The assessor shall require proof, as provided in 
subdivision 13, of the facts upon which classification as a 
homestead may be determined.  Notwithstanding any other law, the 
assessor may at any time require a homestead application to be 
filed in order to verify that any property classified as a 
homestead continues to be eligible for homestead status. 
    When there is a name change or a transfer of homestead 
property, the assessor may reclassify the property in the next 
assessment unless a homestead application is filed to verify 
that the property continues to qualify for homestead 
classification. 
    (b) For purposes of this section, homestead property shall 
include property which is used for purposes of the homestead but 
is separated from the homestead by a road, street, lot, 
waterway, or other similar intervening property.  The term "used 
for purposes of the homestead" shall include but not be limited 
to uses for gardens, garages, or other outbuildings commonly 
associated with a homestead, but shall not include vacant land 
held primarily for future development.  In order to receive 
homestead treatment for the noncontiguous property, the owner 
shall apply for it to the assessor by July 1 of the year when 
the treatment is initially sought.  After initial qualification 
for the homestead treatment, additional applications for 
subsequent years are not required. 
    (c) Residential real estate that is occupied and used for 
purposes of a homestead by a relative of the owner is a 
homestead but only to the extent of the homestead treatment that 
would be provided if the related owner occupied the property.  
For purposes of this paragraph, "relative" means a parent, 
stepparent, child, stepchild, spouse, grandparent, grandchild, 
brother, sister, uncle, or aunt.  This relationship may be by 
blood or marriage.  Property that was classified as seasonal 
recreational residential property at the time when treatment 
under this paragraph would first apply shall continue to be 
classified as seasonal recreational residential property for the 
first two four assessment years beginning after the date when 
the relative of the owner occupies the property as a homestead; 
this delay also applies to property that, in the absence of this 
paragraph, would have been classified as seasonal recreational 
residential property at the time when the residence was 
constructed.  Neither the related occupant nor the owner of the 
property may claim a property tax refund under chapter 290A for 
a homestead occupied by a relative.  In the case of a residence 
located on agricultural land, only the house, garage, and 
immediately surrounding one acre of land shall be classified as 
a homestead under this paragraph, except as provided in 
paragraph (d). 
    (d) Agricultural property that is occupied and used for 
purposes of a homestead by a relative of the owner, is a 
homestead, only to the extent of the homestead treatment that 
would be provided if the related owner occupied the property, 
and only if all of the following criteria are met: 
    (1) the relative who is occupying the agricultural property 
is a son or daughter of the owner of the agricultural property, 
    (2) the owner of the agricultural property must be a 
Minnesota resident, 
    (3) the owner of the agricultural property is not eligible 
to receive homestead treatment on any other agricultural 
property in Minnesota, and 
    (4) the owner of the agricultural property is limited to 
only one agricultural homestead per family under this paragraph. 
    For purposes of this paragraph, "agricultural property" 
means the house, garage, other farm buildings and structures, 
and agricultural land. 
    Application must be made to the assessor by the owner of 
the agricultural property to receive homestead benefits under 
this paragraph.  The assessor may require the necessary proof 
that the requirements under this paragraph have been met. 
    Sec. 18.  Minnesota Statutes 1992, section 273.124, is 
amended by adding a subdivision to read: 
    Subd. 6a.  [PRELIMINARY APPROVAL OF LEASEHOLD 
COOPERATIVES.] Preliminary approval for classification as a 
leasehold cooperative may be granted to property when a 
developer proposes to construct one or more residential 
dwellings or buildings using funds provided by the Minnesota 
housing finance agency if all of the following conditions are 
met: 
    (a) The developer must present an affidavit to the county 
attorney and to the governing body of the municipality that 
includes a statement of the developer's intention to comply with 
all requirements in subdivision 6 and a detailed description of 
the plan for doing so. 
    (b) The commissioner of the Minnesota housing finance 
agency must provide the county attorney and governing body with 
a description of the financing and related terms the 
commissioner proposes to provide with respect to the project, 
together with an objective assessment of the likelihood that the 
project will comply with the requirements of subdivision 6. 
    (c) The county attorney must review the materials provided 
under paragraphs (a) and (b), and may require the developer or 
the Minnesota housing finance agency to provide additional 
information.  If the county attorney determines that it is 
reasonably likely that the project will meet the requirements of 
this subdivision, the county attorney shall provide preliminary 
approval to treatment of the property as a leasehold cooperative.
    (d) The governing body shall conduct a public hearing as 
provided in subdivision 6, paragraph (j), and make its 
preliminary findings based on the information provided by the 
developer and the Minnesota housing finance agency. 
    Upon completion of the project and creation of the 
leasehold cooperative, actual compliance with the requirements 
of this subdivision must be demonstrated, and certified by the 
county attorney.  A second hearing by the governing body is not 
required. 
    If the county attorney finds that the homestead treatment 
granted pursuant to a preliminary approval under this 
subdivision must be revoked because the completed project failed 
to meet the requirements of this subdivision, the benefits of 
the treatment shall be recaptured.  The county assessor shall 
determine the amount by which the tax imposed on the property 
was reduced because it was treated as a leasehold cooperative.  
The developer shall be charged an amount equal to the tax 
reduction received or, if the county attorney determines that 
the failure to meet the requirements was due to the developer's 
intentional disregard of the requirements, 150 percent of the 
tax reduction received.  The penalty must be paid to the county 
treasurer within 90 days after receipt of a statement from the 
treasurer.  The proceeds of the penalty shall be distributed to 
the local taxing jurisdictions in proportion to the amounts of 
their levies on the property. 
    Sec. 19.  Minnesota Statutes 1992, section 273.124, 
subdivision 9, is amended to read: 
    Subd. 9.  [HOMESTEAD ESTABLISHED AFTER ASSESSMENT DATE.] 
Any property that was not used for the purpose of a homestead on 
the assessment date, but which was used for the purpose of a 
homestead by June December 1 of a year, constitutes class 1 or 
class 2a. 
    Any taxpayer meeting the requirements of this subdivision 
must notify the county assessor, or the assessor who has the 
powers of the county assessor under section 273.063, in writing, 
prior to June by December 15 of the year of occupancy in order 
to qualify under this subdivision.  The assessor must not deny 
full homestead treatment to a property that is partially 
homesteaded on January 2 but occupied for the purpose of a full 
homestead by June December 1 of a year.  
    The county assessor and the county auditor may make the 
necessary changes on their assessment and tax records to provide 
for proper homestead classification as provided in this 
subdivision. 
    If homestead classification has not been requested as of 
December 15, the assessor will classify the property as 
nonhomestead for the current assessment year for taxes payable 
in the following year, provided that the owner of any property 
qualifying under this subdivision, which has not been accorded 
the benefits of this subdivision, may be entitled to receive 
homestead classification by proper application as provided in 
section 375.192.  
    The county assessor shall may publish in a newspaper of 
general circulation within the county no later than June 1 of 
each year a notice informing requesting the public of the 
requirement to file an application for homestead prior to June 
15 as soon as practicable after acquisition of a homestead, but 
no later than December 15. 
    The county assessor shall publish in a newspaper of general 
circulation within the county no later than December 1 of each 
year a notice informing the public of the requirement to file an 
application for homestead by December 15. 
    Sec. 20.  Minnesota Statutes 1992, section 273.124, 
subdivision 13, is amended to read: 
    Subd. 13.  [HOMESTEAD APPLICATION.] (a) A person who meets 
the homestead requirements under subdivision 1 must file a 
homestead application with the county assessor to initially 
obtain homestead classification. 
   (b) On or before January 2, 1993, each county assessor 
shall mail a homestead application to the owner of each parcel 
of property within the county which was classified as homestead 
for the 1992 assessment year.  The format and contents of a 
uniform homestead application shall be prescribed by the 
commissioner of revenue.  The commissioner shall consult with 
the chairs of the house and senate tax committees on the 
contents of the homestead application form.  The application 
must clearly inform the taxpayer that this application must be 
signed by all owners of the property and returned to the county 
assessor in order for the property to continue receiving 
homestead treatment.  The envelope containing the homestead 
application shall clearly identify its contents and alert the 
taxpayer of its necessary immediate response. 
    Every four years after the initial homestead application 
has been filed under this subdivision, a county shall mail a 
homestead application to the owner of each parcel of property to 
verify the continued eligibility for homestead status for all 
properties classified as homestead within the county in the 
prior year's assessment.  The homestead application and 
procedures shall be done in the same manner as contained in this 
subdivision for the 1993 homestead application. 
    (c) On the homestead application each owner shall disclose 
the location of any other residential property in the state in 
which the owner holds full or partial ownership and for which 
homestead status has been granted or has been applied for at the 
time of the application.  Each owner must also disclose the name 
and social security number of any relative occupying a property 
qualifying as a homestead under subdivision 1, paragraph (c).  
Failure to disclose the information required under this 
paragraph may result in the imposition of the penalty provided 
under this subdivision. 
    (d) Every property owner applying for homestead 
classification must furnish to the county assessor the social 
security number of each person who is listed as an owner of the 
property listed on the homestead application.  If the social 
security number is not provided, the county assessor shall 
classify the property as nonhomestead.  The social security 
numbers of the property owners are private data on individuals 
as defined by section 13.02, subdivision 12, but, 
notwithstanding that section, the private data may be disclosed 
to the commissioner of revenue. 
    (e) If residential real estate is occupied and used for 
purposes of a homestead by a relative of the owner and qualifies 
for a homestead under subdivision 1, paragraph (c), in order for 
the property to receive homestead status, a homestead 
application must be filed with the assessor.  The social 
security number of each relative occupying the property and the 
social security number of each owner of the property shall be 
required on the homestead application filed under this 
subdivision.  If a different relative of the owner subsequently 
occupies the property, the owner of the property must notify the 
assessor within 30 days of the change in occupancy.  
    (f) The homestead application shall also notify the 
property owners that the application filed under this section 
will not be mailed annually and that if the property is granted 
homestead status for the 1993 assessment, that same property 
shall remain classified as homestead until the property is sold 
or transferred to another person, or the owners or the relatives 
no longer use the property as their homestead.  Upon the sale or 
transfer of the homestead property, a certificate of value must 
be timely filed with the county auditor as provided under 
section 272.115.  Failure to notify the county within 30 days 
that the property has been sold, transferred, or that the owner 
or the relative is no longer occupying the property as a 
homestead, shall result in the penalty provided under this 
subdivision and the property will lose its current homestead 
status. 
    (g) If the initial homestead application is not returned 
within 30 days, the county will send a second application to the 
present owners of record.  The notice of proposed property taxes 
prepared under section 275.065, subdivision 3, shall reflect the 
property's classification.  If a homestead application has not 
been filed with the county by December 15, the assessor shall 
classify the property as nonhomestead for the current assessment 
year for taxes payable in the following year, provided that the 
owner may be entitled to receive the homestead classification by 
proper application under section 375.192. 
    (h) At the request of the commissioner, each county must 
give the commissioner a list that includes the name and social 
security number of each property owner applying for homestead 
classification under this subdivision.  
    (i) If, in comparing the lists supplied by the counties, 
the commissioner finds that a property owner is claiming more 
than one homestead, the commissioner shall notify the 
appropriate counties.  Within 90 days of the notification, the 
county assessor shall investigate to determine if the homestead 
classification was properly claimed.  If the property owner does 
not qualify, the county assessor shall notify the county auditor 
who will determine the amount of homestead benefits that had 
been improperly allowed.  For the purpose of this section, 
"homestead benefits" means the tax reduction resulting from the 
classification as a homestead under section 273.13, the taconite 
homestead credit under section 273.135, and the supplemental 
homestead credit under section 273.1391. 
     The county auditor shall send a notice to the owners of the 
affected property, demanding reimbursement of the homestead 
benefits plus a penalty equal to 100 percent of the homestead 
benefits.  The property owners may appeal the county's 
determination by filing a notice of appeal with the Minnesota 
tax court within 60 days of the date of the notice from the 
county.  If the amount of homestead benefits and penalty is not 
paid within 60 days, and if no appeal has been filed, the county 
auditor shall certify the amount of taxes and penalty to the 
succeeding year's tax list to be collected as part of the 
property taxes. 
    (j) Any amount of homestead benefits recovered by the 
county from the property owner shall be distributed to the 
county, city or town, and school district where the property is 
located in the same proportion that each taxing district's levy 
was to the total of the three taxing districts' levy for the 
current year.  Any amount recovered attributable to taconite 
homestead credit shall be transmitted to the St. Louis county 
auditor to be deposited in the taconite property tax relief 
account.  The total amount of penalty collected must be 
deposited in the county general fund. 
    (k) If a property owner has applied for more than one 
homestead and the county assessors cannot determine which 
property should be classified as homestead, the county assessors 
will refer the information to the commissioner.  The 
commissioner shall make the determination and notify the 
counties within 60 days. 
    (l) In addition to lists of homestead properties, the 
commissioner may ask the counties to furnish lists of all 
properties and the record owners. 
    Sec. 21.  Minnesota Statutes 1992, section 273.124, is 
amended by adding a subdivision to read: 
    Subd. 17.  [OWNER-OCCUPIED MOTEL PROPERTY.] For purposes of 
class 1a determinations, a homestead includes that portion of 
property defined as a motel under chapter 157, provided that the 
person residing in the motel property is using that property as 
a homestead, is part owner, and is actively engaged in the 
operation of the motel business.  Homestead treatment applies 
even if legal title to the property is in the name of a 
corporation or partnership and not in the name of the person 
residing in the motel.  The homestead is limited to that portion 
of the motel actually occupied by the person. 
    A taxpayer meeting the requirements of this subdivision 
must notify the county assessor, or the assessor who has the 
powers of the county assessor under section 273.063, in writing, 
in order to qualify under this subdivision for 1a homestead 
classification. 
    Sec. 22.  Minnesota Statutes 1992, section 273.124, is 
amended by adding a subdivision to read: 
    Subd. 18.  [PROPERTY UNDERGOING RENOVATION.] Property that 
is not occupied as a homestead on the assessment date will be 
classified as a homestead if it meets each of the following 
requirements on that date: 
    (a) The structure is a single family or duplex residence. 
    (b) The property is owned by a church or an organization 
that is exempt from taxation under section 501(c)(3) of the 
Internal Revenue Code of 1986. 
    (c) The organization is in the process of renovating the 
property for use as a homestead by an individual or family whose 
income is no greater than 60 percent of the county or area gross 
median income, adjusted for family size, and that renovation 
process and conveyance for use as a homestead can reasonably be 
expected to be completed within 12 months after construction 
begins. 
The organization must apply to the assessor for classification 
under this subdivision within 30 days of its acquisition of the 
property, and must provide the assessor with the information 
necessary for the assessor to determine whether the property 
qualifies. 
    Sec. 23.  Minnesota Statutes 1992, 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 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 $115,000, the value of 
the remaining land including improvements equal to the 
difference between $115,000 and the market value of the house, 
garage, and surrounding one acre of land has a net class rate of 
.45 percent of market value and a gross class rate of 1.75 
percent of market value.  The remaining value of class 2a 
property over $115,000 of market value that does not exceed 320 
acres has a net class rate of 1.3 percent of market value, and a 
gross class rate of 2.25 percent of market value.  The remaining 
property over the $115,000 market value in excess of 320 acres 
has a class rate of 1.6 percent of market value, and a gross 
class rate 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 
not improved with a structure and is used exclusively for 
growing trees for timber, lumber, and wood and wood products, if 
the owner has participated or is participating in a cost-sharing 
program for afforestation, reforestation, or timber stand 
improvement on that particular property, administered or 
coordinated by the commissioner of natural resources; or (3) 
real estate that is nonhomestead agricultural land.  Class 2b 
property has a net class rate of 1.6 percent of market value, 
and a gross 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 state or federal farm programs.  "Agricultural 
purposes" as used in this section means the raising or 
cultivation of agricultural products.  
     (d) Real estate of less than ten acres used principally for 
raising or cultivating agricultural products, shall be 
considered as agricultural land, if it is not used primarily for 
residential purposes.  
      (e) The term "agricultural products" as used in this 
subdivision includes:  
     (1) livestock, dairy animals, dairy products, poultry and 
poultry products, fur-bearing animals, horticultural and nursery 
stock described in sections 18.44 to 18.61, fruit of all kinds, 
vegetables, forage, grains, bees, and apiary products by the 
owner; 
     (2) fish bred for sale and consumption if the fish breeding 
occurs on land zoned for agricultural use; 
     (3) the commercial boarding of horses if the boarding is 
done in conjunction with raising or cultivating agricultural 
products as defined in clause (1); and 
     (4) property which is owned and operated by nonprofit 
organizations used for equestrian activities, excluding racing.  
     (f) 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. 24.  Minnesota Statutes 1992, 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 class rate of 3.3 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 5.06 
percent of the market value over $100,000.  In the case of 
state-assessed commercial, industrial, and utility property 
owned by one person or entity, only one parcel has a 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 
reduced class rate on the first $100,000 of market value., 
except that: 
    (1) if the market value of the parcel is less than 
$100,000, and additional parcels are owned by the same person or 
entity in the same city or town within that county, the reduced 
class rate shall be applied up to a combined total market value 
of $100,000 for all parcels owned by the same person or entity 
in the same city or town within the county; and 
    (2) in the case of grain, fertilizer, and feed elevator 
facilities, as defined in section 18C.305, subdivision 1, or 
232.21, subdivision 8, the limitation to one parcel per owner 
per county for the reduced class rate shall not apply, but there 
shall be a limit of $100,000 of preferential value per site of 
contiguous parcels owned by the same person or entity.  Only the 
value of the elevator portion of each parcel shall qualify for 
treatment under this clause.  For purposes of this subdivision, 
contiguous parcels include parcels separated only by a railroad 
or public road right-of-way. 
    To receive the reduced class rate on additional parcels 
under clauses (1) and (2), the taxpayer must notify the county 
assessor that the taxpayer owns more than one parcel that 
qualifies under clause (1) or (2). 
    (b) Employment property defined in section 469.166, during 
the period provided in section 469.170, shall constitute class 
3b and has a class rate of 2.3 percent of the first $50,000 of 
market value and 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 class rate of the first $100,000 of market value and 
the class rate of the remainder is 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. 25.  Minnesota Statutes 1992, 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 class rate of 3.5 percent of market value for taxes 
payable in 1992, and 3.4 percent of market value for taxes 
payable in 1993 and thereafter. 
    (b) Class 4b includes: 
    (1) residential real estate containing less than four 
units, other than seasonal residential, and recreational; 
    (2) manufactured homes not classified under any other 
provision; 
    (3) a dwelling, garage, and surrounding one acre of 
property on a nonhomestead farm classified under subdivision 23, 
paragraph (b).  
    Class 4b property has a class rate of 2.8 percent of market 
value for taxes payable in 1992, 2.5 percent of market value for 
taxes payable in 1993, and 2.3 percent of market value for taxes 
payable in 1994 and thereafter. 
     (c) Class 4c property includes: 
     (1) a structure that is:  
     (i) situated on real property that is used for housing for 
the elderly or for low- and moderate-income families as defined 
in Title II, as amended through December 31, 1990, of the 
National Housing Act or the Minnesota housing finance agency law 
of 1971, as amended, or rules promulgated by the agency and 
financed by a direct federal loan or federally insured loan made 
pursuant to Title II of the Act; or 
     (ii) situated on real property that is used for housing the 
elderly or for low- and moderate-income families as defined by 
the Minnesota housing finance agency law of 1971, as amended, or 
rules adopted by the agency pursuant thereto and financed by a 
loan made by the Minnesota housing finance agency pursuant to 
the provisions of the act.  
     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 as defined in section 
42(c)(2) of the Internal Revenue Code of 1986, as amended 
through December 31, 1990, that (i) receives a low-income 
housing credit under section 42 of the Internal Revenue Code of 
1986, as amended through December 31, 1990; or (ii) meets the 
requirements of that section and receives public financing, 
except financing provided under sections 469.174 to 469.179, 
which contains terms restricting the rents; or (iii) meets the 
requirements of section 273.1317.  Classification pursuant to 
this clause is limited 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 unless the owner of the property 
elects to have the property assessed under Laws 1991, chapter 
291, article 1, section 55.  If the owner of the property elects 
to have the market value determined on the basis of the actual 
restricted rents, as provided in Laws 1991, chapter 291, article 
1, section 55, the property will be assessed at the rate 
provided for class 4a or class 4b property, as appropriate.  
Properties described in clauses (1)(ii), (3), and (4) may apply 
to the assessor for valuation under Laws 1991, chapter 291, 
article 1, section 55.  The land on which these structures are 
situated has the class rate given in paragraph (b) if the 
structure contains fewer than four units, and the class rate 
given in paragraph (a) if the structure contains four or more 
units.  This clause applies only to the property of a nonprofit 
or limited dividend entity.  
      (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 
317A; 
       (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 250 days in the year preceding the year of 
assessment.  For purposes of this clause, property is devoted to 
a commercial purpose on a specific day if any portion of the 
property is used for residential occupancy, and a fee is charged 
for residential occupancy.  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 250 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 this clause also includes the remainder 
of class 1c resorts.  Owners of real property devoted to 
temporary and seasonal residential occupancy for recreation 
purposes and all or a portion of which was devoted to commercial 
purposes for not more than 250 days in the year preceding the 
year of assessment desiring classification as class 1c or 4c, 
must submit a declaration to the assessor designating the cabins 
or units occupied for 250 days or less in the year preceding the 
year of assessment by January 15 of the assessment year.  Those 
cabins or units and a proportionate share of the land on which 
they are located will be designated class 1c or 4c as otherwise 
provided.  The remainder of the cabins or units and a 
proportionate share of the land on which they are located will 
be designated as class 3a.  The first $100,000 of the market 
value of the remainder of the cabins or units and a 
proportionate share of the land on which they are located shall 
have a class rate of three percent.  The owner of property 
desiring designation as class 1c or 4c property must provide 
guest registers or other records demonstrating that the units 
for which class 1c or 4c designation is sought were not occupied 
for more than 250 days in the second year preceding the 
assessment if so requested.  The portion of a property operated 
as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 
nonresidential facility operated on a commercial basis not 
directly related to temporary and seasonal residential occupancy 
for recreation purposes shall not qualify for class 1c or 4c; 
     (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, 1990.  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 3.2 
percent 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; 
     (7) post-secondary student housing of not more than one 
acre of land that is owned by a nonprofit corporation organized 
under chapter 317A and is used exclusively by a student 
cooperative, sorority, or fraternity for on-campus housing or 
housing located within two miles of the border of a college 
campus; and 
     (8) manufactured home parks as defined in section 327.14, 
subdivision 3. 
     Class 4c property has a class rate of 2.3 percent of market 
value, except that (i) each parcel of seasonal residential 
recreational property not used for commercial purposes under 
clause (5) has a class rate of 2.2 percent of market value for 
taxes payable in 1992, and for taxes payable in 1993 and 
thereafter, the first $72,000 of market value on each parcel has 
a class rate of two percent and the market value of each parcel 
that exceeds $72,000 has a class rate of 2.5 percent, and (ii) 
manufactured home parks assessed under clause (8) have a class 
rate of two percent for taxes payable in 1993, 1994, and 1995 
only.  
    (d) Class 4d property includes: 
    (1) a structure that is: 
    (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 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.  For property for which 
application is made for 4c or 4d classification for taxes 
payable in 1994 and thereafter, and which was not classified 4c 
or 4d for taxes payable in 1993 those properties, 4c or 4d 
classification is available only for those units meeting the 
requirements of section 273.1318. 
    Classification under this clause is only available to 
property of a nonprofit or limited dividend entity. 
    In the case of a structure financed or refinanced under any 
federal or state mortgage insurance or direct loan program 
exclusively for housing for the elderly or for housing for the 
handicapped, a unit shall be considered occupied so long as it 
is actually occupied by an elderly or handicapped person or, if 
vacant, is held for rental to an elderly or handicapped person. 
    (2) For taxes payable in 1992, 1993 and 1994, only, 
buildings and appurtenances, together with the land upon which 
they are located, leased by the occupant under the community 
lending model lease-purchase mortgage loan program administered 
by the Federal National Mortgage Association, provided the 
occupant's income is no greater than 60 percent of the county or 
area median income, adjusted for family size and the building 
consists of existing single family or duplex housing.  The lease 
agreement must provide for a portion of the lease payment to be 
escrowed as a nonrefundable down payment on the housing.  To 
qualify under this clause, the taxpayer must apply to the county 
assessor by May 30 of each year.  The application must be 
accompanied by an affidavit or other proof required by the 
assessor to determine qualification under this clause. 
    (3) Qualifying buildings and appurtenances, together with 
the land upon which they are located, leased for a period of up 
to five years by the occupant under a lease-purchase program 
administered by the Minnesota housing finance agency or a 
housing and redevelopment authority authorized under sections 
469.001 to 469.047, provided the occupant's income is no greater 
than 80 percent of the county or area median income, adjusted 
for family size, and the building consists of two or less 
dwelling units.  The lease agreement must provide for a portion 
of the lease payment to be escrowed as a nonrefundable down 
payment on the housing.  The administering agency shall verify 
the occupants income eligibility and certify to the county 
assessor that the occupant meets the income criteria under this 
paragraph.  To qualify under this clause, the taxpayer must 
apply to the county assessor by May 30 of each year.  For 
purposes of this section, "qualifying buildings and 
appurtenances" shall be defined as one or two unit residential 
buildings which are unoccupied and have been abandoned and 
boarded for at least six months. 
    Class 4d property has a class rate of two percent of market 
value except that property classified under clause (3), shall 
have the same class rate as class 1a property. 
    (e) Residential rental property that would otherwise be 
assessed as class 4 property under paragraph (a); paragraph (b), 
clauses (1) and (3); paragraph (c), clause (1), (2), (3), or 
(4), 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.  Residential rental 
property that would otherwise be assessed as class 4 property 
under paragraph (d) is assessed at 2.3 percent of market value 
if it is found to be a substandard building under section 
273.1316. 
    Sec. 26.  Minnesota Statutes 1992, section 273.13, 
subdivision 33, is amended to read: 
    Subd. 33.  [CLASSIFICATION OF UNIMPROVED PROPERTY.] (a) 
Except as provided in paragraph All real property that is not 
improved with a structure must be classified according to its 
current use. 
    (b), Real property that is not improved with a 
structure and for which there is no identifiable current use 
must be classified according to its highest and best use 
permitted under the local zoning ordinance.  If the ordinance 
permits more than one use, the land must be classified according 
to the highest and best use permitted under the ordinance.  If 
no such ordinance exists, the assessor shall consider the most 
likely potential use of the unimproved land based upon the use 
made of surrounding land or land in proximity to the unimproved 
land. 
    (b) Real property that is not improved with a structure and 
is in commercial, industrial, or agricultural use under this 
section must be classified according to its actual use. 
    Sec. 27.  Minnesota Statutes 1992, section 273.1318, 
subdivision 1, is amended to read: 
    Subdivision 1.  [INCOME LIMITATION.] (a) Subject to the 
exception in paragraph (b), for a building for which application 
is made for class 4c for taxes payable in 1994 and thereafter, 
and which was not class 4c for taxes payable in 1993, only those 
units occupied by a household whose income is 100 percent or 
less of the county or area median income adjusted for family 
size as determined by the department of housing and urban 
development are eligible for class 4c. 
    (b) For a building for which application is made for class 
4c for taxes payable in 1994 and thereafter, and which was not 
class 4c for taxes payable in 1993, but for which a formal 
application was received by a local, state, or federal agency 
for financing, refinancing, or insurance before July 1, 
1992, and for a building that was classified as class 4c for 
taxes payable in 1993 or an earlier year, the income limit is 
100 percent or less of county or area median income not adjusted 
for family size as determined by the department of housing and 
urban development. 
    Sec. 28.  Minnesota Statutes 1992, section 273.135, 
subdivision 2, is amended to read: 
    Subd. 2.  The amount of the reduction authorized by 
subdivision 1 shall be: 
    (a) In the case of property located within the boundaries 
of a municipality which meets the qualifications prescribed in 
section 273.134, 66 percent of the tax, 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 tax, 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) The maximum reduction of the tax 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.  
    For the purposes of this subdivision, "homestead credit 
equivalency percentage" means one minus the ratio of the net 
class rate to the gross class rate applicable to the first 
$72,000 of the market value of residential homesteads, 
"effective tax rate" means tax divided by the market value of a 
property, and the "base year effective tax rate" means the 
payable 1988 tax on 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, divided by the market value of the property.  
    Sec. 29.  Minnesota Statutes 1992, 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.  
If more than 85 percent of the natural gas or other petroleum 
products actually transported over the pipeline is used for the 
owner's own consumption and not for resale to others, then this 
subdivision shall not apply; provided, however, that in that 
event, the pipeline shall be assessed in proportion to the 
percentage of gas actually transported over such pipeline that 
is not used for the owner's own consumption.  On or before 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. 30.  Minnesota Statutes 1992, section 276.04, 
subdivision 2, is amended to read: 
    Subd. 2.  [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 
shall provide for the printing of the tax statements.  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) 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 under section 272.03, subdivision 8 273.11, subdivision 1; 
    (2) the property's taxable market value after reductions 
under sections 273.11, subdivisions 1a and 16; 
    (3) the property's gross tax, calculated by multiplying the 
property's gross tax capacity times the total local tax rate and 
adding to the result the sum of the aids enumerated in clause 
(3); 
    (3) (4) 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) (5) for homestead residential and agricultural 
properties, the homestead and agricultural credit aid 
apportioned to the property.  This amount is obtained by 
multiplying the total local tax 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) (6) any credits received under sections 273.119; 
273.123; 273.135; 273.1391; 273.1398, subdivision 4; 469.171; 
and 473H.10, except that the amount of credit received under 
section 273.135 must be separately stated and identified as 
"taconite tax relief"; 
    (6) (7) the net tax payable in the manner required in 
paragraph (a); and 
    (7) (8) any additional amount of tax authorized under 
sections 124A.03, subdivision 2a, and 275.61.  These amounts 
shall be listed as "voter approved referenda levies."  
    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, for taxes levied in 1991, and for all counties for taxes 
levied in 1992 and thereafter, the commissioner must certify 
this amount by September 1.  
    Sec. 31.  Minnesota Statutes 1992, section 375.192, 
subdivision 2, is amended to read: 
    Subd. 2.  Upon written application by the owner of any 
property, the county board may grant the reduction or abatement 
of estimated market valuation or taxes and of any costs, 
penalties, or interest on them as the board deems just and 
equitable and order the refund in whole or part of any taxes, 
costs, penalties, or interest which have been erroneously or 
unjustly paid.  The county board is authorized to consider and 
grant reductions or abatements on applications only as they 
relate to taxes payable in the current year and the two prior 
years; provided that reductions or abatements for the two prior 
years shall be considered or granted only for (i) clerical 
errors, or (ii) when the taxpayer fails to file for a reduction 
or an adjustment due to hardship, as determined by the county 
board.  The application must include the social security number 
of the applicant.  The social security number is private data on 
individuals as defined by section 13.02, subdivision 12. All 
applications must be approved by the county assessor, or, if the 
property is located in a city of the first or second class 
having a city assessor, by the city assessor, and by the county 
auditor before consideration by the county board, except that 
the part of the application which is for the abatement of 
penalty or interest must be approved by the county treasurer and 
county auditor.  Approval by the county or city assessor is not 
required for abatements of penalty or interest.  No reduction, 
abatement, or refund of any special assessments made or levied 
by any municipality for local improvements shall be made unless 
it is also approved by the board of review or similar taxing 
authority of the municipality.  Before taking action on any 
reduction or abatement where the reduction of taxes, costs, 
penalties, and interest exceed $10,000, the county board shall 
give 20 days' notice to the school board and the municipality in 
which the property is located.  The notice must describe the 
property involved, the actual amount of the reduction being 
sought, and the reason for the reduction.  If the school board 
or the municipality object to the granting of the reduction or 
abatement, the county board must refer the abatement or 
reduction to the commissioner of revenue with its 
recommendation.  The commissioner shall consider the abatement 
or reduction under section 270.07, subdivision 1.  
     An appeal may not be taken to the tax court from any order 
of the county board made in the exercise of the discretionary 
authority granted in this section.  
    The county auditor shall notify the commissioner of revenue 
of all abatements resulting from the erroneous classification of 
real property, for tax purposes, as nonhomestead property.  For 
the abatements relating to the current year's tax processed 
through June 30, the auditor shall notify the commissioner on or 
before July 31 of that same year of all abatement applications 
granted.  For the abatements relating to the current year's tax 
processed after June 30 through the balance of the year, the 
auditor shall notify the commissioner on or before the following 
January 31 of all applications granted.  The county auditor 
shall submit a form containing the social security number of the 
applicant and such other information the commissioner prescribes.
    Sec. 32.  [PENDING APPLICATIONS.] 
    (a) For applications under Minnesota Statutes, section 
375.192, subdivision 2, pending prior to the effective date of 
this act, the county board's current policy is ratified by this 
act. 
    (b) If an applicant has filed a judicial action before 
January 1, 1993, for a reduction or abatement requiring the 
county to consider the application, paragraph (a) does not 
apply; provided, however, that no reduction or abatement may be 
considered by the county board for more than three years. 
    Sec. 33.  Minnesota Statutes 1992, section 429.061, is 
amended by adding a subdivision to read: 
    Subd. 5.  [SPECIAL ASSESSMENTS; ADMINISTRATIVE 
EXPENSES.] Notwithstanding any general or special law to the 
contrary, a municipality shall pay to the county auditor all 
administrative expenses incurred by the county under subdivision 
3 for each special assessment of any local improvement certified 
by the municipality to the county auditor. 
    Sec. 34.  Minnesota Statutes 1992, section 469.040, 
subdivision 3, is amended to read: 
    Subd. 3.  [STATEMENT FILED WITH ASSESSOR; PERCENTAGE TAX ON 
RENTALS.] Notwithstanding the provisions of subdivision 1, after 
a housing project carried on under sections 469.016 to 469.026 
has become occupied, in whole or in part, an authority shall 
file with the assessor, on or before May 1 April 15 of each 
year, a statement of the aggregate shelter rentals of that 
project collected during the preceding calendar year.  Unless a 
greater amount has been agreed upon between the authority and 
the governing body or bodies for which the authority was 
created, in whose jurisdiction the project is located, five 
percent of the aggregate shelter rentals shall be charged to the 
authority as a service charge for the services and facilities to 
be furnished with respect to that project.  The service charge 
shall be collected from the authority in the manner provided by 
law for the assessment and collection of taxes.  The amount so 
collected shall be distributed to the several taxing bodies in 
the same proportion as the tax rate of each bears to the total 
tax rate of those taxing bodies.  The governing body or bodies 
for which the authority has been created, in whose jurisdiction 
the project is located, may agree with the authority for the 
payment of a service charge for a housing project in an amount 
greater than five percent of the aggregate annual shelter 
rentals of any project, upon the basis of shelter rentals or 
upon another basis agreed upon.  The service charge may not 
exceed the amount which would be payable in taxes were the 
property not exempt.  If such an agreement is made, the service 
charge so agreed upon shall be collected and distributed in the 
manner above provided.  If the project has become occupied, or 
if the land upon which the project is to be constructed has been 
acquired, the agreement shall specify the location of the 
project for which the agreement is made.  "Shelter rental" means 
the total rentals of a housing project exclusive of any charge 
for utilities and special services such as heat, water, 
electricity, gas, sewage disposal, or garbage removal.  "Service 
charge" means payment in lieu of taxes.  The records of each 
housing project shall be open to inspection by the proper 
assessing officer. 
    Sec. 35.  Laws 1985, chapter 302, section 1, subdivision 3, 
is amended to read: 
    Subd. 3.  [SPECIAL SERVICES.] "Special services" means all 
services rendered or contracted for by the city for snow, ice, 
and litter removal and cleaning of sidewalks, curbs, gutters, 
and streets and for banners and other decorations to be used to 
identify and promote the commercial area.: 
    (1) snow, ice removal, and sanding of public areas; 
    (2) cleaning of streets, curbs, gutters, sidewalks, and 
alleys; 
    (3) watering, fertilizing, maintenance, and replacement of 
trees and bushes on public right-of-way; 
    (4) poster and handbill removal; 
    (5) cleaning and scrubbing of sidewalks; 
    (6) provision, installation, maintenance, removal, and 
replacement of banners and decorative items for promotion of 
commercial area; 
    (7) repair and maintenance of sidewalks; 
    (8) installation and maintenance of areawide security 
systems; 
    (9) provision and coordination of security personnel to 
supplement regular city personnel; 
    (10) maintenance, repair, and cleaning of commercial area 
directories, kiosks, benches, bus shelters, newspaper stands, 
trash receptacles, information booths, bicycle racks and bicycle 
storage containers, sculptures, murals, and other public area 
art pieces; 
    (11) installation, maintenance, and removal of lighting on 
commercial area trees; 
    (12) cost of electrical service for pedestrian and tree 
lighting; 
    (13) repair of low-level pedestrian lights and poles; 
    (14) provision of comprehensive liability insurance for 
public space improvements; 
    (15) trash removal and recycling costs; and 
    (16) provision, maintenance, and replacement of special 
signage relating to vehicle and bicycle parking, vehicle and 
pedestrian movement, and special events.  
    Special services do not include services that are 
ordinarily provided throughout the city from ordinary revenues 
of the city unless an increased level of service is provided in 
the special service district. 
    Sec. 36.  Laws 1985, chapter 302, section 2, subdivision 1, 
is amended to read: 
    Subdivision 1.  [ORDINANCE.] The governing body of the city 
may adopt an ordinance ordinances: 
    (a) establishing a special service district in the part of 
Minneapolis which is south of 28th Street, west of Fremont 
Dupont Avenue South, north of 31st Street, and east of Humboldt 
Avenue South East Calhoun Parkway and East Lake of the Isles 
Parkway; and 
    (b) establishing a special service district south of Sixth 
Street southeast, west of Sixteenth Avenue Southeast, north of a 
line parallel to and 200 feet south of University Avenue and 
east of Twelfth Avenue Southeast. 
    Only property which is zoned for commercial, business, or 
industrial use under a municipal zoning ordinance may be 
included in a special service district.  The ordinance shall 
describe with particularity the areas to be included in the 
district and the special services to be furnished.  The 
ordinance may not be adopted until after a public hearing on the 
question.  Notice of the hearing shall include: 
    (1) the time and place of the hearing; 
    (2) a map showing the boundaries of the proposed district; 
and 
    (3) a statement that all persons owning property in the 
proposed district will be given an opportunity to be heard at 
the hearing. 
    Sec. 37.  Laws 1985, chapter 302, section 4, is amended to 
read: 
    Sec. 4.  [ENLARGEMENT OF SPECIAL SERVICE DISTRICTS.] 
    The boundary of a special service district may be enlarged, 
to an area not to exceed one square mile, within the part of 
Minneapolis described in section 2 only after hearing and notice 
as provided in section 2.  Notice shall be served in the 
original district and in the area proposed to be added to the 
district.  Property added to the district shall be subject to 
all taxes levied and service charges imposed within the district 
after the property becomes a part of the district. 
    Sec. 38.  [LOCAL APPROVAL.] 
    Sections 35 to 37 take effect the day after the governing 
body of the city of Minneapolis complies with Minnesota 
Statutes, section 645.021, subdivision 3. 
    Sec. 39.  [FLOODWOOD AREA AMBULANCE DISTRICT.] 
    Subdivision 1.  [AGREEMENT.] The city of Floodwood and one 
or more of the towns of Floodwood, Van Buren, Halden, Cedar 
Valley, Ness, Arrowhead, Fine Lakes, and Prairie Lake, may by 
resolution of their city council and town boards establish the 
Floodwood area ambulance district.  The town of Ness may provide 
that only a described part of its territory be included within 
the district.  The St. Louis county board may by resolution 
provide that property located in unorganized territory 52-21 may 
be included within the district.  The district shall make 
payments of the proceeds of the tax authorized in this section 
to the city of Floodwood, which shall provide ambulance services 
throughout the territory of the district and may exercise all 
the powers of the city and towns that relate to ambulance 
service anywhere within its territory.  Any other contiguous 
town or home rule charter or statutory city may join the 
district with the agreement of the cities and towns that 
comprise the district at the time of its application to join.  
Action to join the district may be taken by the city council or 
town board of the city or town. 
    Subd. 2.  [BOARD.] The district shall be governed by a 
board composed of one member appointed by the city council or 
town board of each city and town in the district.  A district 
board member may, but is not required to, be a member of a city 
council or town board.  Except as provided in this section, 
members shall serve two-year terms ending the first Monday in 
January and until their successors are appointed and qualified.  
Of the members first appointed, as far as possible, the terms of 
one-half shall expire on the first Monday in January in the 
first year following their appointment and one-half the first 
Monday in January in the second year.  The terms of those 
initially appointed shall be determined by lot.  If an 
additional member is added because an additional city or town 
joins the district, the member's term shall be fixed so that, as 
far as possible, the terms of one-half of all the members expire 
on the same date. 
    Subd. 3.  [TAX.] The district may impose a property tax on 
real and personal property in the district in an amount 
sufficient to discharge its operating expenses and debt payable 
in each year, but not to exceed $25,000 each year.  The St. 
Louis county auditor and treasurer shall collect the tax and pay 
it to the Floodwood area ambulance district. 
    Subd. 4.  [PUBLIC INDEBTEDNESS.] The district may incur 
debt in the manner provided for a municipality by Minnesota 
Statutes, chapter 475, when necessary to accomplish a duty 
charged to it. 
    Subd. 5.  [WITHDRAWAL.] Upon two years' notice, a city or 
town may withdraw from the district.  Its territory shall remain 
subject to taxation for debt incurred prior to its withdrawal 
pursuant to Minnesota Statutes, chapter 475. 
    Subd. 6.  [EFFECTIVE DATE.] This section is effective in 
the city of Floodwood, and the towns of Floodwood, Van Buren, 
Halden, Cedar Valley, Ness, Arrowhead, Fine Lakes, and Prairie 
Lake the day after compliance with Minnesota Statutes, section 
645.021, subdivision 3, by the governing body of each.  This 
section is effective for unorganized territory 52-21 the day 
after compliance with Minnesota Statutes, section 645.021, 
subdivision 3, by the St. Louis county board. 
    Sec. 40.  [CITY OF DULUTH; SPECIAL SERVICE DISTRICT.] 
    Subdivision 1.  [DEFINITIONS.] For the purpose of this 
section, the terms defined in this subdivision have the 
following meanings:  
    (1) "City" means the city of Duluth. 
    (2) "Special services" means all services rendered or 
contracted for by the city, including but not limited to:  
    (i) the construction, repair, maintenance, and operation of 
any improvements authorized by Minnesota Statutes, sections 
429.021 and 469.126; 
    (ii) the acquisition of property within a special service 
district, including through the use of the power of eminent 
domain; 
    (iii) the sale or lease of property in the special service 
district at or below "market rate" for the promotion of 
development within the district; 
    (iv) parking services rendered or contracted for by the 
city; 
    (v) promotional services provided or contracted for by the 
city; and 
    (vi) any other service provided to the public by the city 
as authorized by law or charter.  
    (3) "Special service district" means a defined area within 
the city in which special services are rendered and the costs of 
special services are paid from revenues collected from service 
charges imposed within the area as provided in this section.  
    Subd. 2.  [RELATION TO MINNESOTA STATUTES, CHAPTER 
428A.] The creation of a special service district under this 
section must be in accordance with the provisions of Minnesota 
Statutes, chapter 428A.  
    Subd. 3.  [ESTABLISHMENT OF SPECIAL SERVICE DISTRICT; 
AREA.] The governing body of the city may establish a special 
service district in the city.  The district shall be bounded on 
the northwest by Interstate Highway 35, on the northeast by the 
centerline of Sixth Avenue West and as the same is extended to 
the United States Harbor Line in St. Louis Bay, on the southeast 
by said Harbor Line and on the southwest by the centerline of 
Ninth Avenue West and as the same is extended to said Harbor 
Line.  
    Subd. 4.  [SERVICE CHARGES; DETERMINATION OF 
AMOUNT.] Service charges based on the net tax capacity of the 
property within the district shall be distributed in a manner 
determined by the city council to be a fair, equitable, and 
reasonable method of determination, taking into account the 
character and impact of the services to be provided on each 
parcel in the district; provided, it shall not be necessary to 
establish a relationship between any special service charges on 
a parcel of property and the value of special benefits conferred 
upon that property. 
    Subd. 5.  [DELEGATION TO ECONOMIC DEVELOPMENT 
AUTHORITY.] After the creation of a special service district, 
the city council may, by resolution, delegate the operation of 
the district to an economic development authority created 
pursuant to Minnesota Statutes, sections 469.090 to 469.108.  
    Sec. 41.  [PROPERTY ACQUIRED FROM ELECTRIC COOPERATIVE.] 
    Subdivision 1.  [PROPERTY EXEMPTION.] Property owned by a 
cooperative association, as defined in Minnesota Statutes, 
section 273.40, that is purchased by a public utility, as 
defined in Minnesota Statutes, section 216B.02, remains exempt 
from property taxes, if the property: 
    (1) was exempt under Minnesota Statutes, section 272.02, 
subdivision 1, clause (18), or section 273.41 when it was owned 
by the cooperative association; and 
    (2) is located in St. Louis, Koochiching, Itasca, and Lake 
counties. 
    This exemption applies for three assessment years from the 
date of purchase.  The tax under Minnesota Statutes, section 
273.41, continues to apply during the three-year exemption 
period.  The rates charged by the public utility must reflect 
the property tax exemption provided under this section. 
    Subd. 2.  [LOCAL APPROVAL.] Subdivision 1 is effective in 
St. Louis, Koochiching, Itasca, and Lake counties the day after 
the governing body of the county complies with Minnesota 
Statutes, section 645.021, subdivision 3. 
    Sec. 42. [REPORT TO LEGISLATURE.] 
    By February 1 of each year, the commissioner of revenue 
shall make a report to the legislature on the use of limited 
market value under section 273.13, subdivision 1a, and the 
valuation exclusion under section 273.13, subdivision 16.  For 
the limited market value provision, the report shall include the 
total value excluded from taxation by type of property for each 
city and town.  For the valuation exclusion provision, the 
report shall include the total market value excluded from 
taxation for each city and town, as well as a breakdown of the 
excluded improvement amounts by age and value of the property 
being improved and the amount of the qualifying improvement.  
The county assessors shall provide the information necessary for 
the commissioner to compile the report in a manner prescribed by 
the commissioner. 
    Sec. 43.  [REPEALER.] 
    (a) Minnesota Statutes 1992, section 272.115, subdivision 
1a, is repealed. 
    (b) Minnesota Statutes 1992, section 273.124, subdivision 
16, is repealed. 
    (c) Minnesota Statutes 1992, section 383C.78, is repealed. 
    Sec. 44.  [EFFECTIVE DATE.] 
    Section 1 is effective April 1, 1994.  
    Sections 2, 3, clause (26), and 43, paragraph (b), are 
effective for taxes levied in 1993, payable in 1994, and 
thereafter. 
    Section 3, clause (25), is effective for taxes levied in 
1991, payable in 1992, and thereafter.  Upon application to and 
approval by the county auditor, the county treasurer shall 
refund to the taxpayer any taxes paid for 1992 that are exempt 
under section 3, clause (25).  The refund shall be paid without 
interest.  Each taxing jurisdiction must reimburse the county 
for the refund in the same proportion as the taxing 
jurisdiction's levy bears to the total levies of all 
jurisdictions for taxes payable in 1992.  The amount of the 
reimbursement may be deducted in the next distribution of tax 
proceeds to the taxing jurisdiction. 
    Sections 4 to 7, 17, and 43, paragraph (a), are effective 
the day following final enactment, except that section 17, 
paragraphs (c) and (d) are effective for taxes payable in 1994 
and thereafter. 
    Sections 8 to 10, 12, 19, 21 to 27, and 30 are effective 
for 1993 assessments for taxes payable in 1994 and subsequent 
years, except if provided otherwise. 
    Section 11, clauses (1) and (2), are effective for the 1992 
assessment, taxes payable in 1993 and thereafter.  Section 11, 
clause (3), is effective for the 1993 assessment, taxes payable 
in 1994 and thereafter. 
    Section 13 is effective for qualifying improvements made 
after January 2, 1993.  
    Sections 14 and 15 are effective for the 1994 assessment, 
payable in 1995, and thereafter.  Notwithstanding Minnesota 
Statutes, section 273.112, subdivision 6, in order to qualify 
for valuation under Minnesota Statutes, section 273.112, for the 
1994 assessment, the taxpayer of the property devoted to golf 
and operated by private clubs, that does not meet the 
requirement of Minnesota Statutes, section 273.112, subdivision 
3, for the 1993 assessment year, must submit an affidavit or 
other written verification to the assessor showing that the 
bylaws in rules and regulations of the private club meet the 
eligibility requirements of Minnesota Statutes, section 273.112, 
by January 1, 1994. 
    Sections 16 and 18 are effective for assessment year 1994 
and subsequent years. 
    Section 20 is effective for taxes payable in 1995 and 
thereafter. 
    Section 28 is effective for taxes payable in 1994 and 
thereafter. 
    Section 29 is effective for the 1991 assessment and 
thereafter, for taxes payable in 1992 and thereafter.  For taxes 
payable in 1992 and 1993, any amounts paid by the property owner 
in excess of the amounts required by section 29 shall be paid by 
the county treasurer to the property owner under the abatement 
procedures. 
    Section 31 is effective for applications for reductions or 
abatements filed after the day of final enactment. 
    Section 33 is effective for assessments certified after 
July 1, 1993. 
    Section 40 is effective the day after compliance with 
Minnesota Statutes, section 645.021, subdivision 3, by the 
governing body of the city of Duluth. 
    Section 43, clause (c) is repealed effective January 2, 
1993, provided that any improvements made prior to January 2, 
1993, shall continue to qualify for the delayed assessment 
provisions under section 383C.78 for the duration of the period 
provided in that section. 

                               ARTICLE 6 
PROPERTY TAX REFUND
    Section 1.  Minnesota Statutes 1992, section 290A.03, 
subdivision 3, is amended to read: 
    Subd. 3.  [INCOME.] (1) "Income" means the sum of the 
following:  
    (a) federal adjusted gross income as defined in the 
Internal Revenue Code; and 
    (b) the sum of the following amounts to the extent not 
included in clause (a):  
    (i) all nontaxable income; 
    (ii) the amount of a passive activity loss that is not 
disallowed as a result of section 469, paragraph (i) or (m) of 
the Internal Revenue Code and the amount of passive activity 
loss carryover allowed under section 469(b) of the Internal 
Revenue Code; 
    (iii) an amount equal to the total of any discharge of 
qualified farm indebtedness of a solvent individual excluded 
from gross income under section 108(g) of the Internal Revenue 
Code; 
    (iv) cash public assistance and relief; 
    (v) any pension or annuity (including railroad retirement 
benefits, all payments received under the federal Social 
Security Act, supplemental security income, and veterans 
benefits), which was not exclusively funded by the claimant or 
spouse, or which was funded exclusively by the claimant or 
spouse and which funding payments were excluded from federal 
adjusted gross income in the years when the payments were made; 
     (vi) interest received from the federal or a state 
government or any instrumentality or political subdivision 
thereof; 
      (vii) workers' compensation; 
      (viii) nontaxable strike benefits; 
      (ix) the gross amounts of payments received in the nature 
of disability income or sick pay as a result of accident, 
sickness, or other disability, whether funded through insurance 
or otherwise; 
      (x) a lump sum distribution under section 402(e)(3) of the 
Internal Revenue Code; 
      (xi) contributions made by the claimant to an individual 
retirement account, including a qualified voluntary employee 
contribution; simplified employee pension plan; self-employed 
retirement plan; cash or deferred arrangement plan under section 
401(k) of the Internal Revenue Code; or deferred compensation 
plan under section 457 of the Internal Revenue Code; and 
      (xii) nontaxable scholarship or fellowship grants.  
      In the case of an individual who files an income tax return 
on a fiscal year basis, the term "federal adjusted gross income" 
shall mean federal adjusted gross income reflected in the fiscal 
year ending in the calendar year.  Federal adjusted gross income 
shall not be reduced by the amount of a net operating loss 
carryback or carryforward or a capital loss carryback or 
carryforward allowed for the year.  
      (2) "Income" does not include 
    (a) amounts excluded pursuant to the Internal Revenue Code, 
sections 101(a), 102, and 121; 
    (b) amounts of any pension or annuity which was exclusively 
funded by the claimant or spouse and which funding payments were 
not excluded from federal adjusted gross income in the years 
when the payments were made; 
    (c) surplus food or other relief in kind supplied by a 
governmental agency; 
    (d) relief granted under this chapter; or 
    (e) child support payments received under a temporary or 
final decree of dissolution or legal separation.  
    (3) The sum of the following amounts may be subtracted from 
income:  
    (a) for the claimant's first dependent, the exemption 
amount multiplied by 1.4; 
    (b) for the claimant's second dependent, the exemption 
amount multiplied by 1.3; 
    (c) for the claimant's third dependent, the exemption 
amount multiplied by 1.2; 
    (d) for the claimant's fourth dependent, the exemption 
amount multiplied by 1.1; 
    (e) for the claimant's fifth dependent, the exemption 
amount; and 
    (f) if the claimant or claimant's spouse was disabled or 
attained the age of 65 prior to June 1 on or before December 31 
of the year for which the taxes were levied or rent paid, the 
exemption amount.  
      For purposes of this subdivision, the "exemption amount" 
means the exemption amount under section 151(d) of the Internal 
Revenue Code of 1986, as amended through December 31, 1991, for 
the taxable year for which the income is reported.  
    Sec. 2.  Minnesota Statutes 1992, section 290A.03, 
subdivision 7, is amended to read: 
    Subd. 7.  [DEPENDENT.] "Dependent" means any person who is 
considered a dependent under sections 151 and 152 of the 
Internal Revenue Code of 1986, as amended through December 31, 
1991.  In the case of a son, stepson, daughter, or stepdaughter 
of the claimant, amounts received as an aid to families with 
dependent children grant or, allowance to or on behalf of the 
child, surplus food, or other relief in kind supplied by a 
governmental agency must not be taken into account in 
determining whether the child received more than half of the 
child's support from the claimant.  
    Sec. 3.  Minnesota Statutes 1992, section 290A.03, 
subdivision 8, is amended to read: 
    Subd. 8.  [CLAIMANT.] (a) "Claimant" means a person, other 
than a dependent, as defined under sections 151 and 152 of the 
Internal Revenue Code of 1986, as amended through December 31, 
1992, disregarding section 152(b)(3) of the Internal Revenue 
Code, who filed a claim authorized by this chapter and who was a 
resident of this state as provided in chapter 290 during the 
calendar year for which the claim for relief was filed. 
    (b) In the case of a claim relating to rent constituting 
property taxes, the claimant shall have resided in a rented or 
leased unit on which ad valorem taxes or payments made in lieu 
of ad valorem taxes, including payments of special assessments 
imposed in lieu of ad valorem taxes, are payable at some time 
during the calendar year covered by the claim.  
    (c) "Claimant" shall not include a resident of a nursing 
home, intermediate care facility, or long-term residential 
facility whose rent constituting property taxes is paid pursuant 
to the supplemental security income program under title XVI of 
the Social Security Act, the Minnesota supplemental aid program 
under sections 256D.35 to 256D.54, the medical assistance 
program pursuant to title XIX of the Social Security Act, or the 
general assistance medical care program pursuant to section 
256D.03, subdivision 3.  If only a portion of the rent 
constituting property taxes is paid by these programs, the 
resident shall be a claimant for purposes of this chapter, but 
the refund calculated pursuant to section 290A.04 shall be 
multiplied by a fraction, the numerator of which is income as 
defined in subdivision 3, paragraphs (1) and (2), reduced by the 
total amount of income from the above sources other than vendor 
payments under the medical assistance program or the general 
assistance medical care program and the denominator of which is 
income as defined in subdivision 3, paragraphs (1) and (2), plus 
vendor payments under the medical assistance program or the 
general assistance medical care program, to determine the 
allowable refund pursuant to this chapter.  
     (d) Notwithstanding paragraph (c), if the claimant was a 
resident of the nursing home, intermediate care facility or 
long-term residential facility for only a portion of the 
calendar year covered by the claim, the claimant may compute 
rent constituting property taxes by disregarding the rent 
constituting property taxes from the nursing home, intermediate 
care facility, or long-term residential facility and use only 
that amount of rent constituting property taxes or property 
taxes payable relating to that portion of the year when the 
claimant was not in the facility.  The claimant's household 
income is the income for the entire calendar year covered by the 
claim.  
     (e) In the case of a claim for rent constituting property 
taxes of a part-year Minnesota resident, the income and rental 
reflected in this computation shall be for the period of 
Minnesota residency only.  Any rental expenses paid which may be 
reflected in arriving at federal adjusted gross income cannot be 
utilized for this computation.  When two individuals of a 
household are able to meet the qualifications for a claimant, 
they may determine among them as to who the claimant shall be. 
If they are unable to agree, the matter shall be referred to the 
commissioner of revenue whose decision shall be final.  If a 
homestead property owner was a part-year Minnesota resident, the 
income reflected in the computation made pursuant to section 
290A.04 shall be for the entire calendar year, including income 
not assignable to Minnesota. 
    (f) If a homestead is occupied by two or more renters, who 
are not husband and wife, the rent shall be deemed to be paid 
equally by each, and separate claims shall be filed by each.  
The income of each shall be each renter's household income for 
purposes of computing the amount of credit to be allowed. 
    Sec. 4.  Minnesota Statutes 1992, section 290A.04, 
subdivision 2h, is amended to read: 
    Subd. 2h.  (a) If the gross property taxes payable on a 
homestead increase more than 12 percent over the net property 
taxes payable in the prior year on the same property that is 
owned by the same owner in both years, and the amount of that 
increase is $80 or more for taxes payable in 1993, and $100 or 
more for taxes payable in 1994, 1995, and 1996, a claimant who 
is a homeowner shall be allowed an additional refund equal to 75 
percent of the amount of the increase over the greater of 12 
percent of the prior year's net property taxes payable or $80 
for taxes payable in 1993, and 75 percent of the amount of the 
increase over the greater of 12 percent of the prior year's net 
property taxes payable or $100 for taxes payable in 1994, 1995, 
and 1996.  This subdivision shall not apply to any increase in 
the gross property taxes payable attributable to improvements 
made to the homestead after the assessment date for the prior 
year's taxes. 
    In the case of refunds for property taxes payable in 1993 
and thereafter, The maximum refund allowed under this 
subdivision is $1,500. 
    (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 under sections 273.13, 
subdivisions 22 and 23; 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, 1993, 1994, and 1995, 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 for taxes 
payable in 1994, 1995, and 1996 exceed $5,500,000, for each of 
the three years the commissioner shall increase the $100 amount 
of tax increase which must occur before a taxpayer qualifies for 
a refund, and increase by an equal amount the $100 threshold 
used in determining the amount of the refund, so that the 
estimated total refund claims do not exceed $5,500,000 for taxes 
payable in 1994, for taxes payable in 1995, or for taxes payable 
in 1996. 
    The determinations of the revised thresholds by the 
commissioner are not rules subject to chapter 14.  
    Sec. 5.  Minnesota Statutes 1992, section 290A.04, is 
amended by adding a subdivision to read: 
    Subd. 6.  [INFLATION ADJUSTMENT.] Beginning for property 
tax refunds payable in calendar year 1995, the commissioner 
shall annually adjust the dollar amounts of the income 
thresholds and the maximum refunds under subdivisions 2 and 2a 
for inflation.  The commissioner shall make the inflation 
adjustments in accordance with section 290.06, subdivision 2d, 
except that for purposes of this subdivision the percentage 
increase shall be determined from the year ending on August 31, 
1993, to the year ending on August 31 of the year preceding that 
in which the refund is payable.  The commissioner shall round 
the thresholds and the maximum amounts, as adjusted to the 
nearest $10 amount.  If the amount ends in $5, the commissioner 
shall round it up to the next $10 amount.  
    The commissioner shall annually announce the adjusted 
refund schedule at the same time provided under section 290.06.  
The determination of the commissioner under this subdivision is 
not a rule under the administrative procedures act. 
    Sec. 6.  Minnesota Statutes 1992, section 290A.23, is 
amended to read: 
    290A.23 [APPROPRIATION.] 
    Subdivision 1.  [RENTERS CREDIT AND TARGETING.] For 
payments made before July 1, 1996, there is appropriated from 
the general fund in the state treasury to the commissioner of 
revenue the amount necessary to make the payments required under 
section 290A.04, subdivisions 2a and 2h.  For payments made 
after June 30, 1996, the amount necessary to make the payments 
required under section 290A.04, subdivision 2a, are appropriated 
to the commissioner of revenue from the local government trust 
fund. 
    Subd. 2.  [HOMEOWNERS PROPERTY TAX REFUND AND TARGETING.] 
There is appropriated from the local government trust fund to 
the commissioner of revenue the amount necessary to make the 
payments required under section 290A.04, subdivision 
subdivisions 2 and 2h. 
    Sec. 7.  [INCREASE IN PROPERTY TAX REFUNDS FOR RENTERS.] 
    (a) On the basis of the most recent forecast of local 
government trust fund revenues and expenditures, not including 
expenditures under this section, the commissioner of finance 
shall determine on or before July 1, 1994, whether the local 
government trust fund revenues for fiscal year 1995 will exceed 
the amount appropriated from the fund.  If the amount of 
revenues are estimated to exceed appropriations, up to the first 
$3,000,000 of the excess is appropriated from the local 
government trust fund to the commissioner of revenue to increase 
the payment of property tax refunds to renters under Minnesota 
Statutes, section 290A.04, subdivision 2a, for claims relating 
to rent constituting property taxes for rents paid in 1993.  The 
commissioner shall proportionately increase each claimant's 
refund by an amount the commissioner estimates is sufficient to 
pay out the additional appropriation.  The amount paid to a 
claimant under this appropriation is not subject to the 
limitations under Minnesota Statutes, chapter 290A, on the 
maximum amount of a refund.  The additional refund under this 
section shall be included with the originally authorized refund 
and paid at the same time as prescribed for the original refund 
under Minnesota Statutes, section 290A.07.  The commissioner's 
adjustments are final.  If, as a result of the commissioner's 
estimates the additional refund paid under this section exceeds 
the amount the commissioner originally determined as the 
available local government trust fund surplus, the excess is 
appropriated first from any remaining local government trust 
fund surplus and then, if necessary, from the general fund.  
    (b) If an additional appropriation is made under the 
provision of paragraph (a), the commissioner of revenue shall 
recommend modifications of the property tax refund schedule to 
the 1995 legislature to provide an equivalent permanent increase 
in the property tax refund for renters. 
    Sec. 8.  [EFFECTIVE DATE.] 
    Section 1 is effective for refunds payable for rents paid 
in 1993 and property taxes payable in 1994, and thereafter. 
    Sections 2 and 3 are effective for refunds payable for 
rents paid in 1992 and property taxes payable in 1993, and 
thereafter. 
    Section 4 is effective for refunds for property taxes 
payable in 1994, 1995, and 1996 only. 

                               ARTICLE 7

               TRUTH IN TAXATION AND LEVY LIMIT TECHNICAL
    Section 1.  Minnesota Statutes 1992, section 103B.635, 
subdivision 2, is amended to read: 
    Subd. 2.  [MUNICIPAL FUNDING OF DISTRICT.] (a) The 
governing body or board of supervisors of each municipality in 
the district must provide the funds necessary to meet its 
proportion of the total cost determined by the board, provided 
the total funding from all municipalities in the district for 
the costs shall not exceed an amount equal to .00242 percent of 
the total taxable market value within the district, unless 
three-fourths of the municipalities in the district pass a 
resolution concurring to the additional costs.  
    (b) A municipality may raise the funds by any means that 
the municipality has to raise funds.  The municipalities may 
each levy a tax not to exceed .00242 percent of taxable market 
value on the taxable property located in the district for 
funding the district.  The levy must be within all other 
limitations provided by law.  
    (c) The funds must be deposited in the treasury of the 
district in amounts and at times as the treasurer of the 
district requires. 
    Sec. 2.  Minnesota Statutes 1992, section 134.001, is 
amended by adding a subdivision to read: 
    Subd. 8.  [REGIONAL PUBLIC LIBRARY DISTRICT.] "Regional 
public library district" means a governmental unit formed 
according to this chapter to operate multicounty public library 
services. 
    Sec. 3.  [134.201] [REGIONAL LIBRARY DISTRICT.] 
    Subdivision 1.  [ESTABLISHMENT.] Regional public library 
districts may be established under this section in the areas of 
the existing Great River Regional library system and the East 
Central Regional library system.  The geographic boundaries 
shall be those established by the state board of education under 
section 134.34, subdivision 3.  
    Subd. 2.  [FORMATION.] A regional public library district 
may be formed by:  
    (1) approval of a majority of the city councils and boards 
of county commissioners of the cities and counties that finance 
regional public library system services and represent a majority 
of the population to be served; or 
    (2) a majority of those voting on the issue in the entire 
area to be served by the district in a referendum called after 
petitions for the referendum have been filed in each of the 
local governmental units.  Petitions must be signed by eligible 
voters in a number not less than five percent of the number of 
persons who voted in the last general election in each city and 
county that is a party to the system contract or agreement.  
    A city that is not participating in a regional public 
library system may join the district by majority vote of the 
city council or by referendum under clause (2) and with the 
approval of the board of the regional public library district.  
    Subd. 3.  [TERMINATION.] A regional public library district 
may be terminated at any time after the district has been in 
operation for three years.  The procedure for termination is the 
same as that for creation under subdivision 2, clause (2). 
     Subd. 4.  [BOARD.] (a) If the district is formed under 
subdivision 2, clause (1), the board of the public regional 
library district shall be composed of one county commissioner or 
the commissioner's designee from each county in the district's 
service area and one elected member from each county for each 
ten percent or a major fraction of the district's population.  A 
majority of the members of the board must be elected members. 
    (b) If the district is formed under subdivision 2, clause 
(2), the board of the regional library district shall be 
composed of one member elected from each county in the 
district's service area and one member elected from each county 
for each ten percent or a major fraction of the district's 
population. 
    (c) Elected board members shall be elected at large from a 
county at a November election.  Board members elected shall 
assume office on the following January 2.  The term of a member 
shall be four years, with the terms of an initial board to 
expire in two years for one-half of the members.  The board 
shall organize itself under section 134.11, subdivision 1.  The 
board has the powers and duties set forth in section 134.11, 
subdivision 2. 
    Subd. 5.  [GENERAL LEVY AUTHORITY.] The board may levy for 
operation of public library service.  This levy shall replace 
levies for operation of public library service by cities and 
counties authorized in section 134.07.  The amount levied shall 
be spread on the net tax capacity of all taxable property in the 
district at a uniform tax rate.  
    (a) The maximum amount that may be levied by a board under 
this section is the greater of:  (1) the statewide average local 
support per capita for public library services for the most 
recent reporting period available, as certified by the 
commissioner of education, multiplied by the population of the 
district according to the most recent estimate of the state 
demographer or the metropolitan council; or (2) the total amount 
provided by participating counties and cities under section 
134.34, subdivision 4, during the year preceding the first year 
of operation. 
    (b) For its first year of operation, the board shall levy 
an amount not less than the total dollar amount provided by 
participating cities and counties during the preceding year 
under section 134.34, subdivision 4. 
    Subd. 6.  [BASIC SYSTEM SUPPORT GRANT.] A regional public 
library district that meets federal and state requirements for a 
regional library basic system support grant is eligible to 
receive a grant.  A regional library basic system support grant 
shall not be made to a regional public library district if the 
district board reduces its levy for operation of public library 
service below the amount of the levy in the preceding year. 
    Subd. 7.  [LIBRARY BUILDINGS.] In addition to the levy 
authorized in subdivision 5 and all other levies authorized for 
cities and counties, a city or county served by a library 
district may levy for the construction, acquisition, 
maintenance, and utilities costs of library buildings.  The 
board of a district may issue bonds, with an election, according 
to chapter 475 or levy under this section a special capital levy 
for capital improvements for a library building.  A district may 
purchase or lease a building to be used for library purposes 
from a city or county.  
    Subd. 8.  [BORROW MONEY.] The board of a district may 
borrow money and issue tax anticipation certificates as needed 
to provide library services or for library buildings.  
    Subd. 9.  [TRANSITION PROVISIONS.] If a regional public 
library system is reorganized into a regional public library 
district there will be a transition period.  The transition 
period shall begin at the time the regional public library 
system board adopts a resolution that recommends formation of a 
district to its participants and that sets an effective date for 
the establishment of the district.  During the transition period 
participating counties and cities must fund public library 
services under their existing contracts, and planning for 
administrative changes may occur.  The regional public library 
system board shall continue until the district board members 
assume their duties, at which time the transition period ends. 
    Subd. 10.  [ASSUMPTION OF ASSETS, LIABILITIES, AND 
CONTRACTS.] Upon assumption of responsibilities by the regional 
public library district board, the regional public library 
system assets, liabilities, and existing contracts, including 
contracts negotiated under chapter 179A, shall become the 
assets, liabilities, and contracts of the regional public 
library district board. 
    Sec. 4.  Minnesota Statutes 1992, section 134.35, 
subdivision 1, is amended to read: 
    Subdivision 1.  [GRANT APPLICATION.] Any regional public 
library system which qualifies according to the provisions of 
section 134.34 may apply for an annual grant for regional 
library basic system support.  Regional public library districts 
under section 134.201 may not compensate board members using 
grant funds.  The amount of each grant for each fiscal year 
shall be calculated as provided in this section. 
    Sec. 5.  Minnesota Statutes 1992, section 134.351, 
subdivision 4, is amended to read: 
    Subd. 4.  [GOVERNANCE.] In any area where the boundaries of 
a proposed multicounty, multitype library system coincide with 
the boundaries of the regional library system or district, the 
regional library system or district board shall be designated as 
the governing board for the multicounty, multitype library 
system.  In any area where a proposed multicounty, multitype 
library system encompasses more than one regional library system 
or district, the governing board of the multicounty, multitype 
library system shall consist of nine members appointed by the 
cooperating regional library system or district boards from 
their own membership in proportion to the population served by 
each cooperating regional library system or district.  In each 
multicounty, multitype library system there shall be established 
an advisory committee consisting of two representatives of 
public libraries, two representatives of school media services, 
one representative of special libraries, one representative of 
public supported academic libraries, and one representative of 
private academic libraries.  The advisory committee shall 
recommend needed policy to the system governing board. 
    Sec. 6.  Minnesota Statutes 1992, section 204D.19, is 
amended by adding a subdivision to read: 
    Subd. 5.  [PROHIBITION.] No special election shall be held 
under this section on the second Tuesday in December. 
    Sec. 7.  Minnesota Statutes 1992, section 205.10, is 
amended by adding a subdivision to read: 
    Subd. 3.  [PROHIBITION.] No special election shall be held 
under this section on the second Tuesday in December. 
    Sec. 8.  Minnesota Statutes 1992, section 205A.05, 
subdivision 1, is amended to read: 
    Subdivision 1.  [QUESTIONS.] Special elections must be held 
for a school district on a question on which the voters are 
authorized by law to pass judgment.  The school board may on its 
own motion call a special election to vote on any matter 
requiring approval of the voters of a district.  Upon petition 
of 50 or more voters of the school district or five percent of 
the number of voters voting at the preceding regular school 
district election, the school board shall by resolution call a 
special election to vote on any matter requiring approval of the 
voters of a district.  A question is carried only with the 
majority in its favor required by law.  The election officials 
for a special election are the same as for the most recent 
school district general election unless changed according to 
law.  Otherwise, special elections must be conducted and the 
returns made in the manner provided for the school district 
general election.  A special election may not be held during the 
30 days before and the 30 days after the state primary or state 
general election, or on the second Tuesday in December.  In 
addition, a special election may not be held during the 20 days 
before and the 20 days after any regularly scheduled election of 
a municipality wholly or partially within the school district.  
Notwithstanding any other law to the contrary, the time period 
in which a special election must be conducted under any other 
law may be extended by the school board to conform with the 
requirements of this subdivision. 
    Sec. 9.  Minnesota Statutes 1992, section 275.065, 
subdivision 3, is amended to read: 
    Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
county auditor shall prepare and the county treasurer shall 
deliver after November 10 and on or before November 24 each 
year, by first class mail to each taxpayer at the address listed 
on the county's current year's assessment roll, a notice of 
proposed property taxes and, in the case of a town, final 
property taxes.  
    (b) The commissioner of revenue shall prescribe the form of 
the notice. 
    (c) The notice must inform taxpayers that it contains the 
amount of property taxes each taxing authority other than a town 
proposes to collect for taxes payable the following year and, 
for a town, the amount of its final levy.  It must clearly state 
that each taxing authority, other than a town or special taxing 
district including regional library districts established under 
section 134.201, and including the metropolitan taxing districts 
as defined in paragraph (i), but excluding all other special 
taxing districts and towns, will hold a public meeting to 
receive public testimony on the proposed budget and proposed or 
final property tax levy, or, in case of a school district, on 
the current budget and 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.  
For 1993, the notice must clearly state that each taxing 
authority holding a public meeting will describe the increases 
or decreases of the total budget, including employee and 
independent contractor compensation in the prior year, current 
year, and the proposed budget year.  
    (d) The notice must state for each parcel: 
    (1) the market value of the property as defined determined 
under section 272.03, subdivision 8 273.11, and used for 
computing property taxes payable in the following year and for 
taxes payable in the current year; and, in the case of 
residential property, whether the property is classified as 
homestead or nonhomestead.  The notice must clearly inform 
taxpayers of the years to which the market values apply and that 
the values are final values; 
    (2) by county, city or town, school district excess 
referenda levy, remaining school district levy, regional library 
district, if in existence, the total of the metropolitan special 
taxing districts as defined in paragraph (i) and the sum of the 
remaining special taxing districts, and as a total of the taxing 
authorities, including all special taxing districts, the 
proposed or, for a town, final net tax on the property for taxes 
payable the following year and the actual tax for taxes payable 
the current year.  In the case of the city of Minneapolis, the 
levy for the Minneapolis library board and the levy for 
Minneapolis park and recreation shall be listed separately from 
the remaining amount of the city's levy.  In the case of a 
parcel where tax increment or the fiscal disparities areawide 
tax applies, the proposed tax levy on the captured value or the 
proposed tax levy on the tax capacity subject to the areawide 
tax must each be stated separately and not included in the sum 
of the special taxing districts; and 
    (3) the increase or decrease in the amounts in clause (2) 
from taxes payable in the current year to proposed or, for a 
town, final taxes payable the following year, expressed as a 
dollar amount and as a percentage. 
    (e) The notice must clearly state that the proposed or 
final 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; 
     (4) amounts necessary to pay tort judgments against the 
taxing authority that become final after the date the proposed 
taxes are certified; and 
     (5) any additional amount levied in lieu of a local sales 
and use tax, unless this amount is included in the proposed or 
final taxes. 
     (f) Except as provided in subdivision 7, failure of the 
county auditor to prepare or the county treasurer to deliver the 
notice as required in this section does not invalidate the 
proposed or final tax levy or the taxes payable pursuant to the 
tax levy. 
      (g) If the notice the taxpayer receives under this section 
lists the property as nonhomestead and the homeowner provides 
satisfactory documentation to the county assessor that the 
property is owned and has been used as the owner's homestead 
prior to June 1 of that year, the assessor shall reclassify the 
property to homestead for taxes payable in the following year. 
    (h) In the case of class 4 residential property used as a 
residence for lease or rental periods of 30 days or more, the 
taxpayer must either: 
    (1) mail or deliver a copy of the notice of proposed 
property taxes to each tenant, renter, or lessee; or 
    (2) post a copy of the notice in a conspicuous place on the 
premises of the property.  
     (i) For purposes of this subdivision, subdivisions 5a and 
6, "metropolitan special taxing districts" means the following 
taxing districts in the seven-county metropolitan area that levy 
a property tax for any of the specified purposes listed below: 
    (1) metropolitan council under section 473.132, 473.167, 
473.249, 473.325, 473.521, 473.547, or 473.834; 
    (2) metropolitan airports commission under section 473.667, 
473.671, or 473.672; 
    (3) regional transit board under section 473.446; and 
    (4) metropolitan mosquito control commission under section 
473.711. 
    For purposes of this section, any levies made by the 
regional rail authorities in the county of Anoka, Carver, 
Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
398A shall be included with the appropriate county's levy and 
shall be discussed at that county's public hearing. 
    The notice must be mailed or posted by the taxpayer by 
November 27 or within three days of receipt of the notice, 
whichever is later.  A taxpayer may notify the county treasurer 
of the address of the taxpayer, agent, caretaker, or manager of 
the premises to which the notice must be mailed in order to 
fulfill the requirements of this paragraph. 
    Sec. 10.  Minnesota Statutes 1992, section 275.065, 
subdivision 5a, is amended to read: 
    Subd. 5a.  [PUBLIC ADVERTISEMENT.] (a) A city that has a 
population of more than 1,000, county, a metropolitan special 
taxing district as defined in subdivision 3, paragraph (i), a 
regional library district established under section 134.201, or 
school district shall advertise in a newspaper a notice of its 
intent to adopt a budget and property tax levy or, in the case 
of a school district, to review its current budget and proposed 
property taxes payable in the following year, at a public 
hearing.  The notice must be published not less than two 
business days nor more than six business days before the hearing.
    For a city that has a population of more than 1,000 but 
less than 2,500 the advertisement must be at least one-eighth 
page in size of a standard-size or a tabloid-size newspaper.  
The first headline in the advertisement stating the notice of 
proposed property taxes and the notice of public hearing must be 
in a type no smaller than 14-point, and the second headline must 
be in a type no smaller than 12-point.  The text of the 
advertisement must be no smaller than 10-point, except that the 
property tax amounts and percentages may be in 9-point type. 
    For a city that has a population of 2,500 or more, a county 
or a school district, the first headline in the advertisement 
stating the notice of proposed property taxes and the notice of 
public hearing must be in a type no smaller than 30-point, and 
the second headline must be in a type no smaller than 22-point.  
The text of the advertisement must be no smaller than 14-point, 
except that the property tax amounts and percentages may be in 
12-point type. 
    The advertisement must be at least one-eighth page in size 
of a standard-size or a tabloid-size newspaper.  The 
advertisement must not be placed in the part of the newspaper 
where legal notices and classified advertisements appear.  The 
advertisement must be published in an official newspaper of 
general circulation in the taxing authority.  The newspaper 
selected must be one of general interest and readership in the 
community, and not one of limited subject matter.  The 
advertisement must appear in a newspaper that is published at 
least once per week.  
    For purposes of this section, the metropolitan special 
taxing district's advertisement must only be published in the 
Minneapolis Star and Tribune and the St. Paul Pioneer Press. 
    (b) The advertisement must be in the following form, except 
that the notice for a school district may include references to 
the current budget in regard to proposed property taxes. 

                               "NOTICE OF

                         PROPOSED PROPERTY TAXES
 (City/County/School District/Metropolitan
 Special Taxing District/Regional
 Library District) of .........
The governing body of ........ will soon hold budget hearings 
and vote on the property taxes for (city/county/metropolitan 
special taxing district/regional library district services that 
will be provided in 199_/school district services that will be 
provided in 199_ and 199_). 

                        NOTICE OF PUBLIC HEARING:
All concerned citizens are invited to attend a public hearing 
and express their opinions on the proposed (city/county/school 
district/metropolitan special taxing district/regional library 
district) budget and property taxes, or in the case of a school 
district, its current budget and proposed property taxes, 
payable in the following year.  The hearing will be held on 
(Month/Day/Year) at (Time) at (Location, Address)." 
    (c) A city with a population of 1,000 or less must 
advertise by posted notice as defined in section 645.12, 
subdivision 1.  The advertisement must be posted at the time 
provided in paragraph (a).  It must be in the form required in 
paragraph (b). 
    (d) For purposes of this subdivision, the population of a 
city is the most recent population as determined by the state 
demographer under section 4A.02. 
    (e) The commissioner of revenue, subject to the approval of 
the chairs of the house and senate tax committees, shall 
prescribe the form and format of the advertisement. 
    (f) For calendar year 1993, each taxing authority required 
to publish an advertisement must include on the advertisement a 
statement that information on the increases or decreases of the 
total budget, including employee and independent contractor 
compensation in the prior year, current year, and proposed 
budget year will be discussed at the hearing. 
    (g) Notwithstanding paragraph (f), for 1993, the 
commissioner of revenue shall prescribe the form, format, and 
content of an advertisement comparing current and proposed 
expense budgets for the metropolitan council, the metropolitan 
airports commission, the metropolitan mosquito control 
commission, and the regional transit board.  The expense budget 
must include occupancy, personnel, contractual and capital 
improvement expenses.  The form, format, and content of the 
advertisement must be approved by the chairs of the house and 
senate tax committees prior to publication. 
    Sec. 11.  Minnesota Statutes 1992, section 275.065, 
subdivision 6, is amended to read: 
    Subd. 6.  [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 
Between November 29 and December 20, the governing bodies of the 
city and, county, metropolitan special taxing districts as 
defined in subdivision 3, paragraph (i), and regional library 
districts shall each hold a public hearing to adopt discuss and 
seek public comment on 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 review its 
current budget and adopt its proposed property tax levy for 
taxes payable in the following year.  The metropolitan special 
taxing districts shall be required to hold only a single joint 
public hearing, the location of which will be determined by the 
affected metropolitan agencies. 
    At the a subsequent 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 property tax levy certified under section 275.07 by a 
city, county, metropolitan special taxing district, regional 
library district, or school district must not exceed the 
proposed levy determined under subdivision 1, 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 124.82, 
subdivision 3, 124A.03, subdivision 2, 124B.03, subdivision 2, 
or 136C.411, after the proposed levy was certified; 
    (2) the amount of a city or county levy approved by the 
voters 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; 
    (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; and 
    (6) the amount of an increase in levy limits certified to 
the taxing authority by the commissioner of revenue or the 
commissioner of education after the proposed levy was certified. 
    At the hearing under this subdivision, 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.  At the hearing held in 
1993 only, specific information for previous year, current year, 
and proposed budget year must be presented on: 
    (i) percent of total proposed budget representing total 
compensation cost; 
    (ii) numbers of employees by general classification, and 
whether full or part time; 
    (iii) number and budgeted expenditures for independent 
contractors; and 
    (iv) the effect of budget increases or decreases on the 
proposed property tax levy. 
    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.  At a subsequent hearing, the governing body, 
other than the governing body of a school district, shall adopt 
its final property tax levy prior to adopting its final budget. 
    If the hearing is not completed on its scheduled date, the 
taxing authority must announce, prior to adjournment of the 
hearing, the date, time, and place for the continuation of the 
hearing.  The continued hearing must be held at least five 
business days but no more than 14 business days after the 
original hearing. 
    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 governing body of a county shall hold its a hearing on the 
second Tuesday in December each year, and may hold additional 
hearings on other dates before December 20 if necessary for the 
convenience of county residents.  The county auditor shall 
provide for the coordination of hearing dates for all cities and 
school districts within the county. 
    By August 15 10, each school board and the board of the 
regional library district shall certify to the county auditors 
of the counties in which the school district or regional library 
district is located the dates on which it elects to hold its 
hearings and any continuations.  If a school board or regional 
library district does not certify the dates by August 15 10, the 
auditor will assign the hearing date.  The dates elected or 
assigned must not conflict with the county hearing dates.  The 
county auditor shall coordinate with the metropolitan special 
taxing districts as defined in subdivision 3, paragraph (i), a 
date on which the metropolitan special taxing districts will 
hold their joint public hearing and any continuation.  By August 
20, the county auditor shall notify the clerks of the cities 
within the county of the dates on which school districts, 
metropolitan special taxing districts, and regional library 
districts have elected to hold their hearings.  At the time a 
city certifies its proposed levy under subdivision 1 it shall 
certify the dates on which it elects to hold its hearings and 
any continuations.  The city must not select dates that conflict 
with the county hearing dates, metropolitan special taxing 
district dates, or with those elected by or assigned to the 
school districts or regional library district in which the city 
is located. 
    The county hearing dates and the city, metropolitan special 
taxing district, regional library district, and school district 
hearing dates must be designated on the notices required under 
subdivision 3.  The continuation dates need not be stated on the 
notices.  
    This subdivision does not apply to towns and special taxing 
districts other than regional library districts and metropolitan 
special taxing districts. 
    Notwithstanding the requirements of this section, the 
employer is required to meet and negotiate over employee 
compensation as provided for in chapter 179A.  
    Sec. 12.  Minnesota Statutes 1992, section 275.065, is 
amended by adding a subdivision to read: 
    Subd. 8.  [HEARING.] Notwithstanding any other provision of 
law, Ramsey county, the city of St. Paul, and independent school 
district No. 625 are authorized to and shall hold their public 
hearing jointly.  The hearing must be held on the second Tuesday 
of December each year.  The advertisement required in 
subdivision 5a may be a joint advertisement.  The hearing is 
otherwise subject to the requirements of this section. 
    Ramsey county is authorized to hold an additional hearing 
or hearings as provided under this section, provided that any 
additional hearings must not conflict with the hearing dates of 
the other taxing districts.  However, if Ramsey county elects 
not to hold such additional hearing or hearings, the joint 
hearing required by this subdivision must be held in a St. Paul 
location convenient to residents of Ramsey county. 
    Sec. 13.  Minnesota Statutes 1992, section 276.04, 
subdivision 2, is amended to read: 
    Subd. 2.  [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 
shall provide for the printing of the tax statements.  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, the total of the 
metropolitan special taxing districts as defined in section 
275.065, subdivision 3, paragraph (i), school district excess 
referenda levy, remaining school district levy, and the total of 
other voter approved referenda levies based on market value 
under section 275.61 must be separately stated.  The amounts due 
all other special 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) 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 local tax 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 
local tax 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, except that the amount of credit received under section 
273.135 must be separately stated and identified as "taconite 
tax relief"; and 
    (6) the net tax payable in the manner required in paragraph 
(a); and 
    (7) any additional amount of tax authorized under sections 
124A.03, subdivision 2a, and 275.61.  These amounts shall be 
listed as "voter approved referenda levies.". 
    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, for taxes levied in 1991, and for all counties for taxes 
levied in 1992 and thereafter, the commissioner must certify 
this amount by September 1.  
    Sec. 14.  [383A.75] [JOINT PROPERTY TAX ADVISORY 
COMMITTEE.] 
    Subdivision 1.  [CREATION.] There is created the joint 
property tax advisory committee. 
    Subd. 2.  [MEMBERSHIP.] The membership of the committee 
consists of the mayor and up to three members of the city 
council of the city of St. Paul; the county manager and up to 
three members of the county board of Ramsey county; and the 
superintendent and up to three members of the board of education 
of independent school district No. 625.  The chair of the Ramsey 
county league of local governments shall be a nonvoting ex 
officio member.  The committee shall be convened by the mayor of 
St. Paul, and at the first meeting, the chair for the first year 
must be determined by lot, and thereafter, the chair must 
annually rotate among the mayor or designee, the superintendent 
or designee, and the county manager or designee. 
    Subd. 3.  [DUTIES.] The committee is authorized to and 
shall meet from time to time to make appropriate recommendations 
for the efficient and effective use of property tax dollars 
raised by the jurisdictions for programs, buildings, and 
operations.  In addition, the committee shall: 
    (1) identify trends and factors likely to be driving budget 
outcomes over the next five years with recommendations for how 
the jurisdictions should manage those trends and factors to 
increase efficiency and effectiveness; 
    (2) agree, by August 1 of each year, on the appropriate 
level of overall property tax levy for the three jurisdictions 
and publicly report such to the governing bodies of each 
jurisdiction for ratification or modification by resolution; 
    (3) plan for the joint truth-in-taxation hearings under 
section 275.065, subdivision 8; and 
    (4) identify, by December 31 of each year, areas of the 
budget to be targeted in the coming year for joint review to 
improve services or achieve efficiencies. 
    In carrying out its duties, the committee shall consult 
with public employees of each jurisdiction and with other 
stakeholders of the city, county, and school district, as 
appropriate. 
    Subd. 4.  [STAFF; FUNDING.] The committee must be staffed 
by employees as designated by each jurisdiction.  The committee 
may also seek public or private funding from any source to 
assist its work and may utilize volunteer help as appropriate. 
    Subd. 5.  [RECOGNITION OF INNOVATIVE EFFORTS BY LOCAL 
EMPLOYEES.] The committee may use public or private funding to 
recognize or reward efforts by local government employees to 
restructure service delivery to improve efficiency or achieve 
cost savings. 
    Sec. 15.  Minnesota Statutes 1992, section 473.13, 
subdivision 1, is amended to read: 
    Subdivision 1.  [BUDGET.] On or before October 1 December 
20 of each year the council, after a the public hearing required 
in section 275.065, shall adopt a final budget covering its 
anticipated receipts and disbursements for the ensuing year and 
shall decide upon the total amount necessary to be raised from 
ad valorem tax levies to meet its budget.  The budget shall 
state in detail the expenditures for each program to be 
undertaken, including the expenses for salaries, consultant 
services, overhead, travel, printing, and other items.  The 
budget shall state in detail the capital expenditures of the 
council for the budget year, based on a five-year capital 
program adopted by the council and transmitted to the 
legislature.  After adoption of the budget, an increase of over 
$10,000 in the council's budget, a program or department budget, 
or a budget item, must be approved by the council before the 
increase is allowed or the funds obligated.  After adoption of 
the budget and no later than October 1 five working days after 
December 20, the council shall certify to the auditor of each 
metropolitan county the share of the tax to be levied within 
that county, which must be an amount bearing the same proportion 
to the total levy agreed on by the council as the net tax 
capacity of the county bears to the net tax capacity of the 
metropolitan area.  The maximum amount of any levy made for the 
purpose of this chapter may not exceed the limits set by 
sections 473.167 and 473.249. 
    Sec. 16.  Minnesota Statutes 1992, section 473.1623, 
subdivision 3, is amended to read: 
    Subd. 3.  [FINANCIAL REPORT.] By December February 15 of 
even-numbered years, the council, in consultation with the 
advisory committee, shall publish a consolidated financial 
report for the council and all metropolitan agencies and their 
functions, services, and systems.  The financial report must 
cover the calendar year in which the report is published and the 
two three years preceding and three two years succeeding that 
year.  The financial report must contain the following 
information, for each agency, function, or system, respectively, 
and in the aggregate, in a consistent format that allows 
comparison over time and among agencies in expenditure and 
revenue categories: 
    (1) financial policies, goals, and priorities; 
    (2) levels and allocation of public expenditure, including 
capital, debt, operating, and pass-through funds, stated in the 
aggregate and by appropriate functional, programmatic, 
administrative, and geographic categories, and the changes in 
expenditure levels and allocations that the report represents; 
    (3) the resources available under existing fiscal policy; 
    (4) additional resources, if any, that are or may be 
required; 
    (5) changes in council or agency policies on regional 
sources of revenue and in levels of debt, user charges, and 
taxes; 
    (6) other changes in existing fiscal policy, on regional 
revenues and intergovernmental aids respectively, that are 
expected or that have been or may be recommended by the council 
or the respective agencies; 
    (7) an analysis that links, as far as practicable, the uses 
of funds and the sources of funds, by appropriate categories and 
in the aggregate; 
    (8) a description of how the fiscal policies effectuate 
current policy and implementation plans of the council and 
agencies concerned; and 
    (9) a summary of significant changes in council and agency 
finance and an analysis of fiscal trends. 
    The council shall present the report for discussion and 
comment at a public meeting in the metropolitan area and 
request, in writing, an opportunity to make presentations on the 
report before appropriate committees of the legislature. 
    Sec. 17.  Minnesota Statutes 1992, section 473.167, 
subdivision 4, is amended to read: 
    Subd. 4.  [STATE REVIEW.] The commissioner of revenue shall 
certify the council's levy limitation under this section to the 
council by August 1 of the levy year.  The council must certify 
its proposed property tax levy to the commissioner of revenue by 
August 1 September 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 proposed budget is within the levy limitation imposed by 
this section.  The determination must be completed prior to 
September 1 10 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. 18.  Minnesota Statutes 1992, section 473.249, 
subdivision 2, is amended to read: 
    Subd. 2.  The commissioner of revenue shall certify the 
council's levy limitation under this section to the council by 
August 1 of the levy year.  The council must certify its 
proposed property tax levy to the commissioner of revenue 
by August 1 September 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 proposed budget is within the levy limitation 
imposed by this section.  The determination shall be completed 
prior to September 1 10 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. 19.  Minnesota Statutes 1992, 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.  The determination must be completed prior to 
September 1 10 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. 20.  Minnesota Statutes 1992, 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.  The determination must be completed prior to September 1 10 
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. 21.  Laws 1953, chapter 387, section 1, is amended to 
read: 
    Section 1.  [Library board, Minneapolis.] The library board 
of any city now or hereafter having more than 450,000 
inhabitants may levy annually on all real and personal property 
within such city a tax not exceeding four mills on each dollar 
of the assessed valuation of such city for the establishment, 
maintenance and government of the libraries of such city, and 
for the payment of all other expenses proper and incidental to 
the establishment, maintenance and government of such libraries. 
The tax herein authorized to be levied shall not at any time be 
in excess of the maximum rate of taxation fixed for the purposes 
herein mentioned by any board or department of any such city 
upon whom the duty of fixing the maximum rate of taxation for 
the various boards and departments thereof is placed by the 
charter of such city.  For the purpose of determining such tax 
limitations the property classified as Class 3b or as Class 3c 
by Section 273.13 M.S. may be computed at 33 1/3 percent and 40 
percent, respectively, of the full and true value of such real 
property is not subject to any limitations on levies in the city 
charter. 
    Sec. 22.  Laws 1969, chapter 561, section 1, is amended to 
read: 
    Section 1.  [Minneapolis, city of; park improvement fund; 
tax levy.] The board of park commissioners of the City of 
Minneapolis may create a park improvement fund to be maintained 
by an annual tax levy on the real and personal property of the 
city not exceeding six-tenths of a mill on each dollar of the 
assessed valuation of the city.  The amount of any such levy 
shall be subject to the supervision of any fiscal control agency 
which is now or hereafter provided in the charter of any such 
city, but is not subject to any charter limitation on the amount 
of levies for this purpose. 
    Sec. 23.  Laws 1971, chapter 373, section 1, is amended to 
read: 
    Section 1.  [MINNEAPOLIS, CITY OF; TAX LEVY FOR PARK AND 
RECREATION FACILITIES.] Subdivision 1.  The park and recreation 
board of the city of Minneapolis may levy annually on the real 
and personal property of the city a tax not exceeding 8.7 mills 
on each dollar of the assessed valuation of the city for the 
purpose of acquiring, equipping, improving, maintaining, 
operating, and governing parks, parkways, playgrounds and other 
recreational facilities, and conducting recreational programs 
for the public use. 
    Sec. 24.  Laws 1971, chapter 373, section 2, is amended to 
read: 
    Sec. 2.  Any levy under this act shall not be in addition 
to any levy now authorized for any of such purposes by the 
charter of the city or by Laws 1969, Chapter 592; the amount of 
such levy shall be subject to the supervision of any fiscal 
control agency which is now or hereafter provided in the charter 
of any such city.  All taxes so levied shall be certified to the 
county auditor on or before October 10 September 1 each year, 
and shall be collected with, and the payment thereof enforced, 
in the same manner as the general tax and with like penalties 
and interest. 
    Sec. 25.  Laws 1971, chapter 455, section 1, is amended to 
read: 
    Section 1.  [MINNEAPOLIS, CITY OF; PARKS AND PARKWAYS; 
MAINTENANCE FUND; CREATION OF FUND, TAX LEVY.] The park and 
recreation board of the city of Minneapolis may create a park 
rehabilitation and parkway maintenance fund to be maintained by 
an annual tax levy on the real and personal property of the city 
not exceeding 1.1 mills on each dollar of the assessed valuation 
of the city.  The amount of any such levy shall be subject to 
the supervision of any fiscal control agency which is now or 
hereafter provided in the charter of any such city, but is not 
subject to any charter limitations on the amount of levies for 
this purpose. 
    Sec. 26.  [CANCELLATION OF LEVY LIMIT PENALTIES.] 
    Any penalty imposed on a local government under Minnesota 
Statutes 1990, section 275.51, subdivision 4, is canceled 
provided that (1) the penalty has not been collected from aid 
payments to the local government by the end of calendar year 
1992 and (2) the local government is not certified to receive 
any aid in 1993 from which the penalty can be collected. 
    Sec. 27.  [APPLICATION.] 
    The provisions of this article relating to metropolitan 
taxing districts apply in the counties of Anoka, Carver, Dakota, 
Hennepin, Ramsey, Scott, and Washington. 
    Sec. 28.  [REPEALER.] 
    Laws 1953, chapter 387, section 2; Laws 1963, chapter 603, 
section 1; and Laws 1969, chapter 592, sections 1, 2, and 3, are 
repealed. 
    Sec. 29.  [EFFECTIVE DATE.] 
    Sections 1, 6 to 8, 13, 15 to 25, 27, and 28 are effective 
for taxes levied in 1993, payable in 1994 and thereafter.  
    Section 3, subdivision 5, and the provisions of sections 9 
to 11 relating to regional library districts are effective for 
property taxes levied in 1994, payable in 1995, and thereafter.  
The other provisions of sections 9 to 11 are effective for 
property taxes levied in 1993, payable in 1994 and thereafter.  
    Sections 12 and 14 are effective the day following final 
enactment and without local approval, as provided in Minnesota 
Statutes, section 645.023, subdivision 1, clause (a), and shall 
expire after December 31, 1997.  
    Section 26 is effective beginning with aids payable in 
calendar year 1993. 

                                ARTICLE 8

                      INCOME TAX AND FEDERAL UPDATE
    Section 1.  Minnesota Statutes 1992, section 289A.09, is 
amended by adding a subdivision to read: 
    Subd. 3.  [FEDERAL ANNUITIES; TAX WITHHOLDING REQUEST.] The 
commissioner of revenue shall participate with the United States 
Office of Personnel Management in a program of voluntary state 
income tax withholding on the federal annuities of retired 
federal employees.  Upon the request of the taxpayer to the 
commissioner of revenue, and only on request of the taxpayer, 
the commissioner shall provide for state income tax withholding 
on federal annuities paid to the taxpayer. 
    Sec. 2.  Minnesota Statutes 1992, section 289A.20, 
subdivision 2, is amended to read: 
    Subd. 2.  [WITHHOLDING FROM WAGES, ENTERTAINER WITHHOLDING, 
WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, AND 
WITHHOLDING BY PARTNERSHIPS AND SMALL BUSINESS CORPORATIONS.] 
(a) A tax required to be deducted and withheld during the 
quarterly period must be paid on or before the last day of the 
month following the close of the quarterly period, unless an 
earlier time for payment is provided.  A tax required to be 
deducted and withheld from compensation of an entertainer and 
from a payment to an out-of-state contractor must be paid on or 
before the date the return for such tax must be filed under 
section 289A.18, subdivision 2.  Taxes required to be deducted 
and withheld by partnerships and S corporations must be paid on 
or before the date the return must be filed under section 
289A.18, subdivision 2. 
    (b)(1) Unless clause (2) applies, if during any calendar 
month, other than the last month of the calendar quarter, the 
aggregate amount of the tax withheld during that quarter under 
section 290.92, subdivision 2a or 3, or 290.923, subdivision 2, 
exceeds $500, the employer shall deposit the aggregate amount 
with the commissioner within 15 days after the close of the 
calendar month. 
    (2) If at the close of any eighth-monthly period the 
aggregate amount of undeposited taxes is $3,000 or more, the 
employer, or person withholding tax under section 290.92, 
subdivision 2a or 3, or 290.923, subdivision 2, shall deposit 
the undeposited taxes with the commissioner within three banking 
days after the close of the eighth-monthly period.  For purposes 
of this clause, the term "eighth-monthly period" means the first 
three days of a calendar month, the fourth day through the 
seventh day of a calendar month, the eighth day through the 11th 
day of a calendar month, the 12th day through the 15th day of a 
calendar month, the 16th day through the 19th day of a calendar 
month, the 20th day through the 22nd day of a calendar month, 
the 23rd day through the 25th day of a calendar month, or the 
part of a calendar month following the 25th day of the 
month.  An employer who, during the previous quarter, withheld 
more than $500 of tax under section 290.92, subdivision 2a or 3, 
or 290.923, subdivision 2, must deposit tax withheld under those 
sections with the commissioner within the time allowed to 
deposit the employer's federal withheld employment taxes under 
Treasury Regulation, section 31.6302-1, without regard to the 
safe harbor or de minimus rules in subparagraph (f) or the 
one-day rule in subsection (c), clause (3).  Taxpayers must 
submit a copy of their federal notice of deposit status to the 
commissioner upon request by the commissioner. 
    (c) The commissioner may prescribe by rule other return 
periods or deposit requirements.  In prescribing the reporting 
period, the commissioner may classify payors according to the 
amount of their tax liability and may adopt an appropriate 
reporting period for the class that the commissioner judges to 
be consistent with efficient tax collection.  In no event will 
the duration of the reporting period be more than one year. 
    (d) If less than the correct amount of tax is paid to the 
commissioner, proper adjustments with respect to both the tax 
and the amount to be deducted must be made, without interest, in 
the manner and at the times the commissioner prescribes.  If the 
underpayment cannot be adjusted, the amount of the underpayment 
will be assessed and collected in the manner and at the times 
the commissioner prescribes. 
    (e) If the aggregate amount of the tax withheld during a 
fiscal year ending June 30 under section 290.92, subdivision 2a 
or 3, is equal to or exceeds $240,000, the employer must remit 
each required deposit in the subsequent calendar year by means 
of a funds transfer as defined in section 336.4A-104, paragraph 
(a).  The funds transfer payment date, as defined in section 
336.4A-401, must be on or before the date the deposit is due.  
If the date the deposit is due is not a funds transfer business 
day, as defined in section 336.4A-105, paragraph (a), clause 
(4), the payment date must be on or before the funds transfer 
business day next following the date the deposit is due. 
    Sec. 3.  Minnesota Statutes 1992, section 289A.26, 
subdivision 7, is amended to read: 
    Subd. 7.  [REQUIRED INSTALLMENTS.] (a) Except as otherwise 
provided in this subdivision, the amount of a required 
installment is 25 percent of the required annual payment. 
    (b) Except as otherwise provided in this subdivision, the 
term "required annual payment" means the lesser of: 
    (1)(i) for tax years beginning in calendar year 1992, 93 97 
percent of the tax shown on the return for the taxable year, or, 
if no return is filed, 93 97 percent of the tax for that year; 
    (ii) for tax years beginning after December 31, 1992, 95 
percent of the tax shown on the return for the taxable year, or 
if no return is filed 95 percent of the tax for that year; or 
    (2) 100 percent of the tax shown on the return of the 
entity for the preceding taxable year provided the return was 
for a full 12-month period, showed a liability, and was filed by 
the entity. 
    (c) Except for determining the first required installment 
for any taxable year, paragraph (b), clause (2), 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 (b), clause (2), must be recaptured by 
increasing the next required installment by the amount of the 
reduction. 
     (d) In the case of a required installment, if the 
corporation establishes that the annualized income installment 
is less than the amount determined in paragraph (a), 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 later required 
installments to the extent the reductions have not previously 
been recovered. 
      (e) The "annualized income installment" is the excess, if 
any, of: 
      (1) 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 
    (2) the aggregate amount of any prior required installments 
for the taxable year.  
    (3) 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 (1). 
    (4) The "applicable percentage" used in clause (1) is: 
For the following                 The applicable
required installments:            percentage is:
                         for tax years       for tax years
                         beginning in        beginning after
                         1992                December 31, 1992
        1st                 23.25     24.25       23.75
        2nd                 46.5      48.5        47.5
        3rd                 69.75     72.75       71.25
        4th                 93        97          95
    (f)(1) If this paragraph applies, the amount determined for 
any installment must be determined in the following manner: 
    (i) take the taxable income for the months during the 
taxable year preceding the filing month; 
    (ii) divide that amount by the base period percentage for 
the 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 the months during the 
taxable year preceding the filing month.  
     (2) For purposes of this paragraph: 
     (i) the "base period percentage" for a period of months is 
the average percent that 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 only applies 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.  
     (3) In the case of a required installment determined under 
this paragraph, if the entity determines that the installment is 
less than the amount determined in paragraph (a), 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 later 
required installments to the extent the reductions have not 
previously been recovered.  
     Sec. 4.  Minnesota Statutes 1992, section 289A.50, 
subdivision 5, is amended to read: 
    Subd. 5.  [WITHHOLDING OF REFUNDS FROM CHILD SUPPORT AND 
MAINTENANCE DEBTORS.] (a) If a court of this state finds that a 
person obligated to pay child support or maintenance is 
delinquent in making payments, the amount of child support or 
maintenance unpaid and owing, including attorney fees and costs 
incurred in ascertaining or collecting child support or 
maintenance, must be withheld from a refund due the person under 
chapter 290.  The public agency responsible for child support 
enforcement or the parent or guardian of a child for whom the 
support, attorney fees, and costs are owed or the party to whom 
maintenance, attorney fees, and costs are owed may petition the 
district or county court for an order providing for the 
withholding of the amount of child support, maintenance, 
attorney fees, and costs unpaid and owing as determined by court 
order.  The person from whom the refund may be withheld must be 
notified of the petition under the rules of civil procedure 
before the issuance of an order under this subdivision.  The 
order may be granted on a showing to the court that required 
support or maintenance payments, attorney fees, and costs have 
not been paid when they were due. 
    (b) On order of the court, the commissioner shall withhold 
the money from the refund due to the person obligated to pay the 
child support or maintenance.  The amount withheld shall be 
remitted to the public agency responsible for child support 
enforcement or to, the parent or guardian petitioning on behalf 
of the child, or the party to whom maintenance is owed, after 
any delinquent tax obligations of the taxpayer owed to the 
revenue department have been satisfied and after deduction of 
the fee prescribed in section 270A.07, subdivision 1.  An amount 
received by the responsible public agency, or the petitioning 
parent or guardian, or the party to whom maintenance is owed, in 
excess of the amount of public assistance spent for the benefit 
of the child to be supported, or the amount of any 
support, maintenance, attorney fees, and costs that had been the 
subject of the claim under this subdivision that has been paid 
by the taxpayer before the diversion of the refund, must be paid 
to the person entitled to the money.  If the refund is based on 
a joint return, the part of the refund that must be paid to the 
petitioner is the proportion of the total refund that equals the 
proportion of the total federal adjusted gross income of the 
spouses that is the federal adjusted gross income of the spouse 
who is delinquent in making the child support or maintenance 
payments. 
    (c) A petition filed under this subdivision remains in 
effect with respect to any refunds due under this section until 
the support money or maintenance, attorney fees, and costs have 
been paid in full or the court orders the commissioner to 
discontinue withholding the money from the refund due the person 
obligated to pay the support or maintenance, attorney fees, and 
costs.  If a petition is filed under this subdivision concerning 
child support and a claim is made under chapter 270A with 
respect to the individual's refund and notices of both are 
received before the time when payment of the refund is made on 
either claim, the claim relating to the liability that accrued 
first in time must be paid first.  The amount of the refund 
remaining must then be applied to the other claim. 
    Sec. 5.  Minnesota Statutes 1992, section 290.01, 
subdivision 7, is amended to read: 
    Subd. 7.  [RESIDENT.] The term "resident" means (1) any 
individual domiciled in Minnesota, except that an individual is 
not a "resident" for the period of time that the individual is a 
"qualified individual" as defined in section 911(d)(1) of the 
Internal Revenue Code of 1986, as amended through December 31, 
1991, unless, during that period, a Minnesota homestead 
application is filed for property in which the individual has an 
interest if the qualified individual notifies the county within 
three months of moving out of the country that homestead status 
be revoked for the Minnesota residence of the qualified 
individual, and the property is not classified as a homestead 
while the individual remains a qualified individual; and (2) any 
individual domiciled outside the state who maintains a place of 
abode in the state and spends in the aggregate more than 
one-half of the tax year in Minnesota, unless the individual or 
the spouse of the individual is in the armed forces of the 
United States, or the individual is covered under the 
reciprocity provisions in section 290.081. 
    For purposes of this subdivision, presence within the state 
for any part of a calendar day constitutes a day spent in the 
state.  Individuals shall keep adequate records to substantiate 
the days spent outside the state. 
    The term "abode" means a dwelling maintained by an 
individual, whether or not owned by the individual and whether 
or not occupied by the individual, and includes a dwelling place 
owned or leased by the individual's spouse. 
    Sec. 6.  Minnesota Statutes 1992, section 290.01, 
subdivision 19, is amended to read: 
    Subd. 19.  [NET INCOME.] The term "net income" means the 
federal taxable income, as defined in section 63 of the Internal 
Revenue Code of 1986, as amended through the date named in this 
subdivision, incorporating any elections made by the taxpayer in 
accordance with the Internal Revenue Code in determining federal 
taxable income for federal income tax purposes, and with the 
modifications provided in subdivisions 19a to 19f. 
     In the case of a regulated investment company or a fund 
thereof, as defined in section 851(a) or 851(h) of the Internal 
Revenue Code, federal taxable income means investment company 
taxable income as defined in section 852(b)(2) of the Internal 
Revenue Code, except that:  
     (1) the exclusion of net capital gain provided in section 
852(b)(2)(A) of the Internal Revenue Code does not apply; and 
     (2) the deduction for dividends paid under section 
852(b)(2)(D) of the Internal Revenue Code must be applied by 
allowing a deduction for capital gain dividends and 
exempt-interest dividends as defined in sections 852(b)(3)(C) 
and 852(b)(5) of the Internal Revenue Code.  
     The net income of a real estate investment trust as defined 
and limited by section 856(a), (b), and (c) of the Internal 
Revenue Code means the real estate investment trust taxable 
income as defined in section 857(b)(2) of the Internal Revenue 
Code.  
      The Internal Revenue Code of 1986, as amended through 
December 31, 1986, shall be in effect for taxable years 
beginning after December 31, 1986.  The provisions of sections 
10104, 10202, 10203, 10204, 10206, 10212, 10221, 10222, 10223, 
10226, 10227, 10228, 10611, 10631, 10632, and 10711 of the 
Omnibus Budget Reconciliation Act of 1987, Public Law Number 
100-203, the provisions of sections 1001, 1002, 1003, 1004, 
1005, 1006, 1008, 1009, 1010, 1011, 1011A, 1011B, 1012, 1013, 
1014, 1015, 1018, 2004, 3041, 4009, 6007, 6026, 6032, 6137, 
6277, and 6282 of the Technical and Miscellaneous Revenue Act of 
1988, Public Law Number 100-647, and the provisions of sections 
7811, 7816, and 7831 of the Omnibus Budget Reconciliation Act of 
1989, Public Law Number 101-239, shall be effective at the time 
they become effective for federal income tax purposes.  
      The Internal Revenue Code of 1986, as amended through 
December 31, 1987, shall be in effect for taxable years 
beginning after December 31, 1987.  The provisions of sections 
4001, 4002, 4011, 5021, 5041, 5053, 5075, 6003, 6008, 6011, 
6030, 6031, 6033, 6057, 6064, 6066, 6079, 6130, 6176, 6180, 
6182, 6280, and 6281 of the Technical and Miscellaneous Revenue 
Act of 1988, Public Law Number 100-647, the provisions of 
sections 7815 and 7821 of the Omnibus Budget Reconciliation Act 
of 1989, Public Law Number 101-239, and the provisions of 
section 11702 of the Revenue Reconciliation Act of 1990, Public 
Law Number 101-508, shall become effective at the time they 
become effective for federal tax purposes.  
      The Internal Revenue Code of 1986, as amended through 
December 31, 1988, shall be in effect for taxable years 
beginning after December 31, 1988.  The provisions of sections 
7101, 7102, 7104, 7105, 7201, 7202, 7203, 7204, 7205, 7206, 
7207, 7210, 7211, 7301, 7302, 7303, 7304, 7601, 7621, 7622, 
7641, 7642, 7645, 7647, 7651, and 7652 of the Omnibus Budget 
Reconciliation Act of 1989, Public Law Number 101-239, the 
provision of section 1401 of the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989, Public Law Number 101-73, 
and the provisions of sections 11701 and 11703 of the Revenue 
Reconciliation Act of 1990, Public Law Number 101-508, shall 
become effective at the time they become effective for federal 
tax purposes.  
      The Internal Revenue Code of 1986, as amended through 
December 31, 1989, shall be in effect for taxable years 
beginning after December 31, 1989.  The provisions of sections 
11321, 11322, 11324, 11325, 11403, 11404, 11410, and 11521 of 
the Revenue Reconciliation Act of 1990, Public Law Number 
101-508, shall become effective at the time they become 
effective for federal purposes.  
     The Internal Revenue Code of 1986, as amended through 
December 31, 1990, shall be in effect for taxable years 
beginning after December 31, 1990.  
     The Internal Revenue Code of 1986, as amended through 
December 31, 1991, shall be in effect for taxable years 
beginning after December 31, 1991.  
    The provisions of sections 1936 and 1937 of the 
Comprehensive National Energy Policy Act of 1992, Public Law 
Number 102-486, shall become effective at the time they become 
effective for federal purposes.  
    The Internal Revenue Code of 1986, as amended through 
December 31, 1992, shall be in effect for taxable years 
beginning after December 31, 1992.  
    Except as otherwise provided, references to the Internal 
Revenue Code in subdivisions 19a to 19g mean the code in effect 
for purposes of determining net income for the applicable year. 
    Sec. 7.  Minnesota Statutes 1992, section 290.01, 
subdivision 19a, is amended to read: 
    Subd. 19a.  [ADDITIONS TO FEDERAL TAXABLE INCOME.] For 
individuals, estates, and trusts, there shall be added to 
federal taxable income: 
    (1)(i) interest income on obligations of any state other 
than Minnesota or a political or governmental subdivision, 
municipality, or governmental agency or instrumentality of any 
state other than Minnesota exempt from federal income taxes 
under the Internal Revenue Code or any other federal statute, 
and 
       (ii) exempt-interest dividends as defined in section 
852(b)(5) of the Internal Revenue Code, except the portion of 
the exempt-interest dividends derived from interest income on 
obligations of the state of Minnesota or its political or 
governmental subdivisions, municipalities, governmental agencies 
or instrumentalities, but only if the portion of the 
exempt-interest dividends from such Minnesota sources paid to 
all shareholders represents 95 percent or more of the 
exempt-interest dividends that are paid by the regulated 
investment company as defined in section 851(a) of the Internal 
Revenue Code, or the fund of the regulated investment company as 
defined in section 851(h) of the Internal Revenue Code, making 
the payment; and 
    (iii) for the purposes of items (i) and (ii), interest on 
obligations of an Indian tribal government described in section 
7871(c) of the Internal Revenue Code shall be treated as 
interest income on obligations of the state in which the tribe 
is located; 
    (2) the amount of income taxes paid or accrued within the 
taxable year under this chapter and income taxes paid to any 
other state or to any province or territory of Canada, to the 
extent allowed as a deduction under section 63(d) of the 
Internal Revenue Code, but the addition may not be more than the 
amount by which the itemized deductions as allowed under section 
63(d) of the Internal Revenue Code exceeds the amount of the 
standard deduction as defined in section 63(c) of the Internal 
Revenue Code.  For the purpose of this paragraph, the 
disallowance of itemized deductions under section 68 of the 
Internal Revenue Code of 1986, income tax is the last itemized 
deduction disallowed; and 
    (3) the capital gain amount of a lump sum distribution to 
which the special tax under section 1122(h)(3)(B)(ii) of the Tax 
Reform Act of 1986, Public Law Number 99-514, applies; and 
    (4) the amount of income taxes paid or accrued within the 
taxable year under this chapter and income taxes paid to any 
other state or any province or territory of Canada, to the 
extent allowed as a deduction in determining federal adjusted 
gross income.  For the purpose of this paragraph, income taxes 
do not include the taxes imposed by sections 290.0922, 
subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729. 
    Sec. 8.  Minnesota Statutes 1992, 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; or Indian tribal 
governments; 
    (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. 9.  Minnesota Statutes 1992, section 290.0671, 
subdivision 1, is amended to read: 
    Subdivision 1.  [CREDIT ALLOWED.] An individual is allowed 
a credit against the tax imposed by this chapter equal to ten 15 
percent of the credit for which the individual is eligible under 
section 32 of the Internal Revenue Code of 1986, as amended 
through December 31, 1991. 
    For a nonresident or part-year resident, the credit 
determined under section 32 of the Internal Revenue Code of 
1986, as amended through December 31, 1991, must be allocated 
based on the percentage calculated under section 290.06, 
subdivision 2c, paragraph (e). 
    For a person who was a resident for the entire tax year and 
has earned income not subject to tax under this chapter, the 
credit must be allocated based on the ratio of federal adjusted 
gross income reduced by the earned income not subject to tax 
under this chapter over federal adjusted gross income. 
    Sec. 10.  Minnesota Statutes 1992, 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 
Minnesota charitable contribution deduction and non-Minnesota 
charitable deductions to the extent they are included in federal 
alternative minimum taxable income under section 57(a)(6) of the 
Internal Revenue Code, and excluding the medical expense 
deduction; 
    (3) for depletion allowances computed under section 613A(c) 
of the Internal Revenue Code, with respect to each property (as 
defined in section 614 of the Internal Revenue Code), to the 
extent not included in federal alternative minimum taxable 
income, the excess of the deduction for depletion allowable 
under section 611 of the Internal Revenue Code for the taxable 
year over the adjusted basis of the property at the end of the 
taxable year (determined without regard to the depletion 
deduction for the taxable year); 
    (4) to the extent not included in federal alternative 
minimum taxable income, the amount of the tax preference for 
intangible drilling cost under section 57(a)(2) of the Internal 
Revenue Code determined without regard to subparagraph (E); 
    (5) 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, 1991 1992. 
    (c) "Investment interest" means investment interest as 
defined in section 163(d)(3) of the Internal Revenue Code. 
    (d) "Tentative minimum tax" equals seven 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. 
    (g) "Minnesota charitable contribution deduction" means a 
charitable contribution deduction under section 170 of the 
Internal Revenue Code to or for the use of an entity described 
in section 290.21, subdivision 3, clauses (a) to (e). 
    Sec. 11.  Minnesota Statutes 1992, section 290.091, 
subdivision 6, is amended 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) seven 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), determined 
without regard to the last sentence of paragraph (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. 12.  Minnesota Statutes 1992, section 290.0921, 
subdivision 3, is amended to read: 
    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 certain 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 subparagraph (E) and 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. 
    (10) For purposes of calculating the adjustment for 
adjusted current earnings in section 56(g) of the Internal 
Revenue Code, the term "alternative minimum taxable income" as 
it is used in section 56(g) of the Internal Revenue Code, means 
alternative minimum taxable income as defined in this 
subdivision, determined without regard to the adjustment for 
adjusted current earnings in section 56(g) of the Internal 
Revenue Code. 
    (11) For purposes of determining the amount of adjusted 
current earnings under section 56(g)(3) of the Internal Revenue 
Code, no adjustment shall be made under section 56(g)(4) of the 
Internal Revenue Code with respect to (i) the amount of foreign 
dividend gross-up subtracted as provided in section 290.01, 
subdivision 19d, clause (1), (ii) the amount of refunds of 
income, excise, or franchise taxes subtracted as provided in 
section 290.01, subdivision 19d, clause (10), or (iii) the 
amount of royalties, fees or other like income subtracted as 
provided in section 290.01, subdivision 19d, clause (11). 
    Items of tax preference must not be reduced below zero as a 
result of the modifications in this subdivision. 
    Sec. 13.  Minnesota Statutes 1992, section 290.191, 
subdivision 4, is amended to read: 
    Subd. 4.  [APPORTIONMENT FORMULA FOR CERTAIN MAIL ORDER 
BUSINESSES.] If the business of a corporation, partnership, or 
proprietorship consists exclusively of the selling of tangible 
personal property and services in response to orders received by 
United States mail or telephone, and 99 percent of the 
taxpayer's property and payroll is within Minnesota, then the 
taxpayer may apportion net income to Minnesota based solely upon 
the percentage that the sales made within this state in 
connection with the its trade or business during the tax period 
are of the total sales wherever made in connection with the 
trade or business during the tax period.  Property and payroll 
factors are disregarded.  In determining eligibility for this 
subdivision:  
    (1) the sale not in the ordinary course of business of 
tangible or intangible assets used in conducting business 
activities must be disregarded; and 
    (2) property and payroll at a distribution center outside 
of Minnesota are disregarded if the sole activity at the 
distribution center is the filling of orders, and no 
solicitation of orders occurs at the distribution center.  
    Sec. 14.  [INSTRUCTION TO REVISOR.] 
    In the next edition of Minnesota Statutes, the revisor of 
statutes shall substitute the phrase "Internal Revenue Code of 
1986, as amended through December 31, 1992" for the words 
"Internal Revenue Code of 1986, as amended through December 31, 
1991" where the phrase occurs in chapters 289A, 290, 290A, 291, 
and 297, except for section 290.01, subdivision 19, and for the 
words "Internal Revenue Code of 1986, as amended through 
December 31, 1988," where the phrase occurs in chapter 298.  In 
the next edition of Minnesota Statutes, the revisor of statutes 
shall substitute the phrase "Internal Revenue Code of 1986, as 
amended through December 31, 1992," for references to the 
Internal Revenue Code of 1954 or the Internal Revenue Code of 
1986, as amended through dates set in sections 61A.276; 82A.02; 
136.58; 181B.02; 181B.07; 246A.23; 246A.26, subdivisions 1, 2, 
3, and 4; 272.02, subdivision 1; 273.11, subdivision 8; 297A.01, 
subdivision 3; 297A.25, subdivision 25; 352.01, subdivision 2b; 
354A.021, subdivision 5; 355.01, subdivision 9; and 356.62. 
    Sec. 15.  [EFFECTIVE DATE.] 
    Section 2 is effective for payments received after December 
31, 1993. 
    Section 3 is effective for tax years beginning after 
December 31, 1993. 
    Sections 5 to 14 are effective for tax years beginning 
after December 31, 1992. 

                               ARTICLE 9 

                        SALES AND SPECIAL TAXES 
    Section 1.  [17.451] [DEFINITIONS.] 
    Subdivision 1.  [APPLICABILITY.] The definitions in this 
section apply to sections 1 and 2. 
    Subd. 2.  [FARMED CERVIDAE.] "Farmed cervidae" means 
members of the cervidae family that are: 
    (1) raised for the purpose of producing fiber, meat, or 
animal by-products or as breeding stock; 
    (2) held in a constructed enclosure designed to prevent 
escape; and 
    (3) registered in a manner approved by the board of animal 
health and marked or identified with a unique number or other 
system approved by the board. 
    Subd. 3.  [OWNER.] "Owner" means a person who owns or is 
responsible for the raising of farmed cervidae. 
    Sec. 2.  [17.452] [FARM-RAISED CERVIDAE.] 
    Subdivision 1.  [PROMOTION AND COORDINATION.] (a) The 
commissioner shall promote the commercial raising of farmed 
cervidae and shall coordinate programs and rules related to the 
commercial raising of farmed cervidae.  Farmed cervidae 
research, projects, and demonstrations must be reported to the 
commissioner before state appropriations for the research 
projects or demonstrations are encumbered.  The commissioner 
shall maintain a data base of information on raising farmed 
cervidae. 
    (b) The commissioner shall appoint a farmed cervidae 
advisory committee to advise the commissioner on farmed cervidae 
issues.  The advisory committee shall consist of representatives 
from the University of Minnesota, the commissioner of 
agriculture, the board of animal health, the commissioner of 
natural resources, the commissioner of trade and economic 
development, a statewide elk breeders association, a statewide 
deer breeders association, a statewide deer farmers association, 
and members of the house of representatives and the senate.  The 
committee shall meet at least twice a year at the call of the 
commissioner of agriculture. 
    Subd. 2.  [DEVELOPMENT PROGRAM.] The commissioner may 
establish a Minnesota development and aid program that may 
support applied research, demonstration, financing, marketing, 
promotion, breeding development, registration, and other 
services for owners. 
    Subd. 3.  [REPORT.] The commissioner shall include 
information on farmed cervidae in the department's statistical 
reports on Minnesota agriculture. 
    Subd. 4.  [FARMED CERVIDAE ARE LIVESTOCK.] Farmed cervidae 
are livestock and are not wild animals for purposes of game 
farm, hunting, or wildlife laws.  Farmed cervidae and their 
products are farm products and livestock for purposes of 
financial transactions and collateral. 
    Subd. 5.  [RAISING FARMED CERVIDAE IS AN AGRICULTURAL 
PURSUIT.] Raising farmed cervidae is agricultural production and 
an agricultural pursuit. 
    Subd. 6.  [RUNNING AT LARGE PROHIBITED.] (a) An owner may 
not allow farmed cervidae to run at large.  The owner must make 
all reasonable efforts to return escaped farmed cervidae to 
their enclosures as soon as possible.  The owner must notify the 
commissioner of natural resources of the escape of farmed red 
deer if the farmed red deer are not returned or captured by the 
owner within 72 hours of their escape. 
    (b) An owner is liable for expenses of another person in 
capturing, caring for, and returning farmed cervidae that have 
left their enclosures if the person capturing the farmed 
cervidae contacts the owner as soon as possible. 
     (c) If an owner is unwilling or unable to capture escaped 
farmed cervidae, the commissioner of natural resources may 
destroy the escaped farmed cervidae under this paragraph if the 
escaped farmed cervidae are a threat to the health or population 
of native species.  The commissioner must allow the owner to 
attempt to capture the escaped farmed cervidae prior to 
destroying the farmed cervidae.  Farmed cervidae that are not 
captured by 14 days after escape may be destroyed. 
    (d) The owner must notify the commissioner of natural 
resources of the escape of farmed cervidae from a quarantined 
herd if the farmed cervidae are not returned to or captured by 
the owner within 72 hours of their escape.  The escaped farmed 
cervidae from the quarantined herd may be destroyed by the 
commissioner of natural resources if the escaped farmed cervidae 
are a threat to the health or population of native species. 
    Subd. 7.  [FARMING IN NATIVE ELK AREA.] A person may not 
raise farmed red deer in the native elk area without written 
approval of the commissioner of natural resources.  The native 
elk area is the area north of U.S. Highway 2 and west of U.S. 
Highway 71 and trunk highway 72.  The commissioner shall review 
the proposed farming operation and approve with any condition or 
deny approval based on risks to the native elk population. 
    Subd. 8.  [SLAUGHTER.] Farmed cervidae must be slaughtered 
and inspected in accordance with the United States Department of 
Agriculture voluntary program for exotic animals, Code of 
Federal Regulations, title 9, part 352. 
    Subd. 9.  [SALES OF FARMED CERVIDAE AND MEAT 
PRODUCTS.] Persons selling or buying farmed cervidae sold as 
livestock, sold for human consumption, or sold for slaughter 
must comply with chapters 17A, 31, 31A, and 31B. 
    Subd. 10.  [FENCING.] (a) Farmed cervidae must be confined 
in a manner designed to prevent escape.  Fencing must meet the 
requirements in this subdivision unless an alternative is 
specifically approved by the commissioner.  The board of animal 
health shall follow the guidelines established by the United 
States Department of Agriculture in the program for eradication 
of bovine tuberculosis.  Fencing must be of the following 
heights: 
    (1) for farmed deer, at least 75 inches; and 
    (2) for farmed elk, at least 90 inches. 
    (b) The farmed cervidae advisory committee shall establish 
guidelines designed to prevent the escape of farmed cervidae and 
other appropriate management practices.  
    (c) The commissioner of agriculture in consultation with 
the commissioner of natural resources shall adopt rules 
prescribing fencing criteria for farmed cervidae. 
    Subd. 11.  [DISEASE INSPECTION.] Farmed cervidae herds are 
subject to chapter 35 and the rules of the board of animal 
health in the same manner as livestock and domestic animals, 
including provisions relating to importation and transportation. 
    Subd. 12.  [IDENTIFICATION.] (a) Farmed cervidae must be 
identified by brands, markings, tags, collars, electronic 
implants, tattoos, or other means of identification approved by 
the board of animal health.  The board shall authorize discrete 
permanent identification for farmed cervidae in public displays 
or other forums where visible identification is objectionable. 
    (b) Identification of farmed cervidae is subject to 
sections 35.821 to 35.831. 
    (c) The board of animal health shall register farmed 
cervidae upon request of the owner.  The owner must submit the 
registration request on forms provided by the board.  The forms 
must include sales receipts or other documentation of the origin 
of the cervidae.  The board shall provide copies of the 
registration information to the commissioner of natural 
resources upon request.  The owner must keep written records of 
the acquisition and disposition of registered farmed cervidae. 
    Subd. 13.  [INSPECTION.] The commissioner of agriculture 
and the board of animal health may inspect farmed cervidae and 
farmed cervidae records.  The commissioner of natural resources 
may inspect farmed cervidae and farmed cervidae records with 
reasonable suspicion that laws protecting native wild animals 
have been violated.  The owner must be notified in writing at 
the time of the inspection of the reason for the inspection and 
informed in writing after the inspection of whether (1) the 
cause of the inspection was unfounded; or (2) there will be an 
ongoing investigation or continuing evaluation. 
    Subd. 14.  [CONTESTED CASE HEARING.] A person raising 
farmed cervidae that is aggrieved with any decision regarding 
the farmed cervidae may request a contested case hearing under 
chapter 14. 
    Sec. 3.  [17.453] [DEFINITIONS.] 
    Subdivision 1.  [APPLICABILITY.] The definitions in this 
section apply to sections 3 and 4. 
    Subd. 2.  [OWNER.] "Owner" means a person who owns or is 
responsible for the raising of ratitae. 
    Subd. 3.  [RATITAE.] "Ratitae" means members of the ratitae 
family (including ostriches, emus, and rheas) that are raised 
for the purpose of producing fiber, meat, or animal by-products 
or as breeding stock. 
    Sec. 4.  [17.454] [RATITAE.] 
    Subdivision 1.  [RATITAE ARE LIVESTOCK.] Ratitae are 
livestock and are not wild animals for purposes of hunting or 
wildlife laws.  Ratitae and their products are farm products and 
livestock for purposes of financial transactions and collateral. 
    Subd. 2.  [RAISING RATITAE IS AN AGRICULTURAL 
PURSUIT.] Raising ratitae is agricultural production and an 
agricultural pursuit. 
    Subd. 3.  [SALES OF RATITAE AND MEAT PRODUCTS.] Persons 
selling or buying ratitae sold as livestock, sold for human 
consumption, or sold for slaughter must comply with chapters 
17A, 28A, 31, 31A, and 31B. 
    Subd. 4.  [SLAUGHTER.] Ratitae must be slaughtered and 
inspected in accordance with the United States Department of 
Agriculture voluntary inspection program for exotic animals, 
Code of Federal Regulations, title 9, part 352. 
    Subd. 5.  [DISEASE INSPECTION.] Ratitae are subject to 
chapter 35 and the rules of the board of animal health in the 
same manner as livestock and domestic animals, including 
provisions relating to importation and transportation. 
    Sec. 5.  [17.455] [DEFINITIONS.] 
    Subdivision 1.  [APPLICABILITY.] The definitions in this 
section apply to sections 5 and 6. 
    Subd. 2.  [LLAMA.] "Llama" means a member of the genus lama 
that is raised for the purpose of producing fiber, meat, or 
animal by-products or as breeding stock. 
    Subd. 3.  [OWNER.] "Owner" means a person who owns or is 
responsible for the raising of llamas. 
    Sec. 6.  [17.456] [LLAMA.] 
    Subdivision 1.  [LLAMAS ARE LIVESTOCK.] Llamas are 
livestock and are not wild animals for purposes of hunting or 
wildlife laws.  Llamas and their products are farm products and 
livestock for purposes of financial transactions and collateral. 
    Subd. 2.  [RAISING LLAMAS IS AN AGRICULTURAL 
PURSUIT.] Raising llamas is agricultural production and an 
agricultural pursuit. 
    Subd. 3.  [SALES OF LLAMAS AND MEAT PRODUCTS.] Persons 
selling or buying llamas sold as livestock, sold for human 
consumption, or sold for slaughter must comply with chapters 
17A, 28A, 31, 31A, and 31B. 
    Subd. 4.  [SLAUGHTER.] Llamas must be slaughtered and 
inspected in accordance with the United States Department of 
Agriculture voluntary inspection program for exotic animals, 
Code of Federal Regulations, title 9, part 352. 
    Subd. 5.  [DISEASE INSPECTION.] Llamas are subject to 
chapter 35 and the rules of the board of animal health in the 
same manner as livestock and domestic animals, including 
provisions relating to importation and transportation. 
    Sec. 7.  Minnesota Statutes 1992, section 17A.03, 
subdivision 5, is amended to read: 
    Subd. 5.  [LIVESTOCK.] "Livestock" means cattle, sheep, 
swine, horses intended for slaughter, mules, farmed cervidae, as 
defined in section 17.451, subdivision 2, llamas, as defined in 
section 17.455, subdivision 2, ratitae, as defined in section 
17.453, subdivision 3, and goats. 
    Sec. 8.  Minnesota Statutes 1992, section 31.51, 
subdivision 9, is amended to read: 
    Subd. 9.  "Animal" means cattle, swine, sheep, goats, 
farmed cervidae, as defined in section 17.451, subdivision 2, 
horses, mules or other equines, llamas as defined in section 
17.455, subdivision 2, and ratitae, as defined in section 
17.453, subdivision 3.  
    Sec. 9.  Minnesota Statutes 1992, section 31A.02, 
subdivision 4, is amended to read: 
    Subd. 4.  [ANIMALS.] "Animals" means cattle, swine, sheep, 
goats, farmed cervidae, as defined in section 17.451, 
subdivision 2, llamas, as defined in section 17.455, subdivision 
2, ratitae, as defined in section 17.453, subdivision 3, horses, 
equines, and other large domesticated animals, not including 
poultry.  
    Sec. 10.  Minnesota Statutes 1992, section 31A.02, 
subdivision 10, is amended to read: 
    Subd. 10.  [MEAT FOOD PRODUCT.] "Meat food product" means a 
product usable as human food and made wholly or in part from 
meat or a portion of the carcass of cattle, sheep, swine, farmed 
cervidae, as defined in section 17.451, subdivision 2, llamas, 
as defined in section 17.455, subdivision 2, ratitae, as defined 
in section 17.453, subdivision 3, or goats.  "Meat food product" 
does not include products which contain meat or other portions 
of the carcasses of cattle, sheep, swine, farmed cervidae, 
llamas, ratitae, or goats only in a relatively small proportion 
or that historically have not been considered by consumers as 
products of the meat food industry, and which are exempted from 
definition as a meat food product by the commissioner under the 
conditions the commissioner prescribes to assure that the meat 
or other portions of carcasses contained in the products are not 
adulterated and that the products are not represented as meat 
food products.  
    "Meat food product," as applied to products of equines, has 
a meaning comparable to that for cattle, sheep, swine, farmed 
cervidae, llamas, ratitae, and goats. 
    Sec. 11.  Minnesota Statutes 1992, section 31B.02, 
subdivision 4, is amended to read: 
    Subd. 4.  [LIVESTOCK.] "Livestock" means live or dead 
cattle, sheep, swine, horses, mules, farmed cervidae, as defined 
in section 17.451, subdivision 2, llamas, as defined in section 
17.455, subdivision 2, ratitae, as defined in section 17.453, 
subdivision 3, or goats. 
    Sec. 12.  Minnesota Statutes 1992, section 35.821, 
subdivision 4, is amended to read: 
    Subd. 4.  [MARK.] "Mark" means a permanent identification 
cut from the ear or ears of a live animal and for farmed 
cervidae, as defined in section 17.451, subdivision 2, means a 
tag, collar, electronic implant, tattoo, or other means of 
identification approved by the board. 
    Sec. 13.  Minnesota Statutes 1992, section 115B.22, 
subdivision 7, is amended to read: 
    Subd. 7.  [DISPOSITION OF PROCEEDS.] After reimbursement to 
the department of revenue for costs incurred in administering 
sections 115B.22 and 115B.24, the proceeds of the taxes imposed 
under this section including any interest and penalties shall be 
deposited in the environmental response, compensation, and 
compliance account. 
    Sec. 14.  Minnesota Statutes 1992, section 239.785, is 
amended to read: 
    239.785 [LIQUEFIED PETROLEUM GAS SALES.] 
    Subdivision 1.  [LIABILITY FOR PAYMENT.] (a) The operator 
of a terminal that sells located in Minnesota from which 
liquefied petroleum gas for resale to retail customers is 
dispensed for use or sale in this state other than for delivery 
to another terminal shall pay a fee equal to one mill for each 
gallon of liquefied petroleum gas sold by the terminal dispensed.
    (b) Any person in Minnesota, other than the operator of a 
terminal, receiving liquefied petroleum gas from a source 
outside of Minnesota for use or sale in this state shall pay a 
fee equal to one mill for each gallon of liquefied petroleum gas 
received.  
    Subd. 2.  [DUE DATES FOR FILING OF RETURNS AND PAYMENT.] 
The fee must be remitted monthly to on a form prescribed by the 
commissioner of revenue for deposit in the general fund.  The 
fee must be paid and the return filed on or before the 23rd day 
of each month following the month in which the liquefied 
petroleum gas was delivered or received.  
    Subd. 3.  [PENALTIES.] An operator or person who fails to 
pay the fee imposed under this section is subject to the 
penalties provided in sections 296.15 and 296.25.  
    Subd. 4.  [COMMISSIONER'S AUTHORITY.] The provisions of 
chapter 296 relating to the commissioner's authority to audit, 
assess, and collect the tax imposed by that chapter apply to the 
fee imposed by this section.  
    Subd. 5.  [INTEREST.] Fees and penalties are subject to 
interest at the rate provided in section 270.75.  
    Sec. 15.  Minnesota Statutes 1992, section 289A.56, 
subdivision 3, is amended to read: 
    Subd. 3.  [WITHHOLDING TAX, ENTERTAINER WITHHOLDING TAX, 
WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, ESTATE 
TAX, AND SALES TAX OVERPAYMENTS.] When a refund is due for 
overpayments of withholding tax, entertainer withholding tax, 
withholding from payments to out-of-state contractors, or estate 
tax, or sales tax, interest is computed 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. 
    For purposes of computing interest on sales and use tax 
refunds, interest is paid from the date of payment to the date 
the refund is paid or credited, if the refund claim includes a 
detailed schedule reflecting the tax periods covered in the 
claim.  If the refund claim submitted does not include a 
detailed schedule reflecting the tax periods covered in the 
claim, interest is computed from the date the claim was filed. 
    Sec. 16.  Minnesota Statutes 1992, section 289A.63, 
subdivision 3, is amended to read: 
    Subd. 3.  [SALES WITHOUT PERMIT; VIOLATIONS.] (a) A person 
who engages in the business of making retail sales in Minnesota 
without the permit or permits required under chapter 297A, or a 
responsible officer of a corporation who so engages in business, 
is guilty of a gross misdemeanor.  
    (b) A person who engages in the business of making retail 
sales in Minnesota after revocation of a permit under section 
297A.07, when the commissioner has not issued a new permit, is 
guilty of a felony. 
    Sec. 17.  Minnesota Statutes 1992, section 296.01, is 
amended by adding a subdivision to read: 
    Subd. 33a.  [REREFINED WASTE OIL.] "Rerefined waste oil" 
means waste lubrication oils that have been cracked and 
distilled to produce a petroleum distillate intended for use as 
a motor fuel in internal combustion diesel engines.  
    Sec. 18.  Minnesota Statutes 1992, section 296.01, is 
amended by adding a subdivision to read: 
    Subd. 27a.  [PASSENGER SNOWMOBILE.] "Passenger snowmobile" 
means a self-propelled vehicle designed for travel on snow or 
ice, steered by skis or runners, with an enclosed passenger 
section that provides seating for not less than four nor more 
than twelve passengers. 
    Sec. 19.  Minnesota Statutes 1992, section 296.02, 
subdivision 8, is amended to read: 
    Subd. 8.  [CREDITS FOR SALES TO GOVERNMENTS AND SCHOOLS.] A 
distributor shall be allowed a credit of 80 cents for every 
gallon of fuel grade alcohol blended with gasoline to produce 
agricultural alcohol gasoline which is sold to the state, local 
units of government, or for use in the transportation of pupils 
to and from school-related events in school vehicles owned by or 
under contract to a school district.  This reduction is in lieu 
of the reductions provided in subdivision 7. 
    Sec. 20.  [296.035] [CREDIT FOR CERTAIN FUELS.] 
    A licensed distributor or a special fuel dealer, either of 
which elects to pay the tax under section 296.12, subdivision 
3a, at the time special fuel is sold or delivered into the 
supply tank of a licensed motor vehicle, is allowed a credit of 
ten cents per gallon for each gallon of rerefined waste oil sold 
or delivered into the supply tank of a licensed motor vehicle.  
A credit of ten cents per gallon is allowed a licensed 
distributor or special fuel dealer for each gallon of rerefined 
waste oil delivered into the storage tank of a retail service 
station operated by the distributor or a special fuel dealer, if 
either the distributor or special fuel dealer does not elect to 
pay the tax under section 296.12, subdivision 3a, at the time 
special fuel is sold or delivered into the supply tank of a 
licensed motor vehicle.  Bulk purchasers are allowed a credit of 
ten cents per gallon for each gallon of rerefined waste oil that 
is purchased by them and used in a licensed motor vehicle. 
    Sec. 21.  Minnesota Statutes 1992, section 296.18, 
subdivision 1, is amended to read: 
    Subdivision 1.  [CLAIM; FUEL USED IN OTHER VEHICLES.] Any 
person who shall buy and use gasoline for a qualifying purpose 
other than use in motor vehicles, snowmobiles except as provided 
in clause (2), or motorboats, or special fuel for a qualifying 
purpose other than use in licensed motor vehicles, and who shall 
have paid the Minnesota excise tax directly or indirectly 
through the amount of the tax being included in the price of the 
gasoline or special fuel, or otherwise, shall be reimbursed and 
repaid the amount of the tax paid upon filing with the 
commissioner a signed claim in writing in the form and 
containing the information the commissioner shall require and 
accompanied by the original invoice thereof.  By signing any 
such claim which is false or fraudulent, the applicant shall be 
subject to the penalties provided in this section for knowingly 
making a false claim.  The claim shall set forth the total 
amount of the gasoline so purchased and used by the applicant 
other than in motor vehicles, or special fuel so purchased and 
used by the applicant other than in licensed motor vehicles, and 
shall state when and for what purpose it was used.  When a claim 
contains an error in computation or preparation, the 
commissioner is authorized to adjust the claim in accordance 
with the evidence shown on the claim or other information 
available to the commissioner.  The commissioner, on being 
satisfied that the claimant is entitled to the payments, shall 
approve the claim and transmit it to the commissioner of 
finance.  No repayment shall be made unless the claim and 
invoice shall be filed with the commissioner within one year 
from the date of the purchase.  The postmark on the envelope in 
which the claim is mailed shall determine the date of filing.  
The words "gasoline" or "special fuel" as used in this 
subdivision do not include aviation gasoline or special fuel for 
aircraft.  Gasoline or special fuel bought and used for a 
"qualifying purpose" means: 
    (1) Gasoline or special fuel used in carrying on a trade or 
business, used on a farm situated in Minnesota, and used for a 
farming purpose.  "Farm" and "farming purpose" have the meanings 
given them in section 6420(c)(2), (3), and (4) of the Internal 
Revenue Code of 1986, as amended through December 31, 1988.  
    (2) Gasoline or special fuel used for off-highway business 
use.  "Off-highway business use" means any use by a person in 
that person's trade, business, or activity for the production of 
income.  "Off-highway business use" includes use of a passenger 
snowmobile off the public highways as part of the operations of 
a resort as defined in section 157.01, subdivision 1.  
"Off-highway business use" does not include use as a fuel in a 
motor vehicle which, at the time of use, is registered or is 
required to be registered for highway use under the laws of any 
state or foreign country.  
    (3) Gasoline or special fuel placed in the fuel tanks of 
new motor vehicles, manufactured in Minnesota, and shipped by 
interstate carrier to destinations in other states or foreign 
countries. 
    Sec. 22.  Minnesota Statutes 1992, section 297A.01, 
subdivision 6, is amended to read: 
    Subd. 6.  "Use" includes the exercise of any right or power 
over tangible personal property, or tickets or admissions to 
places of amusement or athletic events, purchased from a 
retailer incident to the ownership of any interest in that 
property, except that it does not include the sale of that 
property in the regular course of business.  
    "Use" includes the consumption of printed materials which 
are consumed in the creation of nontaxable advertising that is 
distributed, either directly or indirectly, within Minnesota.  
     Sec. 23.  Minnesota Statutes 1992, section 297A.01, 
subdivision 13, is amended to read: 
    Subd. 13.  "Agricultural production," as used in section 
297A.25, subdivision 9, includes, but is not limited to, 
horticulture; floriculture; raising of pets, fur bearing 
animals, research animals, farmed cervidae, as defined in 
section 17.451, subdivision 2, llamas, as defined in section 
17.455, subdivision 2, ratitae, as defined in section 17.453, 
subdivision 3, and horses. 
    Sec. 24.  Minnesota Statutes 1992, section 297A.01, 
subdivision 15, is amended to read: 
    Subd. 15.  "Farm machinery" means new or used machinery, 
equipment, implements, accessories, and contrivances used 
directly and principally in the production for sale, but not 
including the processing, of livestock, dairy animals, dairy 
products, poultry and poultry products, fruits, vegetables, 
forage, grains and bees and apiary products.  "Farm machinery"  
includes: 
    (1) machinery for the preparation, seeding or cultivation 
of soil for growing agricultural crops and sod, harvesting and 
threshing of agricultural products, harvesting or mowing of sod, 
and certain machinery for dairy, livestock and poultry farms; 
    (2) barn cleaners, milking systems, grain dryers, automatic 
feeding systems and similar installations, whether or not the 
equipment is installed by the seller and becomes part of the 
real property; 
    (3) irrigation equipment sold for exclusively agricultural 
use, including pumps, pipe fittings, valves, sprinklers and 
other equipment necessary to the operation of an irrigation 
system when sold as part of an irrigation system, except 
irrigation equipment which is situated below ground and 
considered to be a part of the real property; 
    (4) logging equipment, including chain saws used for 
commercial logging; and 
    (5) fencing used for the containment of farmed cervidae, as 
defined in section 17.451, subdivision 2; and 
    (6) primary and backup generator units used to generate 
electricity for the purpose of operating farm machinery, as 
defined in this subdivision, or providing light or space heating 
necessary for the production of livestock, dairy animals, dairy 
products, or poultry and poultry products.  
    Repair or replacement parts for farm machinery shall not be 
included in the definition of farm machinery.  
    Tools, shop equipment, grain bins, feed bunks, fencing 
material except fencing material covered by clause (5), 
communication equipment and other farm supplies shall not be 
considered to be farm machinery.  "Farm machinery" does not 
include motor vehicles taxed under chapter 297B, snowmobiles, 
snow blowers, lawn mowers except those used in the production of 
sod for sale, garden-type tractors or garden tillers and the 
repair and replacement parts for those vehicles and machines. 
    Sec. 25.  Minnesota Statutes 1992, section 297A.01, 
subdivision 16, is amended to read: 
    Subd. 16.  [CAPITAL EQUIPMENT.] (a) Capital equipment means 
machinery and equipment and the materials and supplies necessary 
to construct or install the machinery or equipment.  To qualify 
under this definition the capital equipment must be used by the 
purchaser or lessee for manufacturing, fabricating, mining, 
quarrying, or refining a product tangible personal property, for 
electronically transmitting results retrieved by a customer of 
an on-line computerized data retrieval system, or for the 
generation of electricity or steam, to be sold at retail and 
must be used for the establishment of a new or the physical 
expansion of an existing manufacturing, fabricating, mining, 
quarrying, or refining facility in the state.  For purposes of 
this subdivision, "mining" includes peat mining, and "on-line 
computerized data retrieval system" refers to a system whose 
cumulation of information is equally available and accessible to 
all its customers.  
    (b) Capital equipment does not include the following: 
    (1) machinery or equipment purchased or leased to replace 
machinery or equipment performing substantially the same 
function in an existing facility,; 
    (2) repair or replacement parts, or including accessories, 
whether purchased as spare parts, repair parts, or as upgrades 
or modifications, and whether purchased before or after the 
machinery or equipment is placed into service.  Parts or 
accessories are treated as capital equipment only to the extent 
that they are a part of and are essential to the operation of 
the machinery or equipment as initially purchased; 
    (3) machinery or equipment used to receive or store raw 
materials; 
     (4) building materials, including materials used for 
foundations that support machinery or equipment; 
     (5) machinery or equipment used for nonproduction purposes, 
including, but not limited to, the following:  machinery and 
equipment used for plant security, fire prevention, first aid, 
and hospital stations; machinery and equipment used in support 
operations or for administrative purposes; machinery and 
equipment used solely for pollution control, prevention, or 
abatement; machinery and equipment used for environmental 
control, except that when a controlled environment is essential 
for the manufacture of a particular product, the machinery or 
equipment that controls the environment can qualify as capital 
equipment; and machinery and equipment used in plant cleaning, 
disposal of scrap and waste, plant communications, lighting, or 
safety; 
     (6) "farm machinery" as defined by section 297A.01, 
subdivision 15, "special tooling" as defined by section 297A.01, 
subdivision 17, and "aquaculture production equipment" as 
defined by section 297A.01, subdivision 19; or 
    (7) any other item that is not essential to the integrated 
process of manufacturing, fabricating, mining, quarrying, or 
refining. 
    (c) For purposes of this subdivision: 
    (1) the requirement that the machinery or equipment "must 
be used by the purchaser or lessee" means that the person who 
purchases or leases the machinery or equipment must be the one 
who uses it for the qualifying purpose.  When a contractor buys 
and installs machinery or equipment as part of an improvement to 
real property, only the contractor is considered the purchaser; 
    (2) the requirement that the machinery and equipment must 
be used "for manufacturing, fabricating, mining, quarrying, or 
refining" means that the machinery or equipment must be 
essential to the integrated process of manufacturing, 
fabricating, mining, quarrying, or refining.  Neither legal 
requirements nor practical necessity determines whether or not 
the equipment is essential to the integrated process; 
    (3) "facility" means a coordinated group of fixed assets, 
which may include land, buildings, machinery, and equipment that 
are essential to and used in an integrated manufacturing, 
fabricating, refining, mining, or quarrying process; 
    (4) "establishment of a new facility" means the 
construction of a facility, or the purchase by a new owner of a 
facility that was previously closed and not operational for a 
period of at least 12 consecutive months.  Relocating operations 
from an existing facility within Minnesota to another facility 
within Minnesota does not constitute establishing a new 
facility; 
    (5) "physical expansion of an existing facility" means 
adding a new production line, adding new machinery or equipment 
to an existing production line, new construction which will 
become part of the existing facility and which is used for a 
qualifying activity, or conversion of an area in an existing 
facility from a nonqualifying activity to a qualifying activity; 
and 
    (6) performing "substantially the same function" means that 
the new machinery or equipment serves fundamentally or 
essentially the same purpose as did the old equipment or that it 
produces the same or similar end product, even though it may 
increase speed, efficiency, or production capacity. 
     (d) Notwithstanding prior provisions of this subdivision, 
machinery and equipment purchased or leased to replace machinery 
and equipment used in the mining or production of taconite shall 
qualify as capital equipment regardless of whether the facility 
has been expanded. 
    Sec. 26.  Minnesota Statutes 1992, section 297A.04, is 
amended to read: 
    297A.04 [APPLICATIONS; MEMBER; VENDING MACHINES; FORM.] 
    Every person desiring to engage in the business of making 
retail sales within Minnesota shall file with the commissioner 
an application for a permit and if such person has more than one 
place of business, an application for each place of business 
must be filed.  A vending machine operator who has more than one 
vending machine location shall nevertheless be considered to 
have only one place of business for purposes of this section.  
An applicant who has no regular place of doing business and who 
moves from place to place shall be considered to have only one 
place of business and shall attach such permit to the 
applicant's cart, stand, truck or other merchandising device.  
The commissioner may require any person or class of persons 
obligated to file a use tax return under section 289A.11, 
subdivision 3, to file application for a permit.  Every 
application for a permit shall be made upon a form prescribed by 
the commissioner and shall set forth the name under which the 
applicant intends to transact business, the location of the 
applicant's place or places of business, and such other 
information as the commissioner may require.  The application 
shall be filed by the owner, if a natural person; by a member or 
partner, if the owner be is an association or partnership; by a 
person authorized to sign file the application, if the owner be 
is a corporation.  
    Sec. 27.  Minnesota Statutes 1992, section 297A.06, is 
amended to read: 
    297A.06 [PERMIT.] 
    After compliance with sections 297A.04 and 297A.28, when 
security is required, the commissioner shall issue grant to each 
applicant a separate permit for each place of business within 
Minnesota.  A permit shall be is valid until canceled or revoked 
but shall is not be assignable and shall be is valid only for 
the person in whose name it is issued granted and for the 
transaction of business at the place places designated therein.  
It shall at all times be conspicuously displayed at the place 
for which issued. 
    Sec. 28.  Minnesota Statutes 1992, section 297A.07, 
subdivision 1, is amended to read: 
    Subdivision 1.  [HEARINGS.] If any person fails to comply 
with this chapter or the rules adopted under this chapter, 
without reasonable cause, the commissioner may schedule a 
hearing requiring the person to show cause why the permit or 
permits should not be revoked.  The commissioner must give the 
person 15 days' notice in writing, specifying the time and place 
of the hearing and the reason for the proposed revocation.  The 
notice shall also advise the person of the person's right to 
contest the revocation under this subdivision, the general 
procedures for a contested case hearing under chapter 14, and 
the notice requirement under subdivision 2.  The notice may be 
served personally or by mail in the manner prescribed for 
service of an order of assessment.  
    Sec. 29.  Minnesota Statutes 1992, section 297A.11, is 
amended to read: 
    297A.11 [CONTENT AND FORM OF EXEMPTION CERTIFICATE.] 
    The exemption certificate shall be signed by and bear the 
name and address of the purchaser, shall indicate the sales tax 
account number of the permit if any issued to the purchaser and 
shall indicate the general character of the property sold by the 
purchaser in the regular course of business and shall identify 
the property purchased.  The certificate shall be substantially 
in such form as the commissioner may prescribe.  
    Sec. 30.  Minnesota Statutes 1992, section 297A.136, is 
amended to read: 
    297A.136 [TAX ON 900 PAY-PER-CALL SERVICES.] 
    Subdivision 1.  [TAX IMPOSED.] A tax of $.50 is imposed for 
each call placed to a 900 service if the call for that service 
originates from and is charged to a telephone located in this 
state. 
    Subd. 2.  [DEFINITIONS.] For the purposes of this 
section, the following definitions will apply: 
    (a) "900 service" means pay-per-call 900 information 
services provided through a telephone exchange, commonly 
accessed by dialing 1-900, 1-960, 1-976, or other similar prefix 
in which the calling party receives information from the 900 
information provider, and the calling party is charged on a per 
call or per time basis for the information.  The term does not 
include services provided through 1-800 service telephone 
numbers, information provided free of charge, or directory 
assistance service. 
    (b) "Calling party" means the person originating the call 
to the information provider. 
    (c) "900 information provider" means the person being 
called by the calling party, and who provides information 
services to the calling party on a per call or per time basis. 
    (d) "Person" shall have the same meaning as provided in 
section 297A.01, subdivision 2. 
    Subd. 3.  [PAYMENT; ADMINISTRATION.] Liability for the tax 
imposed by this section is on the person making the call calling 
party.  Liability for collection from the calling party is on 
the person providing access to a dial tone contracting with the 
900 information provider to interconnect the information 
provider and the calling party, if such person bills the calling 
party.  In all other instances, the person billing the calling 
party shall be liable for collecting the tax from the calling 
party.  The tax imposed in this section must be reported and 
paid to the commissioner of revenue with the taxes imposed in 
this chapter.  It is subject to the same interest, penalty, and 
other provisions provided for sales and use taxes under chapter 
289A and this chapter.  The commissioner has the same powers to 
assess and collect the tax that are given the commissioner in 
chapters 270 and 289A and this chapter to assess and collect 
sales and use tax. 
    Subd. 4.  [EXEMPTION.] Pay-per-call information services 
provided through a 1-976 prefix are exempt from the tax imposed 
under this section if the charge for the call is less than $1.  
    Sec. 31.  Minnesota Statutes 1992, section 297A.14, 
subdivision 1, is amended to read: 
    Subdivision 1.  [IMPOSITION.] For the privilege of using, 
storing, distributing, or consuming in Minnesota tangible 
personal property or taxable services purchased for use, 
storage, distribution, or consumption in this state, a use tax 
is imposed on every person in this state at the rate of tax 
imposed under section 297A.02 on the sales price of sales at 
retail of the items, unless the tax imposed by section 297A.02 
was paid on the sales price.  
    A use tax is imposed on every person who uses, stores, 
distributes, or consumes tangible personal property in Minnesota 
which has been manufactured, fabricated, or assembled by the 
person from materials, either within or without this state, at 
the rate of tax imposed under section 297A.02 on the sales price 
of sales at retail of the materials contained in the tangible 
personal property, unless the tax imposed by section 297A.02 was 
paid on the sales price. 
     Sec. 32.  Minnesota Statutes 1992, 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, 
fever thermometers, 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, and other diagnostic agents used in the 
treatment of diagnosing, monitoring, or treating diabetes.  
Nonprescription analgesics consisting principally (determined by 
the weight of all ingredients) of acetaminophen, acetylsalicylic 
acid, ibuprofen, or a combination thereof are exempt. 
    Sec. 33.  Minnesota Statutes 1992, section 297A.25, 
subdivision 7, is amended to read: 
    Subd. 7.  [PETROLEUM PRODUCTS.] The gross receipts from the 
sale of and storage, use or consumption of the following 
petroleum products are exempt:  
    (1) products upon which a tax has been imposed and paid 
under the provisions of chapter 296, and no refund has been or 
will be allowed because the buyer used the fuel for nonhighway 
use, 
    (2) products which are used in the improvement of 
agricultural land by constructing, maintaining, and repairing 
drainage ditches, tile drainage systems, grass waterways, water 
impoundment, and other erosion control structures; or 
    (3) products purchased by a transit system receiving 
financial assistance under section 174.24 or 473.384; or 
    (4) products used in a passenger snowmobile, as defined in 
section 296.01, subdivision 27a, for off-highway business use as 
part of the operations of a resort as provided under section 
296.18, subdivision 1, clause (2). 
    Sec. 34.  Minnesota Statutes 1992, 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 colleges, 
state academies, the Minnesota center for arts education, and 
school districts are exempt. 
    As used in this subdivision, "school districts" means 
public school entities and districts of every kind and nature 
organized under the laws of the state of Minnesota, including, 
without limitation, school districts, intermediate school 
districts, education districts, educational cooperative service 
units, secondary vocational cooperative centers, special 
education cooperatives, joint purchasing cooperatives, 
telecommunication cooperatives, regional management information 
centers, technical colleges, joint vocational technical 
districts, and any instrumentality of a school district, as 
defined in section 471.59. 
    Sales exempted by this subdivision include sales under 
section 297A.01, subdivision 3, paragraph (f), but do not 
include sales under section 297A.01, subdivision 3, paragraph 
(j), clause (vii).  
    Sales to hospitals and nursing homes owned and operated by 
political subdivisions of the state are exempt under this 
subdivision.  
    The sales to and exclusively for the use of libraries, as 
defined in section 134.001, of books, periodicals, audio-visual 
materials and equipment, photocopiers for use by the public, and 
all cataloging and circulation equipment, and cataloging and 
circulation software for library use are exempt under this 
subdivision.  For purposes of this paragraph "libraries" means 
libraries as defined in section 134.001, county law libraries 
under chapter 134A, the state library under section 480.09, and 
the legislative reference library. 
    Sales of supplies and equipment used in the operation of an 
ambulance service owned and operated by a political subdivision 
of the state are exempt under this subdivision provided that the 
supplies and equipment are used in the course of providing 
medical care; motor vehicle parts are not exempt under this 
provision.  Sales to a political subdivision of repair and 
replacement parts for emergency rescue vehicles and fire trucks 
and apparatus are exempt under this subdivision.  
    Sales to a political subdivision of machinery and 
equipment, except for motor vehicles, used directly for mixed 
municipal solid waste collection and disposal services at a 
solid waste disposal facility as defined in section 115A.03, 
subdivision 10, are exempt under this subdivision.  
    Sales to political subdivisions of chore and homemaking 
services to be provided to elderly or disabled individuals are 
exempt. 
    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.  
    The tax imposed on sales to political subdivisions of the 
state under this section applies to all political subdivisions 
other than those explicitly exempted under this subdivision, 
notwithstanding section 115A.69, subdivision 6, 116A.25, 
360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2, 
469.127, 473.394, 473.448, 473.545, or 473.608 or any other law 
to the contrary enacted before 1992. 
    Sales to other states or political subdivisions of other 
states are exempt if the sale would be exempt from taxation if 
it occurred in that state. 
    Sec. 35.  Minnesota Statutes 1992, 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 who are either (1) age 55 
or older, or (2) physically disabled, 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.  For 
purposes of this subdivision, charitable purpose includes the 
maintenance of a cemetery owned by a religious organization.  
Sales exempted by this subdivision include sales pursuant to 
section 297A.01, subdivision 3, paragraphs (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. 36.  Minnesota Statutes 1992, section 297A.25, 
subdivision 34, is amended to read: 
    Subd. 34.  [MOTOR VEHICLES.] The gross receipts from the 
sale or use of any motor vehicle taxable under the provisions of 
the motor vehicle excise tax laws of Minnesota shall be exempt 
from taxation under this chapter.  Notwithstanding subdivision 
11, the exemption provided under this subdivision remains in 
effect for motor vehicles purchased or leased by political 
subdivisions of the state if the vehicles are not subject to 
taxation under chapter 297B. 
    Sec. 37.  Minnesota Statutes 1992, section 297A.25, 
subdivision 41, is amended to read: 
    Subd. 41.  [BULLET-PROOF VESTS.] The gross receipts from 
the sale of bullet-resistant soft body armor that is flexible, 
concealable, and custom-fitted to provide the wearer with 
ballistic and trauma protection are exempt if purchased by a law 
enforcement agency of the state or a political subdivision of 
the state, or a licensed peace officer, as defined in section 
626.84, subdivision 1.  The bullet-resistant soft body armor 
must meet or exceed the requirements of standard 0101.01 of the 
National Institute of Law Enforcement and Criminal Justice in 
effect on December 30, 1986, or meet or exceed the requirements 
of the standard except wet armor conditioning. 
    Sec. 38.  Minnesota Statutes 1992, section 297A.25, is 
amended by adding a subdivision to read: 
     Subd. 52.  [PARTS AND ACCESSORIES USED TO MAKE A MOTOR 
VEHICLE HANDICAPPED ACCESSIBLE.] The gross receipts from the 
sale of parts and accessories that are used solely to modify a 
motor vehicle to make it handicapped accessible are exempt.  
Labor charges for modifying a motor vehicle to make it 
handicapped accessible are included in this exemption. 
    Sec. 39.  [297A.2531] [SATELLITE BROADCASTING FACILITY 
MATERIALS; EXEMPTIONS.] 
    Notwithstanding the provisions of this chapter, there shall 
be exempt from the tax imposed therein all materials and 
supplies or equipment used or consumed in constructing, or 
incorporated into the construction of, a new facility in 
Minnesota for providing federal communications commission 
licensed direct satellite broadcasting services using direct 
broadcast satellites operating in the 12-ghz. band or fixed 
satellite regional or national program services, as defined in 
section 272.02, subdivision 1, clause (15), construction of 
which was commenced after June 30, 1993, and all machinery, 
equipment, tools, accessories, appliances, contrivances, 
furniture, fixtures, and all technical equipment or tangible 
personal property of any other nature or description necessary 
to the construction and equipping of that facility in order to 
provide those services. 
    Sec. 40.  [297A.2545] [STEEL REPROCESSOR; EXEMPTION FOR 
POLLUTION CONTROL EQUIPMENT.] 
    Notwithstanding the provisions of this chapter, the 
purchase of pollution control equipment by a steel reprocessing 
firm is exempt from the sales and use tax provided that the 
equipment is necessary to meet state or federal emission 
standards.  For purposes of this section "pollution control 
equipment" means any equipment used for the purpose of 
eliminating, preventing, or reducing air, land, or water 
pollution during or as a result of the manufacturing process.  
"Steel reprocessing firm" means a firm whose primary business is 
the recovery of steel from automobiles, appliances, and other 
steel products and the rerefining of this recovered metal into 
new steel products. 
    Sec. 41.  Minnesota Statutes 1992, section 298.75, 
subdivision 4, is amended to read: 
    Subd. 4.  If any the county auditor has not received the 
report by the 15th day after the last day of each calendar 
quarter from the operator or importer fails to make the 
report as required by subdivision 3 or files has received an 
erroneous report, the county auditor shall determine estimate 
the amount of tax due and notify the operator or importer by 
registered mail of the amount of tax so determined estimated 
within the next 14 days.  An operator or importer may, within 30 
days from the date of mailing the notice, file in the office of 
the county auditor a written statement of objections to the 
amount of taxes determined to be due.  The statement of 
objections shall be deemed to be a petition within the meaning 
of chapter 278, and shall be governed by sections 278.02 to 
278.13. 
    Sec. 42.  Minnesota Statutes 1992, section 298.75, 
subdivision 5, is amended to read: 
    Subd. 5.  Failure to file the report and submit payment 
shall result in a penalty of $5 for each of the first 30 days, 
beginning on the 14th 15th day after the date when the county 
auditor has sent notice to the operator or importer as provided 
in subdivision 4, during which the report is overdue and no 
statement of objection has been filed.  For each subsequent day 
during last day of each calendar quarter, for which the report 
and payment is overdue due and no statement of objection has 
been filed as provided in subdivision 4, and a penalty of $10 
for each subsequent day shall be assessed against the operator 
or importer who is required to file the report.  The penalties 
imposed by this subdivision shall be collected as part of the 
tax and credited to the county revenue fund.  If neither the 
report nor a statement of objection has been filed after more 
than 60 days have elapsed from the date when the notice was 
sent, the operator or importer who is required to file the 
report is guilty of a misdemeanor. 
    Sec. 43.  [349.2115] [SPORTS BOOKMAKING TAX.] 
    Subdivision 1.  [IMPOSITION OF TAX.] An excise tax of six 
percent is imposed on the value of all bets received by, 
recorded by, accepted by, forwarded by, or placed with a person 
engaged in sports bookmaking. 
    Subd. 2.  [BET DEFINED.] For purposes of this section, the 
term "bet" has the meaning given it in section 609.75, 
subdivision 2. 
    Subd. 3.  [SPORTS BOOKMAKING DEFINED.] For purposes of this 
section, the term "sports bookmaking" has the meaning given it 
in section 609.75, subdivision 7. 
    Subd. 4.  [AMOUNT OF BET.] In determining the value or 
amount of any bet for purposes of this section, all charges 
incident to the placing of the bet must be included. 
    Subd. 5.  [TAX RETURNS.] A person engaged in sports 
bookmaking shall file monthly tax returns with the commissioner 
of revenue, in the form required by the commissioner, of all 
bookmaking activity, and shall include information on all bets 
recorded, accepted, forwarded, and placed.  The returns must be 
filed on or before the 20th day of the month following the month 
in which the bets reported were recorded, accepted, forwarded, 
or placed.  The tax imposed by this section is due and payable 
at the time when the returns are filed. 
    Subd. 6.  [PERSONS LIABLE FOR TAX.] Each person who is 
engaged in receiving, recording, forwarding, or accepting sports 
bookmaking bets is liable for and shall pay the tax imposed 
under this section. 
    Subd. 7.  [JEOPARDY ASSESSMENT; JEOPARDY COLLECTION.] The 
tax may be assessed by the commissioner of revenue.  An 
assessment made pursuant to this section shall be considered a 
jeopardy assessment or jeopardy collection as provided in 
section 270.70.  The commissioner shall assess the tax based on 
personal knowledge or information available to the 
commissioner.  The commissioner shall mail to the taxpayer at 
the taxpayer's last known address, or serve in person, a written 
notice of the amount of tax, demand its immediate payment, and, 
if payment is not immediately made, collect the tax by any 
method described in chapter 270, except that the commissioner 
need not await the expiration of the times specified in chapter 
270.  The tax assessed by the commissioner is presumed to be 
valid and correctly determined and assessed. 
    Subd. 8.  [DISCLOSURE PROHIBITED.] (a) Notwithstanding any 
law to the contrary, neither the commissioner nor a public 
employee may reveal facts contained in a sports bookmaking tax 
return filed with the commissioner of revenue as required by 
this section, nor can any information contained in the report or 
return be used against the tax obligor in any criminal 
proceeding, unless independently obtained, except in connection 
with a proceeding involving taxes due under this section, or as 
provided in section 270.064. 
    (b) Any person violating this section is guilty of a gross 
misdemeanor. 
    (c) This section does not prohibit the commissioner from 
publishing statistics that do not disclose the identity of tax 
obligors or the contents of particular returns or reports. 
    Sec. 44.  [NOTIFICATION BY COUNTY AUDITOR.] 
    The county auditor shall notify each operator in the county 
who filed a report in the previous calendar year under Minnesota 
Statutes, section 298.75 of the changes made in sections 41 and 
42 relating to the imposition of the penalty for late payment. 
    Sec. 45.  [COOK COUNTY; SALES TAX.] 
    Subdivision 1.  [IMPOSED.] Notwithstanding Minnesota 
Statutes, section 477A.016, or any other contrary provision of 
law, ordinance, or resolution, Cook county may, by resolution, 
impose an additional sales tax of up to one percent on sales 
transactions taxable pursuant to Minnesota Statutes, chapter 
297A, that occur within the county. 
    Subd. 2.  [USE OF REVENUES.] Revenues received from taxes 
authorized by subdivision 1 shall be used by Cook county to pay 
the cost of collecting the tax and to pay all or a portion of 
the costs of expanding and improving the health care facility 
located in the county and known as North Shore hospital.  
Authorized costs include, but are not limited to, securing or 
paying debt service on bonds or other obligations issued to 
finance the expansion and improvement of North Shore hospital.  
The total capital expenditures payable from bond proceeds, 
excluding investment earnings on bond proceeds and tax revenues, 
shall not exceed $4,000,000. 
    Subd. 3.  [EXPIRATION OF TAXING AUTHORITY AND EXPENDITURE 
LIMITATION.] The authority granted by subdivision 1 to Cook 
county to impose a sales tax shall expire when the principal and 
interest on any bonds or obligations issued to finance the 
expansion and improvement of North Shore hospital have been 
paid, or at an earlier time as the county shall, by resolution, 
determine.  Any funds remaining after completion of the 
improvements and retirement or redemption of the bonds may be 
placed in the general fund of the county. 
    Subd. 4.  [BONDS.] Cook county may issue general obligation 
bonds in an amount not to exceed $4,000,000 for the expansion 
and improvement of North Shore hospital, without election under 
Minnesota Statutes, chapter 475, on the question of issuance of 
the bonds or a property tax to pay them.  The debt represented 
by bonds issued for the expansion and improvement of North Shore 
hospital shall not be included in computing any debt limitations 
applicable to Cook county, and the levy of taxes required by 
Minnesota Statutes, section 475.61, to pay principal of and 
interest on the bonds shall not be subject to any levy 
limitation or be included in computing or applying any levy 
limitation applicable to the county. 
    Subd. 5.  [REFERENDUM.] If the governing body of Cook 
county intends to impose the sales tax authorized by this 
section, it shall conduct a referendum on the issue.  The 
question of imposing the tax must be submitted to the voters at 
a special or general election.  The tax may not be imposed 
unless a majority of votes cast on the question of imposing the 
tax are in the affirmative. The commissioner of revenue shall 
prepare a suggested form of question to be presented at the 
election.  The referendum must be held at a special or general 
election before December 1, 1993. 
    Subd. 6.  [ENFORCEMENT; COLLECTION; ADMINISTRATION OF TAX.] 
A sales tax imposed under this section shall be reported and 
paid to the commissioner of revenue with the state sales taxes, 
and be subject to the same penalties, interest, and enforcement 
provisions.  The proceeds of the tax, less refunds and a 
proportionate share of the cost of collection, shall be remitted 
at least quarterly to Cook county.  The commissioner shall 
deduct from the proceeds remitted an amount that equals the 
indirect statewide cost as well as the direct and indirect 
department costs necessary to administer, audit, and collect the 
tax.  By July 1, 1993, the commissioner of revenue shall provide 
to the governing body of the county an estimate of these costs. 
    Subd. 7.  [EFFECTIVE DATE.] This section is effective the 
day after compliance by the governing body of Cook county with 
Minnesota Statutes, section 645.021, subdivision 3. 
    Sec. 46.  [CITY OF ST. PAUL; SALES TAX AUTHORIZED.] 
    Subdivision 1.  [TAX MAY BE IMPOSED.] Notwithstanding 
Minnesota Statutes, section 477A.016, or any other contrary 
provision of law, ordinance, or city charter, the city of St. 
Paul may, by resolution, impose an additional sales tax of up to 
one-half of one percent on sales transactions taxable pursuant 
to Minnesota Statutes, chapter 297A, that occur within the city. 
    Subd. 2.  [USE OF REVENUES.] Revenues received from the tax 
authorized by subdivision 1 may only be used by the city to pay 
the cost of collecting the tax, and to pay for the following 
projects or to secure or pay any principal, premium, or interest 
on bonds issued in accordance with subdivision 3 for the 
following projects.  
    (a) To pay all or a portion of the capital expenses of 
construction, equipment and acquisition costs for the expansion 
and remodeling of the St. Paul Civic Center complex. 
    (b) The remainder of the funds must be spent for capital 
projects to further residential, cultural, commercial, and 
economic development in both downtown St. Paul and St. Paul 
neighborhoods. 
    By January 15 of each odd-numbered year, the mayor and the 
city council must report to the legislature on the use of sales 
tax revenues during the preceding two-year period. 
    Subd. 3.  [BONDS.] The city may issue general obligation 
bonds of the city to finance all or a portion of the cost for 
projects authorized in subdivision 2, paragraph (a).  The debt 
represented by the bonds shall not be included in computing any 
debt limitations applicable to the city.  The bonds may be paid 
from or secured by any funds available to the city, including 
the tax authorized under subdivision 1.  The bonds may be issued 
in one or more series and sold without election on the question 
of issuance of the bonds or a property tax to pay them.  Except 
as otherwise provided in this section, the bonds must be issued, 
sold, and secured in the manner provided in Minnesota Statutes, 
chapter 475.  The aggregate principal amount of bonds issued 
under this subdivision may not exceed $65 million.  
    Subd. 4.  [ENFORCEMENT; COLLECTION.] A sales tax imposed 
under subdivision 1 may be reported and paid to the commissioner 
of revenue with the state sales tax, and be subject to the same 
penalties, interest, and enforcement provisions imposed under 
Minnesota Statutes, chapters 289A and 297A.  If the commissioner 
of revenue enters into appropriate agreements with the city to 
provide for collection of these taxes by the state on behalf of 
the city, the commissioner shall charge the city a reasonable 
fee for its collection from the proceeds of any taxes to ensure 
that no state funds are expended for the collection of these 
taxes.  The proceeds of the tax, less the cost of collection, 
shall be remitted monthly to the city and the city shall deposit 
such sums into a dedicated fund.  By July 1, 1993, the 
commissioner of revenue shall provide the city an estimate of 
the cost of collection.  
    Subd. 5.  [EXPIRATION OF TAXING AUTHORITY.] The authority 
granted by subdivision 1 to the city to impose a sales tax shall 
expire when the principal and interest on any bonds or other 
obligations issued to finance projects authorized in subdivision 
2, paragraph (a) have been paid or at an earlier time as the 
city shall, by ordinance, determine.  Any funds remaining after 
completion of projects approved under subdivision 2, paragraph 
(a) and retirement or redemption of any bonds or other 
obligations may be placed in the general fund of the city.  
    Subd. 6.  [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 
effective the day following final enactment, and after 
compliance by the governing body of the city of St. Paul with 
Minnesota Statutes, section 645.021, subdivision 3, with respect 
to that section.  If the St. Paul city council intends to 
exercise the authority provided by this section, it shall pass a 
resolution stating the fact before July 1, 1993. 
    Sec. 47.  [CITY OF GARRISON; SALES TAX.] 
    Subdivision 1.  [SALES TAX AUTHORIZED.] Notwithstanding 
Minnesota Statutes, section 477A.016, or any other contrary 
provision of law, ordinance, or city charter, the city of 
Garrison may, by ordinance, impose an additional sales tax of up 
to one percent on sales transactions taxable pursuant to 
Minnesota Statutes, chapter 297A, that occur within the city. 
    Subd. 2.  [USE OF REVENUES.] Revenues received from taxes 
authorized under subdivision 1 must be dedicated by the city to 
pay the cost of collecting the tax and to pay all or part of the 
expenses of the construction of a sewer system in the city, 
including payment of principal and interest on loans received by 
the city to construct the sewer system. 
    Subd. 3.  [ENFORCEMENT; COLLECTION; AND ADMINISTRATION OF 
TAXES.] (a) The city may provide for collection and enforcement 
of the tax by ordinance or the city may enter into an agreement 
with the commissioner of revenue, providing for collection of 
the tax. 
    (b) If the city enters an agreement with the commissioner 
of revenue for collection of the tax, the sales tax imposed 
under this section must be reported and paid to the commissioner 
of revenue with the state sales taxes, and be subject to the 
same penalties, interest, and enforcement provisions.  The 
proceeds of the tax, less refunds and a proportionate share of 
the cost of collection, shall be remitted at least quarterly to 
the city.  The commissioner shall deduct from the proceeds 
remitted an amount that equals the indirect statewide cost as 
well as the direct and indirect department costs necessary to 
administer, audit, and collect the tax. 
    Subd. 4.  [EXPIRATION OF TAXING AUTHORITY.] The authority 
granted by this section to the city of Garrison to impose a 
sales tax expires when the principal and interest on any bonds 
or obligations issued to finance the construction of the sewer 
system have been paid, or at an earlier time as the city shall, 
by resolution, determine.  Any funds remaining after completion 
of the improvements and retirement or redemption of the bonds 
may be placed in the general fund of the city. 
    Subd. 5.  [REFERENDUM.] The city may impose the tax under 
this section only after approval by the voters in a referendum 
held at a special or general election in the city. 
    Subd. 6.  [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 
effective the day after final enactment, upon compliance with 
Minnesota Statutes, section 645.021, subdivision 3, by the city 
of Garrison. 
     Sec. 48.  [CHARITABLE GOLF TOURNAMENTS.] 
     The gross receipts from the sale or use of tickets or 
admissions to a golf tournament held in Minnesota are exempt if 
the beneficiary of the tournament's net proceeds qualifies as a 
tax-exempt organization under section 501(c)(3) of the Internal 
Revenue Code. 
    Sec. 49.  [ADVISORY COUNCIL; SALES TAX ON CAPITAL 
EQUIPMENT.] 
    Subdivision 1.  [CREATION; MEMBERSHIP.] (a) A state 
advisory council is established to study the sales tax exemption 
for capital equipment under Minnesota Statutes 1992, sections 
297A.01, subdivision 16, and 297A.25, subdivision 42, and to 
make recommendations to the 1994 legislature.  The study shall 
be completed and findings reported to the legislature by 
February 1, 1994. 
    (b) The advisory council consists of 15 members who serve 
at the pleasure of the appointing authority as follows: 
    (1) six legislators; three members of the senate, including 
one member of the minority party, appointed by the subcommittee 
on committees of the committee on rules and administration and 
three members of the house of representatives, including one 
member of the minority party, appointed by the speaker; 
    (2) the commissioner of revenue or the commissioner's 
designee; and 
    (3) eight members of the public; two appointed by the 
subcommittee on committees of the committee on rules and 
administration of the senate, two appointed by the speaker of 
the house, and four appointed by the governor. 
    Subd. 2.  [SCOPE OF THE STUDY.] (a) In preparing the study, 
the advisory council shall examine, at least, the following:  
    (1) an overview of the purpose, intent, and application of 
the provisions of the present exemption, including the 
department of revenue's experience in interpreting and 
administering the provisions and the impact of the exemption on 
state tax collections; 
    (2) appropriate tax policy goals for the exemption of 
capital equipment from the sales tax; 
    (3) the effect of the exemption in encouraging new 
investment, increases in economic activity, and creation of new 
jobs in Minnesota or other appropriate economic development 
goals; 
    (4) analyses of alternative versions of the exemption, 
either expanding or narrowing it and specifically including the 
expansions contained in the administrative law judge's report, 
that will further the tax policy and economic development goals 
developed under clauses (2) and (3).  In analyzing alternatives, 
the advisory council must consider alternatives that expand the 
exemption and offset the reduction in state and local sales tax 
revenues by expanding the sales tax base to include final 
consumption items that are now exempt from taxation. 
    (b) The advisory council's report to the legislature must 
include recommendations for modifying the exemption in light of 
the tax policy and economic development goals.  The 
recommendations must not provide for increasing or decreasing 
state revenues relative to the revenue department's estimates of 
the effect of applying the department's interpretations of 
present law.  If the report recommends expanding the exemption, 
it must include recommendations to expand the tax base to offset 
the resulting loss of state and local revenues. 
    Subd. 3.  [STAFF.] The department of revenue and 
legislative staff shall provide administrative and staff 
assistance when requested by the advisory council. 
    Subd. 4.  [COOPERATION BY OTHER AGENCIES.] The 
commissioners of the department of trade and economic 
development, the department of labor and industry, the 
department of jobs and training, and the pollution control 
agency shall, upon request by the advisory council, provide data 
or other information that is collected or possessed by their 
agencies and that is necessary or useful in conducting the study 
and preparing the report required by this section. 
     Sec. 50.  [REPEALER.] 
     Minnesota Statutes 1992, section 115B.24, subdivision 10, 
is repealed. 
    Sec. 51.  [EFFECTIVE DATE.] 
    Sections 1 to 12, 22, 31, 32, the part of section 34 
exempting certain chore and homemaking services, 44 and 49 are 
effective the day following final enactment. 
    Section 13 is effective for taxes due on or after July 1, 
1993. 
    Section 14 is effective for fees due on or after July 1, 
1993. 
    Section 15 is effective for refund claims submitted on or 
after July 1, 1993. 
    Sections 16, 26 to 29, 36 to 39, and 43 are effective July 
1, 1993. 
    Sections 17 and 20 are effective July 1, 1993, for 
deliveries of rerefined waste oil on and after that date. 
    Sections 23 and 24 are effective the day following final 
enactment and apply to all open tax years. 
    Section 25 is effective for claims for refund filed after 
May 5, 1993, except that the extension of the exemption for 
capital equipment used to produce an on-line computerized data 
retrieval system and to replacement equipment used in the 
production of taconite is effective for sales after June 30, 
1993. 
    Section 30 is effective for sales of 900 information 
services made after June 30, 1993. 
    Except as otherwise provided, sections 34 and 35 are 
effective for sales made after June 30, 1993.  The part of 
section 34 exempting sales of machinery and equipment for solid 
waste disposal and collection is effective for sales made after 
May 31, 1992. 
    Section 40 is effective for pollution equipment installed 
after June 30, 1993. 
    Sections 41 and 42 are effective for reports due after July 
1, 1993. 
    Section 48 is effective for sales or uses of tickets or 
admissions occurring after December 31, 1992, and before July 1, 
1993. 

                               ARTICLE 10
COLLECTIONS AND COMPLIANCE 
    Section 1.  Minnesota Statutes 1992, section 60A.15, 
subdivision 2a, is amended to read: 
    Subd. 2a.  [PROCEDURE FOR FILING AND ADJUSTMENT OF 
STATEMENTS AND TAXES.] (a) Every insurer required to pay a 
premium tax in this state shall make and file a statement of 
estimated premium taxes for the period covered by the 
installment tax payment.  Such the installment tax payment.  
Such statement shall be in the form prescribed by the 
commissioner of revenue. 
    (b) On or before March 1, annually every insurer subject to 
taxation under this section shall make an annual return for the 
preceding calendar year setting forth such information as the 
commissioner of revenue may reasonably require on forms 
prescribed by the commissioner. 
    (c) On March 1, the insurer shall pay any additional amount 
due for the preceding calendar year; if there has been an 
overpayment, such overpayment may be credited without interest 
on the estimated tax due April 15. 
    (d) If unpaid by this date, penalties and interest as 
provided in section 290.53 289A.60, subdivision 1, as it relates 
to withholding and sales or use taxes, shall be imposed.  
    Sec. 2.  Minnesota Statutes 1992, section 60A.15, 
subdivision 9a, is amended to read: 
    Subd. 9a.  [FAILURE TO FILE; PENALTIES AND INTEREST.] In 
case of any failure to make and file a return as required by 
this chapter within the time prescribed by law or prescribed by 
the commissioner of revenue in pursuance of law there shall be 
added to the tax penalties and interest as provided in section 
289A.60, subdivision 2, as it relates to withholding and sales 
or use taxes.  
    Sec. 3.  Minnesota Statutes 1992, section 60A.15, is 
amended by adding a subdivision to read: 
    Subd. 9e.  [PENALTY FOR REPEATED FAILURES TO FILE RETURNS 
OR PAY TAXES.] If there is a pattern by a person of repeated 
failures to timely file returns or timely pay taxes, and written 
notice is given that a penalty will be imposed if such failures 
continue, a penalty of 25 percent of the amount of tax not 
timely paid as a result of each such subsequent failure is added 
to the tax.  The penalty can be abated under the abatement 
authority in section 270.07, subdivisions 1, paragraph (e), and 
6.  
    Sec. 4.  Minnesota Statutes 1992, section 60A.198, 
subdivision 3, is amended to read: 
    Subd. 3.  [PROCEDURE FOR OBTAINING LICENSE.] A person 
licensed as an agent in this state pursuant to other law may 
obtain a surplus lines license by doing the following:  
    (a) filing an application in the form and with the 
information the commissioner may reasonably require to determine 
the ability of the applicant to act in accordance with sections 
60A.195 to 60A.209; 
    (b) maintaining an agent's license in this state; 
    (c) delivering to the commissioner a financial guarantee 
bond from a surety acceptable to the commissioner for the 
greater of the following:  
    (1) $5,000; or 
    (2) the largest semiannual surplus lines premium tax 
liability incurred by the applicant in the immediately preceding 
five years; and 
    (d) agreeing to file with the commissioner of revenue no 
later than February 15 and August 15 annually, a sworn statement 
of the charges for insurance procured or placed and the amounts 
returned on the insurance canceled under the license for the 
preceding six-month period ending December 31 and June 30 
respectively, and at the time of the filing of this statement, 
paying the commissioner a tax on premiums equal to three percent 
of the total written premiums less cancellations; and 
    (e) annually paying a fee as prescribed by section 60A.14, 
subdivision 1, paragraph (c), clause (10); and 
    (f) paying penalties imposed under section 289A.60, 
subdivision 1, as it relates to withholding and sales or use 
taxes, if the tax due under clause (d) is not timely paid. 
    Sec. 5.  Minnesota Statutes 1992, section 60A.199, 
subdivision 4, is amended to read: 
    Subd. 4.  [FAILURE TO FILE; PENALTIES AND INTEREST.] In 
case of any failure to make and file a return as required by 
this chapter within the time prescribed by law or prescribed by 
the commissioner in pursuance of law there shall be added to the 
tax penalties and interest as provided in section 289A.60, 
subdivision 2, as it relates to withholding and sales or use 
taxes.  
    Sec. 6.  Minnesota Statutes 1992, section 60A.199, is 
amended by adding a subdivision to read: 
    Subd. 6a.  [PENALTY FOR REPEATED FAILURES TO FILE RETURNS 
OR PAY TAXES.] If there is a pattern by a person of repeated 
failures to timely file returns or timely pay taxes, and written 
notice is given that a penalty will be imposed if such failures 
continue, a penalty of 25 percent of the amount of tax not 
timely paid as a result of each such subsequent failure is added 
to the tax.  The penalty can be abated under the abatement 
authority in section 270.07, subdivisions 1, paragraph (e), and 
6. 
    Sec. 7.  Minnesota Statutes 1992, section 270.06, is 
amended to read: 
    270.06 [POWERS AND DUTIES.] 
    The commissioner of revenue shall: 
    (1) have and exercise general supervision over the 
administration of the assessment and taxation laws of the state, 
over assessors, town, county, and city boards of review and 
equalization, and all other assessing officers in the 
performance of their duties, to the end that all assessments of 
property be made relatively just and equal in compliance with 
the laws of the state; 
     (2) confer with, advise, and give the necessary 
instructions and directions to local assessors and local boards 
of review throughout the state as to their duties under the laws 
of the state; 
     (3) direct proceedings, actions, and prosecutions to be 
instituted to enforce the laws relating to the liability and 
punishment of public officers and officers and agents of 
corporations for failure or negligence to comply with the 
provisions of the laws of this state governing returns of 
assessment and taxation of property, and cause complaints to be 
made against local assessors, members of boards of equalization, 
members of boards of review, or any other assessing or taxing 
officer, to the proper authority, for their removal from office 
for misconduct or negligence of duty; 
     (4) require county attorneys to assist in the commencement 
of prosecutions in actions or proceedings for removal, 
forfeiture and punishment for violation of the laws of this 
state in respect to the assessment and taxation of property in 
their respective districts or counties; 
    (5) require town, city, county, and other public officers 
to report information as to the assessment of property, 
collection of taxes received from licenses and other sources, 
and such other information as may be needful in the work of the 
department of revenue, in such form and upon such blanks as the 
commissioner may prescribe; 
    (6) require individuals, copartnerships, companies, 
associations, and corporations to furnish information concerning 
their capital, funded or other debt, current assets and 
liabilities, earnings, operating expenses, taxes, as well as all 
other statements now required by law for taxation purposes; 
    (7) summon subpoena witnesses, at a time and place 
reasonable under the circumstances, to appear and give 
testimony, and to produce books, records, papers and 
documents for inspection and copying relating to any tax matter 
which the commissioner may have authority to investigate or 
determine. Provided, that any summons; 
     (8) issue a subpoena which does not identify the person or 
persons with respect to whose tax liability the summons subpoena 
is issued may be served, but only if (a) the summons subpoena 
relates to the investigation of a particular person or 
ascertainable group or class of persons, (b) there is a 
reasonable basis for believing that such person or group or 
class of persons may fail or may have failed to comply with 
any tax law administered by the commissioner, (c) the 
information sought to be obtained from the examination of the 
records (and the identity of the person or persons with respect 
to whose liability the summons subpoena is issued) is not 
readily available from other sources, (d) the summons subpoena 
is clear and specific as to the information sought to be 
obtained, and (e) the information sought to be obtained is 
limited solely to the scope of the investigation.  Provided 
further that the party served with a summons subpoena which does 
not identify the person or persons with respect to whose tax 
liability the summons subpoena is issued shall have the right, 
within 20 days after service of the summons subpoena, to 
petition the district court for the judicial district in which 
lies the county in which that party is located for a 
determination as to whether the commissioner of revenue has 
complied with all the requirements in (a) to (e), and thus, 
whether the summons subpoena is enforceable.  If no such 
petition is made by the party served within the time prescribed, 
the summons subpoena shall have the force and effect of a court 
order; 
    (8) (9) cause the deposition of witnesses residing within 
or without the state, or absent therefrom, to be taken, upon 
notice to the interested party, if any, in like manner that 
depositions of witnesses are taken in civil actions in the 
district court, in any matter which the commissioner may have 
authority to investigate or determine; 
    (9) (10) investigate the tax laws of other states and 
countries and to formulate and submit to the legislature such 
legislation as the commissioner may deem expedient to prevent 
evasions of assessment and taxing laws, and secure just and 
equal taxation and improvement in the system of assessment and 
taxation in this state; 
    (10) (11) consult and confer with the governor upon the 
subject of taxation, the administration of the laws in regard 
thereto, and the progress of the work of the department of 
revenue, and furnish the governor, from time to time, such 
assistance and information as the governor may require relating 
to tax matters; 
    (11) (12) transmit to the governor, on or before the third 
Monday in December of each even-numbered year, and to each 
member of the legislature, on or before November 15 of each 
even-numbered year, the report of the department of revenue for 
the preceding years, showing all the taxable property in the 
state and the value of the same, in tabulated form; 
    (12) (13) inquire into the methods of assessment and 
taxation and ascertain whether the assessors faithfully 
discharge their duties, particularly as to their compliance with 
the laws requiring the assessment of all property not exempt 
from taxation; 
    (13) (14) administer and enforce the assessment and 
collection of state taxes and, from time to time, make, publish, 
and distribute rules for the administration and enforcement of 
state tax laws.  The rules have the force of law; 
    (14) (15) prepare blank forms for the returns required by 
state tax law and distribute them throughout the state, 
furnishing them subject to charge on application; 
    (15) (16) prescribe rules governing the qualification and 
practice of agents, attorneys, or other persons representing 
taxpayers before the commissioner.  The rules may require that 
those persons, agents, and attorneys show that they are of good 
character and in good repute, have the necessary qualifications 
to give taxpayers valuable services, and are otherwise competent 
to advise and assist taxpayers in the presentation of their case 
before being recognized as representatives of taxpayers.  After 
due notice and opportunity for hearing, the commissioner may 
suspend and disbar from further practice before the commissioner 
any person, agent, or attorney who is shown to be incompetent or 
disreputable, who refuses to comply with the rules, or who with 
intent to defraud, willfully or knowingly deceives, misleads, or 
threatens a taxpayer or prospective taxpayer, by words, 
circular, letter, or by advertisement.  This clause does not 
curtail the rights of individuals to appear in their own behalf 
or partners or corporations' officers to appear in behalf of 
their respective partnerships or corporations; 
    (16) (17) appoint agents as the commissioner considers 
necessary to make examinations and determinations.  The agents 
have the rights and powers conferred on the commissioner 
to subpoena, examine, and copy books, records, papers, or 
memoranda, subpoena witnesses, administer oaths and 
affirmations, and take testimony.  In addition to administrative 
subpoenas of the commissioner and the agents, upon demand of the 
commissioner or an agent, the clerk or court administrator of 
any district court shall issue a subpoena for the attendance of 
a witness or the production of books, papers, records, or 
memoranda before the agent for inspection and copying.  The 
commissioner may also issue subpoenas.  Disobedience of 
subpoenas issued under this chapter a court administrator's 
subpoena shall be punished by the district court of the district 
in which the subpoena is issued, or in the case of a subpoena 
issued by the commissioner or an agent, by the district court of 
the district in which the party served with the subpoena is 
located, in the same manner as contempt of the district court; 
    (17) (18) appoint and employ additional help, purchase 
supplies or materials, or incur other expenditures in the 
enforcement of state tax laws as considered necessary.  The 
salaries of all agents and employees provided for in this 
chapter shall be fixed by the appointing authority, subject to 
the approval of the commissioner of administration; 
    (18) (19) execute and administer any agreement with the 
secretary of the treasury of the United States or a 
representative of another state regarding the exchange of 
information and administration of the tax laws; 
    (19) (20) administer and enforce the provisions of sections 
325D.30 to 325D.42, the Minnesota unfair cigarette sales act; 
    (20) (21) authorize the use of unmarked motor vehicles to 
conduct seizures or criminal investigations pursuant to the 
commissioner's authority; and 
    (21) (22) exercise other powers and perform other duties 
required of or imposed upon the commissioner of revenue by law.  
    Sec. 8.  Minnesota Statutes 1992, section 270.70, 
subdivision 1, is amended to read: 
    Subdivision 1.  [AUTHORITY OF COMMISSIONER.] If any tax 
payable to the commissioner of revenue or to the department of 
revenue is not paid when due, such tax may be collected by the 
commissioner of revenue within five years after the date of 
assessment of the tax, or if a lien has been filed, during the 
period the lien is enforceable, or if the tax judgment has been 
filed, within the statutory period of enforcement of a valid tax 
judgment, by a levy upon all property and rights to property, 
including any property in the possession of law enforcement 
officials, of the person liable for the payment or collection of 
such tax (except that which is exempt from execution pursuant to 
section 550.37 and amounts received under United States Code, 
title 29, chapter 19, as amended through December 31, 1989) or 
property on which there is a lien provided in section 270.69.  
For this purpose, the term "tax" shall include any penalty, 
interest, and costs properly payable.  The term "levy" includes 
the power of distraint and seizure by any means; provided, no 
entry can be made upon the business premises or residence of a 
taxpayer in order to seize property without first obtaining a 
writ of entry listing the property to be seized and signed by a 
judge of the district court of the district in which the 
business premises or residence is located. 
    Sec. 9.  [270.7001] [CONTINUOUS LEVY.] 
    Subdivision 1.  [AUTHORITY.] The commissioner may, within 
five years after the date of assessment of the tax, or if a lien 
has been filed under section 270.69, within the statutory period 
for enforcement of the lien, give notice to a person, officer, 
or political subdivision or agency of the state to withhold the 
amount of any tax, interest, or penalties due from a taxpayer, 
or the amount due from an employer or person who has failed to 
withhold and transmit amounts due from any payments to the 
taxpayer, employer, or person.  The amounts withheld shall be 
transmitted to the commissioner at the times the commissioner 
designates. 
    Subd. 2.  [LEVY CONTINUOUS.] The levy made under 
subdivision 1 is continuous from the date the notice is received 
until (1) the amount due stated on the notice has been withheld 
or (2) the notice has been released by the commissioner under 
section 270.709, whichever occurs first. 
    Subd. 3.  [AMOUNT TO BE WITHHELD.] The amount required to 
be withheld under this section is the least of: 
    (1) the amount stated on the notice; 
    (2) if the taxpayer, employer, or person is not a natural 
person, 100 percent of the payment; 
    (3) if the taxpayer, employer, or person is an individual, 
25 percent of the payment. 
    Subd. 4.  [PAYMENTS COVERED.] For purposes of this section, 
the term payments does not include wages as defined in section 
290.92 or funds in a deposit account as defined in section 
336.9-105.  The term payments does include the following: 
    (1) payments due for services of independent contractors, 
dividends, rents, royalties, residuals, patent rights, and 
mineral or other natural resource rights; 
    (2) payments or credits under written or oral contracts for 
services or sales whether denominated as wages, salary, 
commission, bonus, or otherwise, if the payments are not covered 
by section 290.92, subdivision 23; and 
    (3) any other periodic payments or credits resulting from 
an enforceable obligation to the taxpayer, employer, or person. 
    Subd. 5.  [DETERMINATION OF STATUS; EFFECT.] A 
determination of a person's status as an independent contractor 
under this section does not affect the determination of the 
person's status for the purposes of any other law or rule. 
    Sec. 10.  [270.78] [PENALTY FOR FAILURE TO MAKE PAYMENT BY 
ELECTRONIC FUNDS TRANSFER.] 
    In addition to other applicable penalties imposed by law, 
after notification from the commissioner of revenue to the 
taxpayer that payments for a tax administered by the 
commissioner are required to be made by means of electronic 
funds transfer, and the payments are remitted by some other 
means, there is a penalty in the amount of five percent of each 
payment that should have been remitted electronically.  The 
penalty can be abated under the abatement procedures prescribed 
in section 270.07, subdivision 6, if the failure to remit the 
payment electronically is due to reasonable cause. 
    Sec. 11.  Minnesota Statutes 1992, section 276.02, is 
amended to read: 
    276.02 [TREASURER TO BE COLLECTOR.] 
    The county treasurer shall collect all taxes extended on 
the tax lists of the county and the fines, forfeitures, or 
penalties received by any person or officer for the use of the 
county.  The treasurer shall collect the taxes according to law 
and credit them to the proper funds.  This section does not 
apply to fines and penalties accruing to municipal corporations 
for the violation of their ordinances that are recoverable 
before a city justice.  The county board may by resolution 
authorize the treasurer to impose a charge for any dishonored 
checks. 
    The county board may, by resolution, authorize the 
treasurer and/or other designees to accept payments of real 
property taxes by credit card provided that a fee is charged for 
its use.  The fee charged must be commensurate with the costs 
assessed by the card issuer.  If a credit card transaction under 
this section is subsequently voided or otherwise reversed, the 
lien of real property taxes under section 272.31 is revived and 
attaches in the manner and time provided in that section as 
though the credit card transaction had never occurred, and the 
voided or reversed credit card transaction shall not impair the 
right of a lienholder under section 272.31 to enforce the lien 
in its favor. 
    Sec. 12.  Minnesota Statutes 1992, section 279.37, 
subdivision 1a, is amended to read: 
    Subd. 1a.  The delinquent taxes upon a parcel of property 
which was classified class 4c pursuant to section 273.13, 
subdivision 9, or for taxes assessed in 1986 and thereafter, 
classified class 3a, for the previous year's assessment and had 
a total market value of less than $100,000 $200,000 for that 
same assessment shall be eligible to be composed into a 
confession of judgment.  Property qualifying under this 
subdivision shall be subject to the same provisions as provided 
in this section except as herein provided. 
    (a) The down payment shall include all special assessments 
due in the current tax year, all delinquent special assessments, 
and 20 percent of the ad valorem tax, penalties, and interest 
accrued against the parcel.  The balance remaining shall be 
payable in four equal annual installments; and 
    (b) The amounts entered in judgment shall bear interest at 
the rate provided in section 279.03, subdivision 1a, commencing 
with the date the judgment is entered.  The interest rate is 
subject to change each year on the unpaid balance in the manner 
provided in section 279.03, subdivision 1a. 
    Sec. 13.  Minnesota Statutes 1992, section 289A.18, 
subdivision 4, is amended to read: 
    Subd. 4.  [SALES AND USE TAX RETURNS.] (a) Sales and use 
tax returns must be filed on or before the 20th day of the month 
following the close of the preceding reporting period, except 
that annual use tax returns provided for under section 289A.11, 
subdivision 1, must be filed by April 15 following the close of 
the calendar year.  In addition, on or before June 20 of a year, 
a retailer who has a May liability of $1,500 or more must file a 
return with the commissioner for one-half of the estimated June 
liability, in addition to filing a return for the May 
liability.  On or before August 20 of a year, the retailer must 
file a return showing the actual June liability.  
    (b) Returns filed by retailers required to remit 
liabilities by means of funds transfer under section 289A.20, 
subdivision 4, paragraph (d), are due on or before the 25th day 
of the month following the close of the preceding reporting 
period.  Returns filed under the second sentence of paragraph 
(a) by a retailer required to remit by means of funds transfer 
are due on June 25 The return for the May liability and 75 
percent of the estimated June liability is due on the date 
payment of the estimated June liability is due, and on or before 
August 25 of a year, the retailer must file a return showing the 
actual June liability. 
    (c) If a retailer has an average sales and use tax 
liability, including local sales and use taxes administered by 
the commissioner, equal to or less than $500 per month in any 
quarter of a calendar year, and has substantially complied with 
the tax laws during the preceding four calendar quarters, the 
retailer may request authorization to file and pay the taxes 
quarterly in subsequent calendar quarters.  The authorization 
remains in effect during the period in which the retailer's 
quarterly returns reflect sales and use tax liabilities of less 
than $1,500 and there is continued compliance with state tax 
laws. 
    (d) If a retailer has an average sales and use tax 
liability, including local sales and use taxes administered by 
the commissioner, equal to or less than $100 per month during a 
calendar year, and has substantially complied with the tax laws 
during that period, the retailer may request authorization to 
file and pay the taxes annually in subsequent years.  The 
authorization remains in effect during the period in which the 
retailer's annual returns reflect sales and use tax liabilities 
of less than $1,200 and there is continued compliance with state 
tax laws. 
    (e) The commissioner may also grant quarterly or annual 
filing and payment authorizations to retailers if the 
commissioner concludes that the retailers' future tax 
liabilities will be less than the monthly totals identified in 
paragraphs (c) and (d).  An authorization granted under this 
paragraph is subject to the same conditions as an authorization 
granted under paragraphs (c) and (d). 
    Sec. 14.  Minnesota Statutes 1992, section 289A.20, 
subdivision 2, is amended to read: 
    Subd. 2.  [WITHHOLDING FROM WAGES, ENTERTAINER WITHHOLDING, 
WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, AND 
WITHHOLDING BY PARTNERSHIPS AND SMALL BUSINESS CORPORATIONS.] 
(a) A tax required to be deducted and withheld during the 
quarterly period must be paid on or before the last day of the 
month following the close of the quarterly period, unless an 
earlier time for payment is provided.  A tax required to be 
deducted and withheld from compensation of an entertainer and 
from a payment to an out-of-state contractor must be paid on or 
before the date the return for such tax must be filed under 
section 289A.18, subdivision 2.  Taxes required to be deducted 
and withheld by partnerships and S corporations must be paid on 
or before the date the return must be filed under section 
289A.18, subdivision 2. 
    (b)(1) Unless clause (2) applies, if during any calendar 
month, other than the last month of the calendar quarter, the 
aggregate amount of the tax withheld during that quarter under 
section 290.92, subdivision 2a or 3, or 290.923, subdivision 2, 
exceeds $500, the employer shall deposit the aggregate amount 
with the commissioner within 15 days after the close of the 
calendar month. 
      (2) If at the close of any eighth-monthly period the 
aggregate amount of undeposited taxes is $3,000 or more, the 
employer, or person withholding tax under section 290.92, 
subdivision 2a or 3, or 290.923, subdivision 2, shall deposit 
the undeposited taxes with the commissioner within three banking 
days after the close of the eighth-monthly period.  For purposes 
of this clause, the term "eighth-monthly period" means the first 
three days of a calendar month, the fourth day through the 
seventh day of a calendar month, the eighth day through the 11th 
day of a calendar month, the 12th day through the 15th day of a 
calendar month, the 16th day through the 19th day of a calendar 
month, the 20th day through the 22nd day of a calendar month, 
the 23rd day through the 25th day of a calendar month, or the 
part of a calendar month following the 25th day of the month. 
     (c) The commissioner may prescribe by rule other return 
periods or deposit requirements.  In prescribing the reporting 
period, the commissioner may classify payors according to the 
amount of their tax liability and may adopt an appropriate 
reporting period for the class that the commissioner judges to 
be consistent with efficient tax collection.  In no event will 
the duration of the reporting period be more than one year. 
     (d) If less than the correct amount of tax is paid to the 
commissioner, proper adjustments with respect to both the tax 
and the amount to be deducted must be made, without interest, in 
the manner and at the times the commissioner prescribes.  If the 
underpayment cannot be adjusted, the amount of the underpayment 
will be assessed and collected in the manner and at the times 
the commissioner prescribes. 
      (e) If the aggregate amount of the tax withheld during a 
fiscal year ending June 30 under section 290.92, subdivision 2a 
or 3, is equal to or exceeds $240,000 $120,000, the employer 
must remit each required deposit in the subsequent calendar year 
by means of a funds transfer as defined in section 336.4A-104, 
paragraph (a).  The funds transfer payment date, as defined in 
section 336.4A-401, must be on or before the date the deposit is 
due.  If the date the deposit is due is not a funds transfer 
business day, as defined in section 336.4A-105, paragraph (a), 
clause (4), the payment date must be on or before the funds 
transfer business day next following the date the deposit is due.
    Sec. 15.  Minnesota Statutes 1992, section 289A.20, 
subdivision 4, is amended to read: 
    Subd. 4.  [SALES AND USE TAX.] (a) The taxes imposed by 
chapter 297A are due and payable to the commissioner monthly on 
or before the 20th day of the month following the month in which 
the taxable event occurred or following another reporting period 
as the commissioner prescribes, except that use taxes due on an 
annual use tax return as provided under section 289A.11, 
subdivision 1, are payable by April 15 following the close of 
the calendar year. 
    (b) A vendor having a liability of $1,500 $120,000 or more 
in May of during a fiscal year ending June 30 must remit the 
June liability for the next year in the following manner: 
    (1) On or Two business days before June 20 30 of the year, 
the vendor must remit the actual May liability and one-half 75 
percent of the estimated June liability to the commissioner.  
    (2) On or before August 20 14 of the year, the vendor must 
pay any additional amount of tax not remitted in June. 
    (3) If the vendor is required to remit by means of funds 
transfer as provided in paragraph (d), the vendor may remit the 
May liability as provided for in paragraph (e), but must remit 
one-half of the estimated June liability on or before June 14.  
The remaining amount of the June liability is due on August 14. 
    (c) When a retailer located outside of a city that imposes 
a local sales and use tax collects use tax to be remitted to 
that city, the retailer is not required to remit the tax until 
the amount collected reaches $10. 
    (d) A vendor having a liability of $240,000 $120,000 or 
more during a fiscal year ending June 30 must remit all 
liabilities in the subsequent calendar year by means of a funds 
transfer as defined in section 336.4A-104, paragraph (a).  The 
funds transfer payment date, as defined in section 336.4A-401, 
must be on or before the date the tax is due the 14th day of the 
month following the month in which the taxable event occurred, 
except for the one-half 75 percent of the estimated June 
liability, which is due with the May liability on two business 
days before June 14 30.  The remaining amount of the June 
liability is due on August 14.  If the date the tax is due is 
not a funds transfer business day, as defined in section 
336.4A-105, paragraph (a), clause (4), the payment date must be 
on or before the funds transfer business day next following the 
date the tax is due. 
    (e) If the vendor required to remit by electronic funds 
transfer as provided in paragraph (d) is unable due to 
reasonable cause to determine the actual sales and use tax due 
on or before the due date for payment, the vendor may remit an 
estimate of the tax owed using one of the following options: 
    (1) 100 percent of the tax reported on the previous month's 
sales and use tax return; 
     (2) 100 percent of the tax reported on the sales and use 
tax return for the same month in the previous calendar year; or 
     (3) 95 percent of the actual tax due. 
     Any additional amount of tax that is not remitted on or 
before the due date for payment, must be remitted with the 
return.  A vendor must notify the commissioner of the option 
that will be used to estimate the tax due, and must obtain 
approval from the commissioner to switch to another option.  If 
a vendor fails to remit the actual liability or does not remit 
using one of the estimate options by the due date for payment, 
the vendor must remit actual liability as provided in paragraph 
(d) in all subsequent periods.  This paragraph does not apply to 
the June sales and use liability. 
    Sec. 16.  Minnesota Statutes 1992, section 289A.36, 
subdivision 3, is amended to read: 
    Subd. 3.  [POWER TO COMPEL TESTIMONY.] In the 
administration of state tax law, the commissioner 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 for 
inspection and copying; 
    (2) examine under oath or affirmation any person regarding 
the business of any taxpayer concerning any relevant matter 
incident to the administration of state tax law.  The fees of 
witnesses required by the commissioner 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; and 
    (3) in addition to other remedies that may be 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 
have jurisdiction over the action and disobedience of an 
injunction issued under this clause will be punished as a 
contempt of district court. 
    Sec. 17.  Minnesota Statutes 1992, section 289A.36, 
subdivision 7, is amended to read: 
    Subd. 7.  [APPLICATION TO COURT FOR ENFORCEMENT OF 
SUBPOENA.] The commissioner 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 an order compelling the appearance of 
the subpoenaed witness or the production of the subpoenaed 
records.  If the subpoenaed party fails to comply with the order 
of the court, the party may be punished by the court as for 
contempt.  Disobedience of subpoenas issued under this section 
shall be punished by the district court of the district in which 
the party served with the subpoena is located, in the same 
manner as contempt of the district court.  
    Sec. 18.  Minnesota Statutes 1992, section 289A.40, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [INDIVIDUAL INCOME TAXES; REASONABLE CAUSE.] If 
the taxpayer establishes reasonable cause for failing to timely 
file the return required by section 289A.08, subdivision 1, 
files the required return within ten years of the date specified 
in section 289A.18, subdivision 1, and independently verifies 
that an overpayment has been made, the commissioner shall grant 
a refund claimed by the original return, notwithstanding the 
limitations of subdivision 1. 
    Sec. 19.  Minnesota Statutes 1992, section 289A.60, 
subdivision 1, is amended to read: 
    Subdivision 1.  [PENALTY FOR FAILURE TO PAY TAX.] If a 
tax other than a withholding or sales or use tax is not paid or 
amounts required to be withheld are not remitted within the time 
specified for payment, a penalty must be added to the amount 
required to be shown as tax.  The penalty is three percent of 
the tax not paid on or before the date specified for payment of 
the 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 a withholding or sales or use tax is not paid within the 
time specified for payment, a penalty must be added to the 
amount required to be shown as tax.  The penalty is five percent 
of the tax not paid on or before the date specified for payment 
of the tax if the failure is for not more than 30 days, with an 
additional penalty of 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 15 
percent in the aggregate.  
    Sec. 20.  Minnesota Statutes 1992, section 289A.60, 
subdivision 2, is amended to read: 
    Subd. 2.  [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If 
a taxpayer fails to make and file a return other than an income 
tax return of an individual, a withholding return, or sales or 
use tax 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 including any extensions 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, other than an income 
tax return of an individual, 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 not be less than 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.
    If a taxpayer fails to file an individual income tax return 
within six months after the date prescribed for filing of the 
return, a penalty of ten percent of the amount of tax not paid 
by the end of that six-month period is added to the tax.  
    If a taxpayer fails to file a withholding or sales or use 
tax return within the time prescribed, including an extension, a 
penalty of five percent of the amount of tax not timely paid is 
added to the tax.  
    Sec. 21.  Minnesota Statutes 1992, section 289A.60, is 
amended by adding a subdivision to read: 
    Subd. 5a.  [PENALTY FOR REPEATED FAILURES TO FILE RETURNS 
OR PAY TAXES.] If there is a pattern by a person of repeated 
failures to timely file withholding or sales or use tax returns 
or timely pay withholding or sales or use taxes, and written 
notice is given that a penalty will be imposed if such failures 
continue, a penalty of 25 percent of the amount of tax not 
timely paid as a result of each such subsequent failure is added 
to the tax.  The penalty can be abated under the abatement 
authority in section 270.07, subdivisions 1, paragraph (e), and 
6. 
    Sec. 22.  Minnesota Statutes 1992, section 289A.60, 
subdivision 15, is amended to read: 
    Subd. 15.  [ACCELERATED PAYMENT OF JUNE SALES TAX 
LIABILITY; PENALTY FOR UNDERPAYMENT.] If a vendor is required by 
law to submit an estimation of June sales tax liabilities and 
one-half 75 percent payment by a certain date, and the vendor 
fails to remit the balance due by the date required, the vendor 
shall pay a penalty equal to ten percent of the amount of actual 
June liability required to be paid in June less the amount 
remitted in June.  The penalty must not be imposed, however, if 
the amount remitted in June equals the lesser of:  (1) 45 70 
percent of the actual June liability, (2) 50 75 percent of the 
preceding May's liability, or (3) 50 75 percent of the average 
monthly liability for the previous calendar year. 
    Sec. 23.  Minnesota Statutes 1992, section 289A.60, is 
amended by adding a subdivision to read: 
    Subd. 21.  [PENALTY FOR FAILURE TO MAKE PAYMENT BY 
ELECTRONIC FUNDS TRANSFER.] In addition to other applicable 
penalties imposed by this section, after notification from the 
commissioner to the taxpayer that payments are required to be 
made by means of electronic funds transfer under section 
289A.20, subdivision 2, paragraph (e), or 4, paragraph (d), or 
289A.26, subdivision 2a, and the payments are remitted by some 
other means, there is a penalty in the amount of five percent of 
each payment that should have been remitted electronically.  The 
penalty can be abated under the abatement procedures prescribed 
in section 270.07, subdivision 6, if the failure to remit the 
payment electronically is due to reasonable cause. 
    Sec. 24.  Minnesota Statutes 1992, section 294.03, 
subdivision 1, is amended to read: 
    Subdivision 1.  If any company, joint stock association, 
copartnership, corporation, or individual required by law to pay 
taxes to the state on a gross earnings basis shall fail to pay 
such tax or gross earnings percentage within the time specified 
by law for the payment thereof, or within 30 days after final 
determination of an appeal to the Minnesota tax court relating 
thereto, there shall be added a specific penalty equal to ten 
five percent of the amount so remaining unpaid if the failure is 
for not more than 30 days, with an additional penalty of 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 15 percent in the aggregate.  
Such penalty shall be collected as part of said tax, and the 
amount of said tax not timely paid, together with said penalty, 
shall bear interest at the rate specified in section 270.75 from 
the time such tax should have been paid until paid. 
    Sec. 25.  Minnesota Statutes 1992, section 294.03, 
subdivision 2, is amended to read: 
    Subd. 2.  In case of any failure to make and file a return 
as required by this chapter within the time prescribed by law or 
prescribed by the commissioner in pursuance of law, unless it is 
shown that such failure is not due to willful neglect, there 
shall be added to the tax in lieu of the ten percent specific 
penalty provided in subdivision 1:  ten percent if the failure 
is for not more than 30 days with an additional five percent for 
each additional 30 days or fraction thereof during which such 
failure continues, not exceeding 25 percent in the aggregate a 
penalty of five percent of the amount of tax not timely paid.  
The amount so added to any tax shall be collected at the same 
time and in the same manner and as a part of the tax, and the 
amount of said tax together with the amount so added shall bear 
interest at the rate specified in section 270.75 from the time 
such tax should have been paid until paid unless the tax has 
been paid before the discovery of the neglect, in which case the 
amount so added shall be collected in the same manner as the tax.
    For purposes of this subdivision, the amount of any taxes 
required to be shown on the return shall be reduced by the 
amount of any part of the tax which is paid on or before the 
date prescribed for payment of the tax and by the amount of any 
credit against the tax which may be claimed upon the return. 
    Sec. 26.  Minnesota Statutes 1992, section 294.03, is 
amended by adding a subdivision to read: 
    Subd. 4.  If there is a pattern by a person of repeated 
failures to timely file returns or timely pay taxes, and written 
notice is given that a penalty will be imposed if such failures 
continue, a penalty of 25 percent of the amount of tax not 
timely paid as a result of each such subsequent failure is added 
to the tax.  The penalty can be abated under the abatement 
authority in section 270.07, subdivisions 1, paragraph (e), and 
6. 
    Sec. 27.  Minnesota Statutes 1992, section 296.14, 
subdivision 1, is amended to read: 
    Subdivision 1.  [CONTENTS; PAYMENT OF TAX; SHRINKAGE 
ALLOWANCE.] On or before the 23rd day of each month, every 
person who is required to pay gasoline tax or inspection fee on 
petroleum products and every distributor shall file in the 
office of the commissioner at St. Paul, Minnesota, a report in a 
manner approved by the commissioner showing the number of 
gallons of petroleum products received by the reporter during 
the preceding calendar month, and such other information as the 
commissioner may require.  The number of gallons of gasoline 
shall be reported in United States standard liquid gallons (231 
cubic inches), except that the commissioner may upon written 
application therefor and for cause shown permit the distributor 
to report the number of gallons of such gasoline as corrected to 
a 60 degree Fahrenheit temperature.  If such application is 
granted, all gasoline covered in such application and as allowed 
by the commissioner must continue to be reported by the 
distributor on the adjusted basis for a period of one year from 
the date of the granting of the application.  The number of 
gallons of petroleum products other than gasoline shall be 
reported as originally invoiced. 
     Each report shall show separately the number of gallons of 
aviation gasoline received by the reporter during such calendar 
month. 
     Each report shall be accompanied by remittance covering 
inspection fees on petroleum products and gasoline tax on 
gasoline received by the reporter during the preceding month; 
provided that in computing such tax a deduction of three percent 
of the quantity of gasoline received by a distributor shall be 
made for evaporation and loss; provided further that at the time 
of remittance the distributor shall submit satisfactory evidence 
that one-third of such three percent deduction shall have been 
credited or paid to dealers on quantities sold to them.  The 
report and remittance shall be deemed to have been filed as 
herein required if postmarked on or before the 23rd day of the 
month in which payable. 
    Each report shall contain a confession of judgment for the 
amount of the tax shown due thereon to the extent not timely 
paid.  
    If the aggregate remittances made during a fiscal year 
ending June 30 equal or exceed $240,000 $120,000, all 
remittances in the subsequent calendar year must be made by 
means of a funds transfer as defined in section 336.4A-104, 
paragraph (a).  The funds transfer payment date, as defined in 
section 336.4A-401, must be on or before the date the remittance 
is due.  If the date the remittance is due is not a funds 
transfer business day, as defined in section 336.4A-105, 
paragraph (a), clause (4), the payment date must be on or before 
the funds transfer business day next following the date the 
remittance is due. 
    Sec. 28.  Minnesota Statutes 1992, section 297.03, 
subdivision 6, is amended to read: 
    Subd. 6.  [TAX STAMPING MACHINES.] (a) The commissioner 
shall require any person licensed as a distributor to stamp 
packages with a heat-applied tax stamping machine, approved by 
the commissioner, which shall be provided by the distributor.  
The commissioner shall supervise and check the operation of the 
machines and shall provide for the payment of the tax on any 
package so stamped, subject to the discount provided in 
subdivision 5.  The commissioner may sell heat-applied stamps on 
a credit basis under conditions prescribed by the commissioner.  
The stamps shall be sold by the commissioner at a price which 
includes the tax after giving effect to the discount provided in 
subdivision 5.  The commissioner shall recover the actual costs 
of the stamps from the distributor.  A distributor having a 
liability of $240,000 $120,000 or more during a fiscal year 
ending June 30 must remit all liabilities purchased on a credit 
basis in the subsequent calendar year by means of a funds 
transfer as defined in section 336.4A-104, paragraph (a).  The 
funds transfer payment date, as defined in section 336.4A-401, 
must be on or before the date the tax is due.  If the date the 
tax is due is not a funds transfer business day, as defined in 
section 336.4A-105, paragraph (a), clause (4), the payment date 
must be on or before the funds transfer business day next 
following the date the tax is due.  
    (b) If the commissioner finds that a stamping machine is 
not affixing a legible stamp on the package, the commissioner 
may order the distributor to immediately cease the stamping 
process until the machine is functioning properly. 
     (c) The commissioner shall annually establish the maximum 
amount of heat applied stamps that may be purchased each month.  
Notwithstanding any other provisions of this chapter, the tax 
due on the return will be based upon actual heat applied stamps 
purchased during the reporting period. 
    Sec. 29.  Minnesota Statutes 1992, section 297.07, 
subdivision 1, is amended to read: 
    Subdivision 1.  [MONTHLY RETURN FILED WITH COMMISSIONER.] 
On or before the 18th day of each calendar month every 
distributor with a place of business in this state shall file a 
return with the commissioner showing the quantity of cigarettes 
manufactured or brought in from without the state or purchased 
during the preceding calendar month and the quantity of 
cigarettes sold or otherwise disposed of in this state and 
outside this state during that month.  Every licensed 
distributor outside this state shall in like manner file a 
return showing the quantity of cigarettes shipped or transported 
into this state during the preceding calendar month.  Returns 
shall be made upon forms furnished and prescribed by the 
commissioner and shall contain such other information as the 
commissioner may require.  The return shall be accompanied by a 
remittance for the full unpaid tax liability shown by it.  The 
return for the May liability and 75 percent of the estimated 
June liability is due on the date payment of the tax is due. 
    Sec. 30.  Minnesota Statutes 1992, section 297.07, 
subdivision 4, is amended to read: 
    Subd. 4.  [ACCELERATED TAX PAYMENT.] Every distributor 
having a liability of $1,500 $120,000 or more in May 1987 or in 
May of each subsequent during a fiscal year ending June 30, 
shall remit the June liability for the next year in the 
following manner required by this section.:  
    On or (a) Two business days before June 18, 1987, or June 
18 30 of each subsequent the year, the distributor shall remit 
the actual May liability and one-half 75 percent of the 
estimated June liability to the commissioner and file the return 
on a form prescribed by the commissioner.  
    (b) On or before July 18, 1987, or July August 18 of each 
subsequent the year, the distributor shall submit a return 
showing the actual June liability and paying any additional 
amount of tax not remitted in June.  A penalty is imposed equal 
to ten percent of the amount of June liability required to be 
paid in June less the amount remitted in June.  However, the 
penalty shall not be imposed if the amount remitted in June 
equals the lesser of (a) 45 70 percent of the actual June 
liability, or (b) 50 75 percent of the preceding May's liability.
    Sec. 31.  Minnesota Statutes 1992, section 297.35, 
subdivision 1, is amended to read: 
    Subdivision 1.  On or before the 18th day of each calendar 
month every distributor with a place of business in this state 
shall file a return with the commissioner showing the quantity 
and wholesale sales price of each tobacco product (1) brought, 
or caused to be brought, into this state for sale; and (2) made, 
manufactured, or fabricated in this state for sale in this 
state, during the preceding calendar month.  Every licensed 
distributor outside this state shall in like manner file a 
return showing the quantity and wholesale sales price of each 
tobacco product shipped or transported to retailers in this 
state to be sold by those retailers, during the preceding 
calendar month.  Returns shall be made upon forms furnished and 
prescribed by the commissioner and shall contain such other 
information as the commissioner may require.  Each return shall 
be accompanied by a remittance for the full tax liability shown 
therein, less 1.5 percent of such liability as compensation to 
reimburse the distributor for expenses incurred in the 
administration of sections 297.31 to 297.39.  The return for the 
May liability and 75 percent of the estimated June liability is 
due on the date payment of the tax is due. 
    A distributor having a liability of $240,000 $120,000 or 
more during a calendar year must remit all liabilities in the 
subsequent fiscal year ending June 30 by means of a funds 
transfer as defined in section 336.4A-104, paragraph (a).  The 
funds transfer payment date, as defined in section 336.4A-401, 
must be on or before the date the tax is due.  If the date the 
tax is due is not a funds transfer business day, as defined in 
section 336.4A-105, paragraph (a), clause (4), the payment date 
must be on or before the funds transfer business day next 
following the date the tax is due. 
    Sec. 32.  Minnesota Statutes 1992, section 297.35, 
subdivision 5, is amended to read: 
    Subd. 5.  Every distributor having a liability of 
$1,500 $120,000 or more in May 1987 or in May of each subsequent 
during a fiscal year ending June 30, shall remit the June 
liability for the next year in the following manner required by 
this section.: 
    On or (a) Two business days before June 18, 1987, or June 
18 30 of each subsequent the year, the distributor shall remit 
the actual May liability and one-half 75 percent of the 
estimated June liability to the commissioner and file the return 
on a form prescribed by the commissioner.  
    (b) On or before July 18, 1987, or July August 18 of each 
subsequent the year, the distributor shall submit a return 
showing the actual June liability and paying any additional 
amount of tax not remitted in June.  A penalty is imposed equal 
to ten percent of the amount of June liability required to be 
paid in June less the amount remitted in June.  However, the 
penalty is not imposed if the amount remitted in June equals the 
lesser of (a) (1) 45 70 percent of the actual June liability, 
or (b) (2) 50 75 percent of the preceding May's liability.  
    Sec. 33.  Minnesota Statutes 1992, section 297.43, 
subdivision 1, is amended to read: 
    Subdivision 1.  [PENALTY ON UNPAID TAX.] If a tax imposed 
by this chapter, or any part of it, is not paid within the time 
required for the payment, or an extension of time, or within 30 
days after final determination of an appeal to the tax court 
relating to it, there shall be added to the tax a penalty equal 
to three five percent of the amount remaining unpaid if the 
failure is for not more than 30 days, with an additional penalty 
of three five percent of the amount of tax remaining unpaid 
during each additional 30 days or fraction thereof, not 
exceeding 24 15 percent in the aggregate. 
    Sec. 34.  Minnesota Statutes 1992, section 297.43, 
subdivision 2, is amended to read: 
    Subd. 2.  [PENALTY FOR FAILURE TO FILE.] If a person fails 
to make and file a return within the time required under 
sections 297.07, 297.23, and 297.35, there shall be added to the 
tax three five 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 for each additional 30 days 
or fraction thereof during which such failure continues, not 
exceeding 23 percent in the aggregate.  The amount so added to 
any tax under this subdivision and subdivision 1 shall be 
collected at the same time and in the same manner and as a part 
of the tax and shall bear interest at the rate specified in 
section 270.75 from the time the tax should have been paid, 
unless the tax has been paid before the discovery of the 
negligence, in which case the amount so added shall be collected 
in the same manner as the tax. 
    In the case of a failure 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 shall not be less than the lesser of (i) 
$200; or (ii) 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.  
    Sec. 35.  Minnesota Statutes 1992, section 297.43, is 
amended by adding a subdivision to read: 
    Subd. 4a.  [PENALTY FOR REPEATED FAILURES TO FILE RETURNS 
OR PAY TAXES.] If there is a pattern by a person of repeated 
failures to timely file returns or timely pay taxes, and written 
notice is given that a penalty will be imposed if such failures 
continue, a penalty of 25 percent of the amount of tax not 
timely paid as a result of each such subsequent failure is added 
to the tax.  The penalty can be abated under the abatement 
authority in section 270.07, subdivisions 1, paragraph (e), and 
6.  
    Sec. 36.  Minnesota Statutes 1992, section 297C.03, 
subdivision 1, is amended to read: 
    Subdivision 1.  [MANNER AND TIME OF PAYMENT; FAILURE TO 
PAY.] The tax on wines and distilled spirits on which the excise 
tax has not been previously paid must be paid to the 
commissioner by persons liable for the tax on or before the 18th 
day of the month following the month in which the first sale is 
made in this state by a licensed manufacturer or wholesaler.  
Every person liable for the tax on wines or distilled spirits 
imposed by section 297C.02 must file with the commissioner on or 
before the 18th day of the month following first sale in this 
state by a licensed manufacturer or wholesaler a return in the 
form prescribed by the commissioner, and must keep records and 
render reports required by the commissioner.  The commissioner 
may certify to the commissioner of public safety any failure to 
pay taxes when due as a violation of a statute relating to the 
sale of intoxicating liquor for possible revocation or 
suspension of license.  The return for the May liability and 75 
percent of the estimated June liability is due on the date 
payment of the tax is due.  
    A person liable for an excise tax of $240,000 $120,000 or 
more during a fiscal year ending June 30 must remit all excise 
tax liabilities in the subsequent calendar year by means of a 
funds transfer as defined in section 336.4A-104, paragraph (a).  
The funds transfer payment date, as defined in section 
336.4A-401, must be on or before the date the excise tax is 
due.  If the date the excise tax is due is not a funds transfer 
business day, as defined in section 336.4A-105, paragraph (a), 
clause (4), the payment date must be on or before the funds 
transfer business day next following the date the excise tax is 
due. 
    Sec. 37.  Minnesota Statutes 1992, section 297C.04, is 
amended to read: 
    297C.04 [PAYMENT OF TAX; MALT LIQUOR.] 
    The commissioner may by rule provide a reporting method for 
paying and collecting the excise tax on fermented malt 
beverages.  The tax is imposed upon the first sale or 
importation made in this state by a licensed brewer or 
importer.  The rules must require reports to be filed with and 
the excise tax to be paid to the commissioner on or before the 
18th day of the month following the month in which the 
importation into or the first sale is made in this state, 
whichever first occurs.  The rules must also require payments in 
June of 1987 and subsequent years according to the provisions of 
section 297C.05, subdivision 2.  
    A distributor who has title to or possession of fermented 
malt beverages upon which the excise tax has not been paid and 
who knows that the tax has not been paid, shall file a return 
with the commissioner on or before the 18th day of the month 
following the month in which the distributor obtains title or 
possession of the fermented malt beverages.  The return must be 
made on a form furnished and prescribed by the commissioner, and 
must contain all information that the commissioner requires.  
The return must be accompanied by a remittance for the full 
unpaid liability shown on it.  The return for the May liability 
and 75 percent of the estimated June liability is due on the 
date payment of the tax is due. 
    A licensed brewer, importer, or distributor having an 
excise tax liability of $240,000 $120,000 or more during a 
fiscal year ending June 30 must remit all excise tax liabilities 
in the subsequent calendar year by means of a funds transfer as 
defined in section 336.4A-104, paragraph (a).  The funds 
transfer payment date, as defined in section 336.4A-401, must be 
on or before the date the excise tax is due.  If the date the 
excise tax is due is not a funds transfer business day, as 
defined in section 336.4A-105, paragraph (a), clause (4), the 
payment date must be on or before the funds transfer business 
day next following the date the excise tax is due. 
    Sec. 38.  Minnesota Statutes 1992, section 297C.05, 
subdivision 2, is amended to read: 
    Subd. 2.  [ACCELERATED TAX PAYMENT.] Every person liable 
for tax under this chapter having a liability of $1,500 $120,000 
or more in May 1987 or in May of each subsequent during a fiscal 
year ending June 30, shall remit the June liability for the next 
year in the following manner required by this section.: 
    On or (a) Two business days before June 18, 1987, or June 
18 30 of each subsequent the year, the taxpayer shall remit the 
actual May liability and one-half 75 percent of the estimated 
June liability to the commissioner and file the return on a form 
prescribed by the commissioner.  
    (b) On or before August 18, 1987, or August 18 of each 
subsequent the year, the taxpayer shall submit a return showing 
the actual June liability and paying any additional amount of 
tax not remitted in June.  A penalty is hereby imposed equal to 
ten percent of the amount of June liability required to be paid 
in June less the amount remitted in June.  However, the penalty 
shall not be imposed if the amount remitted in June equals the 
lesser of (a) (1) 45 70 percent of the actual June liability, 
or (b) (2) 50 75 percent of the preceding May's liability.  
    Sec. 39.  Minnesota Statutes 1992, section 297C.14, 
subdivision 1, is amended to read: 
    Subdivision 1.  [PENALTY ON UNPAID TAX.] If a tax imposed 
by this chapter, or any part of it, is not paid within the time 
required for the payment, or an extension of time, or within 30 
days after final determination of an appeal to the tax court 
relating to it, there shall be added to the tax a penalty equal 
to three five percent of the amount remaining unpaid if the 
failure is for not more than 30 days, with an additional penalty 
of three five percent of the amount of tax unpaid during each 
additional 30 days or fraction thereof, not exceeding 24 15 
percent in the aggregate. 
    Sec. 40.  Minnesota Statutes 1992, section 297C.14, 
subdivision 2, is amended to read: 
    Subd. 2.  [PENALTY FOR FAILURE TO FILE.] If a person fails 
to make and file a return within the time required by this 
chapter or an extension of time, there shall be added to the tax 
three five 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 for each additional 30 days or 
fraction thereof during which such failure continues, not 
exceeding 23 percent in the aggregate.  The amount so added to 
any tax under subdivisions 1 and 2 shall be collected at the 
same time and in the same manner and as a part of the tax and 
shall bear interest at the rate specified in section 270.75 from 
the time the tax should have been paid, unless the tax has been 
paid before the discovery of the negligence, in which case the 
amount so added shall be collected in the same manner as the tax.
    In the case of a failure 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 shall not be less than the lesser of (i) 
$200; or (ii) 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.  
    Sec. 41.  Minnesota Statutes 1992, section 297C.14, is 
amended by adding a subdivision to read: 
    Subd. 9.  [PENALTY FOR REPEATED FAILURES TO FILE RETURNS OR 
PAY TAXES.] If there is a pattern by a person of repeated 
failures to timely file returns or timely pay taxes, and written 
notice is given that a penalty will be imposed if such failures 
continue, a penalty of 25 percent of the amount of tax not 
timely paid as a result of each such subsequent failure is added 
to the tax.  The penalty can be abated under the abatement 
authority in section 270.07, subdivisions 1, paragraph (e), and 
6.  
    Sec. 42.  Minnesota Statutes 1992, section 298.27, is 
amended to read: 
    298.27 [COLLECTION AND PAYMENT OF TAX.] 
    The taxes provided by section 298.24 shall be paid directly 
to each eligible county and the iron range resources and 
rehabilitation board.  The commissioner of revenue shall notify 
each producer of the amount to be paid each recipient prior to 
February 8 15.  Every person subject to taxes imposed by section 
298.24 shall file a correct report covering the preceding year.  
The report must contain the information required by the 
commissioner.  The report shall be filed on or before February 
1.  A remittance equal to 90 100 percent of the total tax 
required to be paid hereunder shall be paid on or before 
February 15 24.  On or before February 25, the county auditor 
shall make distribution of the payment received by the county in 
the manner provided by section 298.28.  The balance due shall be 
paid on or before April 15 following the production year, and 
shall be distributed by the county auditor as provided in 
section 298.28 by May 15.  Reports shall be made and hearings 
held upon the determination of the tax in accordance with 
procedures established by the commissioner of revenue.  The 
commissioner of revenue shall have authority to make reasonable 
rules as to the form and manner of filing reports necessary for 
the determination of the tax hereunder, and by such rules may 
require the production of such information as may be reasonably 
necessary or convenient for the determination and apportionment 
of the tax.  All the provisions of the occupation tax law with 
reference to the assessment and determination of the occupation 
tax, including all provisions for appeals from or review of the 
orders of the commissioner of revenue relative thereto, but not 
including provisions for refunds, are applicable to the taxes 
imposed by section 298.24 except in so far as inconsistent 
herewith.  If any person subject to section 298.24 shall fail to 
make the report provided for in this section at the time and in 
the manner herein provided, the commissioner of revenue shall in 
such case, upon information possessed or obtained, ascertain the 
kind and amount of ore mined or produced and thereon find and 
determine the amount of the tax due from such person.  There 
shall be added to the amount of tax due a penalty for failure to 
report on or before February 1, which penalty shall equal ten 
percent of the tax imposed and be treated as a part thereof. 
    If any person responsible for making a partial tax payment 
at the time and in the manner herein provided fails to do so, 
there shall be imposed a penalty equal to ten percent of the 
amount so due, which penalty shall be treated as part of the tax 
due. 
    In the case of any underpayment of the partial tax payment 
required herein, there may be added and be treated as part of 
the tax due a penalty equal to ten percent of the amount so 
underpaid. 
    If any portion of the taxes provided for in section 298.24 
is not paid before the fifteenth day of April of the year in 
which due and payable, a penalty of ten percent of such unpaid 
portion shall immediately accrue, and thereafter one percent per 
month shall be added to such tax and penalty while such tax 
remains unpaid. 
    A person having a liability of $120,000 or more during a 
calendar year must remit all liabilities by means of a funds 
transfer as defined in section 336.4A-104, paragraph (a).  The 
funds transfer payment date, as defined in section 336A.4A-401, 
must be on or before the date the tax is due.  If the date the 
tax is due is not a funds transfer business day, as defined in 
section 336.4A-105, paragraph (a), clause (4), the payment date 
must be on or before the funds transfer business day next 
following the date the tax is due. 
    Sec. 43.  Minnesota Statutes 1992, section 299F.21, 
subdivision 2, is amended to read: 
    Subd. 2.  [ANNUAL RETURNS.] (a) Every insurer required to 
pay a tax under this section shall make and file a statement of 
estimated taxes for the period covered by the installment tax 
payment.  The statement shall be in the form prescribed by the 
commissioner of revenue.  
    (b) On or before March 1, annually every insurer subject to 
taxation under this section shall make an annual return for the 
preceding calendar year setting forth information the 
commissioner of revenue may reasonably require on forms 
prescribed by the commissioner.  
    (c) On March 1, the insurer shall pay any additional amount 
due for the preceding calendar year; if there has been an 
overpayment, the overpayment may be credited without interest on 
the estimated tax due April 15.  
    (d) If unpaid by this date, penalties and interest as 
provided in section 289A.60, subdivision 1, as related to 
withholding and sales or use taxes, shall be imposed. 
    Sec. 44.  Minnesota Statutes 1992, section 299F.23, 
subdivision 2, is amended to read: 
    Subd. 2.  [FAILURE TO FILE; PENALTIES AND INTEREST.] In 
case of any failure to make and file a return as required by 
this chapter within the time prescribed by law or prescribed by 
the commissioner of revenue in pursuance of law there shall be 
added to the tax penalties and interest as provided in section 
289A.60, subdivision 2, as related to withholding and sales or 
use taxes.  
    Sec. 45.  Minnesota Statutes 1992, section 299F.23, is 
amended by adding a subdivision to read: 
    Subd. 5.  [PENALTY FOR REPEATED FAILURES TO FILE RETURNS OR 
PAY TAXES.] If there is a pattern by a person of repeated 
failures to timely file returns or timely pay taxes, and written 
notice is given that a penalty will be imposed if such failures 
continue, a penalty of 25 percent of the amount of tax not 
timely paid as a result of each such subsequent failure is added 
to the tax.  The penalty can be abated under the abatement 
authority in section 270.07, subdivisions 1, paragraph (e), and 
6.  
    Sec. 46.  Minnesota Statutes 1992, 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.  The rate of the tax is two percent 
of the ideal gross of the pull-tab or tipboard deal.  The sales 
tax imposed by chapter 297A on the sale of the pull-tabs and 
tipboards by the licensed distributor 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 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 customer, to a common or contract carrier for 
delivery to the customer, or when received by the 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) Pull-tabs and tipboards sold to an organization that 
sells pull-tabs and tipboards under the exemption from licensing 
in section 349.166, subdivision 2, paragraph (a), 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.  
    (d) A distributor having a liability of $240,000 $120,000 
or more during a fiscal year ending June 30 must remit all 
liabilities in the subsequent calendar year by means of a funds 
transfer as defined in section 336.4A-104, paragraph (a).  The 
funds transfer payment date, as defined in section 336.4A-401, 
must be on or before the date the tax is due.  If the date the 
tax is due is not a funds transfer business day, as defined in 
section 336.4A-105, paragraph (a), clause (4), the payment date 
must be on or before the funds transfer business day next 
following the date the tax is due. 
    Sec. 47.  Minnesota Statutes 1992, section 349.217, 
subdivision 1, is amended to read: 
    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 five 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 15 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. 
    Sec. 48.  Minnesota Statutes 1992, section 349.217, 
subdivision 2, is amended to read: 
    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 five 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.
    Sec. 49.  Minnesota Statutes 1992, section 349.217, is 
amended by adding a subdivision to read: 
    Subd. 5a.  [PENALTY FOR REPEATED FAILURES TO FILE RETURNS 
OR PAY TAXES.] If there is a pattern by a person of repeated 
failures to timely file returns or timely pay taxes, and written 
notice is given that a penalty will be imposed if such failures 
continue, a penalty of 25 percent of the amount of tax not 
timely paid as a result of each such subsequent failure is added 
to the tax.  The penalty can be abated under the abatement 
authority in section 270.07, subdivisions 1, paragraph (e), and 
6.  
    Sec. 50.  Minnesota Statutes 1992, section 473.843, 
subdivision 3, is amended to read: 
    Subd. 3.  [PAYMENT OF FEE.] On or before the 20th day of 
each month each operator shall pay the fee due under this 
section for the previous month, using a form provided by the 
commissioner of revenue.  
    An operator having a fee of $240,000 $120,000 or more 
during a fiscal year ending June 30 must pay all fees in the 
subsequent calendar year by means of a funds transfer as defined 
in section 336.4A-104, paragraph (a).  The funds transfer 
payment date, as defined in section 336.4A-401, must be on or 
before the date the fee is due.  If the date the fee is due is 
not a funds transfer business day, as defined in section 
336.4A-105, paragraph (a), clause (4), the payment date must be 
on or before the funds transfer business day next following the 
date the fee is due. 
    Sec. 51.  [PENALTY FOR REPEATED NON-FILING; RULEMAKING 
REQUIRED.] 
    Before imposing a penalty under section 3, 6, 21, 26, 35, 
41, 45, or 49, the commissioner of revenue shall promulgate 
rules under Minnesota Statutes, chapter 14, that prescribe what 
constitutes "repeated failures to timely file returns or timely 
pay taxes" for purposes of the penalty under each section and 
any other matters the commissioner determines appropriate. 
    Sec. 52.  [EFFECTIVE DATE.] 
    Sections 1 to 6, 19 to 21, 24 to 26, 33 to 35, 39 to 41, 43 
to 45, and 47 to 49 are effective for taxes and returns due on 
or after January 1, 1994. 
    For purposes of imposing the penalties under sections 3, 6, 
21, 26, 35, 41, 45, and 49, violations for late filing of 
returns or late payment of taxes can occur before or after 
January 1, 1994, but no penalty may be imposed under those 
sections until final rules promulgated under the administrative 
procedures act satisfying requirements of section 51 take effect.
    Sections 7, 8, 11, 16, and 17 are effective the day 
following final enactment. 
    Section 9 is effective July 1, 1993. 
    Sections 10 and 23 are effective for taxes due on or after 
October 1, 1993. 
    Section 12 is effective for confessions of judgment entered 
into after June 30, 1993. 
    Sections 13 to 15, 22, 27 to 32, 36 to 38, 42, 46, and 50 
are effective for payments due in the calendar year 1994, and 
thereafter, based upon payments made in the fiscal year ending 
June 30, 1993, and thereafter; provided that section 13, as it 
relates to quarterly and annual sales and use tax returns, is 
effective for returns due for calendar quarters beginning with 
the first quarter of 1994, and for calendar years beginning with 
1994. 
     Section 18 is effective for returns due for taxable years 
beginning after December 31, 1982. 

                               ARTICLE 11

                        ASSESSORS ADMINISTRATIVE
    Section 1.  Minnesota Statutes 1992, section 270B.12, is 
amended by adding a subdivision to read: 
    Subd. 9.  [COUNTY ASSESSORS.] If, as a result of an audit, 
the commissioner determines that a person is a Minnesota 
nonresident or part-year resident for income tax purposes, the 
commissioner may disclose the person's name, address, and social 
security number to the assessor of any political subdivision in 
the state, when there is reason to believe that the person may 
have claimed or received homestead property tax benefits for a 
corresponding assessment year in regard to property apparently 
located in the assessor's jurisdiction. 
    Sec. 2.  Minnesota Statutes 1992, 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. 3.  Minnesota Statutes 1992, section 273.11, 
subdivision 13, is amended to read: 
    Subd. 13.  [VALUATION OF INCOME-PRODUCING PROPERTY.] 
Beginning with the 1995 assessment, only accredited assessors or 
senior accredited assessors or other licensed assessors who have 
successfully completed at least two income-producing property 
appraisal courses may value income-producing property for ad 
valorem tax purposes.  "Income-producing property" as used in 
this subdivision means the taxable property in class 3a and 3b 
in section 273.13, subdivision 24; class 4a and 4c, except for 
seasonal recreational property not used for commercial purposes, 
and class 4d in section 273.13, subdivision 25; and class 5 in 
section 273.13, subdivision 31.  "Income-producing property 
appraisal course" as used in this subdivision means a course of 
study of approximately 30 instructional hours, with a final 
comprehensive test.  An assessor must successfully complete the 
final examination for each of the two required courses.  The 
course must be approved by the board of assessors. 
    Sec. 4.  [REPORT ON COMPOSITION OF FARMS.] 
    Before December 1, 1993, each county assessor shall provide 
a report to the commissioner of revenue on the composition of 
farm homesteads within the county.  The report shall document 
the size of farms in acres, the value of farms broken down into 
land value and building value, and such other information as the 
commissioner shall require.  The report shall be in a form 
prescribed by the commissioner with consultation from 
legislative staff.  The commissioner shall make the information 
collected in the reports available to legislative staff. 
    Sec. 5.  [EFFECTIVE DATE.] 
    Sections 1 and 3 are effective the day following final 
enactment. 
    Section 2 is effective for any appointment beginning 
January 1, 1993 and thereafter. 

                               ARTICLE 12

                            CONTAMINATION TAX
    Section 1.  [270.91] [CONTAMINATION TAX.] 
    Subdivision 1.  [IMPOSITION.] A tax is annually imposed on 
the contamination value of taxable real property in this state. 
    Subd. 2.  [INITIAL TAX RATES.] Unless the rates under 
subdivision 3 or 4 apply, the tax imposed under this section 
equals 100 percent of the class rate for the property under 
section 273.13, multiplied by the contamination value of the 
property. 
    Subd. 3.  [TAX RATES, NONRESPONSIBLE PARTY.] If neither the 
owner nor the operator of the taxable real property, in the 
assessment year, is a responsible person under chapter 115B or a 
responsible party under chapter 18D for the presence of 
contaminants on the property, unless subdivision 4 applies, the 
tax imposed under this section equals 25 percent of the class 
rate for the property under section 273.13, multiplied by the 
contamination value of the property.  A determination under 
section 115B.177 or other similar determination by the 
commissioner of the pollution control agency or by the 
commissioner of agriculture for a release of agricultural 
chemicals is dispositive of whether the owner or operator is not 
a responsible person under chapter 18D or 115B for purposes of 
this section.  To qualify under this subdivision, the property 
owner must provide the assessor with a copy of the determination 
by July 1 of the assessment year. 
    Subd. 4.  [TAX RATES AFTER PLAN APPROVAL.] (a) The tax 
imposed under this subdivision applies for the first assessment 
year that begins after one of the following occurs: 
    (1) a response action plan for the property has been 
approved by the commissioner of the pollution control agency or 
by the commissioner of agriculture for an agricultural chemical 
release or incident subject to chapter 18D and work under the 
plan has begun; or 
    (2) the contaminants are asbestos and the property owner 
has in place an abatement plan for enclosure, removal, or 
encapsulation of the asbestos or a proactive, in-place 
management program pursuant to the rules, requirements, and 
formal policies of the United States environmental protection 
agency.  To qualify under this clause, the property owner must 
(1) have entered into a binding contract with a licensed 
contractor for completion of the work, (2) have obtained a 
license from the commissioner of health and begun the work, or 
(3) implemented a proactive, in-place management program 
pursuant to the rules, requirements, and formal policies of the 
United States environmental protection agency.  An abatement 
plan must provide for completion of the work within a reasonable 
time period, as determined by the assessors.  An asbestos 
management program must cover a period of time and require such 
proactive practices as are required by the rules, requirements, 
and formal policies of the United States environmental 
protection agency. 
    (b) To qualify under paragraph (a), the property owner must 
provide the assessor with a copy of:  (1) the approved response 
action plan; (2) a copy of the asbestos abatement plan and 
contract for completion of the work or the owner's license to 
perform the work; or (3) a copy of the approved asbestos 
management program.  The property owner also must file with the 
assessor an affidavit indicating when work under the response 
action plan or asbestos abatement plan began. 
    (c) The tax imposed under this subdivision equals 50 
percent of the class rate for the property under section 273.13, 
multiplied by the contamination value of the property.  
    (d) The tax imposed under this subdivision equals 12.5 
percent of the class rate for the property under section 273.13, 
multiplied by the contamination value of the property.  The tax 
under this paragraph applies if one of the following conditions 
is satisfied: 
    (1) the contaminants are subject to chapter 115B and 
neither the owner nor the operator of the taxable real property 
in the assessment year is a responsible person under chapter 
115B; 
    (2) the contaminants are subject to chapter 18D and neither 
the owner nor the operator of the taxable real property in the 
assessment year is a responsible party under chapter 18D; 
    (3) the contaminants are asbestos and neither the owner nor 
the operator of the taxable real property in the assessment year 
is required to undertake asbestos-related work, but is 
implementing a proactive in-place management program. 
    Sec. 2.  [270.92] [DEFINITIONS.] 
    Subdivision 1.  [SCOPE OF APPLICATION.] For purposes of 
sections 1 to 8, the following terms have the meanings given. 
    Subd. 2.  [ASSESSMENT YEAR.] "Assessment year" means the 
assessment year for purposes of general ad valorem property 
taxes. 
    Subd. 3.  [CONTAMINANT.] "Contaminant" means a harmful 
substance as defined in section 115B.25, subdivision 7a. 
    Subd. 4.  [CONTAMINATED MARKET VALUE.] "Contaminated market 
value" is the amount determined under section 3. 
    Subd. 5.  [PRESENCE OF CONTAMINANTS.] "Presence of 
contaminants" includes the release or threatened release, as 
defined in section 115B.02, subdivision 15, of contaminants on 
the property. 
    Subd. 6.  [RESPONSE PLAN.] "Response plan" means:  (1) a 
development action response plan, as defined in section 469.174, 
subdivision 17; (2) a response action plan under chapter 115B or 
a corrective action plan under chapter 18D; (3) a plan for 
corrective action approved by the commissioner of agriculture 
under section 18D.105; or (4) a plan for corrective action 
approved by the commissioner of the pollution control agency 
under section 115C.03. 
    Sec. 3.  [270.93] [TAX BASE; CONTAMINATION VALUE.] 
    The contamination value of a parcel of property is the 
amount of the market value reduction, if any, that is granted 
for general ad valorem property tax purposes for the assessment 
year because of the presence of contaminants.  The contamination 
value for a property may be no greater than the estimated cost 
of implementing a reasonable response action plan or asbestos 
abatement plan or management program for the property.  These 
reductions in market value include those granted by a court, by 
a board of review, by the assessor upon petition or request of a 
property owner, or by the assessor.  Reductions granted by the 
assessor are included only if the assessor reduced the 
property's market value for the presence of contaminants using 
an appraisal method or methods that are specifically designed or 
intended to adjust for the valuation effects of the presence of 
contaminants.  The contamination value for a parcel with a 
reduction in value of less than $10,000 is zero. 
    Sec. 4.  [270.94] [EXEMPTION.] 
    (a) The tax imposed by sections 1 to 8 does not apply to 
the contamination value of a parcel of property attributable to 
contaminants that were addressed by a response action plan for 
the property, if the commissioner of the pollution control 
agency, or the commissioner of agriculture for a release subject 
to chapter 18D, has determined that all the requirements of the 
plan have been satisfied.  This exemption applies beginning for 
the first assessment year after the commissioner of the 
pollution control agency, or the commissioner of agriculture 
determines that the implementation of a response action plan has 
been completed.  To qualify under this paragraph, the property 
owner must provide the assessor with a copy of the determination 
by the commissioner of the pollution control agency or the 
commissioner of agriculture of the completion of the response 
action plan. 
     (b) The tax imposed by sections 1 to 8 does not apply to 
the contamination value of a parcel that is attributable to 
asbestos, if the work has been completed under an asbestos 
abatement plan and the property owner provides the assessor with 
an affidavit stating the work under the abatement plan has been 
completed and any other evidence or information the assessor 
requests. 
    Sec. 5.  [270.95] [PAYMENT; ADMINISTRATION.] 
    The tax imposed under sections 1 to 8 is payable at the 
same time and manner as the regular ad valorem property tax.  
The tax is subject to the penalty, interest, lien, forfeiture, 
and any other rules for collection of the regular ad valorem 
property tax.  If a reduction in market value that creates 
contamination value is granted after the ad valorem property tax 
has been paid, the contamination tax must be subtracted from the 
amount to be refunded to the property owner. 
    Sec. 6.  [270.96] [DUTIES.] 
    Subdivision 1.  [ASSESSORS.] Each assessor shall notify the 
county auditor of the contamination value under section 1 by the 
separate tax rate categories under subdivisions 2, 3, and 4 for 
each parcel of property within the assessor's jurisdiction.  The 
assessor shall provide notice of the contamination value to the 
property owner by the later of June 1 of the assessment year or 
30 days after the reduction in market value is finally granted. 
    Subd. 2.  [AUDITOR.] The county auditor shall prepare 
separate lists of the contamination values for all property 
located in the county that are taxed under section 1, 
subdivisions 2, 3, and 4.  The commissioner shall prescribe the 
form of the listing.  The auditor shall include the amount of 
the contamination taxes on the contamination value for the 
assessment year on the regular ad valorem property tax statement 
under section 276.04. 
    Subd. 3.  [TREASURER.] (a) The county treasurer shall pay 
the proceeds of the tax imposed under section 1, subdivision 4, 
less the amount retained by the county for the cost of 
administration under section 8, to the commissioner at the same 
times provided for the ad valorem property tax settlements. 
     (b) The county treasurer shall pay the proceeds of the tax 
imposed under section 1, subdivisions 2 and 3 to the local 
taxing jurisdictions in the same manner provided for the 
distribution of ad valorem property taxes. 
    Subd. 4.  [COURT ORDERED REDUCTIONS IN VALUE.] If a court 
orders a reduction in market value for purposes of the ad 
valorem property tax because of the presence of contaminants on 
the property, the court shall include in its order an offset for 
payment of the tax on contaminated value under section 1. 
    Sec. 7.  [270.97] [DEPOSIT OF REVENUES.] 
    The commissioner shall deposit all revenues derived from 
the tax, interest, and penalties received from the county in the 
contaminated site cleanup and development account in the general 
fund. 
    Sec. 8.  [270.98] [LOCAL ADMINISTRATIVE COSTS.] 
    The county may retain five percent of the total revenues 
derived from the tax imposed under section 1, subdivision 4, 
including interest and penalties, as compensation for 
administering the tax.  The county board may reimburse 
municipalities for the services provided by assessors employed 
by the municipality in administering sections 1 to 8. 
    Sec. 9.  Minnesota Statutes 1992, section 273.11, is 
amended by adding a subdivision to read: 
    Subd. 17.  [VALUATION OF CONTAMINATED PROPERTIES.] (a) In 
determining the market value of property containing 
contaminants, the assessor shall reduce the market value of the 
property by the contamination value of the property.  The 
contamination value is the amount of the market value reduction 
that results from the presence of the contaminants, but it may 
not exceed the cost of a reasonable response action plan or 
asbestos abatement plan or management program for the property. 
    (b) For purposes of this subdivision, "asbestos abatement 
plan," "contaminants," and "response action plan" have the 
meanings as used in sections 1 and 2. 
    Sec. 10.  Minnesota Statutes 1992, section 275.065, 
subdivision 3, is amended to read: 
    Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
county auditor shall prepare and the county treasurer shall 
deliver after November 10 and on or before November 24 each 
year, by first class mail to each taxpayer at the address listed 
on the county's current year's assessment roll, a notice of 
proposed property taxes and, in the case of a town, final 
property taxes.  
    (b) The commissioner of revenue shall prescribe the form of 
the notice. 
    (c) The notice must inform taxpayers that it contains the 
amount of property taxes each taxing authority other than a town 
proposes to collect for taxes payable the following year and, 
for a town, the amount of its final levy.  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 proposed or final property tax levy, 
or, in case of a school district, on the current budget and 
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.  
    (d) 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; and, in 
the case of residential property, whether the property is 
classified as homestead or nonhomestead.  The notice must 
clearly inform taxpayers of the years to which the market values 
apply and that the values are final values; 
     (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 
or, for a town, final net tax on the property for taxes payable 
the following year and the actual tax for taxes payable the 
current year.  In the case of a parcel where tax increment or 
the fiscal disparities areawide tax applies, the proposed tax 
levy on the captured value or the proposed tax levy on the tax 
capacity subject to the areawide tax must each be stated 
separately and not included in the sum of the special taxing 
districts; and 
     (3) the increase or decrease in the amounts in clause (2) 
from taxes payable in the current year to proposed or, for a 
town, final taxes payable the following year, expressed as a 
dollar amount and as a percentage. 
     (e) The notice must clearly state that the proposed or 
final 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; 
    (4) amounts necessary to pay tort judgments against the 
taxing authority that become final after the date the proposed 
taxes are certified; and 
    (5) any additional amount levied in lieu of a local sales 
and use tax, unless this amount is included in the proposed or 
final taxes; and 
     (6) the contamination tax imposed on properties which 
received market value reductions for contamination. 
    (f) Except as provided in subdivision 7, failure of the 
county auditor to prepare or the county treasurer to deliver the 
notice as required in this section does not invalidate the 
proposed or final tax levy or the taxes payable pursuant to the 
tax levy. 
    (g) If the notice the taxpayer receives under this section 
lists the property as nonhomestead and the homeowner provides 
satisfactory documentation to the county assessor that the 
property is owned and has been used as the owner's homestead 
prior to June 1 of that year, the assessor shall reclassify the 
property to homestead for taxes payable in the following year. 
    (h) In the case of class 4 residential property used as a 
residence for lease or rental periods of 30 days or more, the 
taxpayer must either: 
    (1) mail or deliver a copy of the notice of proposed 
property taxes to each tenant, renter, or lessee; or 
    (2) post a copy of the notice in a conspicuous place on the 
premises of the property.  
    The notice must be mailed or posted by the taxpayer by 
November 27 or within three days of receipt of the notice, 
whichever is later.  A taxpayer may notify the county treasurer 
of the address of the taxpayer, agent, caretaker, or manager of 
the premises to which the notice must be mailed in order to 
fulfill the requirements of this paragraph. 
    Sec. 11.  Minnesota Statutes 1992, section 276.04, 
subdivision 2, is amended to read: 
    Subd. 2.  [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 
shall provide for the printing of the tax statements.  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 amount of the tax on contamination 
value imposed under sections 270.91 to 270.98, if any, must also 
be separately stated.  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) 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 local tax 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 
local tax 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, except that the amount of credit received under section 
273.135 must be separately stated and identified as "taconite 
tax relief"; 
    (6) the net tax payable in the manner required in paragraph 
(a); and 
    (7) any additional amount of tax authorized under sections 
124A.03, subdivision 2a, and 275.61.  These amounts shall be 
listed as "voter approved referenda levies." 
    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, for taxes levied in 1991, and for all counties for taxes 
levied in 1992 and thereafter, the commissioner must certify 
this amount by September 1. 
    Sec. 12.  [EFFECTIVE DATE.] 
    Sections 1 to 11 are effective beginning with taxes 
assessed in 1994, payable in 1995, and apply to reductions in 
market value in effect for the year regardless of when they were 
granted. 

                               ARTICLE 13

                      CONTAMINATION CLEANUP GRANTS
    Section 1.  [116J.551] [CREATION OF ACCOUNT.] 
    A contaminated site cleanup and development account is 
created in the general fund.  Money in the account may be used, 
as appropriated by law, to make grants as provided in section 4 
and to pay for the commissioner's costs in reviewing 
applications and making grants. 
    Sec. 2.  [116J.552] [DEFINITIONS.] 
    Subdivision 1.  [SCOPE OF APPLICATION.] For purposes of 
sections 1 to 7, the following terms have the meanings given. 
    Subd. 2.  [CLEANUP COSTS.] "Cleanup costs" or "costs" mean 
the cost of implementing an approved response action plan. 
    Subd. 3.  [CONTAMINANT.] "Contaminant" means a hazardous 
substance or a pollutant or contaminant as those terms are 
defined in section 115B.02. 
    Subd. 4.  [DEVELOPMENT AUTHORITY.] "Development authority" 
includes a statutory or home rule charter city, housing and 
redevelopment authority, economic development authority, and a 
port authority. 
    Subd. 5.  [METROPOLITAN AREA.] "Metropolitan area" means 
the seven-county metropolitan area, as defined in section 
473.121, subdivision 2. 
    Subd. 6.  [MUNICIPALITY.] "Municipality" means the 
statutory or home rule charter city, town, or, in the case of 
unorganized territory, the county in which the site is located. 
     Subd. 7.  [PROJECT COSTS.] "Project costs" includes cleanup 
costs for the site and the cost of related site acquisition, 
demolition of existing improvements, and installation of public 
improvements necessary for the development authority to 
implement the response action plan. 
    Subd. 8.  [RESPONSE ACTION PLAN.] "Response action plan" 
means a response action plan approved by the commissioner of the 
pollution control agency, including a "development action 
response plan" that meets the requirements of section 469.174, 
subdivision 17; and a "voluntary response action plan" under 
section 115B.175, subdivision 3. 
    Sec. 3.  [116J.553] [GRANT APPLICATIONS.] 
    Subdivision 1.  [APPLICATION REQUIRED.] To obtain a 
contamination cleanup development grant, the development 
authority shall apply to the commissioner.  The governing body 
of the municipality must approve, by resolution, the application.
    Subd. 2.  [REQUIRED CONTENT.] The commissioner shall 
prescribe and provide the application form.  The application 
must include at least the following information: 
    (1) identification of the site; 
    (2) an approved response action plan for the site, 
including the results of engineering and other tests showing the 
nature and extent of the release or threatened release of 
contaminants at the site; 
    (3) a detailed estimate, along with necessary supporting 
evidence, of the total cleanup costs for the site; 
    (4) an appraisal of the current market value of the 
property, separately taking into account the effect of the 
contaminants on the market value, prepared by a qualified 
independent appraiser using accepted appraisal methodology; 
    (5) an assessment of the development potential or likely 
use of the site after completion of the response action plan, 
including any specific commitments from third parties to 
construct improvements on the site; 
    (6) the manner in which the municipality will meet the 
local match requirement; and 
    (7) any additional information or material that the 
commissioner prescribes. 
    Sec. 4.  [116J.554] [GRANTS.] 
    Subdivision 1.  [AUTHORITY.] The commissioner may make a 
grant to an applicant development authority to pay for up to 75 
percent of the cleanup costs for a qualifying site, except the 
grant may not exceed 50 percent of the project costs.  The 
determination of whether to make a grant for a qualifying site 
is within the sole discretion of the commissioner, subject to 
the process provided by this section, and available unencumbered 
money in the appropriation.  The commissioner's decisions and 
application of the priorities under section 5 are not subject to 
judicial review, except for abuse of discretion. 
    Subd. 2.  [QUALIFYING SITES.] A site qualifies for a grant 
under this section, if the following criteria are met: 
    (1) the site is not scheduled for funding during the 
current or next fiscal year under the Comprehensive 
Environmental Response, Compensation, and Liability Act, United 
States Code, title 42, section 9601, et seq. or under the 
environmental response, and liability act under sections 115B.01 
to 115B.24; 
    (2) the appraised value of the site after adjusting for the 
effect on the value of the presence or possible presence of 
contaminants using accepted appraisal methodology (i) is less 
than 50 percent of the estimated cleanup costs for the site or 
(ii) is less than or equal to the estimated cleanup costs for 
the site and the cleanup costs equal or exceed $3 per square 
foot for the site; and 
    (3) if the proposed cleanup is completed, it is expected 
that the site will be improved with buildings or other 
improvements and these improvements will provide a substantial 
increase in the property tax base within a reasonable period of 
time or the site will be used for an important publicly owned or 
tax-exempt facility. 
    Sec. 5.  [116J.555] [PRIORITIES.] 
    Subdivision 1.  [PRIORITIES.] (a) The legislature expects 
that applications for grants will exceed the available 
appropriations and the agency will be able to provide grants to 
only some of the applicant development authorities. 
    (b) If applications for grants for qualified sites exceed 
the available appropriations, the agency shall make grants for 
sites that, in the commissioner's judgment, provide the highest 
return in public benefits for the public costs incurred and that 
meet all the requirements provided by law.  In making this 
judgment, the commissioner shall consider the following factors: 
    (1) the recommendations or ranking of projects by the 
commissioner of the pollution control agency regarding the 
potential threat to public health and the environment that would 
be reduced or eliminated by completion of each of the response 
action plans; 
    (2) the potential increase in the property tax base of the 
local taxing jurisdictions, considered relative to the fiscal 
needs of the jurisdictions, that will result from developments 
that will occur because of completion of each of the response 
action plans; 
    (3) the social value to the community of the cleanup and 
redevelopment of the site, including the importance of 
development of the proposed public facilities on each of the 
sites; 
    (4) the probability that each site will be cleaned up 
without use of government money in the reasonably foreseeable 
future; 
    (5) the amount of cleanup costs for each site; and 
    (6) the amount of the commitment of municipal or other 
local resources to pay for the cleanup costs.  
    The factors are not listed in a rank order of priority; 
rather the commissioner may weigh each factor, depending upon 
the facts and circumstances, as the commissioner considers 
appropriate.  The commissioner may consider other factors that 
affect the net return of public benefits for completion of the 
response action plan.  The commissioner, notwithstanding the 
listing of priorities and the goal of maximizing the return of 
public benefits, shall make grants that distribute available 
money to sites both within and outside of the metropolitan 
area.  The commissioner shall provide a written statement of the 
supporting reasons for each grant.  Unless sufficient 
applications are not received for qualifying sites outside of 
the metropolitan area, at least 25 percent of the money provided 
as grants must be made for sites located outside of the 
metropolitan area. 
    Subd. 2.  [APPLICATION CYCLES; REPORTING TO LCWM.] (a) In 
making grants, the commissioner shall establish regular 
application deadlines in which grants will be authorized from 
all or part of the available appropriations of money in the 
account. 
     (b) After each cycle in which grants are awarded, the 
commissioner shall report to the legislative commission on waste 
management the grants awarded and appropriate supporting 
information describing each grant made.  This report must be 
made within 30 days after the grants are awarded. 
     (c) The commissioner shall annually report to the 
legislative commission on the status of the cleanup projects 
undertaken under grants made under the programs.  The 
commissioner shall include in the annual report information on 
the cleanup and development activities undertaken for the grants 
made in that and previous fiscal years.  The commissioner shall 
make this report no later than 120 days after the end of the 
fiscal year. 
    Sec. 6.  [116J.556] [LOCAL MATCH REQUIREMENT.] 
    (a) In order to qualify for a grant under sections 1 to 7, 
the municipality must pay for at least one-half of the project 
costs as a local match.  The municipality shall pay an amount of 
the project costs equal to at least 18 percent of the cleanup 
costs from the municipality's general fund, a property tax levy 
for that purpose, or other unrestricted money available to the 
municipality (excluding tax increments).  These unrestricted 
moneys may be spent for project costs, other than cleanup costs, 
and qualify for the local match payment equal to 18 percent of 
cleanup costs.  The rest of the local match may be paid with tax 
increments or any other money available to the municipality. 
    (b) If the development authority establishes a tax 
increment financing district or hazardous substance subdistrict 
on the site to pay for part of the local match requirement, the 
district or subdistrict is not subject to the state aid 
reductions under section 273.1399.  In order to qualify for the 
exemption from the state aid reductions, the municipality must 
elect, by resolution, on or before the request for certification 
is filed that all tax increments from the district or 
subdistrict will be used exclusively to pay (1) for project 
costs for the site and (2) administrative costs for the district 
or subdistrict.  The district or subdistrict must be decertified 
when an amount of tax increments equal to no more than three 
times the costs of implementing the response action plan for the 
site and the administrative costs for the district or 
subdistrict have been received, after deducting the amount of 
the state grant. 
    Sec. 7.  [116J.557] [COST RECOVERY ACTIONS.] 
    Subdivision 1.  [CAUSE OF ACTION.] The attorney general or 
a development authority or municipality that incurs cleanup 
costs to implement an approved response action plan pursuant to 
sections 216C.11 to 216C.16, may bring an action under section 
115B.04 or other law to recover the reasonable and necessary 
cleanup costs incurred by the development authority or 
municipality.  The attorney general, development authority, or 
municipality may recover all cleanup costs incurred whether paid 
from the proceeds of a grant under sections 216C.11 to 216C.16 
or funds of the development authority or municipality.  
Recoverable costs include administrative and legal costs related 
to the development and implementation of the response action 
plan but do not include any cost associated with development or 
redevelopment of property.  A development authority or 
municipality must have the consent of the attorney general to 
bring or settle an action under this subdivision to recover 
cleanup costs paid from the proceeds of a grant. 
    Subd. 2.  [PROCEDURES.] The commissioner shall notify the 
attorney general when a grant is awarded under sections 216C.11 
to 216C.16.  Upon request of the attorney general the 
development authority shall prepare and submit a certification 
of the cleanup costs and shall cooperate in any cost recovery 
action brought by the attorney general under subdivision 1.  
Certification by the development authority of the cleanup costs 
incurred to develop and implement the approved response action 
plan is prima facie evidence that the costs are reasonable and 
necessary in any action brought under this section. 
    Subd. 3.  [ATTORNEY GENERAL ASSISTANCE AND COSTS.] (a) The 
attorney general may assist a development authority or 
municipality, if requested to do so, in bringing an action under 
subdivision 1 by providing legal and technical advice or other 
appropriate assistance.  The attorney general shall not assess 
any fee to the development authority or municipality for the 
assistance but may recover the cost of the assistance as 
provided in paragraph (b). 
    (b) If the attorney general brings or assists in an action 
brought under subdivision 1, the reasonable litigation expenses 
or other costs of legal or technical assistance incurred by the 
attorney general must be deducted from any recovery and paid to 
the attorney general before proceeds of the recovery are 
otherwise distributed.  The attorney general shall deposit any 
money so deducted in the general fund. 
    Subd. 4.  [DISPOSITION OF RECOVERED AMOUNTS.] Amounts 
recovered from responsible persons, after any deduction under 
subdivision 3, and all other amounts otherwise received by the 
municipality, the agency, or the attorney general for the site 
shall be used to reimburse the municipality and the account in 
proportion to their respective payments for response costs.  The 
amount of recovered costs apportioned to tax increments must be 
treated by the municipality and development authority as an 
excess increment under section 469.176, subdivision 2. 
    Sec. 8.  [ST. PAUL; ARLINGTON-JACKSON STUDY AREA; SPECIAL 
RULES FOR LOCAL MATCH.] 
    (a) The city of St. Paul or any of its development 
authorities or agencies may apply for one or more grants under 
this article for contamination cleanup in the area bounded on 
the south by Maryland Avenue, on the west by Jackson Street, on 
the north by Arlington Avenue, and on the east by interstate 
highway 35E.  In applying the local match requirement under 
section 6, the city may meet the requirement that an amount 
equal to 18 percent of cleaning costs be paid with unrestricted 
money (excluding tax increments) by including unrestricted money 
spent in the defined area for land acquisition, public 
improvements or other development costs which do not qualify as 
cleanup costs. 
    (b) Notwithstanding this exception, the city must provide, 
at least, one-half of the project costs for the site for which 
the grant is made.  The local share of the project costs may be 
financed wholly or in part with tax increments. 
    (c) Unrestricted money spent for land acquisition or other 
costs and counted to meet the 18 percent match may be spent for 
costs anywhere with the defined area, regardless of whether they 
are for the specific site, but may only be used once in an 
application for a grant, if grant applications are made for two 
or more sites in the area. 
    (d) These special rules are provided to allow the city to 
begin activities within the broader area before testing and 
assessment of the contamination has been done and still to be 
able to qualify for a grant with an equivalent local match.  The 
legislature shall study whether similar situations are common 
for other contaminated areas and whether the general law should 
be modified to provide for similar treatment for all comparable 
sites. 
    Sec. 9.  [APPROPRIATION.] 
    $2,000,000 is appropriated to the commissioner of trade and 
economic development from the contaminated site cleanup and 
development account in the general fund to make grants under 
sections 1 to 7 and to pay the costs of administering the grant 
program.  This appropriation is for fiscal year 1995 and remains 
available and does not cancel. 

                               ARTICLE 14

                        TAX INCREMENT FINANCING 
    Section 1.  Minnesota Statutes 1992, section 273.1399, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DEFINITIONS.] For purposes of this 
section, the following terms have the meanings given. 
    (a) "Qualifying captured net tax capacity" means the 
following amounts:  
    (1) the captured net tax capacity of a new or the expanded 
part of an existing economic development or soils condition tax 
increment financing district, other than a qualified 
manufacturing district, for which certification was requested 
after April 30, 1990; 
    (2) the captured net tax capacity of a qualified 
manufacturing district, multiplied by the following percentage 
based on the number of years that have elapsed since the 
assessment year of the original net tax capacity.  In no case 
may the final amounts be less than zero or greater than the 
total captured net tax capacity of the district: 
        Number of Years        Percentage
               1                    0
               2                   20
               3                   40
               4                   60
               5                   80
               6 or more          100;
    (3) the captured net tax capacity of a new or the expanded 
part of an existing tax increment financing district, other than 
a qualified housing district, qualified hazardous substance 
subdistrict, or an economic development or soils condition 
district, for which certification was requested after April 30, 
1990, multiplied by the following percentage based on the number 
of years that have elapsed since the assessment year of the 
original net tax capacity.  In no case may the final amounts be 
less than zero or greater than the total captured net tax 
capacity of the district. 
         Number of     Renewal and     All other 
         years         Renovation      Districts
                       Districts
         0 to 5           0                0 
            6            12.5              6.25
            7            25               12.5 
            8            37.5             18.75 
            9            50               25 
           10            62.5             31.25 
           11            75               37.5 
           12            87.5             43.75 
           13            100              50 
           14            100              56.25 
           15            100              62.5 
           16            100              68.75 
           17            100              75 
           18            100              81.25 
           19            100              87.5 
           20            100              93.75 
           21 or more    100              100 
    In the case of a hazardous substance subdistrict, the 
number of years must be measured from the date of certification 
of the subdistrict for purposes of the additional captured net 
tax capacity resulting from the reduction in the subdistrict's 
or site's original net tax capacity.  
    (b) The terms defined in section 469.174 have the meanings 
given in that section. 
    (c) "Qualified manufacturing district" means an economic 
development district that qualifies under section 469.176, 
subdivision 4c, paragraph (a), without regard to clauses (2) and 
(4) (5), for which certification was requested after June 30, 
1991, located in a home rule charter or statutory city that (1) 
has a population under 10,000 according to the last federal 
census and (2) is wholly located outside of a metropolitan 
statistical area as determined by the United States Office of 
Management and Budget. 
    (d) "Qualified housing district" means a housing district 
for a residential rental project or projects in which the only 
properties receiving assistance from revenues derived from tax 
increments from the district meet all of the requirements for a 
low-income housing credit under section 42 of the Internal 
Revenue Code of 1986, as amended through December 31, 1992, 
regardless of whether the project actually receives a low-income 
housing credit. 
    (e) "Qualified hazardous substance subdistrict" means a 
hazardous substance subdistrict in which the municipality has 
made an election to make an alternative local contribution as 
provided under section 9. 
    Sec. 2.  [272.71] [TIF PROPERTIES; NOTICE OF POTENTIAL 
VALUATION REDUCTIONS.] 
    (a) The following officials shall notify the municipality 
of potential reductions in the market value of taxable parcels 
located in a tax increment financing district: 
    (1) for applications to reduce market value or abate taxes 
or for applications to a local or county board of review, the 
assessor; 
    (2) for applications to reduce market value or abate taxes 
by the state board of equalization, the commissioner of revenue; 
    (3) for petitions to reduce market value or object to taxes 
under chapter 278, the county attorney. 
The official shall provide the notice to the municipality in 
writing within 60 days after the petition or application for a 
reduction is made. 
    (b) This section applies only to reductions in valuation or 
taxes that are granted after certification of final values for 
purposes of certifying local tax rates. 
    (c) For purposes of this section, "municipality" means the 
municipality for the tax increment financing district, as 
defined under section 469.174, subdivision 6. 
    Sec. 3.  Minnesota Statutes 1992, section 469.012, 
subdivision 1, is amended to read: 
    Subdivision 1.  [SCHEDULE OF POWERS.] An authority shall be 
a public body corporate and politic and shall have all the 
powers necessary or convenient to carry out the purposes of 
sections 469.001 to 469.047, except that the power to levy and 
collect taxes or special assessments is limited to the power 
provided in sections 469.027 to 469.033.  Its powers include the 
following powers in addition to others granted in sections 
469.001 to 469.047:  
    (1) to sue and be sued; to have a seal, which shall be 
judicially noticed, and to alter it; to have perpetual 
succession; and to make, amend, and repeal rules consistent with 
sections 469.001 to 469.047; 
    (2) to employ an executive director, technical experts, and 
officers, agents, and employees, permanent and temporary, that 
it requires, and determine their qualifications, duties, and 
compensation; for legal services it requires, to call upon the 
chief law officer of the city or to employ its own counsel and 
legal staff; so far as practicable, to use the services of local 
public bodies in its area of operation, provided that those 
local public bodies, if requested, shall make the services 
available; 
         (3) to delegate to one or more of its agents or employees 
the powers or duties it deems proper; 
         (4) within its area of operation, to undertake, prepare, 
carry out, and operate projects and to provide for the 
construction, reconstruction, improvement, extension, 
alteration, or repair of any project or part thereof; 
         (5) subject to the provisions of section 469.026, to give, 
sell, transfer, convey, or otherwise dispose of real or personal 
property or any interest therein and to execute leases, deeds, 
conveyances, negotiable instruments, purchase agreements, and 
other contracts or instruments, and take action that is 
necessary or convenient to carry out the purposes of these 
sections; 
         (6) within its area of operation, to acquire real or 
personal property or any interest therein by gifts, grant, 
purchase, exchange, lease, transfer, bequest, devise, or 
otherwise, and by the exercise of the power of eminent domain, 
in the manner provided by chapter 117, to acquire real property 
which it may deem necessary for its purposes, after the adoption 
by it of a resolution declaring that the acquisition of the real 
property is necessary to eliminate one or more of the conditions 
found to exist in the resolution adopted pursuant to section 
469.003 or to provide decent, safe, and sanitary housing for 
persons of low and moderate income, or is necessary to carry out 
a redevelopment project.  Real property needed or convenient for 
a project may be acquired by the authority for the project by 
condemnation pursuant to this section.  This includes any 
property devoted to a public use, whether or not held in trust, 
notwithstanding that the property may have been previously 
acquired by condemnation or is owned by a public utility 
corporation, because the public use in conformity with the 
provisions of sections 469.001 to 469.047 shall be deemed a 
superior public use.  Property devoted to a public use may be so 
acquired only if the governing body of the municipality has 
approved its acquisition by the authority.  An award of 
compensation shall not be increased by reason of any increase in 
the value of the real property caused by the assembly, clearance 
or reconstruction, or proposed assembly, clearance or 
reconstruction for the purposes of sections 469.001 to 469.047 
of the real property in an area; 
      (7) within its area of operation, and without the adoption 
of an urban renewal plan, to acquire, by all means as set forth 
in clause (6) but without the adoption of a resolution provided 
for in clause (6), real property, and to demolish, remove, 
rehabilitate, or reconstruct the buildings and improvements or 
construct new buildings and improvements thereon, or to so 
provide through other means as set forth in Laws 1974, chapter 
228, or to grade, fill, and construct foundations or otherwise 
prepare the site for improvements.  The authority may dispose of 
the property pursuant to section 469.029, provided that the 
provisions of section 469.029 requiring conformance to an urban 
renewal plan shall not apply.  The authority may finance these 
activities by means of the redevelopment project fund or by 
means of tax increments or tax increment bonds or by the methods 
of financing provided for in section 469.033 or by means of 
contributions from the municipality provided for in section 
469.041, clause (9), or by any combination of those means.  Real 
property with buildings or improvements thereon shall only be 
acquired under this clause when the buildings or improvements 
are substandard.  The exercise of the power of eminent domain 
under this clause shall be limited to real property which 
contains, or has contained within the three years immediately 
preceding the exercise of the power of eminent domain and is 
currently vacant, buildings and improvements which are vacated 
and substandard.  Notwithstanding the prior sentence, in cities 
of the first class the exercise of the power of eminent domain 
under this clause shall be limited to real property which 
contains, or has contained within the three years immediately 
preceding the exercise of the power of eminent domain, buildings 
and improvements which are substandard.  For the purpose of this 
clause, substandard buildings or improvements mean hazardous 
buildings as defined in section 463.15, subdivision 3, or 
buildings or improvements that are dilapidated or obsolescent, 
faultily designed, lack adequate ventilation, light, or sanitary 
facilities, or any combination of these or other factors that 
are detrimental to the safety or health of the community; 
    (8) within its area of operation, to determine the level of 
income constituting low or moderate family income.  The 
authority may establish various income levels for various family 
sizes.  In making its determination, the authority may consider 
income levels that may be established by the Department of 
Housing and Urban Development or a similar or successor federal 
agency for the purpose of federal loan guarantees or subsidies 
for persons of low or moderate income.  The authority may use 
that determination as a basis for the maximum amount of income 
for admissions to housing development projects or housing 
projects owned or operated by it; 
      (9) to provide in federally assisted projects any 
relocation payments and assistance necessary to comply with the 
requirements of the Federal Uniform Relocation Assistance and 
Real Property Acquisition Policies Act of 1970, and any 
amendments or supplements thereto; 
      (10) to make an agreement with the governing body or bodies 
creating the authority which provides exemption from all real 
and personal property taxes levied or imposed by the state, 
city, county, or other political subdivisions, for which the 
authority shall make payments in lieu of taxes to the state, 
city, county, or other political subdivisions as provided in 
section 469.040.  The governing body shall agree on behalf of 
all the applicable governing bodies affected that local 
cooperation as required by the federal government shall be 
provided by the local governing body or bodies in whose 
jurisdiction the project is to be located, at no cost or at no 
greater cost than the same public services and facilities 
furnished to other residents; 
      (11) to cooperate with or act as agent for the federal 
government, the state or any state public body, or any agency or 
instrumentality of the foregoing, in carrying out any of the 
provisions of sections 469.001 to 469.047 or of any other 
related federal, state, or local legislation; and upon the 
consent of the governing body of the city to purchase, lease, 
manage, or otherwise take over any housing project already owned 
and operated by the federal government; 
      (12) to make plans for carrying out a program of voluntary 
repair and rehabilitation of buildings and improvements, and 
plans for the enforcement of laws, codes, and regulations 
relating to the use of land and the use and occupancy of 
buildings and improvements, and to the compulsory repair, 
rehabilitation, demolition, or removal of buildings and 
improvements.  The authority may develop, test, and report 
methods and techniques, and carry out demonstrations and other 
activities for the prevention and elimination of slums and 
blight; 
         (13) to borrow money or other property and accept 
contributions, grants, gifts, services, or other assistance from 
the federal government, the state government, state public 
bodies, or from any other public or private sources; 
         (14) to include in any contract for financial assistance 
with the federal government any conditions that the federal 
government may attach to its financial aid of a project, not 
inconsistent with purposes of sections 469.001 to 469.047, 
including obligating itself (which obligation shall be 
specifically enforceable and not constitute a mortgage, 
notwithstanding any other laws) to convey to the federal 
government the project to which the contract relates upon the 
occurrence of a substantial default with respect to the 
covenants or conditions to which the authority is subject; to 
provide in the contract that, in case of such conveyance, the 
federal government may complete, operate, manage, lease, convey, 
or otherwise deal with the project until the defaults are cured 
if the federal government agrees in the contract to reconvey to 
the authority the project as then constituted when the defaults 
have been cured; 
         (15) to issue bonds for any of its corporate purposes and 
to secure the bonds by mortgages upon property held or to be 
held by it or by pledge of its revenues, including grants or 
contributions; 
        (16) to invest any funds held in reserves or sinking funds, 
or any funds not required for immediate disbursement, in 
property or securities in which savings banks may legally invest 
funds subject to their control or in the manner and subject to 
the conditions provided in section 475.66 for the deposit and 
investment of debt service funds; 
         (17) within its area of operation, to determine where 
blight exists or where there is unsafe, unsanitary, or 
overcrowded housing; 
         (18) to carry out studies of the housing and redevelopment 
needs within its area of operation and of the meeting of those 
needs.  This includes study of data on population and family 
groups and their distribution according to income groups, the 
amount and quality of available housing and its distribution 
according to rentals and sales prices, employment, wages, 
desirable patterns for land use and community growth, and other 
factors affecting the local housing and redevelopment needs and 
the meeting of those needs; to make the results of those studies 
and analyses available to the public and to building, housing, 
and supply industries; 
      (19) if a local public body does not have a planning agency 
or the planning agency has not produced a comprehensive or 
general community development plan, to make or cause to be made 
a plan to be used as a guide in the more detailed planning of 
housing and redevelopment areas; 
      (20) to lease or rent any dwellings, accommodations, lands, 
buildings, structures, or facilities included in any project 
and, subject to the limitations contained in sections 469.001 to 
469.047 with respect to the rental of dwellings in housing 
projects, to establish and revise the rents or charges therefor; 
      (21) to own, hold, and improve real or personal property 
and to sell, lease, exchange, transfer, assign, pledge, or 
dispose of any real or personal property or any interest 
therein; 
      (22) to insure or provide for the insurance of any real or 
personal property or operations of the authority against any 
risks or hazards; 
      (23) to procure or agree to the procurement of government 
insurance or guarantees of the payment of any bonds or parts 
thereof issued by an authority and to pay premiums on the 
insurance; 
      (24) to make expenditures necessary to carry out the 
purposes of sections 469.001 to 469.047; 
      (25) to enter into an agreement or agreements with any 
state public body to provide informational service and 
relocation assistance to families, individuals, business 
concerns, and nonprofit organizations displaced or to be 
displaced by the activities of any state public body; 
      (26) to compile and maintain a catalog of all vacant, open 
and undeveloped land, or land which contains substandard 
buildings and improvements as that term is defined in clause 
(7), that is owned or controlled by the authority or by the 
governing body within its area of operation and to compile and 
maintain a catalog of all authority owned real property that is 
in excess of the foreseeable needs of the authority, in order to 
determine and recommend if the real property compiled in either 
catalog is appropriate for disposal pursuant to the provisions 
of section 469.029, subdivisions 9 and 10; 
      (27) to recommend to the city concerning the enforcement of 
the applicable health, housing, building, fire prevention, and 
housing maintenance code requirements as they relate to 
residential dwelling structures that are being rehabilitated by 
low- or moderate-income persons pursuant to section 469.029, 
subdivision 9, for the period of time necessary to complete the 
rehabilitation, as determined by the authority; 
     (28) to recommend to the city the initiation of municipal 
powers, against certain real properties, relating to repair, 
closing, condemnation, or demolition of unsafe, unsanitary, 
hazardous, and unfit buildings, as provided in section 469.041, 
clause (5); 
     (29) to sell, at private or public sale, at the price or 
prices determined by the authority, any note, mortgage, lease, 
sublease, lease purchase, or other instrument or obligation 
evidencing or securing a loan made for the purpose of economic 
development, job creation, redevelopment, or community 
revitalization by a public agency to a business, for-profit or 
nonprofit organization, or an individual; 
     (30) within its area of operation, to acquire and sell real 
property that is benefited by federal housing assistance 
payments, other rental subsidies, interest reduction payments, 
or interest reduction contracts for the purpose of preserving 
the affordability of low- and moderate-income multifamily 
housing; 
     (31) to apply for, enter into contracts with the federal 
government, administer, and carry out a section 8 program.  
Authorization by the governing body creating the authority to 
administer the program at the authority's initial application is 
sufficient to authorize operation of the program in its area of 
operation for which it was created without additional local 
governing body approval.  Approval by the governing body or 
bodies creating the authority constitutes approval of a housing 
program for purposes of any special or general law requiring 
local approval of section 8 programs undertaken by city, county, 
or multicounty authorities; and 
    (32) to secure a mortgage or loan for a rental housing 
project by obtaining the appointment of receivers or assignments 
of rents and profits under sections 559.17 and 576.01, except 
that the limitation relating to the minimum amounts of the 
original principal balances of mortgages specified in sections 
559.17, subdivision 2, clause (2); and 576.01, subdivision 2, 
does not apply. 
    Sec. 4.  Minnesota Statutes 1992, section 469.174, 
subdivision 19, is amended to read: 
    Subd. 19.  [SOILS CONDITION DISTRICTS.] (a) "Soils 
condition 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 the 
following conditions exist: 
    (1) less than 70 percent of the parcels in the district are 
occupied by buildings, streets, utilities, or other 
improvements; 
    (2) unusual terrain, the presence of hazardous substances, 
pollution or contaminants, or soil deficiencies for 80 percent 
of the acreage in the district require substantial filling, 
grading, removal or remedial action, or other physical 
preparation for use; 
    (3) (2) the estimated cost of the physical preparation 
under clause (2) (1), but excluding costs directly related to 
roads as defined in section 160.01 and local improvements as 
described in sections 429.021, subdivision 1, clauses (1) to 
(7), (11), and (12), and 430.01, when added to the fair market 
value of the land upon inclusion in the district exceeds the 
anticipated fair market value of the land upon before completion 
of the preparation. 
     The requirements of clause (2) need not be satisfied, if 
each parcel of property in the district either satisfies the 
requirements of clause (2) or the estimated costs of the 
proposed removal or remedial action exceeds $2 per square foot 
for the area of the parcel. 
    (b) An area does not qualify as a soils condition district 
if it contains a wetland, as defined in section 103G.005, unless 
the development agreement prohibits draining, filling, or other 
alteration of the wetland or other binding legal assurances for 
preservation of the wetland are provided. 
    (c) If the district is located in the metropolitan area, 
the proposed development of the district in the tax increment 
financing plan must be consistent with the municipality's land 
use plan adopted in accordance with sections 473.851 to 473.872 
and reviewed by the metropolitan council under section 473.175.  
If the district is located outside of the metropolitan area, the 
proposed development of the district must be consistent with the 
municipality's comprehensive municipal plan. 
    (d) No parcel shall be included in the district unless the 
authority has concluded an agreement or agreements for the 
development of at least 50 percent of the acreage having the 
unusual soil or terrain deficiencies.  The agreement must 
provide recourse for the authority if the development is not 
completed. 
    Sec. 5.  Minnesota Statutes 1992, section 469.174, 
subdivision 20, is amended to read: 
    Subd. 20.  [INTERNAL REVENUE CODE.] "Internal Revenue Code" 
means the Internal Revenue Code of 1986, as amended through 
December 31, 1988 1992. 
    Sec. 6.  Minnesota Statutes 1992, section 469.174, is 
amended by adding a subdivision to read: 
    Subd. 22.  [TOURISM FACILITY.] "Tourism facility" means 
property that: 
    (1) is located in a county where the median income is no 
more than 85 percent of the state median income; 
    (2) is located in a county in which, excluding the cities 
of the first class in that county, the earnings on 
tourism-related activities are 15 percent or more of the total 
earnings in the county; 
    (3) is located outside the metropolitan area defined in 
section 473.121, subdivision 2; 
    (4) is not located in a city with a population in excess of 
20,000; and 
    (5) is acquired, constructed, or rehabilitated for use as a 
convention and meeting facility, amusement park, recreation 
facility, cultural facility, marina, park, hotel, motel, lodging 
facility, or nonhomestead dwelling unit that in each case is 
intended to serve primarily individuals from outside the county. 
    Sec. 7.  Minnesota Statutes 1992, section 469.175, 
subdivision 1, is amended to read: 
    Subdivision 1.  [TAX INCREMENT FINANCING PLAN.] (a) A tax 
increment financing plan shall contain:  
    (1) a statement of objectives of an authority for the 
improvement of a project; 
    (2) a statement as to the development program for the 
project, including the property within the project, if any, that 
the authority intends to acquire; 
    (3) a list of any development activities that the plan 
proposes to take place within the project, for which contracts 
have been entered into at the time of the preparation of the 
plan, including the names of the parties to the contract, the 
activity governed by the contract, the cost stated in the 
contract, and the expected date of completion of that activity; 
    (4) identification or description of the type of any other 
specific development reasonably expected to take place within 
the project, and the date when the development is likely to 
occur; 
    (5) estimates of the following:  
    (i) cost of the project, including administration expenses; 
    (ii) amount of bonded indebtedness to be incurred; 
    (iii) sources of revenue to finance or otherwise pay public 
costs; 
    (iv) the most recent net tax capacity of taxable real 
property within the tax increment financing district; 
    (v) the estimated captured net tax capacity of the tax 
increment financing district at completion; and 
    (vi) the duration of the tax increment financing district's 
existence; 
    (6) statements of the authority's alternate estimates of 
the impact of tax increment financing on the net tax capacities 
of all taxing jurisdictions in which the tax increment financing 
district is located in whole or in part.  For purposes of one 
statement, the authority shall assume that the estimated 
captured net tax capacity would be available to the taxing 
jurisdictions without creation of the district, and for purposes 
of the second statement, the authority shall assume that none of 
the estimated captured net tax capacity would be available to 
the taxing jurisdictions without creation of the district; 
    (7) identification and description of studies and analyses 
used to make the determination set forth in subdivision 3, 
clause (2); and 
    (8) identification of all parcels to be included in the 
district. 
    (b) For a housing district, redevelopment district, or a 
hazardous substance subdistrict, the authority may elect in the 
tax increment financing plan to provide for the identification 
of a minimum market value in the plan, development agreement, or 
assessment agreement, and provide that increment is first 
received by the authority when (1) the market value of the 
improvements as determined by the assessor reaches or exceeds 
the minimum market value, or (2) four years has elapsed from the 
date of certification of the original net tax capacity of the 
taxable real property in the district by the county auditor, 
whichever is earlier. 
    Sec. 8.  Minnesota Statutes 1992, section 469.175, is 
amended by adding a subdivision to read: 
    Subd. 2a.  [HOUSING DISTRICTS; REDEVELOPMENT DISTRICTS.] In 
the case of a proposed housing district or redevelopment 
district, in addition to the requirements of subdivision 2, at 
least 30 days before the publication of the notice for public 
hearing under subdivision 3, the authority shall deliver written 
notice of the proposed district to each county commissioner who 
represents part of the area proposed to be included in the 
district.  The notice must contain a general description of the 
boundaries of the proposed district and the proposed activities 
to be financed by the district, an offer by the authority to 
meet and discuss the proposed district with the county 
commissioner, and a solicitation of the commissioner's comments 
with respect to the district. 
    Sec. 9.  Minnesota Statutes 1992, section 469.175, is 
amended by adding a subdivision to read: 
    Subd. 7a.  [HAZARDOUS SUBSTANCE SUBDISTRICTS; LOCAL 
CONTRIBUTION ELECTION.] The state aid reductions under section 
273.1399 do not apply to a hazardous substance subdistrict, if 
the municipality elects to pay and pays 18 percent of the cost 
of developing and implementing the development action response 
plan for the subdistrict and of any deposits to an 
indemnification fund out of its general fund, a property tax 
levy for that purpose, or other unrestricted money of the 
municipality (other than tax increments).  The municipality must 
elect this option before it requests certification of the 
original tax capacity of the subdistrict and must notify the 
commissioner of revenue of its election.  The election is 
irrevocable. 
    Sec. 10.  Minnesota Statutes 1992, 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 (g) subdivisions 1a to 1f, 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) subdivisions 1a to 1f.  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 are 
pledged to the payment of the bonds until the principal of and 
interest on the bonds has been paid in full.  
    (d) Subd. 1a.  [DURATION LIMIT; THREE-YEAR ACTIVITY RULE.] 
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, unless 
within the three-year period (1) bonds have been issued in aid 
of the project containing the district pursuant to section 
469.178, or any other law, except revenue bonds issued pursuant 
to sections 469.152 to 469.165, 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) Subd. 1b.  [DURATION LIMITS; TERMS.] (a) No tax 
increment shall in any event be paid to the authority 
    (1) after 25 years from date of receipt by the authority of 
the first tax increment for a mined underground space 
development district, redevelopment district, or housing 
district, 
    (2) after 15 years after receipt by the authority of the 
first increment for a renewal and renovation district, 
    (3) after 12 years from approval of the tax increment 
financing plan for a soils condition district, and 
    (4) after eight nine years from the date of the receipt, or 
ten 11 years from approval of the tax increment financing plan, 
whichever is less, for an economic development district., 
    (5) for a housing district or a redevelopment district, 
after 20 years from the date of receipt by the authority of the 
first tax increment by the authority pursuant to section 
469.175, subdivision 1, paragraph (b); or, if no provision is 
made under section 469.175, subdivision 1, paragraph (b), after 
25 years from the date of receipt by the authority of the first 
increment. 
    (b) For purposes of determining a duration limit under this 
subdivision or subdivision 1e that is based on the receipt of an 
increment, any increments from taxes payable in the year in 
which the district terminates shall be paid to the authority.  
This paragraph does not affect a duration limit calculated from 
the date of approval of the tax increment financing plan or 
based on the recovery of costs or to a duration limit under 
subdivision 1c.  This paragraph does not supersede the 
restrictions on payment of delinquent taxes in subdivision 1f. 
    Subd. 1c.  [DURATION LIMITS; PRE-1979 DISTRICTS.] 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) Subd. 1d.  [DURATION LIMITS; EFFECT OF MODIFICATIONS.] 
Modification of a tax increment financing plan pursuant to 
section 469.175, subdivision 4, shall not extend the durational 
limitations of this subdivision subdivisions 1 to 1f. 
    (g) Subd. 1e.  [DURATION LIMITS; HAZARDOUS SUBSTANCE 
SUBDISTRICTS.] 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 
subdivisions 1 to 1f for the overlying district.  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 469.174, subdivision 7, 
paragraph (b), and received after the date of certification to 
the county auditor described in section 469.174, 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 20 years if the authority 
elects under section 469.175, subdivision 1, paragraph (b), to 
defer receipt of the first increment; or (2) the period 
necessary to recover the costs of removal actions or remedial 
actions specified in a development response action plan. 
    (h) Subd. 1f.  [DELINQUENT TAXES AFTER TERMINATION.] If a 
parcel located in the district has delinquent property taxes 
when the district terminates under the duration limits under 
this subdivision, the payment of the parcel's delinquent taxes 
made after decertification of the district are tax increments to 
the extent the nonpayment of property taxes caused the 
outstanding bonds or contractual obligations pledged to be paid 
by the district to be paid by sources other than tax increments 
or to go unpaid.  The county auditor shall pay the appropriate 
amount to the district.  The authority shall provide the county 
auditor with information regarding the payment of outstanding 
bonds or contractual obligations and any other information 
necessary to administer the payment, as requested by the county 
auditor. 
    Sec. 11.  Minnesota Statutes 1992, section 469.176, 
subdivision 4, is amended to read: 
    Subd. 4.  [LIMITATION ON USE OF TAX INCREMENT; GENERAL 
RULE.] All revenues derived from tax increment shall be used in 
accordance with the tax increment financing plan.  The revenues 
shall be used solely for the following purposes:  (1) to pay the 
principal of and interest on bonds issued to finance a project; 
(2) by a rural development financing authority for the purposes 
stated in section 469.142, by a port authority or municipality 
exercising the powers of a port authority to finance or 
otherwise pay the cost of redevelopment pursuant to sections 
469.048 to 469.068, by an economic development authority to 
finance or otherwise pay the cost of redevelopment pursuant to 
sections 469.090 to 469.108, by a housing and redevelopment 
authority or economic development authority to finance or 
otherwise pay public redevelopment costs pursuant to sections 
469.001 to 469.047, by a municipality or economic development 
authority to finance or otherwise pay the capital and 
administration costs of a development district pursuant to 
sections 469.124 to 469.134, by a municipality or authority to 
finance or otherwise pay the costs of developing and 
implementing a development action response plan, by a 
municipality or redevelopment agency to finance or otherwise pay 
premiums for insurance or other security guaranteeing the 
payment when due of principal of and interest on the bonds 
pursuant to chapter 462C, sections 469.152 to 469.165, or both, 
or to accumulate and maintain a reserve securing the payment 
when due of the principal of and interest on the bonds pursuant 
to chapter 462C, sections 469.152 to 469.165, or both, which 
revenues in the reserve shall not exceed, subsequent to the 
fifth anniversary of the date of issue of the first bond issue 
secured by the reserve, an amount equal to 20 percent of the 
aggregate principal amount of the outstanding and nondefeased 
bonds secured by the reserve. 
    Sec. 12.  Minnesota Statutes 1992, section 469.176, 
subdivision 4c, is amended to read: 
    Subd. 4c.  [ECONOMIC DEVELOPMENT DISTRICTS.] (a) Revenue 
derived from tax increment from an economic development district 
may not be used to provide improvements, loans, subsidies, 
grants, interest rate subsidies, or assistance in any form to 
developments consisting of buildings and ancillary facilities, 
if at least ten more than 15 percent of the buildings and 
facilities (determined on the basis of square footage) are used 
for a purpose other than:  
    (1) the manufacturing or production of tangible personal 
property, including processing resulting in the change in 
condition of the property; 
    (2) warehousing, storage, and distribution of tangible 
personal property, but excluding retail sales; 
    (3) research and development or related to the activities 
listed in clause (1) or (2); 
    (4) telemarketing if that activity is the exclusive use of 
the property; or 
    (4) (5) tourism facilities, if the tourism facility is not 
located in a development region, as defined in section 462.384, 
with a population in excess of 1,000,000; or 
    (6) space necessary for and related to the activities 
listed in clauses (1) to (5).  
    The percentage of buildings and facilities that may be used 
for nonqualifying purposes is increased above ten percent, but 
not over 25 percent, to the extent the nonqualifying square 
footage is directly related to and in support of the qualifying 
activity. 
    (b) Population must be determined under the provisions of 
section 477A.011.  Tourism facilities are limited to hotel and 
motel properties, including ancillary restaurants, convention 
and meeting facilities, amusement parks, recreation facilities, 
cultural facilities, marinas, and parks.  The city must find 
that the tourism facilities are intended primarily to serve 
individuals outside of the development region. 
    (c) If the authority financed the construction of 
improvements with increment revenues for a site on which the 
authority expected qualifying facilities to be constructed and 
nonqualified property was constructed on the site in excess of 
the amount permitted under paragraph (a) within five years after 
the district was created, the developer of the nonqualified 
property must pay to the authority an amount equal to 90 percent 
of the benefit resulting from the improvements.  The amount 
required to be paid may not exceed the proportionate cost of the 
improvements, including capitalized interest, that was financed 
with increment revenues.  The payment must be used to prepay or 
discharge bonds under section 469.176, subdivision 2, paragraph 
(a), clauses (1) to (3).  If no bonds are outstanding, the 
payment shall be distributed as an excess increment.  "Benefit" 
has the meaning given in chapter 429.  
    (d) (b) Notwithstanding the provisions of this subdivision, 
revenue derived from tax increment from an economic development 
district may be used to provide improvements, loans, subsidies, 
grants, interest rate subsidies, or assistance in any form for 
up to 5,000 square feet of commercial and retail facilities 
within the municipal jurisdiction of a home rule charter or 
statutory city that has a population of 5,000 or less.  The 
5,000 square feet limitation is cumulative and applies to all 
facilities in all the economic development districts within the 
municipal jurisdiction. 
    Sec. 13.  Minnesota Statutes 1992, section 469.176, 
subdivision 4e, is amended to read: 
    Subd. 4e.  [HAZARDOUS SUBSTANCE SUBDISTRICTS.] The 
additional tax increment received by the municipality from a 
hazardous substance subdistrict as a result of a reduction in 
original net tax capacity pursuant to section 469.174, 
subdivision 7, paragraph (b), or as a result of the extension of 
the period for collection of tax increment from a hazardous 
substance site or subdistrict provided for in subdivision 1, 
paragraph (g), may be used only to pay or reimburse the costs 
of:  (1) removal actions or remedial actions with respect to 
hazardous substances or pollutants or contaminants or petroleum 
releases affecting or which may affect the designated hazardous 
substance site; (2) pollution testing, demolition, and soil 
compaction correction necessitated by the development response 
action plan for the designated hazardous substance site; and (3) 
purchase of environmental insurance or deposits to a guaranty 
fund, relating only to liability or response costs for land in 
the subdistrict; and (4) related administrative and legal costs, 
including costs of review and approval of development response 
action plans by the pollution control agency and litigation 
expenses of the attorney general. 
    Sec. 14.  Minnesota Statutes 1992, section 469.176, 
subdivision 4g, is amended to read: 
    Subd. 4g.  [GENERAL GOVERNMENT USE PROHIBITED.] (a) These 
revenues shall not be used to circumvent existing levy limit 
law.  No revenues derived from tax increment from any district, 
whether certified before or after August 1, 1979, shall be used 
for the acquisition, construction, renovation, operation, or 
maintenance of a building to be used primarily and regularly for 
conducting the business of a municipality, county, school 
district, or any other local unit of government or the state or 
federal government.  This provision shall not prohibit the use 
of revenues derived from tax increments for the construction or 
renovation of a parking structure, a commons area used as a 
public park, or a facility used for social, recreational, or 
conference purposes and not primarily for conducting the 
business of the municipality.  
    (b) If any publicly owned facility used for social, 
recreational, or conference purposes and financed in whole or in 
part from revenues derived from a district is operated or 
managed by an entity other than the authority, the operating and 
management policies of the facility must be approved by the 
governing body of the authority. 
    Sec. 15.  [469.1765] [GUARANTY FUND.] 
    Subdivision 1.  [AUTHORITY TO ESTABLISH.] An authority may 
establish and maintain a guaranty fund or funds.  Money in the 
guaranty fund is available, under the terms and conditions that 
the development authority establishes, to indemnify or hold 
harmless a person from liability for remediation costs under a 
state or federal environmental law, regulation, ruling, order, 
or decision. 
    Subd. 2.  [ELIGIBLE PERSON.] The authority may agree to 
pledge money in the guaranty fund to indemnify a person whose 
liability arises out of use, ownership, occupancy, or financing 
of a property in the subdistrict or district. 
    Subd. 3.  [TERMS OF INDEMNITY.] The authority shall 
determine by resolution or by agreement with the person the 
terms and conditions under which money in the guaranty fund will 
be used to indemnify or hold harmless the person.  The authority 
may not agree to indemnify a person from liability for 
contamination caused by the person.  The maximum amount that may 
be paid from the guaranty fund with respect to properties within 
a subdistrict or district is one-half of the remediation and 
removal costs.  The maximum duration of an indemnification 
agreement is 25 years.  An indemnification agreement is subject 
to any other restrictions provided by this section or other law. 
    Subd. 4.  [FUNDING.] (a) Revenues derived from tax 
increments and any other money available to the authority may be 
deposited in the guaranty fund.  The municipality may 
appropriate money to the authority to be deposited in the 
guaranty fund. 
    (b) If a guaranty fund is established that applies to 
property located in more than one tax increment financing 
district or subdistrict, the authority shall establish separate 
accounts for each subdistrict and district.  The authority shall 
deposit all revenues derived from tax increments from a 
subdistrict or district in the account for that subdistrict or 
district, except the following amounts may be deposited in a 
general or other account:  (1) the portion of revenue derived 
increments from a district, subject to section 469.1763, that 
may be spent on activities outside of the district, or (2) up to 
25 percent of the revenues derived from increments from 
districts that are not subject to section 469.1763 and which may 
be deposited in the guaranty fund under the applicable tax 
increment financing plans.  Investment earnings of money in an 
account must be credited to that account. 
    (c) The only money which may be pledged to indemnify or 
hold harmless a person from liability are amounts either in the 
account for the subdistrict or district in which the property 
out of which the liability arose is located or in an account not 
dedicated to a specific subdistrict or district. 
    Subd. 5.  [LIABILITY LIMITED.] The authority and 
municipality is liable under a guaranty fund agreement only to 
the extent funds are available in the guaranty fund account or 
accounts available for the property. 
    Subd. 6.  [DEPOSITORY.] The authority shall provide for the 
guaranty fund to be held by or maintained with a financial 
institution or corporate fiduciary eligible for the deposit of 
public money or eligible to act as a trustee or fiduciary for 
obligations issued under chapter 475. 
    Subd. 7.  [FINAL DISPOSITION OF FUNDS.] At the end of the 
period of the indemnification, all unencumbered money in the 
guaranty fund for the subdistrict or district must be treated as 
an excess increment and distributed under the provisions of 
section 469.176, subdivision 2, paragraph (a), clause (4).  If 
the municipality contributed money to the account, other than 
revenues derived from increments, the authority may deduct and 
pay to the municipality a proportionate share of the 
unencumbered money in the account before the money is 
distributed as an excess increment.  The proportionate share is 
determined based on the amount of contributions of nonincrements 
to the account relative to total contributions, including 
increments, to the account. 
    Sec. 16.  [469.1766] [DEVELOPER PAYMENTS.] 
    If the development agreement, other agreement, or 
arrangement provides for the developer to repay all or part of 
the assistance provided that was financed, directly or 
indirectly, with revenues derived from tax increments, the 
developer payments are subject to the restrictions imposed by 
law on revenues derived from tax increments and may only be 
spent for the purposes for which increments may be spent.  A 
developer includes any beneficiary of assistance financed with 
revenues derived from tax increments. 
    Assistance includes sales of property at less than the cost 
of acquisition or fair market value, grants, ground or other 
leases at less than fair market rent, interest rate subsidies, 
utility service connections, roads, or other similar assistance 
that otherwise would have been paid in whole or part by the 
beneficiary. 
    Sec. 17.  Minnesota Statutes 1992, section 469.177, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ORIGINAL NET TAX CAPACITY.] (a) Upon or 
after adoption of a tax increment financing plan, the auditor of 
any county in which the district is situated shall, upon request 
of the authority, certify the original net tax capacity of the 
tax increment financing district as described in the tax 
increment financing plan and shall certify in each year 
thereafter the amount by which the original net tax capacity has 
increased or decreased as a result of a change in tax exempt 
status of property within the district, reduction or enlargement 
of the district or changes pursuant to subdivision 4.  
    (b) In the case of a mined underground space development 
district the county auditor shall certify the original net tax 
capacity as zero, plus the net tax capacity, if any, previously 
assigned to any subsurface area included in the mined 
underground space development district pursuant to section 
272.04. 
    (c) For districts approved under section 469.175, 
subdivision 3, or parcels added to existing districts after May 
1, 1988, if the classification under section 273.13 of property 
located in a district changes to a classification that has a 
different assessment ratio, the original net tax capacity of 
that property must be redetermined at the time when its use is 
changed as if the property had originally been classified in the 
same class in which it is classified after its use is changed. 
     (d) The amount to be added to the original net tax capacity 
of the district as a result of previously tax exempt real 
property within the district becoming taxable equals the net tax 
capacity of the real property as most recently assessed pursuant 
to section 273.18 or, if that assessment was made more than one 
year prior to the date of title transfer rendering the property 
taxable, the net tax capacity assessed by the assessor at the 
time of the transfer.  If substantial taxable improvements were 
made to a parcel after certification of the district and if the 
property later becomes tax exempt, in whole or part, as a result 
of the authority acquiring the property through foreclosure or 
exercise of remedies under a lease or other revenue agreement or 
as a result of tax forfeiture, the amount to be added to the 
original net tax capacity of the district as a result of the 
property again becoming taxable is the amount of the parcel's 
value that was included in original net tax capacity when the 
parcel was first certified.  The amount to be added to the 
original net tax capacity of the district as a result of 
enlargements equals the net tax capacity of the added real 
property as most recently certified by the commissioner of 
revenue as of the date of modification of the tax increment 
financing plan pursuant to section 469.175, subdivision 4. 
    (e) For districts approved under section 469.175, 
subdivision 3, or parcels added to existing districts after May 
1, 1988, if the net tax capacity of a property increases because 
the property no longer qualifies under the Minnesota 
agricultural property tax law, section 273.111; the Minnesota 
open space property tax law, section 273.112; or the 
metropolitan agricultural preserves act, chapter 473H, or 
because platted, unimproved property is improved or three years 
pass after approval of the plat under section 273.11, 
subdivision 1, the increase in net tax capacity must be added to 
the original net tax capacity.  
     (f) Each year the auditor shall also add to the original 
net tax capacity of each economic development district an amount 
equal to the original net tax capacity for the preceding year 
multiplied by the average percentage increase in the market 
value of all property included in the economic development 
district during the five years prior to certification of the 
district. 
      (g) The amount to be subtracted from the original net tax 
capacity of the district as a result of previously taxable real 
property within the district becoming tax exempt, or a reduction 
in the geographic area of the district, shall be the amount of 
original net tax capacity initially attributed to the property 
becoming tax exempt or being removed from the district.  If the 
net tax capacity of property located within the tax increment 
financing district is reduced by reason of a court-ordered 
abatement, stipulation agreement, voluntary abatement made by 
the assessor or auditor or by order of the commissioner of 
revenue, the reduction shall be applied to the original net tax 
capacity of the district when the property upon which the 
abatement is made has not been improved since the date of 
certification of the district and to the captured net tax 
capacity of the district in each year thereafter when the 
abatement relates to improvements made after the date of 
certification.  The county auditor may specify reasonable form 
and content of the request for certification of the authority 
and any modification thereof pursuant to section 469.175, 
subdivision 4.  
    (h) If a parcel of property contained a substandard 
building that was demolished or removed and if the authority 
elects to treat the parcel as occupied by a substandard building 
under section 469.174, subdivision 10, paragraph (b), the 
auditor shall certify the original net tax capacity of the 
parcel using the greater of (1) the current net tax capacity of 
the parcel, or (2) the estimated market value of the parcel for 
the year in which the building was demolished or removed, but 
applying the class rates for the current year. 
    Sec. 18.  Minnesota Statutes 1992, section 469.177, 
subdivision 8, is amended to read: 
    Subd. 8.  [ASSESSMENT AGREEMENTS.] An authority may enter 
into a written assessment agreement with any person establishing 
a minimum market value of land, existing improvements, or 
improvements to be constructed in a district, if the property is 
owned or will be owned by the person.  The minimum market value 
established by an assessment agreement may be fixed, or increase 
or decrease in later years from the initial minimum market 
value.  If an agreement is fully executed before July 1 of an 
assessment year, the market value as provided under the 
agreement must be used by the county or local assessor as the 
taxable market value of the property for that assessment.  
Agreements executed on or after July 1 of an assessment year 
become effective for assessment purposes in the following 
assessment year.  An assessment agreement terminates on the 
earliest of the date on which conditions in the assessment 
agreement for termination are satisfied, the termination date 
specified in the agreement, or the date when tax increment is no 
longer paid to the authority under section 469.176, subdivision 
1.  The assessment agreement shall be presented to the county 
assessor, or city assessor having the powers of the county 
assessor, of the jurisdiction in which the tax increment 
financing district and the property that is the subject of the 
agreement is located.  The assessor shall review the plans and 
specifications for the improvements to be constructed, review 
the market value previously assigned to the land upon which the 
improvements are to be constructed and, so long as the minimum 
market value contained in the assessment agreement appears, in 
the judgment of the assessor, to be a reasonable estimate, shall 
execute the following certification upon the agreement:  
     The undersigned assessor, being legally responsible 
     for the assessment of the above described property, 
     certifies that the market values assigned to 
     the land and improvements are reasonable.
    The assessment agreement shall be filed for record and 
recorded in the office of the county recorder or the registrar 
of titles of each county where the real estate or any part 
thereof is situated.  After the agreement becomes effective for 
assessment purposes, the assessor shall value the property under 
section 273.11, except that the market value assigned shall not 
be less than the minimum market value established by the 
assessment agreement.  The assessor may assign a market value to 
the property in excess of the minimum market value established 
by the assessment agreement.  The owner of the property may 
seek, through the exercise of administrative and legal remedies, 
a reduction in market value for property tax purposes, but no 
city assessor, county assessor, county auditor, board of review, 
board of equalization, commissioner of revenue, or court of this 
state shall grant a reduction of the market value below the 
minimum market value established by the assessment agreement 
during the term of the agreement filed of record regardless of 
actual market values which may result from incomplete 
construction of improvements, destruction, or diminution by any 
cause, insured or uninsured, except in the case of acquisition 
or reacquisition of the property by a public entity.  Recording 
an assessment agreement constitutes notice of the agreement to 
anyone who acquires any interest in the land or improvements 
that is subject to the assessment agreement, and the agreement 
is binding upon them.  
    An assessment agreement may be modified or terminated by 
mutual consent of the current parties to the agreement.  
Modification or termination of an assessment agreement must be 
approved by the governing body of the municipality.  If the 
estimated market value for the property for the most recently 
available assessment is less than the minimum market value 
established by the assessment agreement for that or any later 
year and if bond counsel does not conclude that termination of 
the agreement is necessary to preserve the tax exempt status of 
outstanding bonds or refunding bonds to be issued, the 
modification or termination of the assessment agreement also 
must be approved by the governing bodies of the county and the 
school district.  A document modifying or terminating an 
agreement, including records of the municipality, county, and 
school district approval, must be filed for record.  The 
assessor's review and certification is not required if the 
document terminates an agreement.  A change to an agreement not 
fully executed before July 1 of an assessment year is not 
effective for assessment purposes for that assessment year.  If 
an assessment agreement has been modified or prematurely 
terminated, a person may seek a reduction in market value or tax 
through the exercise of any administrative or legal remedy.  The 
remedy may not provide for reduction of the market value below 
the minimum provided under a modified assessment agreement that 
remains in effect.  In no event may a reduction be sought for a 
year other than the current taxes payable year. 
    Sec. 19.  Minnesota Statutes 1992, section 469.1831, 
subdivision 4, is amended to read: 
    Subd. 4.  [PROGRAM MONEY; DISTRIBUTION AND RESTRICTIONS.] 
(a) Neighborhood revitalization program money may only be 
expended in accordance with the program for a purpose listed in 
subdivision 3 or this subdivision.  Program money may not be 
used in those project areas of the city where the city 
determines that private investment will be sufficient to provide 
for development and redevelopment of the project area without 
public sector assistance, except in cases where program money is 
being used to remove or rehabilitate structurally substandard or 
obsolete buildings.  Revenues derived from tax increments may 
only be expended for the purposes otherwise permitted by law, 
except that notwithstanding any law to the contrary, the city 
must pay at least the following amount of program money, 
including revenues derived from tax increments:  (1) 15 percent 
to the school district, (2) 7.5 percent to the county, and (3) 
7.5 percent for social services.  Payment must be made to the 
county and school district within 15 days after the city 
receives the distribution of increment revenues, provided that 
the payment for calendar year 1990 may be made at any time 
during the year.  Payment to the county for social services 
delivery shall be paid only after approval of program and 
spending plans under paragraph (b).  Payment to the school 
district for education programs and services shall be paid only 
after approval of program and spending plans under paragraph (b).
     (b) The money distributed to the county in a calendar year 
must be deducted from the county's levy limit for the following 
calendar year.  In calculating the county's levy limit base for 
later years, the amount deducted must be treated as a local 
government aid payment. 
    The city must notify the commissioner of education of the 
amount of the payment made to the school district for the year.  
The commissioner shall deduct from the school district's state 
education aid payments one-half of the amount received by the 
school district. 
    The program money paid to the school district must be 
expended for additional education programs and services in 
accordance with the program.  The amounts expended by the school 
district may not replace existing services. 
    The money for social services must be paid to the county 
for the cost of the provision of social services under the plan, 
as approved by the policy board and the county board.  
    (c) The city must expend on housing programs and related 
purposes as provided by the program at least 75 percent of the 
program money, after deducting the payments to the school 
district and county. 
    (d) Notwithstanding any other provisions of law to the 
contrary, for a city of the first class qualifying under section 
469.1781, paragraph (a), program money and money described in 
Laws 1990, chapter 604, article 7, section 29, as amended, may 
be expended anywhere within the city by the authority for a 
purpose permitted by this section for any political 
subdivision without compliance with section 469.175, subdivision 
4, and such money shall be deemed to be expended for a purpose 
that is a permitted project under section 469.176 and for a 
purpose that is permitted under section 469.176 for the district 
from which the increment was received. 
    Sec. 20.  [MINNETONKA; SOILS DISTRICT.] 
    Subdivision 1.  [AUTHORITY.] The city of Minnetonka may 
create a soils condition tax increment financing district with 
or without a hazardous substance subdistrict, covering all or 
any portion of the following described property in the city of 
Minnetonka, county of Hennepin, state of Minnesota: 
    All that part of the east half of the northeast quarter of 
section 14, township 117 north, range 22 west, lying north of 
the Great Northern Railway right-of-way; 
    The east half of the southeast quarter of section 11, 
township 117 north, range 22 west; and 
    Lots 1, 2, 3, 4, 5, and 10, Block 1, and Lots 1, 2, 3, and 
8, Block 2, Golden Acres Addition. 
    This district and a subdistrict may be created under 
Minnesota Statutes, section 469.175, if the governing body of 
the city finds, by resolution, that establishment of the 
district and a subdistrict will facilitate environmental 
response and provide for the settlement of pending litigation.  
Except as otherwise provided in this section, the provisions of 
Minnesota Statutes, sections 469.174 to 469.179, apply to the 
district and a subdistrict.  The city may issue bonds or other 
obligations payable, in whole or in part, from increment derived 
from the district and a subdistrict.  The request for 
certification of the district and a subdistrict must be filed 
with the county auditor before December 1, 1995.  The city may 
defer receipt of the first increment from the district or from a 
subdistrict for up to three years following certification.  
Minnesota Statutes, sections 469.174, subdivisions 7, paragraph 
(c), and 19, clause (a)(3); and 469.176, subdivisions 1, 
paragraph (d), 4b, 4e, 6, and 7, do not apply to this district 
and subdistrict.  Nothing in this section affects the liability 
of persons for costs or damages associated with the release of 
hazardous substances, the city's right to pursue responsible 
parties or reimbursement under applicable insurance contracts, 
or the city's liability under Minnesota Statutes, section 
115B.04, subdivision 4.  The powers granted are in addition to 
other powers of the city. 
    Subd. 2.  [QUALIFICATION RULES.] Before creating a district 
or subdistrict under this section, the governing body of the 
city of Minnetonka must find (i) that the response costs related 
to the district and subdistrict and deposits to the 
indemnification fund or premiums for the purchase of private 
environmental insurance necessary to develop the site exceed the 
estimated fair market value of the land in the district and 
subdistrict after completion of all necessary response 
activities and provision of indemnification under the plan and 
(ii) that independent of the environmental response costs, that 
the cost of correcting the unusual terrain and soil conditions 
materially impairs the ability of the owner to develop, sell, or 
finance all or any significant portion of the district.  This 
finding is in addition to the findings required under Minnesota 
Statutes, section 469.174, subdivision 19, paragraph (a), 
clauses (1) and (2), in the case of the district, and the 
findings required under Minnesota Statutes, section 469.174, 
subdivision 7, in the case of the subdistrict. 
    Subd. 3.  [LIMITS ON SPENDING INCREMENTS; POOLING 
RULES.] (a) The provisions of Minnesota Statutes, section 
469.1763, do not apply to the district and a subdistrict created 
under this section.  Revenues derived from tax increments from 
the district and subdistrict may be spent only on: 
    (1) response costs related to the area contained in the 
district and subdistrict including the activities outside of the 
subdistrict or the district but within the project, to the 
extent necessary to prevent contaminants moving to or from the 
contaminated parcels; 
    (2) deposits to an indemnification fund or the purchase of 
environmental insurance, relating only to liability or 
additional response costs for contaminated parcels located in 
the district; 
    (3) the costs of correcting the unusual terrain or soil 
deficiencies and the additional costs of installing public 
improvements directly caused by the deficiencies (except 
increments derived from reducing original tax capacity under 
Minnesota Statutes, section 469.174, subdivision 7, paragraph 
(b), may not be used for this purpose); and 
    (4) administrative expenses and costs permitted under 
Minnesota Statutes, section 469.176, subdivisions 3 and 4h, 
including costs of review and approval of development response 
actions plans by the commissioner of the pollution control 
agency and litigation expenses of the attorney general, if any. 
    (b) After sufficient revenues derived from tax increments 
have been received to pay all remediation costs, deposits to an 
indemnification fund or insurance premiums, and administrative 
and other qualifying costs, the district and subdistrict must be 
decertified.  Minnesota Statutes, section 469.176, subdivision 
1, paragraphs (e) and (g), apply to the district and 
subdistrict, except to the extent limited by this section. 
    Subd. 4.  [DEFINITION.] For purposes of this section, 
"response" means activity constituting "respond" or "response" 
as those terms are defined in Minnesota Statutes, section 
115B.02.  Response costs include activities, including 
installation of public infrastructure, necessary to respond. 
    Subd. 5.  [STATE AID REDUCTION.] (a) The state aid 
reductions under Minnesota Statutes, section 273.1399, do not 
apply to the district or a subdistrict established under this 
section, if the city elects to pay and pays 25 percent of the 
response costs and deposits to the indemnification fund out of 
its general fund, a property tax levy for that purpose, or other 
unrestricted city money (other than tax increments).  The city 
must elect this option at the time of certification of the 
district and must notify the commissioner of revenue of its 
election.  The election is irrevocable. 
    (b) If the city does not elect to pay for a portion of the 
cost as provided by paragraph (a), the state aid reductions 
under Minnesota Statutes, section 273.1399, apply.  The 
qualified captured net tax capacity of the district or 
subdistrict or both must be calculated under Minnesota Statutes 
1992, section 273.1399, subdivision 1, paragraph (a), clause (3) 
under the "All Other Districts" column. 
    Sec. 21.  [CITY OF HOPKINS; HAZARDOUS SUBSTANCE 
SUBDISTRICT.] 
    Subdivision 1.  [AUTHORIZATION.] Pursuant to Minnesota 
Statutes, section 469.175, subdivision 7, the city of Hopkins or 
its housing and redevelopment authority may create one or more 
hazardous substance subdistricts within tax increment financing 
district No. 2-5, or within any new or existing tax increment 
financing district encompassing any parcels located within 
township 117N, range 22W, sections 25 and 26 in the area bounded 
on the north by CSAH No. 3; on the south by the Hennepin County 
Regional Railroad Authority right-of-way; on the west by the 
city of Hopkins/city of Minnetonka boundary; and on the east by 
the existing parcel occupied by the city of Hopkins Well No. 1 
Building.  The city or its housing and redevelopment authority 
may issue bonds or other obligations payable in whole or in part 
from increment derived from the subdistrict or district upon a 
finding by city resolution that establishment of the subdistrict 
will facilitate environmental remediation and further the 
objectives of the tax increment financing plan for the 
district.  The request for certification of the subdistrict must 
be filed with the county auditor before December 1, 1995.  The 
city may defer receipt of the first increment from a subdistrict 
for up to three years following certification.  Minnesota 
Statutes, sections 469.174, subdivisions 7, paragraph (c), and 
16; and 469.176, subdivisions 1, paragraphs (d) and (g), 4e, 6, 
and 7, do not apply to the subdistrict. 
    Subd. 2.  [PRESERVATION OF RIGHTS.] Nothing in this section 
affects the liability of persons for costs or damages associated 
with the release of hazardous substances, or the city's right to 
pursue responsible parties or to secure reimbursement under 
applicable insurance contracts, or the city's liability under 
Minnesota Statutes, section 115B.04, subdivision 4.  The powers 
granted are in addition to other powers of the city. 
    Subd. 3.  [QUALIFICATION RULES.] Before creation of a 
subdistrict under subdivision 1, the city of Hopkins shall 
determine that the existence of pollution or contamination of 
parcels within the subdistrict materially impairs the ability of 
the owners of the parcels to develop, sell, lease, or finance 
all or any portion of the parcels.  For purposes of determining 
the original net tax capacity of the subdistrict under Minnesota 
Statutes, section 469.174, subdivision 7, paragraph (b), the 
requirement that the authority enter into a redevelopment or 
other agreement or have in place a response action plan before 
reduction of the original tax capacity does not apply.  The 
amount of the estimated costs of the removal or remedial actions 
may be based on reasonable estimates prepared for the city. 
    In addition, the city shall, following review by the 
pollution control agency, prepare and adopt a report which 
delineates the maximum amount of money to be reserved for 
eligible expenditures. 
    Subd. 4.  [ELIGIBLE EXPENDITURES.] Revenue derived from tax 
increments from the subdistrict may be spent only on: 
    (1) costs of investigating and remediating the pollution or 
contamination in the area contained in the subdistrict, 
including activities outside of the subdistrict to the extent 
necessary to prevent pollutants or contaminants moving to or 
from the subdistrict; 
    (2) deposits to an indemnification fund to be used to 
indemnify existing or future owners, purchasers, lessees, or 
mortgagees of any parcel in the subdistrict against 
environmental liability and costs associated with the 
investigation and remediation of pollution or contamination in 
the subdistrict, or the purchase of environmental insurance 
relating only to liability or remediation costs for parcels 
located in the subdistrict; 
    (3) administrative expenses and costs, including those 
permitted under Minnesota Statutes, section 469.176, subdivision 
4h, and costs of preparation, review, and approval of any 
response action plan or partial response action plan by the 
pollution control agency; and 
    (4) costs of actions, including litigation, to recover 
investigation and remediation costs incident to the subdistrict 
from responsible persons. 
    Subd. 5.  [DECERTIFICATION.] After sufficient revenues 
derived from tax increments have been received to pay all 
investigation and remediation costs, deposits to an 
indemnification fund, insurance premiums, and administrative and 
other qualifying costs, and in all events not more than 20 years 
from the date of receipt by the city of the first tax increment 
from the subdistrict, the subdistrict must be decertified. 
    Subd. 6.  [REDISTRIBUTION.] When the city has received 
sufficient tax increment funds to pay all eligible expenditures, 
any funds received must be applied by the city in the manner of 
excess tax increments under Minnesota Statutes, section 469.176, 
subdivision 2, and the Hennepin county auditor shall increase 
the original net tax capacity of the parcels in the subdistrict 
to the original net tax capacity that would prevail had no 
reduction been made. 
    Subd. 7.  [DEFINITIONS.] For purposes of this section, 
"remediation" means activity constituting removal, remedy, 
remedial action, or response as those terms are defined in 
Minnesota Statutes, section 115B.02, including activities to 
develop and implement a response action plan approved by the 
pollution control agency under Minnesota Statutes, section 
115B.17, subdivision 14, or a partial response action plan 
approved by the pollution control agency under Minnesota 
Statutes, section 115B.175.  Remediation costs include 
activities necessary to accomplish remediation, including 
installation of public infrastructure. 
    Subd. 8.  [STATE AID REDUCTION.] The state aid reductions 
under Minnesota Statutes, section 273.1399, do not apply to a 
subdistrict established under this section, if the city elects 
to pay and pays 25 percent of the response costs and deposits to 
the indemnification fund out of its general fund, a property tax 
levy for that purpose, or other unrestricted city money (other 
than tax increments).  The city must elect this option at the 
time of certification of the district and must notify the 
commissioner of revenue of its election.  The election is 
irrevocable. 
    Sec. 22.  [INVER GROVE HEIGHTS.] 
    Subdivision 1.  [EXTENSION OF TAX INCREMENT FINANCING 
DISTRICT.] Tax increment financing district No. 3-2, established 
by the city of Inver Grove Heights on April 30, 1992, under Laws 
1990, chapter 604, article 7, section 30, subdivision 2, 
continues in effect until the earlier of (1) May 1, 2004, or (2) 
when all costs provided for in the tax increment financing plan 
relating to the district have been paid.  In no event may the 
city receive more than eight years of tax increments for the 
district and all tax increments received after May 1, 2002, in 
excess of the amount of local government aid lost by the city 
under Minnesota Statutes, section 273.1399, as a result of such 
tax increments, shall be used only to pay or reimburse capital 
costs of public road and bridge improvements. 
    Subd. 2.  [BOND AUTHORIZATION.] If the city of Inver Grove 
Heights, the Minnesota department of transportation, and Dakota 
county agree to the planning, design, construction, and 
reconstruction of state, county, and city highway, street, and 
bridge improvements that serve, among other areas, the area of 
tax increment financing district No. 3-2, the city council may, 
by resolution, authorize, sell, and issue general obligation 
bonds of the city in a principal amount not to exceed $4,000,000 
to finance part of the cost of the improvements to be paid for 
by the state under the agreement.  The city shall issue the 
bonds only if and to the extent it estimates they are necessary 
to pay costs of the improvements coming due for which state 
funds are not immediately available but will be received by the 
city under the agreement.  The city shall pledge the state money 
to the payment of the bonds and after it receives the money 
shall pay the bonds as soon as practicable.  The bonds shall be 
issued and secured under Minnesota Statutes, chapter 475, except 
no election is required to authorize their issuance. 
    Sec. 23.  [CITY OF MANKATO; DURATION OF TAX INCREMENT 
FINANCING DISTRICT.] 
    Notwithstanding Minnesota Statutes, section 469.176, 
subdivision 1, the duration of the key city redevelopment 
project tax increment financing district, district AA1, located 
within the city of Mankato, may be extended by the authority to 
August 1, 2009.  Any increment received during the period of 
extended duration may only be utilized for payment of or to 
secure payment of debt service on bonds issued after April 1, 
1993, and before January 1, 1994, or bonds issued to refund 
those bonds. 
    Sec. 24.  [EFFECTIVE DATE.] 
    Sections 1, 4, 9, 11, 13, 15, and 16 are effective for 
districts and subdistricts for which requests for certification 
are made after August 1, 1993. 
    Section 2 is effective for applications filed after the day 
of final enactment. 
     Sections 6, 7, 8, and 10, subdivision 1b, clauses (4) and 
(5), 12, and 14 are effective for districts for which the 
request for certification is made after May 31, 1993. 
    Section 10, except subdivision 1b, clauses (4) and (5), is 
effective for districts for which the requests for certification 
were made after July 31, 1979. 
    Sections 17 and 18 are effective July 1, 1993, and apply to 
all districts, regardless of when the request for certification 
was made, including districts for which the request for 
certification was made before August 1, 1979.  Section 18 
applies only to modifications of assessment agreements made 
after August 1, 1993. 
    Section 19 is effective upon compliance by the city of 
Minneapolis with Minnesota Statutes, section 645.021, 
subdivision 3. 
    Section 20 is effective upon compliance by the city of 
Minnetonka with Minnesota Statutes, section 645.021, subdivision 
3. 
    Section 21 is effective upon compliance by the city of 
Hopkins with Minnesota Statutes, section 645.021, subdivision 3. 
    Section 22 is effective the day following final enactment 
without the approval of any local government. 
     Section 23 is effective upon compliance by the city of 
Mankato with Minnesota Statutes, section 645.021, subdivision 3. 

                              ARTICLE 15 

              LOCAL GOVERNMENT EFFICIENCY AND COOPERATION
    Section 1.  [465.795] [DEFINITIONS.] 
    Subdivision 1.  [AGENCY.] "Agency" means a department, 
agency, board, or other instrumentality of state government that 
has jurisdiction over an administrative rule or law from which a 
waiver is sought under section 3.  If no specific agency has 
jurisdiction over such a law, "agency" refers to the attorney 
general. 
    Subd. 2.  [BOARD.] "Board" means the board of government 
innovation and cooperation established by section 2. 
    Subd. 3.  [COUNCIL.] "Council" or "metropolitan council" 
means the metropolitan council established by section 473.123. 
    Subd. 4.  [LOCAL GOVERNMENT UNIT.] "Local government unit" 
means a county, home rule charter or statutory city, school 
district, town, or special taxing district, except for purposes 
of sections 465.81 to 465.87. 
    Subd. 5.  [METROPOLITAN AGENCY.] "Metropolitan agency" has 
the meaning given in section 473.121, subdivision 5a. 
    Subd. 6.  [METROPOLITAN AREA.] "Metropolitan area" has the 
meaning given in section 473.121, subdivision 2. 
    Subd. 7.  [SCOPE.] As used in sections 1 to 5 and sections 
465.80 to 465.87, the terms defined in this section have the 
meanings given them. 
    Sec. 2.  [465.796] [BOARD OF GOVERNMENT INNOVATION AND 
COOPERATION.] 
    Subdivision 1.  [MEMBERSHIP.] The board of government 
innovation and cooperation consists of three members of the 
senate appointed by the subcommittee on committees of the senate 
committee on rules and administration, three members of the 
house of representatives appointed by the speaker of the house, 
two administrative law judges appointed by the chief 
administrative law judge, the commissioner of finance, the 
commissioner of administration, and the state auditor.  The 
commissioners of finance and administration and the state 
auditor may each designate one staff member to serve in the 
commissioner's or auditor's place.  The members of the senate 
and house of representatives serve as nonvoting members.  
    Subd. 2.  [DUTIES OF BOARD.] The board shall: 
    (1) accept applications from local government units for 
waivers of administrative rules and temporary, limited 
exemptions from enforcement of procedural requirements in state 
law as provided in section 3, and determine whether to approve, 
modify, or reject the application; 
    (2) accept applications for grants to local government 
units and related organizations proposing to design models or 
plans for innovative service delivery and management as provided 
in section 4 and determine whether to approve, modify, or reject 
the application; 
    (3) accept applications from local government units for 
financial assistance to enable them to plan for cooperative 
efforts as provided in section 5, and determine whether to 
approve, modify, or reject the application; 
    (4) accept applications from eligible local government 
units for service-sharing grants as provided in section 465.80, 
and determine whether to approve, modify, or reject the 
application; 
    (5) accept applications from counties, cities, and towns 
proposing to combine under sections 465.81 to 465.87, and 
determine whether to approve or disapprove the application; and 
    (6) make recommendations to the legislature regarding the 
elimination of state mandates that inhibit local government 
efficiency, innovation, and cooperation. 
The board may purchase services from the metropolitan council in 
reviewing requests for waivers and grant applications. 
    Subd. 3.  [STAFF.] The board may hire staff or consultants 
as necessary to perform its duties. 
    Sec. 3.  [465.797] [RULE AND LAW WAIVER REQUESTS.] 
    Subdivision 1.  [GENERALLY.] (a) Except as provided in 
paragraph (b), a local government unit may request the board of 
government innovation and cooperation to grant a waiver from one 
or more administrative rules or a temporary, limited exemption 
from enforcement of state procedural laws governing delivery of 
services by the local government unit.  Two or more local 
government units may submit a joint application for a waiver or 
exemption under this section if they propose to cooperate in 
providing a service or program that is subject to the rule or 
law.  Before submitting an application to the board, the 
governing body of the local government unit must approve the 
waiver or exemption request by resolution at a meeting required 
to be public under section 471.705. 
    (b) A school district that is granted a variance from rules 
of the state board of education under section 121.11, 
subdivision 12, need not apply to the board for a waiver of 
those rules under this section.  A school district may not seek 
a waiver of rules under this section if the state board of 
education has authority to grant a variance to the rules under 
section 121.11, subdivision 12.  This paragraph does not 
preclude a school district from being included in a cooperative 
effort with another local government unit under this section.  
    Subd. 2.  [APPLICATION.] A local government unit requesting 
a waiver of a rule or exemption from enforcement of a law under 
this section shall present a written application to the board.  
The application must include: 
    (1) identification of the service or program at issue; 
    (2) identification of the administrative rule or the law 
imposing a procedural requirement with respect to which the 
waiver or exemption is sought; 
    (3) a description of the improved service outcome sought, 
including an explanation of the effect of the waiver or 
exemption in accomplishing that outcome; 
    (4) a description of the means by which the attainment of 
the outcome will be measured; and 
    (5) if the waiver or exemption is proposed by a single 
local government unit, a description of the consideration given 
to intergovernmental cooperation in providing this service, and 
an explanation of why the local government unit has elected to 
proceed independently. 
    A copy of the application must be provided by the 
requesting local government unit to the exclusive representative 
of its employees as certified under section 179A.12. 
    Subd. 3.  [REVIEW PROCESS.] Upon receipt of an application 
from a local government unit, the board shall review the 
application.  The board shall dismiss or request modification of 
an application within 60 days of its receipt if it finds that 
(1) the application does not meet the requirements of 
subdivision 2, or (2) the application should not be granted 
because it clearly proposes a waiver of rules or exemption from 
enforcement of laws that would result in due process violations, 
violations of federal law or the state or federal constitution, 
or the loss of services to people who are entitled to them.  If 
the application is submitted by a local government unit in the 
metropolitan area or the unit requests a waiver of a rule or 
temporary, limited exemptions from enforcement of a procedural 
law over which the metropolitan council or a metropolitan agency 
has jurisdiction, the board shall also transmit a copy of the 
application to the council for review and comment.  The council 
shall report its comments to the board within 60 days of the 
date the application was transmitted to the council.  The 
council may point out any resources or technical assistance it 
may be able to provide a local government submitting a request 
under this section.  If it does not dismiss the application, the 
board shall transmit a copy of it to the commissioner of each 
agency having jurisdiction over a rule or law from which a 
waiver or exemption is sought.  The agency may mail a notice 
that it has received an application for a waiver or exemption to 
all persons who have registered with the agency under section 
14.14, subdivision 1a, identifying the rule or law from which a 
waiver or exemption is requested.  If no agency has jurisdiction 
over the rule or law, the board shall transmit a copy of the 
application to the attorney general.  If the commissioner of 
finance, the commissioner of administration, or the state 
auditor has jurisdiction over the rule or law, the chief 
administrative law judge shall appoint a second administrative 
law judge to serve as a member of the board in the place of that 
official for purposes of determining whether to grant the waiver 
or exemption.  The agency shall inform the board of its 
agreement with or objection to and grounds for objection to the 
waiver or exemption request within 60 days of the date when the 
application was transmitted to it.  Interested persons may 
submit written comments to the board on the waiver or exemption 
request within 60 days of the board's receipt of the 
application.  If the agency fails to inform the board of its 
conclusion with respect to the application within 60 days of its 
receipt, the agency is deemed to have agreed to the waiver or 
exemption.  If the exclusive representative of the employees of 
the requesting local government unit objects to the waiver or 
exemption request it may inform the board of the objection to 
and the grounds for the objection to the waiver or exemption 
request within 60 days of the receipt of the application. 
    Subd. 4.  [HEARING.] If the agency or the exclusive 
representative does not agree with the waiver or exemption 
request, the board shall set a date for a hearing on the 
application, which may be no earlier than 90 days after the date 
when the application was transmitted to the agency.  The hearing 
must be conducted informally at a meeting of the board.  Persons 
representing the local government unit shall present their case 
for the waiver or exemption, and persons representing the agency 
shall explain the agency's objection to it.  Members of the 
board may request additional information from either party.  The 
board may also request, either before or at the hearing, 
information or comments from representatives of business, labor, 
local governments, state agencies, consultants, and members of 
the public.  If necessary, the hearing may be continued at a 
subsequent board meeting.  A waiver or exemption must be granted 
by a vote of a majority of the board members.  The board may 
modify the terms of the waiver or exemption request in arriving 
at the agreement required under subdivision 5. 
    Subd. 5.  [CONDITIONS OF AGREEMENTS.] If the board grants a 
request for a waiver or exemption, the board and the local 
government unit shall enter into an agreement providing for the 
delivery of the service or program that is the subject of the 
application.  The agreement must specify desired outcomes and 
the means of measurement by which the board will determine 
whether the outcomes specified in the agreement have been met.  
The agreement must specify the duration of the waiver or 
exemption, which may be for no less than two years and no more 
than four years, subject to renewal if both parties agree.  A 
waiver of a rule under this section has the effect of a variance 
granted by an agency under section 14.05, subdivision 4.  A 
local unit of government that is granted an exemption from 
enforcement of a procedural requirement in state law under this 
section is exempt from that law for the duration of the 
exemption.  The board may require periodic reports from the 
local government unit, or conduct investigations of the service 
or program. 
    Subd. 6.  [ENFORCEMENT.] If the board finds that the local 
government unit is failing to comply with the terms of the 
agreement under subdivision 5, it may rescind the agreement.  
Upon the recision, the local unit of government becomes subject 
to the rules and laws covered by the agreement. 
     Subd. 7.  [ACCESS TO DATA.] If a local government unit, 
through a cooperative program under this section, gains access 
to data collected, created, received, or maintained by another 
local government that is classified as not public, the unit 
gaining access is governed by the same restrictions on access to 
and use of the data as the unit that collected, created, 
received, or maintained the data. 
    Sec. 4.  [465.798] [SERVICE BUDGET MANAGEMENT MODEL 
GRANTS.] 
    One or more local units of governments, an association of 
local governments, the metropolitan council, or an organization 
acting in conjunction with a local unit of government may apply 
to the board of government innovation and management for a grant 
to be used to develop models for innovative service budget 
management.  Proposed models may provide options to local 
governments, neighborhood or community organizations, or 
individuals for managing budgets for service delivery.  A copy 
of the work product for which the grant was provided must be 
furnished to the board upon completion, and the board may 
disseminate it to other local units of government or interested 
groups.  If the board finds that the model was not completed or 
implemented according to the terms of the grant agreement, it 
may require the grantee to repay all or a portion of the grant.  
The amount of a grant under this section shall not exceed 
$50,000. 
    Sec. 5.  [465.799] [COOPERATION PLANNING GRANTS.] 
    Two or more local government units may apply to the board 
of government innovation and cooperation for a grant to be used 
to develop a plan for intergovernmental cooperation in providing 
services.  The grant application must include the following 
information: 
    (1) the identity of the local government units proposing to 
enter into the planning process; 
    (2) a description of the services to be studied and the 
outcomes sought from the cooperative venture; and 
    (3) a description of the proposed planning process, 
including an estimate of its costs, identification of the 
individuals or entities who will participate in the planning 
process, and an explanation of the need for a grant to the 
extent that the cost cannot be paid out of the existing 
resources of the local government unit. 
    The plan may include model contracts or agreements to be 
used to implement the plan.  A copy of the work product for 
which the grant was provided must be furnished to the board upon 
completion.  If the board finds that the grantee has failed to 
implement the plan, it may require the grantee to repay all or a 
portion of the grant.  The amount of a grant under this section 
shall not exceed $50,000. 
    Sec. 6.  Minnesota Statutes 1992, section 465.80, 
subdivision 1, is amended to read: 
    Subdivision 1.  [SCOPE.] This section establishes a program 
for grants to cities, counties, and towns local government units 
to enable them to meet the start-up costs of providing shared 
services or functions.  
    Sec. 7.  Minnesota Statutes 1992, section 465.80, 
subdivision 2, is amended to read: 
    Subd. 2.  [ELIGIBILITY.] Any home rule charter or statutory 
city, county, or town local government unit that provides a plan 
for offering a governmental service under a joint powers 
agreement with another city, county, or town local government 
unit, or with an agency of state government, is eligible for a 
grant under this section, and is referred to in this section as 
an "eligible local government unit." 
    Sec. 8.  Minnesota Statutes 1992, section 465.80, 
subdivision 4, is amended to read: 
    Subd. 4.  [SUBMISSION OF PLAN TO DEPARTMENT BOARD.] The 
plan must be submitted to the department of trade and economic 
development board of government innovation and cooperation.  A 
copy of the plan must also be provided by the requesting local 
government units to the exclusive representatives of the 
employees as certified under section 179A.12. The commissioner 
of trade and economic development board will approve a plan only 
if it contains the elements set forth in subdivision 3, with 
sufficient information to verify the assertions under clauses 
(2) and (3).  The commissioner board may request modifications 
of a plan.  If the commissioner board rejects a plan, written 
reasons for the rejection must be provided, and a governmental 
unit may modify the plan and resubmit it.  
    Sec. 9.  Minnesota Statutes 1992, section 465.80, 
subdivision 5, is amended to read: 
    Subd. 5.  [GRANTS.] The amount of each grant shall be equal 
to the additional start-up costs for which evidence is presented 
under subdivision 3, clause (3).  Only one grant will be given 
to a local government unit for any function or service it 
proposes to combine with another government unit, but a unit may 
apply for separate grants for different services or functions it 
proposes to combine.  If the amount of money available for 
making the grants is not sufficient to fully fund the grants to 
eligible local government units with approved plans, 
the commissioner board shall award grants on the basis of each 
qualified applicant's score under a scoring system to be devised 
by the commissioner board to measure the relative needs for the 
grants and the ratio of costs to benefits for each proposal.  
    Sec. 10.  Minnesota Statutes 1992, section 465.81, 
subdivision 2, is amended to read: 
    Subd. 2.  [DEFINITIONS.] As used in sections 465.81 to 
465.87, the words defined in this subdivision have the meanings 
given them in this subdivision. 
    "Board" means the board of government innovation and 
cooperation. 
    "City" means home rule charter or statutory cities. 
    "Commissioner" means the commissioner of trade and economic 
development. 
    "Department" means the department of trade and economic 
development. 
    "Governing body" means, in the case of a county, the county 
board; in the case of a city, the city council; and, in the case 
of a town, the town board. 
    "Local government unit" or "unit" includes counties, 
cities, and towns. 
    Sec. 11.  Minnesota Statutes 1992, section 465.82, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ADOPTION AND STATE AGENCY REVIEW.] Each 
governing body that proposes to combine under sections 465.81 to 
465.87 must adopt by resolution a plan for cooperation and 
combination.  The plan must address each item in this section.  
The plan must be specific for any item that will occur within 
three years and may be general or set forth alternative 
proposals for an item that will occur more than three years in 
the future.  The plan must be submitted to the department of 
trade and economic development board of government innovation 
and cooperation for review and comment.  For a metropolitan area 
local government unit, the plan must also be submitted to the 
metropolitan council for review and comment.  The council may 
point out any resources or technical assistance it may be able 
to provide a governing body submitting a plan under this 
subdivision.  Significant modifications and specific resolutions 
of items must be submitted to the department board and council, 
if appropriate, for review and comment.  In the official 
newspaper of each local government unit proposed for 
combination, the governing body must publish at least a summary 
of the adopted plans, each significant modification and 
resolution of items, and the results of each department board 
and council, if appropriate, review and comment. 
    Sec. 12.  Minnesota Statutes 1992, section 465.83, is 
amended to read: 
    465.83 [STATE AGENCY APPROVAL.] 
    Before scheduling a referendum on the question of combining 
local government units under section 465.84, the units shall 
submit the plan adopted under section 465.82 to the commissioner 
board.  Metropolitan area units shall also submit the plan to 
the metropolitan council for review and comment.  The 
commissioner board may require any information it deems 
necessary to evaluate the plan.  The commissioner board shall 
disapprove the proposed combination if the commissioner it finds 
that the plan is not reasonably likely to enable the combined 
unit to provide services in a more efficient or less costly 
manner than the separate units would provide them, or if the 
plans or plan modification are incomplete.  If the combination 
of local government units is approved by the board under this 
section, the local units are not required to proceed under 
chapter 414 to accomplish the combination. 
    Sec. 13.  Minnesota Statutes 1992, section 465.87, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ELIGIBILITY.] A local government unit is 
eligible for aid under this section if the commissioner board 
has approved its plan to cooperate and combine under section 
465.83. 
    Sec. 14.  Minnesota Statutes 1992, section 465.87, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [ADDITIONAL ELIGIBILITY.] A local government 
unit is eligible for aid under this section if it has combined 
with another unit of government in accordance with chapter 414 
and a copy of the municipal board's order combining the two 
units of government is forwarded to the board. 
    Sec. 15.  [APPROPRIATION.] 
    $1,200,000 is appropriated from the local government trust 
fund to the board of government innovation and cooperation for 
the purpose of making grants under this article, including 
grants made under Minnesota Statutes, section 465.80, and aid 
paid under Minnesota Statutes, section 465.87. 

                               ARTICLE 16

                              TACONITE TAX
    Section 1.  Minnesota Statutes 1992, section 298.227, is 
amended to read: 
    298.227 [TACONITE ECONOMIC DEVELOPMENT FUND.] 
    An amount equal to 10.4 cents per taxable ton that 
distributed pursuant to each taconite producer's taxable 
production and qualifying sales under section 298.28, 
subdivision 9a, for production years 1992 and 1993 shall be held 
by the iron range resources and rehabilitation board in a 
separate taconite economic development fund for each taconite 
producer.  Money from the fund for each producer shall be 
released only on the written authorization of a joint committee 
consisting of an equal number of representatives of the salaried 
employees and the nonsalaried production and maintenance 
employees of that producer.  The district 33 director of the 
United States Steelworkers of America, on advice of each local 
employee president, shall select the employee members.  In 
nonorganized operations, the employee committee shall be elected 
by the nonsalaried production and maintenance employees.  Each 
producer's joint committee may authorize release of the funds 
held pursuant to this section only for acquisition of equipment 
and facilities for the producer or for research and development 
in Minnesota on new mining, or taconite, iron, or steel 
production technology.  Funds may be released only upon a 
majority vote of the representatives of the committee.  Any 
portion of the fund which is not released by a joint committee 
within two years of its deposit in the fund shall be divided 
between the taconite environmental protection fund created in 
section 298.223 and the northeast Minnesota economic protection 
trust fund created in section 298.292 for placement in their 
respective special accounts.  Two-thirds of the unreleased funds 
shall be distributed to the taconite environmental protection 
fund and one-third to the northeast Minnesota economic 
protection trust fund.  This section is effective for taxes 
payable in 1993 and 1994. 
    Sec. 2.  Minnesota Statutes 1992, section 298.28, 
subdivision 4, is amended to read: 
    Subd. 4.  [SCHOOL DISTRICTS.] (a) 27.5 cents per taxable 
ton plus the increase provided in paragraph (d) must be 
allocated to qualifying school districts to be distributed, 
based upon the certification of the commissioner of revenue, 
under paragraphs (b) and (c). 
     (b) 5.5 cents per taxable ton must be distributed to the 
school districts in which the lands from which taconite was 
mined or quarried were located or within which the concentrate 
was produced.  The distribution must be based on the 
apportionment formula prescribed in subdivision 2. 
     (c)(i) 22 cents per taxable ton, less any amount 
distributed under paragraph (e), shall be distributed to a group 
of school districts comprised of those school districts in which 
the taconite was mined or quarried or the concentrate produced 
or in which there is a qualifying municipality as defined by 
section 273.134 in direct proportion to school district indexes 
as follows:  for each school district, its pupil units 
determined under section 124.17 for the prior school year shall 
be multiplied by the ratio of the average adjusted net tax 
capacity per pupil unit for school districts receiving aid under 
this clause as calculated pursuant to chapter 124A for the 
school year ending prior to distribution to the adjusted net tax 
capacity per pupil unit of the district.  Each district shall 
receive that portion of the distribution which its index bears 
to the sum of the indices for all school districts that receive 
the distributions.  
        (ii) Notwithstanding clause (i), each school district that 
receives a distribution under sections 298.018; 298.23 to 
298.28, exclusive of any amount received under this clause; 
298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 
imposing a tax on severed mineral values that is less than the 
amount of its levy reduction under section 124.918, subdivision 
8, for the second year prior to the year of the distribution 
shall receive a distribution equal to the difference; the amount 
necessary to make this payment shall be derived from 
proportionate reductions in the initial distribution to other 
school districts under clause (i).  
        (d) On July 15, in years prior to 1988, an amount equal to 
the increase derived by increasing the amount determined by 
paragraph (c) in the same proportion as the increase in the 
steel mill products index over the base year of 1977 as provided 
in section 298.24, subdivision 1, clause (a), shall be 
distributed to any school district described in paragraph (c) 
where a levy increase pursuant to section 124A.03, subdivision 
2, is authorized by referendum, according to the following 
formula.  On July 15, 1988, the increase over the amount 
established for 1987 shall be determined as if there had been an 
increase in the tax rate under section 298.24, subdivision 1, 
paragraph (b), according to the increase in the implicit price 
deflator.  On July 15, 1989, 1990, and 1991, the increase over 
the amount established for the prior year shall be determined 
according to the increase in the implicit price deflator as 
provided in section 298.24, subdivision 1, paragraph (a).  In 
1992 and 1993, the amount distributed per ton shall be the same 
as that determined for distribution in 1991.  In 1994, the 
amount distributed per ton shall be equal to the amount per ton 
distributed in 1991 increased in the same proportion as the 
increase between the fourth quarter of 1988 1989 and the fourth 
quarter of 1992 in the implicit price deflator as defined in 
section 298.24, subdivision 1.  On July 15, 1995, and subsequent 
years, the increase over the amount established for the prior 
year shall be determined according to the increase in the 
implicit price deflator as provided in section 298.24, 
subdivision 1.  Each district shall receive the product of: 
    (i) $175 times the pupil units identified in section 
124.17, subdivision 1, enrolled in the second previous year or 
the 1983-1984 school year, whichever is greater, less the 
product of 1.8 percent times the district's taxable net tax 
capacity in the second previous year; times 
    (ii) the lesser of: 
    (A) one, or 
    (B) the ratio of the sum of the amount certified pursuant 
to section 124A.03, subdivision 1g, in the previous year, plus 
the amount certified pursuant to section 124A.03, subdivision 
1i, in the previous year, plus the referendum aid according to 
section 124A.03, subdivision 1h, for the current year, to the 
product of 1.8 percent times the district's taxable net tax 
capacity in the second previous year. 
     If the total amount provided by paragraph (d) is 
insufficient to make the payments herein required then the 
entitlement of $175 per pupil unit shall be reduced uniformly so 
as not to exceed the funds available.  Any amounts received by a 
qualifying school district in any fiscal year pursuant to 
paragraph (d) shall not be applied to reduce general education 
aid which the district receives pursuant to section 124A.23 or 
the permissible levies of the district.  Any amount remaining 
after the payments provided in this paragraph shall be paid to 
the commissioner of iron range resources and rehabilitation who 
shall deposit the same in the taconite environmental protection 
fund and the northeast Minnesota economic protection trust fund 
as provided in subdivision 11. 
     Each district receiving money according to this paragraph 
shall reserve $25 times the number of pupil units in the 
district.  It may use the money for early childhood programs or 
for outcome-based learning programs that enhance the academic 
quality of the district's curriculum.  The outcome-based 
learning programs must be approved by the commissioner of 
education.  
     (e) There shall be distributed to any school district the 
amount which the school district was entitled to receive under 
section 298.32 in 1975. 
     Sec. 3.  Minnesota Statutes 1992, section 298.28, 
subdivision 7, is amended to read: 
    Subd. 7.  [IRON RANGE RESOURCES AND REHABILITATION BOARD.] 
Three cents per taxable ton shall be paid to the iron range 
resources and rehabilitation board for the purposes of section 
298.22.  The amount determined in this subdivision shall be 
increased in 1981 and subsequent years prior to 1988 in the same 
proportion as the increase in the steel mill products index as 
provided in section 298.24, subdivision 1, and shall be 
increased in 1989, 1990, and 1991 according to the increase in 
the implicit price deflator as provided in section 298.24, 
subdivision 1.  In 1992 and 1993, the amount distributed per ton 
shall be the same as the amount distributed per ton in 1991.  In 
1994, the amount distributed shall be the distribution per ton 
for 1991 increased in the same proportion as the increase 
between the fourth quarter of 1988 1989 and the fourth quarter 
of 1992 in the implicit price deflator as defined in section 
298.24, subdivision 1.  That amount shall be increased in 1995 
and subsequent years in the same proportion as the increase in 
the implicit price deflator as provided in section 298.24, 
subdivision 1.  The amount distributed in 1988 shall be 
increased according to the increase that would have occurred in 
the rate of tax under section 298.24 if the rate had been 
adjusted according to the implicit price deflator for 1987 
production.  The amount distributed pursuant to this subdivision 
shall be expended within or for the benefit of a tax relief area 
defined in section 273.134.  No part of the fund provided in 
this subdivision may be used to provide loans for the operation 
of private business unless the loan is approved by the governor 
and the legislative advisory commission. 
    Sec. 4.  Minnesota Statutes 1992, section 298.28, 
subdivision 9a, is amended to read: 
    Subd. 9a.  [TACONITE ECONOMIC DEVELOPMENT FUND.] (a) 10.4 
cents per ton for distributions in 1993 and 15.4 cents per ton 
for distributions in 1994 shall be paid to the taconite economic 
development fund.  No distribution shall be made under 
this subdivision paragraph in any year in which total industry 
production falls below 30 million tons. 
    (b) An amount equal to 50 percent of the tax under section 
298.24 for concentrate sold in the form of pellet chips and 
fines not exceeding 1/4 inch in size and not including crushed 
pellets shall be paid to the taconite economic development 
fund.  The amount paid shall not exceed $700,000 annually for 
all companies.  If the initial amount to be paid to the fund 
exceeds this amount, each company's payment shall be prorated so 
the total does not exceed $700,000. 
    Sec. 5.  Minnesota Statutes 1992, section 298.28, 
subdivision 10, is amended to read: 
    Subd. 10.  [INCREASE.] The amounts determined under 
subdivisions 6, paragraph (a), and 9 shall be increased in 1979 
and subsequent years prior to 1988 in the same proportion as the 
increase in the steel mill products index as provided in section 
298.24, subdivision 1.  The amount distributed in 1988 shall be 
increased according to the increase that would have occurred in 
the rate of tax under section 298.24 if the rate had been 
adjusted according to the implicit price deflator for 1987 
production.  Those amounts shall be increased in 1989, 1990, and 
1991 in the same proportion as the increase in the implicit 
price deflator as provided in section 298.24, subdivision 1.  In 
1992 and 1993, the amounts determined under subdivisions 6, 
paragraph (a), and 9, shall be the distribution per ton 
determined for distribution in 1991.  In 1994, the amounts 
determined under subdivisions 6, paragraph (a), and 9, shall be 
the distribution per ton determined for distribution in 1991 
increased in the same proportion as the increase between the 
fourth quarter of 1988 1989 and the fourth quarter of 1992 in 
the implicit price deflator as defined in section 298.24, 
subdivision 1.  Those amounts shall be increased in 1995 and 
subsequent years in the same proportion as the increase in the 
implicit price deflator as provided in section 298.24, 
subdivision 1.  
    The distributions per ton determined under subdivisions 5, 
paragraphs (b) and (d), and 6, paragraphs (b) and (c) for 
distribution in 1988 and subsequent years shall be the 
distribution per ton determined for distribution in 1987. 
    Sec. 6.  [EFFECTIVE DATE.] 
    Section 4 is effective for production years beginning after 
December 31, 1992. 

                               ARTICLE 17

                             MISCELLANEOUS
    Section 1.  Minnesota Statutes 1992, section 16A.15, 
subdivision 6, as amended by Laws 1993, chapter 192, section 60, 
if enacted, is amended to read: 
    Subd. 6.  [BUDGET RESERVE AND CASH FLOW ACCOUNT 
ESTABLISHED.] (a) A budget reserve and cash flow account is 
created in the general fund in the state treasury.  The 
commissioner of finance shall restrict part or all of the 
balance before reserves in the general fund as may be necessary 
to fund the budget reserve and cash flow account as provided by 
law from time to time. 
     (b) The commissioner of finance shall transfer the amount 
necessary to bring the total amount of the budget reserve and 
cash flow account, including any existing balance in the account 
on June 30, 1993, to $360,000,000.  The amounts restricted shall 
remain in the account until drawn down under subdivision 1 or 
increased under section 16A.1541. 
    Sec. 2.  Minnesota Statutes 1992, section 16A.1541, as 
amended by Laws 1993, chapter 192, section 63, if enacted, 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 reserve and cash flow 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.  Beginning 
in November 1990 July 1, 1993, forecast unrestricted budgetary 
general fund balances are first appropriated to restore the 
budget reserve and cash flow account 
to $550,000,000 $500,000,000 and then to reduce the property tax 
levy recognition percent under section 121.904, subdivision 4a, 
to 27 percent zero before money is allocated to the budget 
reserve and cash flow account under the preceding sentence. 
    The amounts necessary to meet the requirements of this 
section are appropriated from the general fund. 
    Sec. 3.  Minnesota Statutes 1992, section 97A.061, 
subdivision 2, is amended to read: 
    Subd. 2.  [ALLOCATION.] (a) Except as provided in 
subdivision 3, the county treasurer shall allocate the payment 
among the county, towns, and school districts on the same basis 
as if the payments were taxes on the land received in the year.  
Payment of a town's or a school district's allocation must be 
made by the county treasurer to the town or school district 
within 30 days of receipt of the payment to the county.  The 
county's share of the payment shall be deposited in the county 
general revenue fund.  
    (b) The county treasurer of a county with a population over 
39,000 but less than 42,000 in the 1950 federal census shall 
allocate the payment only among the towns and school districts 
on the same basis as if the payments were taxes on the lands 
received in the current year. 
    Sec. 4.  Minnesota Statutes 1992, section 97A.061, 
subdivision 3, is amended to read: 
    Subd. 3.  [GOOSE MANAGEMENT CROPLANDS.] (a) The 
commissioner shall make a payment on July 1 of each year from 
the game and fish fund, to each county where the state owns more 
than 1,000 acres of crop land, for wild goose management 
purposes.  The payment shall be equal to the taxes assessed on 
comparable, privately owned, adjacent land.  The county 
treasurer shall allocate and distribute the payment as provided 
in subdivision 2.  
    (b) The land used for goose management under this 
subdivision is exempt from taxation as provided in sections 
272.01 and 273.19.  
    Sec. 5.  Minnesota Statutes 1992, section 243.23, 
subdivision 3, is amended to read: 
    Subd. 3.  [EXCEPTIONS.] Notwithstanding sections 241.26, 
subdivision 5, and 243.24, subdivision 1, the commissioner may 
promulgate rules for the disbursement of funds earned under 
subdivision 1, or other funds in an inmate account, and section 
243.88, subdivision 2, for the support of families and dependent 
relatives of the respective inmates, for the payment of 
court-ordered restitution, contribution to any programs 
established by law to aid victims of crime provided that the 
contribution shall not be more than 20 percent of an inmate's 
gross wages, for the payment of restitution to the commissioner 
ordered by prison disciplinary hearing officers for damage to 
property caused by an inmate's conduct, and for the discharge of 
any legal obligations arising out of litigation under this 
subdivision.  The commissioner may authorize the payment of 
court-ordered restitution from an inmate's wages when the 
restitution was ordered by the court as a sanction for the 
conviction of an offense which is not the offense of commitment, 
including offenses which occurred prior to the offense for which 
the inmate was committed to the commissioner.  An inmate of an 
adult correctional facility under the control of the 
commissioner is subject to actions for the enforcement of 
support obligations and reimbursement of any public assistance 
rendered the dependent family and relatives.  The commissioner 
may conditionally release an inmate who is a party to an action 
under this subdivision and provide for the inmate's detention in 
a local detention facility convenient to the place of the 
hearing when the inmate is not engaged in preparation and 
defense. 
    Sec. 6.  Minnesota Statutes 1992, section 270.07, 
subdivision 3, is amended to read: 
    Subd. 3.  [ADDITIONAL POWERS OF COMMISSIONER.] 
Notwithstanding any other provision of law the commissioner of 
revenue may, 
    (a) based upon the administrative costs of processing, 
determine minimum standards for the determination of additional 
tax for which an order shall be issued, and 
    (b) based upon collection costs as compared to the amount 
of tax involved, determine minimum standards of collection, and 
    (c) based upon the administrative costs of processing, 
determine the minimum amount of refunds for which an order shall 
be issued and refund made where no claim therefor has been 
filed, and 
    (d) cancel any amounts below these minimum standards 
determined under (a) and (b) hereof, and 
    (e) based upon the inability of a taxpayer to pay a 
delinquent tax liability, abate the liability if the taxpayer 
agrees to perform uncompensated public service work for a state 
agency, a political subdivision or public corporation of this 
state, or a nonprofit educational, medical, or social service 
agency.  The department of corrections shall administer the work 
program.  No benefits under chapter 176 or 268 shall be 
available, but a claim authorized under section 3.739 may be 
made by the taxpayer.  The state may not enter into any 
agreement that has the purpose of or results in the displacement 
of public employees by a delinquent taxpayer under this 
section.  The state must certify to the appropriate bargaining 
agent or employees, as applicable, that the work performed by a 
delinquent taxpayer will not result in the displacement of 
currently employed workers or layoff from a substantially 
equivalent position, including partial displacement such as 
reduction in hours of nonovertime work, wages, or other 
employment benefits.  The program authorized under this 
paragraph terminates June 30, 1993 1998. 
     Sec. 7.  Minnesota Statutes 1992, section 270.66, is 
amended by adding a subdivision to read: 
    Subd. 4.  [POLITICAL SUBDIVISION DEBTS.] (a) As used in 
this subdivision, "political subdivision" means counties and 
home rule charter or statutory cities, and "debts" means a legal 
obligation to pay a fixed amount of money, which equals or 
exceeds $100 and which is due and payable to the claimant 
political subdivision. 
    (b) If one political subdivision owes a debt to another 
political subdivision, and the debt has not been paid within six 
months of the date when payment was due, the creditor political 
subdivision may notify the commissioner of revenue of the debt, 
and shall provide the commissioner with information sufficient 
to verify the claim.  If the commissioner has reason to believe 
that the claim is valid, and the debt has not been paid, the 
commissioner shall initiate setoff procedures under this 
subdivision. 
    (c) Within ten days of receipt of the notification from the 
creditor political subdivision, the commissioner shall send a 
written notice to the debtor political subdivision, advising it 
of the nature and amount of the claim.  This written notice 
shall advise the debtor of the creditor political subdivision's 
intention to request setoff of the refund against the debt. 
    The notice will also advise the debtor that the debt can be 
setoff against a state aid payment, and will advise the debtor 
of the right to contest the validity of the claim at a hearing.  
The debtor must assert this right by written request to the 
commissioner of revenue, which request the commissioner must 
receive within 45 days of the mailing date of the notice. 
    (d) If the commissioner receives written notice of a debtor 
political subdivision's intention to contest at hearing the 
claim upon which the intended setoff is based, the commissioner 
shall initiate a hearing according to contested case procedures 
established in the state administrative procedure act not later 
than 30 days after receipt of the debtor's request for a 
hearing.  The costs of the hearing shall be paid equally by the 
political subdivisions that are parties to the hearing.  The 
office of administrative hearings shall separately bill each 
political subdivision for one-half of the costs. 
    (e) If the debtor political subdivision does not object to 
the claim, or does not prevail in an objection to the claim or 
at a hearing on the claim, the commissioner of revenue shall 
deduct the amount of the debt from the next payment scheduled to 
be made to the debtor under section 273.1398 or chapter 477A.  
The commissioner shall remit the amount deducted to the claimant 
political subdivision. 
    Sec. 8.  Minnesota Statutes 1992, section 270A.03, 
subdivision 7, is amended to read: 
    Subd. 7.  [REFUND.] "Refund" means an individual income tax 
refund or political contribution refund, pursuant to chapter 
290, or a property tax credit or refund, pursuant to chapter 
290A.  
    For purposes of this chapter, lottery prizes, as set forth 
in section 349A.08, subdivision 8, shall be treated as refunds. 
    In the case of a joint property tax refund payable to 
spouses under chapter 290A, the refund shall be considered as 
belonging to each spouse in the proportion of the total refund 
that equals each spouse's proportion of the total income 
determined under section 290A.03, subdivision 3.  The 
commissioner shall remit the entire refund to the claimant 
agency, which shall, upon the request of the spouse who does not 
owe the debt, determine the amount of the refund belonging to 
that spouse and refund the amount to that spouse. 
    Sec. 9.  Minnesota Statutes 1992, section 270A.10, is 
amended to read: 
    270A.10 [PRIORITY OF CLAIMS.] 
    If two or more debts, in a total amount exceeding the 
debtor's refund, are submitted for setoff, the priority of 
payment shall be as follows:  First, any delinquent tax 
obligations of the debtor which are owed to the department shall 
be satisfied.  Secondly, the refund shall be applied to debts 
for child support based on the order in time in which the 
commissioner received the debts.  Thirdly, the refund shall be 
applied to payment of restitution obligations.  Fourthly, the 
refund shall be applied to the remaining debts based on the 
order in time in which the commissioner received the debts. 
    Sec. 10.  Minnesota Statutes 1992, section 270B.01, 
subdivision 8, is amended to read: 
    Subd. 8.  [MINNESOTA TAX LAWS.] For purposes of this 
chapter only, "Minnesota tax laws" means the taxes administered 
by or paid to the commissioner under chapters 289A (except taxes 
imposed under sections 298.01, 298.015, and 298.24), 290, 290A, 
291, and 297A, and includes any laws for the assessment, 
collection, and enforcement of those taxes.  
    Sec. 11.  Minnesota Statutes 1992, section 270B.14, 
subdivision 8, is amended to read: 
    Subd. 8.  [EXCHANGE BETWEEN DEPARTMENTS OF LABOR AND 
INDUSTRY AND REVENUE.] Notwithstanding any law to the contrary, 
The departments of labor and industry and revenue may exchange 
information on a reciprocal basis.  Data that may be disclosed 
are limited to data used in determining whether a business is an 
employer or a contracting agent. as follows:  
    (1) data used in determining whether a business is an 
employer or a contracting agent; 
    (2) taxpayer identity information relating to employers for 
purposes of supporting tax administration and chapter 176; and 
    (3) data to the extent provided in and for the purpose set 
out in section 176.181, subdivision 8. 
    Sec. 12.  Minnesota Statutes 1992, section 319A.11, 
subdivision 1, is amended to read: 
    Subdivision 1.  [GENERALLY.] (a) A professional corporation 
may issue its stock only to and admit as a member only natural 
persons licensed to render a kind of professional service which 
the corporation is authorized to render or partnerships or 
professional corporations rendering the same kind of 
professional service.  A person, partnership or professional 
corporation who becomes a shareholder or member of any such 
corporation may transfer its shares of stock or its membership 
only to a natural person, partnership or professional 
corporation to whom the corporation could have issued the shares 
of stock or membership.  No proxy to vote any share in a 
professional corporation or membership may be given to a person 
who is not so licensed, nor may any voting trust be established 
with respect to the shares of the professional corporation 
unless all the voting trustees are natural persons so licensed. 
    (b) Notwithstanding paragraph (a), a professional 
corporation may issue its stock under this section to an 
employee stock ownership plan, as defined in section 4975(e)(7) 
of the Internal Revenue Code of 1986, as amended, if 
    (1) the voting trustees of the plan are natural persons 
licensed to render a kind of professional service which the 
corporation is authorized to render, and 
    (2) the shares are not directly issued to a person or 
entity not licensed to render a kind of advice which the 
corporation is authorized to render. 
    Sec. 13.  Minnesota Statutes 1992, section 325D.33, is 
amended by adding a subdivision to read: 
    Subd. 8.  [PENALTIES.] (a) A retailer who sells cigarettes 
for less than a legal retail price may be assessed a penalty in 
the full amount of three times the difference between the actual 
selling price and a legal price under sections 325D.30 to 
325D.42.  This penalty may be collected under the authorities 
given the commissioner in chapters 270 and 297, and the penalty 
shall bear interest at the rate prescribed by section 270.75, 
subdivision 5. 
    (b) A wholesaler who sells cigarettes for less than a legal 
price may be assessed a penalty in the full amount of three 
times the difference between the actual selling price and the 
legal price under sections 325D.30 to 325D.42.  This penalty may 
be collected under the authorities given the commissioner in 
chapters 270 and 297, and the penalty shall bear interest at the 
rate prescribed by section 270.75, subdivision 5.  
    (c) A retailer who engages in a plan, scheme, or device 
with a wholesaler to purchase cigarettes at a price which the 
retailer knows to be less than a legal price may be assessed a 
penalty in the full amount of three times the difference between 
the actual purchase price and the legal price under sections 
325D.30 to 325D.42.  A retailer that coerces or requires a 
wholesaler to sell cigarettes at a price which the retailer 
knows to be less than a legal price may be assessed a penalty in 
the full amount of three times the difference between the actual 
purchase price and the legal price.  These penalties may be 
collected under the authorities given the commissioner in 
chapters 270 and 297, and the penalties shall bear interest at 
the rate prescribed by section 270.75, subdivision 5. 
     For purposes of this subdivision, a retailer is presumed to 
know that a purchase price is less than a legal price if any of 
the following have been done: 
    (1) the commissioner has published the legal price in the 
Minnesota State Register; 
    (2) the commissioner has provided written notice to the 
retailer of the legal price; 
    (3) the commissioner has provided written notice to the 
retailer that the retailer is purchasing cigarettes for less 
than a legal price; 
    (4) the commissioner has issued a written order to the 
retailer to cease and desist from purchases of cigarettes for 
less than a legal price; or 
    (5) there is evidence that the retailer has knowledge of, 
or has participated in, efforts to disguise or misrepresent the 
actual purchase price as equal to or more than a legal price, 
when it is actually less than a legal price. 
    In any proceeding arising under this subdivision, the 
commissioner shall have the burden of providing by a reasonable 
preponderance of the evidence that the facts necessary to 
establish the presumption set forth in this section exist, or 
that the retailer had knowledge that a purchase price was less 
than the legal price. 
    (d) The commissioner may not assess penalties against any 
wholesaler, retailer, or combination of wholesaler and retailer, 
which are greater than three times the difference between the 
actual price and the legal price under sections 325D.30 to 
325D.42. 
    Sec. 14.  Minnesota Statutes 1992, section 325D.37, 
subdivision 3, is amended to read: 
    Subd. 3.  Before selling cigarettes at a price set in good 
faith to meet competition, a wholesaler shall contact notify the 
commissioner to verify that a competitor has met the 
requirements of section 325D.32, subdivision 10, or that a 
competitor has contacted the commissioner under this subdivision 
in response to a wholesaler who has met the requirements of 
section 325D.32, subdivision 10 in writing that it intends to 
meet a competitor's legal price.  A wholesaler filing the notice 
shall be allowed to meet the competitor's price unless within 
seven days of receipt of the notice, the commissioner informs 
the wholesaler that the competitor's price is an illegal price. 
    Sec. 15.  [325D.371] [PUBLICATION OF CIGARETTE PRICES.] 
    The commissioner shall publish in the State Register the 
presumed legal prices of all cigarettes as calculated pursuant 
to section 325D.32, subdivision 10.  The prices must be 
published within one month of each recomputation, but not less 
than once each year. 
    Sec. 16.  [383A.62] [ELECTIONS DEPARTMENT MERGER.] 
    The city of St. Paul and Ramsey county may, by agreement 
subject to this section, provide for the merger of the city 
elections office with the county election office.  The 
consolidation shall be set to begin at the beginning of a fiscal 
year.  In the preceding fiscal year and each year thereafter the 
county shall provide a budget and levy a property tax for the 
merged office that will defray the costs of the services 
provided throughout the county by the merged office.  The county 
shall succeed to the obligations of the city under any 
collective bargaining agreements in existence at the time of the 
merger.  Nothing in this section or in an agreement for merger 
under this section shall diminish any rights defined in 
collective bargaining agreements.  The merger must not occur 
until bargaining units representing affected employees have 
completed negotiations on post-merger terms and conditions of 
employment.  The county shall succeed to the other obligations 
and to the real and personal property of the merged city offices.
     Sec. 17.  Minnesota Statutes 1992, section 429.061, 
subdivision 1, is amended to read: 
    Subdivision 1.  [CALCULATION, NOTICE.] At any time after 
the expense incurred or to be incurred in making an improvement 
shall be calculated under the direction of the council, the 
council shall determine by resolution the amount of the total 
expense the municipality will pay, other than the amount, if 
any, which it will pay as a property owner, and the amount to be 
assessed.  If a county proposes to assess within the boundaries 
of a city for a county state-aid highway or county highway, 
including curbs, gutters, and storm sewers, the resolution must 
include the portion of the cost proposed to be assessed within 
the city.  The county shall forward the resolution to the city 
and it may not proceed with the assessment procedure nor may the 
county allocate any cost under this section for property within 
the city unless the city council adopts the resolution approving 
the assessment.  Thereupon the clerk, with the assistance of the 
engineer or other qualified person selected by the council, 
shall calculate the proper amount to be specially assessed for 
the improvement against every assessable lot, piece or parcel of 
land, without regard to cash valuation, in accordance with the 
provisions of section 429.051.  The proposed assessment roll 
shall be filed with the clerk and be open to public inspection.  
The clerk shall thereupon, under the council's direction, 
publish notice that the council will meet to consider the 
proposed assessment.  Such notice shall be published in the 
newspaper at least once and shall be mailed to the owner of each 
parcel described in the assessment roll.  For the purpose of 
giving mailed notice under this subdivision, owners shall be 
those shown to be such 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; but other 
appropriate records may be used for this purpose.  Such 
publication and mailing shall be no less than two weeks prior to 
such meeting of the council.  Except as to the owners of tax 
exempt property or property taxes on a gross earnings basis, 
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 such 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 such purpose.  Such 
notice shall state the date, time, and place of such meeting, 
the general nature of the improvement, the area proposed to be 
assessed, the total amount of the proposed assessment, that the 
proposed assessment roll is on the file with the clerk, and that 
written or oral objections thereto by any property owner will be 
considered.  The notice must also state that no appeal may be 
taken as to the amount of any assessment adopted pursuant to 
subdivision 2, unless a written objection signed by the affected 
property owner is filed with the municipal clerk prior to the 
assessment hearing or presented to the presiding officer at the 
hearing.  The notice shall also state that an owner may appeal 
an assessment to district court pursuant to section 429.081 by 
serving notice of the appeal upon the mayor or clerk of the 
municipality within 30 days after the adoption of the assessment 
and filing such notice with the district court within ten days 
after service upon the mayor or clerk.  The notice shall also 
inform property owners of the provisions of sections 435.193 to 
435.195 and the existence of any deferment procedure established 
pursuant thereto in the municipality.  In addition, the notice 
mailed to the owner must include state in clear language the 
following information: 
    (1) the amount to be specially assessed against that 
particular lot, piece, or parcel of land; 
    (2) adoption by the council of the proposed assessment may 
be taken at the hearing; 
    (3) the right of the property owner to prepay the entire 
assessment and the person to whom prepayment must be made; 
    (3) (4) whether partial prepayment of the assessment has 
been authorized by ordinance; 
    (4) (5) the time within which prepayment may be made 
without the assessment of interest; and 
    (5) (6) the rate of interest to be accrued if the 
assessment is not prepaid within the required time period. 
    Sec. 18.  Minnesota Statutes 1992, section 469.169, is 
amended by adding a subdivision to read: 
    Subd. 9.  [ADDITIONAL BORDER CITY ALLOCATIONS.] In addition 
to tax reductions authorized in subdivisions 7 and 8, the 
commissioner may allocate $1,100,000 for tax reductions to 
border city enterprise zones in cities located on the western 
border of the state, and $300,000 to the border city enterprise 
zone in the city of Duluth.  The commissioner shall make 
allocations to zones in cities on the western border by 
evaluating which cities' applications for allocations relate to 
business prospects that have the greatest positive economic 
impact.  Allocations made under this subdivision may be used for 
tax reductions as provided in section 469.171, or other offsets 
of taxes imposed on or remitted by businesses located in the 
enterprise zone, but only if the municipality determines that 
the granting of the tax reduction or offset is necessary in 
order to retain a business within or attract a business to the 
zone.  Limitations on allocations under section 469.169, 
subdivision 7, do not apply to this allocation.  Enterprise 
zones that receive allocations under this subdivision may 
continue in effect for purposes of those allocations through 
December 31, 1994. 
    Sec. 19.  [473.334] [SPECIAL ASSESSMENT; AGREEMENT.] 
    Subdivision 1.  [GENERALLY.] In determining the special 
benefit received by regional recreation open space system 
property as defined in sections 473.301 to 473.351 from an 
improvement for which a special assessment is determined, the 
governing body shall not consider any use of the property other 
than as regional recreation open space property at the time the 
special assessment is determined.  The metropolitan council 
shall not be bound by the determination of the governing body of 
the city but may pay a lesser amount, as agreed upon by the 
metropolitan council and the governing body of the city, as they 
determine is the measure of benefit to the land from the 
improvement. 
    Subd. 2.  [EXCEPTION.] This section does not apply to 
Otter-Bald Eagle lake regional park property in the town of 
White Bear, Ramsey county, which shall continue to be governed 
by section 435.19. 
    Sec. 20.  Minnesota Statutes 1992, section 477A.14, is 
amended to read: 
    477A.14 [USE OF FUNDS.] 
    Forty percent of the total payment to the county shall be 
deposited in the county general revenue fund to be used to 
provide property tax levy reduction.  The remainder shall be 
distributed by the county in the following priority:  
    (a) 37.5 cents for each acre of county-administered other 
natural resources land shall be deposited in a resource 
development fund to be created within the county treasury for 
use in resource development, forest management, game and fish 
habitat improvement, and recreational development and 
maintenance of county-administered other natural resources 
land.  Any county receiving less than $5,000 annually for the 
resource development fund may elect to deposit that amount in 
the county general revenue fund; 
    (b) From the funds remaining, within 30 days of receipt of 
the payment to the county, the county treasurer shall pay each 
organized township shall receive 30 cents per acre of acquired 
natural resources land and 7.5 cents per acre of other natural 
resources land located within its boundaries.  Payments for 
natural resources lands not located in an organized township 
shall be deposited in the county general revenue fund.  Payments 
to counties and townships pursuant to this paragraph shall be 
used to provide property tax levy reduction.  Provided that, if 
the total payment to the county pursuant to section 477A.12 is 
not sufficient to fully fund the distribution provided for in 
this clause, the amount available shall be distributed to each 
township and the county general revenue fund on a pro rata 
basis; and 
    (c) Any remaining funds shall be deposited in the county 
general revenue fund.  Provided that, if the distribution to the 
county general revenue fund exceeds $35,000, the excess shall be 
used to provide property tax levy reduction. 
    Sec. 21.  [UNEMPLOYMENT TAX ADMINISTRATION; STUDY.] 
    The commissioner of revenue and the commissioner of jobs 
and training shall study the feasibility of transferring the 
responsibility for collection of unemployment taxes from the 
department of jobs and training to the department of revenue.  
The commissioners must present their report to the legislature 
by February 1, 1994. 
    Sec. 22.  [ST. PAUL; SPECIAL ASSESSMENTS.] 
    Subdivision 1.  [POWERS.] The city of St. Paul may by 
ordinance choose to exercise the powers provided by this section 
in place of those provided by Minnesota Statutes, section 
429.101, subdivision 1, but in accordance with the provisions of 
Minnesota Statutes, section 429.101, subdivisions 2 and 3.  In 
addition to any method authorized by law or charter, the city 
may provide for the collection of unpaid special charges for all 
or any part of the following costs: 
    (1) snow, ice, rubbish, or litter removal from public 
parking facilities; 
    (2) the operation, including maintenance and repair, of 
lighting systems for public parking facilities; or 
    (3) the operation, including maintenance and repair, of 
public parking facilities. 
    Subd. 2.  [SPECIAL ASSESSMENTS.] The costs listed in 
subdivision 1 may be collected as a special assessment against 
the property benefited. 
    Subd. 3.  [REGULATIONS.] The council may by ordinance adopt 
regulations consistent with this section to make this authority 
effective, including, at the option of the council, provisions 
for collection of actual or estimated charges from the property 
owner or other person served before the unpaid charges are made 
a special assessment. 
    Subd. 4.  [ADJUSTMENT.] If estimated charges are collected 
and, based upon subsequent actual costs, found to be excessive 
or deficient, subsequent charges shall be reduced by the excess 
or increased by the deficiency. 
    Sec. 23.  [ST. PAUL HOUSING LOAN AND GRANT PROGRAM.] 
    Subdivision 1.  [HOUSING REHABILITATION LOAN PROGRAM.] The 
city of Saint Paul may develop and administer a housing 
rehabilitation loan program with respect to residential property 
located anywhere within its boundaries on the terms and 
conditions as it determines.  In approving applications for the 
program, the following factors must be considered: 
    (1) the availability of other governmental programs 
affordable by the applicant; 
    (2) the availability and affordability of private market 
financing; 
    (3) whether the housing is required, pursuant to an urban 
renewal program or a code enforcement program, to be repaired, 
improved, or rehabilitated; 
    (4) whether the housing is required, pursuant to a court 
order issued under Minnesota Statutes, section 566.25, clauses 
(b), (c), and (e), to be repaired, improved, or rehabilitated; 
    (5) whether the housing has been determined to be 
uninsurable because of physical hazards after inspection 
pursuant to a statewide property insurance plan approved by the 
United States Department of Housing and Urban Development under 
Title XII of the National Housing Act; and 
    (6) whether rehabilitation of the housing will maintain or 
improve the value of the housing and will help to stabilize the 
neighborhood in which the housing is located. 
    All loans and grants shall be issued primarily for 
rehabilitating housing so that it meets applicable housing 
codes, building codes, and health and safety codes, and to make 
other necessary improvements. 
    Subd. 2.  [NEW RESIDENTIAL DWELLING UNITS.] A housing 
rehabilitation loan program undertaken under subdivision 1 may 
also provide for the city to make or purchase loans made to 
finance the acquisition of single-family residences and 
multifamily housing projects that have been newly constructed in 
established neighborhoods on land owned by the city or any 
agency of the city.  For purposes of this subdivision, land 
shall be considered to be owned by the city if the city or one 
of its agencies previously owned the land and conveyed it to an 
individual, partnership, or other entity under a development 
agreement in which the developer has agreed to construct 
single-family housing or one or more multifamily housing 
projects on the land.  In approving applications for a loan to 
be made under this subdivision, the following factors shall be 
considered: 
    (1) the availability and affordability of other 
governmental programs or private market financing; and 
    (2) whether the construction of the housing enhances the 
stability of the neighborhood in which it is located. 
    Subd. 3.  [HOUSING REHABILITATION GRANT PROGRAM.] The city 
of St. Paul may develop and administer a housing rehabilitation 
grant program with respect to property within its boundaries, on 
the terms and conditions as it determines.  In approving 
applications for grants used under this program, all of the 
considerations and limitations enumerated in subdivision 2 for 
loans must be considered and the following factors must also be 
considered: 
    (1) whether the housing unit is a single-family dwelling, 
homesteaded unit, or multifamily housing project; and 
    (2) whether the applicant is a person of low income. 
The city council shall by ordinance set forth the regulations 
for its grant program.  The dollar value of grants made shall 
not exceed five percent of the total value of the bonds issued 
for both the loan and the grant programs.  All grants shall be 
made primarily to rehabilitate housing so that it meets 
applicable housing codes, building codes, and health and safety 
codes or to make other necessary improvements. 
    Subd. 4.  [ISSUANCE OF BONDS.] To finance the programs 
authorized by this section, the governing body of the city of 
Saint Paul may, by resolution, authorize, issue, and sell 
general obligation bonds of the city of Saint Paul, with or 
without an election, and otherwise in accordance with the 
provisions of chapter 475.  The total amount of all bonds 
outstanding at any time for the program authorized by this 
section shall not exceed $25,000,000.  The amount of all bonds 
issued shall be included in the net indebtedness of the city for 
the purpose of any charter or statutory debt limitation. 
    Subd. 5.  [AUTHORITY MAY UNDERTAKE PROGRAM; AUTHORITY 
GENERAL OBLIGATION REVENUE BONDS.] The Saint Paul housing and 
redevelopment authority may exercise the powers of the city 
under this section, except that the regulations required by 
subdivision 3 must be enacted by an ordinance of the city.  To 
finance the programs authorized by this section, the authority 
may issue bonds and pledge the full faith and credit and taxing 
power of the city as additional security for bonds payable from 
the income or revenues of a program or from the income or 
revenues of specific projects undertaken pursuant to a program, 
in the manner authorized by Minnesota Statutes, section 469.034, 
subdivision 2, except that the program may consist of a program 
of loans or grants for single-family housing or multifamily 
housing projects, and except that in lieu of the limit stated in 
section 469.034, subdivision 2, the maximum amount of bonds that 
may be outstanding at any time under this subdivision, together 
with the principal amount of bonds outstanding at any time under 
subdivision 4, shall not exceed the amount stated in subdivision 
4.  Each residential dwelling unit must be purchased or occupied 
by the elderly, or a person or family with income not greater 
than 175 percent of the median family income for the 
Minneapolis-Saint Paul metropolitan statistical area as 
estimated by the United States Department of Housing and Urban 
Development. 
    Subd. 6.  [POWERS SUPPLEMENTAL; OWNERSHIP.] The powers 
granted by this subdivision supplement the powers granted to the 
city or authority by any other general or special law.  
Notwithstanding any contrary provision of any general or special 
law, single-family residences or multifamily housing projects 
financed by the city or authority pursuant to this subdivision 
may be owned by the city or authority or by a private person or 
entity.  Except for properties that are part of a lease purchase 
program, the city or authority shall not own projects financed 
under this section for more than two years. 
    Sec. 24.  [GOODHUE COUNTY; COUNTY REDEVELOPMENT AUTHORITY.] 
    Subdivision 1.  [ESTABLISHMENT.] The Goodhue county board 
may, by adopting a written enabling resolution, establish a 
county redevelopment authority that, subject to subdivision 2, 
has the following powers:  powers of an economic development 
authority under Minnesota Statutes, sections 469.090 to 
469.1081, except for the authority to issue general obligation 
bonds under Minnesota Statutes, section 469.102; powers of a 
rural development financing authority under Minnesota Statutes, 
sections 469.142 to 469.151; and powers of a housing and 
redevelopment authority under Minnesota Statutes, chapter 462. 
    Subd. 2.  [ECONOMIC DEVELOPMENT AUTHORITY POWERS.] If the 
Goodhue county redevelopment 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 
469.1081, including a tax levy to support the activities of the 
authority.  The 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 by 
the written resolution of the county board.  All modifications 
to the enabling resolution must be by written resolution. 
    (c) Before the authority begins a project, the governing 
body of the municipality in which the project is to be located 
or the Goodhue county board, if the project is outside municipal 
corporate limits, must approve the project by majority vote 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 Goodhue county board.  Each director shall be appointed 
to serve for three years or until a successor is appointed.  No 
director may serve more than two consecutive terms.  The 
appointment of directors must reflect representation of the 
entire county.  The other two directors must be representatives 
of various county-based economic development organizations. 
    (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.  A 
vacancy occurs if a director no longer resides in the county.  A 
director may be removed by the county board for inefficiency, 
neglect of duty, or misconduct in office. 
    (c) The county administrator or the designee of the county 
administrator shall be the executive secretary of the county 
redevelopment authority. 
    (d) The directors shall receive no compensation other than 
reimbursement for expenses incurred in the performance of their 
duties. 
     Sec. 25.  [STATE ADVISORY COUNCIL.] 
    Subdivision 1.  [ESTABLISHMENT; PURPOSE.] A state advisory 
council on metropolitan governance is established to provide a 
forum at the state level for education, discussion, 
identification of emerging regional needs and appropriate 
responses, and advice to the legislature on the present and 
future role of the metropolitan council, metropolitan agencies, 
and the local governmental units as defined in Minnesota 
Statutes, section 473.121.  The creation of the advisory council 
shall not affect any otherwise existing reporting relationships 
of the council, metropolitan agencies, or the local governmental 
units to the legislature. 
    Subd. 2.  [AUTHORITY; DUTIES.] (a) The advisory council 
shall review and comment to the legislature on the duties and 
responsibilities of the council, metropolitan agencies, and the 
local governmental units. 
    (b) The advisory council may gather information, conduct 
research and analysis, and advise the legislature on matters 
related to the council's charge. 
    (c) The advisory council may conduct public hearings to 
inform the public and solicit opinion. 
    (d) The advisory council shall consult with local 
governmental units in making its recommendations. 
    Subd. 3.  [MEMBERSHIP.] The advisory council shall consist 
of 15 members who serve at the pleasure of the appointing 
authority as follows: 
    (1) six legislators; three members of the senate appointed 
by the subcommittee on committees of the committee on rules and 
administration; and three members of the house of 
representatives appointed by the speaker; and 
    (2) nine public members who are residents of the 
metropolitan area; two appointed by the subcommittee on 
committees of the committee on rules and administration of the 
senate and two appointed by the speaker of the house of 
representatives; and five appointed by the governor. 
    Subd. 4.  [CHAIRS.] The legislative appointing authorities 
shall each designate a legislative appointee to serve as 
co-chair of the advisory council. 
    Subd. 5.  [ADMINISTRATION.] Legislative staff, the 
metropolitan council, and metropolitan agencies shall provide 
administrative and staff assistance when requested by the 
advisory council. 
    Subd. 6.  [EXPENSES.] The metropolitan council shall 
compensate the members of the advisory council.  Public members 
are to be compensated in an amount provided by Minnesota 
Statutes, section 15.059, subdivision 3.  Members of the 
legislature are to be paid per diem and expenses in an amount 
provided by Minnesota Statutes, section 3.099.  The council 
shall adopt a budget of estimated expenses at its first meeting 
and provide a copy to the metropolitan council. 
    Subd. 7.  [APPLICATION.] This section applies in the 
counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and 
Washington. 
    Sec. 26.  [APPROPRIATION.] 
    $301,000 is appropriated for fiscal year 1994 and $119,000 
is appropriated for fiscal year 1995 from the general fund to 
the commissioner of revenue for the purpose of meeting the cost 
to the department of revenue of administering the provisions of 
this act. 
    Sec. 27.  [REPEALER.] 
    Minnesota Statutes 1992, section 325D.33, subdivision 7, is 
repealed. 
    Sec. 28.  [EFFECTIVE DATE.] 
    Section 1 is effective June 30, 1993.  
    Sections 3, 4, and 20 are effective for payments received 
by the county after June 30, 1993. 
    Section 7 is effective for debts incurred after July 31, 
1993. 
    Section 8 is effective for property tax refunds paid after 
December 31, 1992. 
    Section 10 is effective retroactively to April 25, 1992. 
    Section 13, paragraphs (a), (b), and (d), are effective the 
day following final enactment.  Section 13, paragraph (c), is 
effective May 29, 1987, except that in any proceeding under 
paragraph (c) that arises out of purchases that occurred prior 
to August 1, 1993, the penalties shall not exceed the difference 
between the actual purchase price and the legal price. 
    Sections 14 and 15 are effective August 1, 1993. 
    Sections 16, 22, 23, and 24 are effective the day following 
final enactment and without local approval, as provided in 
Minnesota Statutes, section 645.023, subdivision 1, clause (a). 
    Section 25 is effective the day following final enactment 
and is repealed June 30, 1994. 
    Section 27 is effective May 29, 1987. 
    Presented to the governor May 20, 1993 
    Signed by the governor May 24, 1993, 5:54 p.m.

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