Minnesota Session Laws - 1994, Regular Session

                            CHAPTER 513-S.F.No. 2329 
                  An act relating to taxation; property; providing an 
                  exemption for power facilities containing cogeneration 
                  systems; amending Minnesota Statutes 1993 Supplement, 
                  section 272.02, subdivision 1.  
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1993 Supplement, section 
        272.02, subdivision 1, is amended to read: 
           Subdivision 1.  All property described in this section to 
        the extent herein limited shall be exempt from taxation: 
           (1) all public burying grounds; 
           (2) all public schoolhouses; 
           (3) all public hospitals; 
           (4) all academies, colleges, and universities, and all 
        seminaries of learning; 
           (5) all churches, church property, and houses of worship; 
           (6) institutions of purely public charity except parcels of 
        property containing structures and the structures described in 
        section 273.13, subdivision 25, paragraph (c), clauses (1), (2), 
        and (3), or paragraph (d), 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 
        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) 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. 
           (27) 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. 
           (28) Notwithstanding clause (8), item (a), attached 
        machinery and other personal property which is part of a 
        facility containing a cogeneration system as described in 
        section 216B.166, subdivision 2, paragraph (a), if the 
        cogeneration system has met the following criteria:  (i) the 
        system utilizes natural gas as a primary fuel and the 
        cogenerated steam initially replaces steam generated from 
        existing thermal boilers utilizing coal; (ii) the facility 
        developer is selected as a result of a procurement process 
        ordered by the public utilities commission; and (iii) 
        construction of the facility is commenced after July 1, 1994, 
        and before July 1, 1997. 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective the day following final enactment 
        and applies to property taxes levied in 1994, and thereafter. 
           Presented to the governor April 22, 1994 
           Signed by the governor April 25, 1994, 1:17 p.m.