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1994 Minnesota Session Laws

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

                            CHAPTER 587-H.F.No. 3209 
                  An act relating to the financing and operation of 
                  state and local government; conforming with certain 
                  changes in the federal income tax law; changing tax 
                  brackets, rates, bases, exemptions, withholding, 
                  payments, and refunds; allowing tax credits; changing 
                  the subtraction for the elderly and disabled; altering 
                  taconite production tax rates and distributions; 
                  providing for use of taconite economic development 
                  funds; altering procedures of the board of government 
                  innovation and cooperation and appropriating money to 
                  the board; providing aids to local governments; 
                  changing the calculation of property tax refunds; 
                  modifying property tax provisions relating to appeals, 
                  petitions, procedures, valuation, levies, 
                  classifications, homesteads, credits, and exemptions; 
                  changing certain tax return or report requirements; 
                  changing operation of the local government trust fund 
                  and providing for its future repeal; authorizing 
                  special assessments; authorizing a local lodging tax; 
                  enacting provisions relating to certain cities, 
                  counties, special taxing districts, and towns; 
                  changing certain redemption provisions; reforming 
                  state budget procedures; changing certain bonding 
                  provisions and authorizing bonding; creating a bond 
                  guarantee fund; modifying tax increment financing 
                  requirements; eliminating certain conditions relating 
                  to the contamination tax; providing for creation and 
                  operation of the Cross Lake area water and sewer board 
                  and the Chisholm/Hibbing airport authority; giving the 
                  commissioner of revenue certain authority; requiring 
                  certain permits and permit fees; requiring studies; 
                  appropriating money and limiting appropriations; 
                  amending Minnesota Statutes 1992, sections 16A.711, 
                  subdivisions 4 and 5; 60A.02, by adding a subdivision; 
                  60A.15, by adding a subdivision; 124.196; 256E.06, 
                  subdivision 5, and by adding a subdivision; 271.06, 
                  subdivision 7; 273.061, by adding a subdivision; 
                  273.111, subdivision 11; 273.138, by adding a 
                  subdivision; 273.1398, by adding a subdivision; 
                  273.165, subdivision 1; 278.05, subdivision 6; 
                  289A.02, by adding a subdivision; 289A.25, subdivision 
                  5; 290.01, subdivision 19d, and by adding 
                  subdivisions; 290.05, subdivision 3, and by adding a 
                  subdivision; 290.06, subdivision 2c; 290.067, 
                  subdivision 1; 290.068, subdivision 2; 290.0802, 
                  subdivisions 1 and 2; 290.091, subdivision 3; 
                  290.0921, subdivision 2; 290.35, by adding a 
                  subdivision; 290A.04, subdivisions 2 and 2a; 296.16, 
                  subdivision 1; 297.01, by adding a subdivision; 
                  297A.01, by adding a subdivision; 297A.02; 297A.135, 
                  subdivision 1; 297A.15, subdivision 5; 297A.25, by 
                  adding subdivisions; 297A.256; 297A.44, subdivision 1; 
                  297C.03, subdivision 6; 298.017, subdivision 2; 
                  298.24, subdivision 1; 298.26; 298.28, by adding a 
                  subdivision; 298.296, subdivision 2, and by adding a 
                  subdivision; 360.036, subdivisions 2 and 3; 360.037, 
                  subdivision 2; 360.042, subdivision 10; 466A.02, 
                  subdivision 3; 469.004, subdivision 1a; 473.341; 
                  473H.05, by adding a subdivision; 473H.18; 477A.014, 
                  subdivision 5; 477A.03, as amended; and 580.23, as 
                  amended; Minnesota Statutes 1993 Supplement, sections 
                  16A.712; 84.794, subdivision 1; 84.803, subdivision 1; 
                  256E.06, subdivision 12; 270.78; 270.91, subdivision 
                  4; 270.94; 273.11, subdivisions 1a, 16, and by adding 
                  a subdivision; 273.112, subdivision 3; 273.124, 
                  subdivisions 1 and 13; 273.13, subdivisions 23 and 24; 
                  273.166, by adding a subdivision; 275.065, subdivision 
                  3; 276.04, subdivision 2; 278.01, subdivision 1; 
                  289A.11, subdivision 1; 289A.26, subdivision 7; 
                  289A.60, subdivision 21; 290.01, subdivision 19; 
                  290.091, subdivision 2; 290A.04, subdivisions 2h, as 
                  amended, and 6; 290A.23, subdivision 1, and by adding 
                  a subdivision; 296.02, subdivision 1a; 296.025, 
                  subdivision 1a; 297A.01, subdivision 16; 297B.03; 
                  298.227; 298.28, subdivision 9a; 383A.75, subdivision 
                  3; 465.795, subdivision 7; 465.796, subdivision 2; 
                  465.797, subdivisions 1, 2, 3, 4, and 5; 465.798; 
                  465.799; 477A.013, subdivisions 1, 8, as amended, and 
                  9; Laws 1969, chapter 499, section 2; and Laws 1993, 
                  chapters 55, section 1; and 375, article 9, section 
                  51; proposing coding for new law in Minnesota 
                  Statutes, chapters 16A; 275; 296; 297A; 297B; 462C; 
                  465; 469; 473; and 477A; repealing Minnesota Statutes 
                  1992, sections 3.862; 16A.711; 273.1381; 273.1398, 
                  subdivision 7; 290.05, subdivision 6; 290.067, 
                  subdivision 6; 297A.021; 297A.44, subdivision 4; 
                  297B.09, subdivision 3; 465.80, subdivision 3; 
                  477A.012, subdivision 6; and 477A.0132, as amended; 
                  Minnesota Statutes 1993 Supplement, sections 16A.712; 
                  82.19, subdivision 9; 256E.06, subdivision 12; 
                  273.166, subdivision 4; 289A.25, subdivision 5a; 
                  290A.23; 465.80, subdivisions 1, 2, 4, and 5; and 
                  477A.03, subdivision 1; Laws 1973, chapter 650, 
                  article 24, section 6, as amended. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
                                   ARTICLE 1
                         INCOME TAX AND BUSINESS TAXES
           Section 1.  Minnesota Statutes 1992, section 60A.02, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [MUTUAL PROPERTY AND CASUALTY INSURANCE 
        COMPANY.] "Mutual property and casualty insurance company" 
        includes a property and casualty insurance company that was 
        converted to a stock company after December 31, 1987, and before 
        January 1, 1994, if the company was controlled on the date of 
        conversion by a mutual life insurance company and so long as the 
        company continues to be controlled by a mutual life insurance 
        company. 
           Sec. 2.  Minnesota Statutes 1992, section 60A.15, is 
        amended by adding a subdivision to read: 
           Subd. 15.  [GUARANTY ASSOCIATION ASSESSMENT OFFSET.] An 
        insurance company may offset against its premium tax liability 
        to this state any amount paid pursuant to assessments made for 
        insolvencies which occur after July 31, 1994, under sections 
        60C.01 to 60C.22, and any amount paid pursuant to assessments 
        made after July 31, 1994, under Minnesota Statutes 1992, 
        sections 61B.01 to 61B.16, or sections 61B.18 to 61B.32 as 
        follows: 
           (a) Each such assessment shall give rise to an amount of 
        offset equal to 20 percent of the amount of the assessment for 
        each of the five calendar years following the year in which the 
        assessment was paid. 
           (b) The amount of offset initially determined for each 
        taxable year is the sum of the amounts determined under 
        paragraph (a) for that taxable year. 
           (c) Each year the commissioner of revenue shall compare 
        total guaranty association assessments levied over the preceding 
        five calendar years to the sum of all premium tax and corporate 
        franchise tax revenues collected from insurance companies, 
        without reduction for any guaranty association assessment offset 
        in the preceding calendar year, referred to in this subdivision 
        as "preceding year insurance tax revenues."  If total guaranty 
        association assessments levied over the preceding five years 
        exceed the preceding year insurance tax revenues, insurance 
        companies shall be allowed only a proportionate part of the 
        premium tax offset calculated under paragraph (b) for the 
        current calendar year.  The proportionate part of the premium 
        tax offset allowed in the current calendar year is determined by 
        multiplying the amount calculated under paragraph (b) by a 
        fraction, the numerator of which equals the preceding year 
        insurance tax revenues and the denominator of which equals total 
        guaranty association assessments levied over the preceding 
        five-year period.  The proportionate part of the premium tax 
        offset that is not allowed shall be carried forward to 
        subsequent tax years and added to the amount of premium tax 
        offset calculated under paragraph (b) prior to application of 
        the limitation imposed by this paragraph.  Any amount carried 
        forward from prior years must be allowed before allowance of the 
        offset for the current year calculated under paragraph (b).  The 
        premium tax offset limitation must be calculated separately for 
        (1) insurance companies subject to assessment under sections 
        60C.01 to 60C.22, and (2) insurance companies subject to 
        assessment under Minnesota Statutes 1992, sections 61B.01 to 
        61B.16, or sections 61B.18 to 61B.32.  When the premium tax 
        offset is limited by this provision, the commissioner of revenue 
        shall notify affected insurance companies on a timely basis for 
        purposes of completing premium and corporate franchise tax 
        returns.  The guaranty associations created under sections 
        60C.01 to 60C.22, Minnesota Statutes 1992, sections 61B.01 to 
        61B.16, and sections 61B.18 to 61B.32, shall provide the 
        commissioner of revenue with the necessary information on 
        guaranty association assessments.  The limitation in this 
        paragraph is effective for offsets allowable in 1999 and 
        thereafter. 
           (d) If the offset determined by the application of 
        paragraphs (a) to (c) exceeds the greater of the insurance 
        company's premium tax liability under this section or its 
        corporate franchise tax liability under chapter 290 prior to 
        allowance of the credit for premium taxes, then the insurance 
        company may carry forward the excess, referred to in this 
        subdivision as the "carryforward credit," to subsequent taxable 
        years.  The carryforward credit shall be allowed as an offset 
        against premium tax liability for the first succeeding year to 
        the extent that the premium tax liability for that year exceeds 
        the amount of the allowable offset for the year determined under 
        paragraphs (a) to (c).  The carryforward credit shall be 
        reduced, but not below zero, by the greater of the amount of the 
        carryforward credit allowed as an offset against the premium tax 
        under this paragraph or the amount of the carryforward credit 
        allowed as an offset against the insurance company's corporate 
        franchise tax liability under section 290.35, subdivision 6, 
        paragraph (d).  The remainder, if any, of the carryforward 
        credit must be carried forward to succeeding taxable years until 
        the entire carryforward credit has been credited against the 
        insurance company's liability for premium tax under this chapter 
        and corporate franchise tax under chapter 290 if applicable for 
        that taxable year. 
           (e) A refund paid by the Minnesota life and health 
        insurance guaranty association to member insurers under 
        Minnesota Statutes 1992, section 61B.07, subdivision 6, or 
        section 61B.24, subdivision 6, with respect to an assessment 
        payment which has been offset against taxes shall reduce the 
        carryforward credit determined under paragraph (d).  If the 
        refund exceeds the amount of the carryforward credit, it shall 
        be repaid by the insurers to the extent of the offset to the 
        state in the manner the commissioner of revenue requires. 
           Sec. 3.  Minnesota Statutes 1992, section 289A.02, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [INTERNAL REVENUE CODE.] Unless specifically 
        defined otherwise, "Internal Revenue Code" means the Internal 
        Revenue Code of 1986, as amended through December 31, 1993. 
           Sec. 4.  Minnesota Statutes 1992, section 289A.25, 
        subdivision 5, is amended to read: 
           Subd. 5.  [AMOUNT OF REQUIRED INSTALLMENT.] The amount of 
        any installment required to be paid shall be 25 percent of the 
        required annual payment except as provided in clause (3).  The 
        term "required annual payment" means the lesser of 
           (1) 90 percent of the tax shown on the return for the 
        taxable year or 90 percent of the tax for the year if no return 
        is filed, or 
           (2) the total tax liability shown on the return of the 
        individual taxpayer for the preceding taxable year, if a return 
        showing a liability for the taxes was filed by the individual 
        taxpayer for the preceding taxable year of 12 months,.  If the 
        adjusted gross income shown on the return of the taxpayer for 
        the preceding taxable year exceeds $150,000, this clause shall 
        be applied by substituting "110 percent of the total tax 
        liability" for "the total tax liability" 
           (i) for an individual who is not a Minnesota resident for 
        the entire year, the term "adjusted gross income" means the 
        Minnesota share of that income apportioned to Minnesota under 
        section 290.06, subdivision 2c, paragraph (e), or 
           (ii) for a trust the term "adjusted gross income" means the 
        income assigned to Minnesota under section 290.17; or 
           (3) an amount equal to the applicable percentage of the tax 
        for the taxable year computed by placing on an annualized basis 
        the taxable income and alternative minimum taxable income for 
        the months in the taxable year ending before the month in which 
        the installment is required to be paid.  The applicable 
        percentage of the tax is 22.5 percent in the case of the first 
        installment, 45 percent for the second installment, 67.5 percent 
        for the third installment, and 90 percent for the fourth 
        installment.  For purposes of this clause, the taxable income 
        and alternative minimum taxable income shall be placed on an 
        annualized basis by 
           (i) multiplying by 12 (or in the case of a taxable year of 
        less than 12 months, the number of months in the taxable year) 
        the taxable income and alternative minimum taxable income 
        computed for the months in the taxable year ending before the 
        month in which the installment is required to be paid; and 
           (ii) dividing the resulting amount by the number of months 
        in the taxable year ending before the month in which the 
        installment date falls. 
        A reduction in an installment under clause (3) must be 
        recaptured by increasing the amount of the next required 
        installment by the amount of the reduction. 
           Sec. 5.  Minnesota Statutes 1993 Supplement, 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) 97 100 percent of the tax shown on the return for the 
        taxable year, or, if no return is filed, 97 100 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:
                1st                           24.25 25 
                2nd                           48.5 50  
                3rd                           72.75 75  
                4th                           97 100   
           (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. 6.  Minnesota Statutes 1993 Supplement, 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, and the provisions of section 13224 and 13261 of the 
        Omnibus Budget Reconciliation Act of 1993, Public Law Number 
        103-66, 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 provisions of section 13431 of the Omnibus Budget 
        Reconciliation Act of 1993, Public Law Number 103-66, shall 
        become effective at the time they became effective for federal 
        purposes.  
           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, and the provisions of sections 13101, 13114, 
        13122, 13141, 13150, 13151, 13174, 13239, 13301, and 13442 of 
        the Omnibus Budget Reconciliation Act of 1993, Public Law Number 
        103-66, 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.  
           The provisions of sections 13116, 13121, 13206, 13210, 
        13222, 13223, 13231, 13232, 13233, 13239, 13262, and 13321 of 
        the Omnibus Budget Reconciliation Act of 1993, Public Law Number 
        103-66, shall become effective at the time they become effective 
        for federal purposes. 
           The Internal Revenue Code of 1986, as amended through 
        December 31, 1993, shall be in effect for taxable years 
        beginning after December 31, 1993. 
           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, is 
        amended by adding a subdivision to read: 
           Subd. 4b.  [MUTUAL PROPERTY AND CASUALTY INSURANCE 
        COMPANY.] "Mutual property and casualty insurance company" 
        includes a property and casualty insurance company that was 
        converted to a stock company after December 31, 1987, and before 
        January 1, 1994, if the company was controlled on the date of 
        conversion by a mutual life insurance company and so long as the 
        company continues to be controlled by a mutual life insurance 
        company. 
           Sec. 8.  Minnesota Statutes 1992, section 290.01, 
        subdivision 19d, is amended to read: 
           Subd. 19d.  [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL 
        TAXABLE INCOME.] For corporations, there shall be subtracted 
        from federal taxable income after the increases provided in 
        subdivision 19c:  
           (1) the amount of foreign dividend gross-up added to gross 
        income for federal income tax purposes under section 78 of the 
        Internal Revenue Code; 
           (2) the amount of salary expense not allowed for federal 
        income tax purposes due to claiming the federal jobs credit 
        under section 51 of the Internal Revenue Code; 
           (3) any dividend (not including any distribution in 
        liquidation) paid within the taxable year by a national or state 
        bank to the United States, or to any instrumentality of the 
        United States exempt from federal income taxes, on the preferred 
        stock of the bank owned by the United States or the 
        instrumentality; 
           (4) amounts disallowed for intangible drilling costs due to 
        differences between this chapter and the Internal Revenue Code 
        in taxable years beginning before January 1, 1987, as follows: 
           (i) to the extent the disallowed costs are represented by 
        physical property, an amount equal to the allowance for 
        depreciation under Minnesota Statutes 1986, section 290.09, 
        subdivision 7, subject to the modifications contained in 
        subdivision 19e; and 
           (ii) to the extent the disallowed costs are not represented 
        by physical property, an amount equal to the allowance for cost 
        depletion under Minnesota Statutes 1986, section 290.09, 
        subdivision 8; 
           (5) the deduction for capital losses pursuant to sections 
        1211 and 1212 of the Internal Revenue Code, except that: 
           (i) for capital losses incurred in taxable years beginning 
        after December 31, 1986, capital loss carrybacks shall not be 
        allowed; 
           (ii) for capital losses incurred in taxable years beginning 
        after December 31, 1986, a capital loss carryover to each of the 
        15 taxable years succeeding the loss year shall be allowed; 
           (iii) for capital losses incurred in taxable years 
        beginning before January 1, 1987, a capital loss carryback to 
        each of the three taxable years preceding the loss year, subject 
        to the provisions of Minnesota Statutes 1986, section 290.16, 
        shall be allowed; and 
           (iv) for capital losses incurred in taxable years beginning 
        before January 1, 1987, a capital loss carryover to each of the 
        five taxable years succeeding the loss year to the extent such 
        loss was not used in a prior taxable year and subject to the 
        provisions of Minnesota Statutes 1986, section 290.16, shall be 
        allowed; 
           (6) an amount for interest and expenses relating to income 
        not taxable for federal income tax purposes, if (i) the income 
        is taxable under this chapter and (ii) the interest and expenses 
        were disallowed as deductions under the provisions of section 
        171(a)(2), 265 or 291 of the Internal Revenue Code in computing 
        federal taxable income; 
           (7) in the case of mines, oil and gas wells, other natural 
        deposits, and timber for which percentage depletion was 
        disallowed pursuant to subdivision 19c, clause (11), a 
        reasonable allowance for depletion based on actual cost.  In the 
        case of leases the deduction must be apportioned between the 
        lessor and lessee in accordance with rules prescribed by the 
        commissioner.  In the case of property held in trust, the 
        allowable deduction must be apportioned between the income 
        beneficiaries and the trustee in accordance with the pertinent 
        provisions of the trust, or if there is no provision in the 
        instrument, on the basis of the trust's income allocable to 
        each; 
           (8) 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, an amount equal to the allowance for 
        depreciation under Minnesota Statutes 1986, section 290.09, 
        subdivision 7; 
           (9) the amount included in federal taxable income 
        attributable to the credits provided in Minnesota Statutes 1986, 
        section 273.1314, subdivision 9, or Minnesota Statutes, section 
        469.171, subdivision 6; 
           (10) amounts included in federal taxable income that are 
        due to refunds of 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 a foreign country or 
        possession of the United States to the extent that the taxes 
        were added to federal taxable income under section 290.01, 
        subdivision 19c, clause (1), in a prior taxable year; 
           (11) the following percentage of royalties, fees, or other 
        like income accrued or received from a foreign operating 
        corporation or a foreign corporation which is part of the same 
        unitary business as the receiving corporation: 
              Taxable Year 
              Beginning After .......... Percentage 
              December 31, 1988 ........ 50 percent 
              December 31, 1990 ........ 80 percent;    
           (12) income or gains from the business of mining as defined 
        in section 290.05, subdivision 1, clause (a), that are not 
        subject to Minnesota franchise tax; 
           (13) the amount of handicap access expenditures in the 
        taxable year which are not allowed to be deducted or capitalized 
        under section 44(d)(7) of the Internal Revenue Code of 1986; and 
           (14) the amount of qualified research expenses not allowed 
        for federal income tax purposes under section 280C(c) of the 
        Internal Revenue Code, but only to the extent that the amount 
        exceeds the amount of the credit allowed under section 290.068.; 
        and 
           (15) the amount of salary expenses not allowed for federal 
        income tax purposes due to claiming the Indian employment credit 
        under section 45A(a) of the Internal Revenue Code of 1986, as 
        amended through December 31, 1993.  
           Sec. 9.  Minnesota Statutes 1992, section 290.01, is 
        amended by adding a subdivision to read: 
           Subd. 31.  [INTERNAL REVENUE CODE.] Unless specifically 
        defined otherwise, "Internal Revenue Code" means the Internal 
        Revenue Code of 1986, as amended through December 31, 1993. 
           Sec. 10.  Minnesota Statutes 1992, section 290.05, 
        subdivision 3, is amended to read: 
           Subd. 3.  (a) An organization exempt from taxation under 
        subdivision 2 shall, nevertheless, be subject to tax under this 
        chapter to the extent provided in the following provisions of 
        the Internal Revenue Code:  
           (i) section 527 (dealing with political organizations); 
           (ii) section 528 (dealing with certain homeowners 
        associations); 
           (iii) sections 511 to 515 (dealing with unrelated business 
        income); and 
           (iv) section 521 (dealing with farmers' cooperatives); and 
           (v) section 6033(e)(2) (dealing with lobbying expense); but 
           notwithstanding this subdivision, shall be considered an 
        organization exempt from income tax for the purposes of any law 
        which refers to organizations exempt from income taxes.  
           (b) The tax shall be imposed on the taxable income of 
        political organizations or homeowner associations or the 
        unrelated business taxable income, as defined in section 512 of 
        the Internal Revenue Code, of organizations defined in section 
        511 of the Internal Revenue Code, provided that the tax is not 
        imposed on:  
           (1) advertising revenues from a newspaper published by an 
        organization described in section 501(c)(4) of the Internal 
        Revenue Code; or 
           (2) revenues from lawful gambling authorized under chapter 
        349 that are expended for purposes that qualify for the 
        deduction for charitable contributions under section 170 of the 
        Internal Revenue Code of 1986, as amended through December 31, 
        1991 1993, disregarding the limitation under section 170(b)(2), 
        but only to the extent the contributions are not deductible in 
        computing federal taxable income. 
           The tax shall be at the corporate rates.  The tax shall 
        only be imposed on income and deductions assignable to this 
        state under sections 290.17 to 290.20.  To the extent deducted 
        in computing federal taxable income, the deductions contained in 
        section 290.21 shall not be allowed in computing Minnesota 
        taxable net income. 
           (c) The tax shall be imposed on organizations subject to 
        federal tax under section 6033(e)(2) of the Internal Revenue 
        Code of 1986, as amended through December 31, 1993, in an amount 
        equal to the corporate tax rate multiplied by the amount of 
        lobbying expenses taxed under section 6033(e)(2) which are 
        attributable to lobbying the Minnesota state government. 
           Sec. 11.  Minnesota Statutes 1992, section 290.05, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [AUTHORITY TO REVOKE EXEMPTION FOR FAILURE TO 
        COMPLY WITH FEDERAL LAW.] The commissioner may examine or 
        investigate an entity claiming exemption under this section and 
        subpart F of the Internal Revenue Code.  The commissioner may 
        revoke the exemption under this section for violations of 
        federal law that would permit the commissioner of internal 
        revenue or the secretary of the treasury to revoke the exemption 
        under federal law, regardless of whether such action has been 
        taken under federal law.  A revocation under this subdivision is 
        subject to administrative review under section 289A.65. 
           Sec. 12.  Minnesota Statutes 1992, section 290.06, 
        subdivision 2c, is amended to read: 
           Subd. 2c.  [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 
        AND TRUSTS.] (a) The income taxes imposed by this chapter upon 
        married individuals filing joint returns and surviving spouses 
        as defined in section 2(a) of the Internal Revenue Code of 1986 
        as amended through December 31, 1991, must be computed by 
        applying to their taxable net income the following schedule of 
        rates: 
           (1) On the first $19,910, 6 percent; 
           (2) On all over $19,910, but not over $79,120, 8 percent; 
           (3) On all over $79,120, 8.5 percent. 
           Married individuals filing separate returns, estates, and 
        trusts must compute their income tax by applying the above rates 
        to their taxable income, except that the income brackets will be 
        one-half of the above amounts.  
           (b) The income taxes imposed by this chapter upon unmarried 
        individuals must be computed by applying to taxable net income 
        the following schedule of rates: 
           (1) On the first $13,620, 6 percent; 
           (2) On all over $13,620, but not over $44,750, 8 percent; 
           (3) On all over $44,750, 8.5 percent. 
           (c) The income taxes imposed by this chapter upon unmarried 
        individuals qualifying as a head of household as defined in 
        section 2(b) of the Internal Revenue Code of 1986, as amended 
        through December 31, 1991, must be computed by applying to 
        taxable net income the following schedule of rates: 
           (1) On the first $16,770, 6 percent; 
           (2) On all over $16,770, but not over $67,390, 8 percent; 
           (3) On all over $67,390, 8.5 percent. 
           (d) In lieu of a tax computed according to the rates set 
        forth in this subdivision, the tax of any individual taxpayer 
        whose taxable net income for the taxable year is less than an 
        amount determined by the commissioner must be computed in 
        accordance with tables prepared and issued by the commissioner 
        of revenue based on income brackets of not more than $100.  The 
        amount of tax for each bracket shall be computed at the rates 
        set forth in this subdivision, provided that the commissioner 
        may disregard a fractional part of a dollar unless it amounts to 
        50 cents or more, in which case it may be increased to $1. 
           (e) An individual who is not a Minnesota resident for the 
        entire year must compute the individual's Minnesota income tax 
        as provided in this subdivision.  After the application of the 
        nonrefundable credits provided in this chapter, the tax 
        liability must then be multiplied by a fraction in which:  
           (1) The numerator is the individual's Minnesota source 
        federal adjusted gross income as defined in section 62 of the 
        Internal Revenue Code of 1986, as amended through December 31, 
        1991, less the deduction allowed by section 217 of the Internal 
        Revenue Code of 1986, as amended through December 31, 1991, 
        after applying the allocation and assignability provisions of 
        section 290.081, clause (a), or 290.17; and 
           (2) the denominator is the individual's federal adjusted 
        gross income as defined in section 62 of the Internal Revenue 
        Code of 1986, as amended through December 31, 1991 1993, 
        increased by the addition required for interest income from 
        non-Minnesota state and municipal bonds under section 290.01, 
        subdivision 19a, clause (1). 
           Sec. 13.  Minnesota Statutes 1992, section 290.067, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AMOUNT OF CREDIT.] (a) A taxpayer may take 
        as a credit against the tax due from the taxpayer and a spouse, 
        if any, under this chapter an amount equal to the dependent care 
        credit for which the taxpayer is eligible pursuant to the 
        provisions of section 21 of the Internal Revenue Code subject to 
        the limitations provided in subdivision 2 except that in 
        determining whether the child qualified as a dependent, income 
        received as an aid to families with dependent children grant or 
        allowance to or on behalf of the child must not be taken into 
        account in determining whether the child received more than half 
        of the child's support from the taxpayer, and the provisions of 
        section 32(b)(1)(D) of the Internal Revenue Code of 1986, as 
        amended through December 31, 1991, do not apply. 
           (b) If a child who is six years of age or less at the close 
        of the taxable year is cared for at a licensed family day care 
        home operated by the child's parent, the taxpayer is deemed to 
        have paid employment-related expenses.  If the child is 16 
        months old or younger at the close of the taxable year, the 
        amount of expenses deemed to have been paid equals the maximum 
        limit for one qualified individual under section 21(c) and (d) 
        of the Internal Revenue Code.  If the child is older than 16 
        months of age but not older than six years of age at the close 
        of the taxable year, the amount of expenses deemed to have been 
        paid equals the amount the licensee would charge for the care of 
        a child of the same age for the same number of hours of care.  
           (c) If a married couple: 
           (1) has a child one year of age or less at the close of the 
        taxable year; 
           (2) files a joint tax return for the taxable year; and 
           (3) does not participate in a dependent care assistance 
        program as defined in section 129 of the Internal Revenue Code, 
        in lieu of the actual employment related expenses paid for that 
        child under paragraph (a) or the deemed amount under paragraph 
        (b), the lesser of (i) the combined earned income of the couple 
        or (ii) $2,400 will be deemed to be the employment related 
        expense paid for that child.  The earned income limitation of 
        section 21(d) of the Internal Revenue Code shall not apply to 
        this deemed amount.  These deemed amounts apply regardless of 
        whether any employment-related expenses have been paid.  
           (d) If the taxpayer is not required and does not file a 
        federal individual income tax return for the tax year, no credit 
        is allowed for any amount paid to any person unless: 
           (1) the name, address, and taxpayer identification number 
        of the person are included on the return claiming the credit; or 
           (2) if the person is an organization described in section 
        501(c)(3) of the Internal Revenue Code and exempt from tax under 
        section 501(a) of the Internal Revenue Code, the name and 
        address of the person are included on the return claiming the 
        credit.  
        In the case of a failure to provide the information required 
        under the preceding sentence, the preceding sentence does not 
        apply if it is shown that the taxpayer exercised due diligence 
        in attempting to provide the information required. 
           In the case of a nonresident, part-year resident, or a 
        person who has earned income not subject to tax under this 
        chapter, the credit determined under section 21 of the Internal 
        Revenue Code must be allocated based on the ratio by which the 
        earned income of the claimant and the claimant's spouse from 
        Minnesota sources bears to the total earned income of the 
        claimant and the claimant's spouse. 
           Sec. 14.  Minnesota Statutes 1992, section 290.068, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
        following terms have the meanings given.  
           (a) "Qualified research expenses" means (i) qualified 
        research expenses and basic research payments as defined in 
        section 41(b) and (e) of the Internal Revenue Code, except it 
        does not include expenses incurred for qualified research or 
        basic research conducted outside the state of Minnesota pursuant 
        to section 41(d) and (e) of the Internal Revenue Code; and (ii) 
        contributions to a nonprofit corporation established and 
        operated pursuant to the provisions of chapter 317A for the 
        purpose of promoting the establishment and expansion of business 
        in this state, provided the contributions are invested by the 
        nonprofit corporation for the purpose of providing funds for 
        small, technologically innovative enterprises in Minnesota 
        during the early stages of their development.  
           (b) "Qualified research" means qualified research as 
        defined in section 41(d) of the Internal Revenue Code, except 
        that the term does not include qualified research conducted 
        outside the state of Minnesota.  
           (c) "Base amount" means base amount as defined in section 
        41(c) of the Internal Revenue Code, except that the average 
        annual gross receipts must be calculated using Minnesota sales 
        or receipts under section 290.191 and the definitions contained 
        in clauses (a) and (b) shall apply.  
           (d) "Internal Revenue Code" means the Internal Revenue Code 
        of 1986, as amended through December 31, 1991. 
           Sec. 15.  Minnesota Statutes 1992, section 290.0802, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For purposes of this 
        section, the following terms have the meanings given. 
           (a) "Adjusted gross income" means federal adjusted gross 
        income as used in section 22(d) of the Internal Revenue Code for 
        the taxable year, plus a lump sum distribution as defined in 
        section 402(e)(3) of the Internal Revenue Code, and less any 
        pension, annuity, or disability benefits included in federal 
        gross income but not subject to state taxation other than the 
        subtraction allowed under section 290.01, subdivision 19b, 
        clause (4). 
           (b) "Disability income" means disability income as defined 
        in section 22(c)(2)(B)(iii) of the Internal Revenue Code. 
           (c) "Internal Revenue Code" means the Internal Revenue Code 
        of 1986, as amended through December 31, 1991. 
           (d) "Nontaxable retirement and disability benefits" means 
        the amount of pension, annuity, or disability benefits that 
        would be included in the reduction under section 22(c)(3) of the 
        Internal Revenue Code and pension, annuity, or disability 
        benefits included in federal gross income but not subject to 
        state taxation other than the subtraction allowed under section 
        290.01, subdivision 19b, clause (4). 
           (e) (d) "Qualified individual" means a qualified individual 
        as defined in section 22(b) of the Internal Revenue Code. 
           (e) "Social security benefits above the second federal 
        threshold" means the amount of social security benefits included 
        in federal taxable income due to the provisions of section 13215 
        of the Omnibus Budget Reconciliation Act of 1993, Public Law 
        Number 103-66. 
           Sec. 16.  Minnesota Statutes 1992, section 290.0802, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SUBTRACTION.] (a) A qualified individual is 
        allowed a subtraction from federal taxable income for 
        the greater of (1) the individual's subtraction base amount or 
        (2) the minimum amount.  The excess of the subtraction base 
        amount over the taxable net income computed without regard to 
        the subtraction for the elderly or disabled under section 
        290.01, subdivision 19b, clause (5), may be used to reduce the 
        amount of a lump sum distribution subject to tax under section 
        290.032. 
           (b)(1) The initial subtraction base amount equals 
           (i) $10,000 $12,000 for a married taxpayer filing a joint 
        return if a spouse is a qualified individual, 
           (ii) $8,000 $9,600 for a single taxpayer, and 
           (iii) $5,000 $6,000 for a married taxpayer filing a 
        separate federal return. 
           (2) The qualified individual's initial subtraction base 
        amount, then, must be reduced by the sum of nontaxable 
        retirement and disability benefits and one-half of the amount of 
        adjusted gross income in excess of the following thresholds: 
           (i) $15,000 $18,000 for a married taxpayer filing a joint 
        return if both spouses are qualified individuals, 
           (ii) $12,000 $14,500 for a single taxpayer or for a married 
        couple filing a joint return if only one spouse is a qualified 
        individual, and 
           (iii) $7,500 $9,000 for a married taxpayer filing a 
        separate federal return. 
           (3) In the case of a qualified individual who is under the 
        age of 65, the maximum amount of the subtraction base may not 
        exceed the taxpayer's disability income. 
           (4) The resulting amount is the subtraction base amount. 
           (c) Qualified individuals who must include social security 
        benefits above the second federal threshold in federal taxable 
        income may claim a minimum amount equal to the lesser of 
           (1) the amount of social security benefits above the second 
        federal threshold included in federal taxable income; or 
           (2) a minimum amount subject to an income phase-out. 
           For taxable years beginning after December 31, 1993, and 
        before January 1, 1995, the minimum amount equals 
           (i) $3,750 for married individuals filing a joint return if 
        both spouses are qualified individuals, 
           (ii) $3,000 for a single taxpayer or for married 
        individuals filing a joint return if one spouse is a qualified 
        individual, and 
           (iii) $1,875 for a married individual filing a separate 
        return. 
           For taxable years beginning after December 31, 1994, and 
        before January 1, 1996, the minimum amount equals 
           (i) $2,250 for married individuals filing a joint return if 
        both spouses are qualified individuals, 
           (ii) $1,800 for a single taxpayer or for married 
        individuals filing a joint return if one spouse is a qualified 
        individual, and 
           (iii) $1,125 for married individuals filing a separate 
        return. 
           For taxable years beginning after December 31, 1995, and 
        before January 1, 1997, the minimum amount equals 
           (i) $1,000 for married individuals filing a joint return if 
        both spouses are qualified individuals, 
           (ii) $800 for a single taxpayer or for married individuals 
        filing a joint return if one spouse is a qualified individual, 
        and 
           (iii) $500 for married individuals filing a separate return.
           For taxable years beginning after December 31, 1996, the 
        minimum amount is zero. 
           The minimum amount is reduced by 20 percent for each $1,000 
        of adjusted gross income above an income threshold, but in no 
        case may the minimum amount be reduced to less than zero.  The 
        income thresholds equal 
           (i) $75,000 for married individuals filing a joint return 
        if both spouses are qualified individuals, 
           (ii) $60,000 for single taxpayers and for married 
        individuals filing a joint return if only one spouse is a 
        qualified individual, and 
           (iii) $37,500 for married individuals filing a separate 
        return. 
           Sec. 17.  Minnesota Statutes 1993 Supplement, 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), to the extent 
        included in federal alternative minimum taxable income; 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, 1992. 
           (c) "Investment interest" means investment interest as 
        defined in section 163(d)(3) of the Internal Revenue Code. 
           (d) (c) "Tentative minimum tax" equals seven percent of 
        alternative minimum taxable income after subtracting the 
        exemption amount determined under subdivision 3. 
           (e) (d) "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) (e) "Net minimum tax" means the minimum tax imposed by 
        this section. 
           (g) (f) "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. 18.  Minnesota Statutes 1992, section 290.091, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EXEMPTION AMOUNT.] For purposes of computing the 
        alternative minimum tax, the exemption amount is the exemption 
        determined under section 55(d) of the Internal Revenue Code, as 
        amended through December 31, 1992, except that alternative 
        minimum taxable income as determined under this section must be 
        substituted in the computation of the phase out under section 
        55(d)(3). 
           Sec. 19.  Minnesota Statutes 1992, section 290.0921, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] (a) For purposes of this section, 
        the following terms have the meanings given them. 
           (b) "Alternative minimum taxable net income" is alternative 
        minimum taxable income, 
           (1) less the exemption amount, and 
           (2) apportioned or allocated to Minnesota under section 
        290.17, 290.191, or 290.20. 
           (c) The "exemption amount" is $40,000, reduced, but not 
        below zero, by 25 percent of the excess of alternative minimum 
        taxable income over $150,000. 
           (d) "Internal Revenue Code" means the Internal Revenue Code 
        of 1986, as amended through December 31, 1991. 
           (e) "Minnesota alternative minimum taxable income" is 
        alternative minimum taxable net income, less the deductions for 
        alternative tax net operating loss under subdivision 4; 
        charitable contributions under subdivision 5; and dividends 
        received under subdivision 6.  The sum of the deductions under 
        this paragraph may not exceed 90 percent of alternative minimum 
        taxable net income.  This limitation does not apply to a 
        deduction for dividends paid to or received from a corporation 
        which is subject to tax under section 290.35 or 290.36 and which 
        is a member of an affiliated group of corporations as defined by 
        the Internal Revenue Code. 
           Sec. 20.  Minnesota Statutes 1992, section 290.35, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [GUARANTY ASSOCIATION ASSESSMENT OFFSET.] An 
        insurance company may offset against its corporate franchise tax 
        liability under this chapter any amount paid pursuant to 
        assessments made for insolvencies which occur after July 31, 
        1994, under sections 60C.01 to 60C.22, and any amount paid 
        pursuant to assessments made after July 31, 1994, under 
        Minnesota Statutes 1992, sections 61B.01 to 61B.16, or sections 
        61B.18 to 61B.32, as follows: 
           (a) Each such assessment shall give rise to an amount of 
        offset equal to 20 percent of the amount of the assessment for 
        each of the five calendar years following the year in which the 
        assessment was paid. 
           (b) The amount of offset initially determined for each 
        taxable year is the sum of the amounts determined under 
        paragraph (a) for that taxable year. 
           (c) Each year the commissioner of revenue shall compare 
        total guaranty association assessments levied over the preceding 
        five calendar years to the sum of all premium tax and corporate 
        franchise tax revenues collected from insurance companies 
        without reduction for any guaranty association assessment 
        offset, in the preceding calendar year, referred to in this 
        subdivision as "preceding year insurance tax revenues."  If 
        total guaranty association assessments levied over the preceding 
        five years exceed the preceding year insurance tax revenues, 
        insurance companies shall be allowed only a proportionate part 
        of the corporate franchise tax offset calculated under paragraph 
        (b) for the current calendar year.  The proportionate part of 
        the corporate franchise tax offset allowed in the current 
        calendar year is determined by multiplying the amount calculated 
        under paragraph (b) by a fraction, the numerator of which equals 
        the preceding year insurance tax revenues and the denominator of 
        which equals total guaranty association assessments levied over 
        the preceding five-year period.  The proportionate part of the 
        premium tax offset that is not allowed shall be carried forward 
        to subsequent tax years and added to the amount of corporate 
        franchise tax offset calculated under paragraph (b) before 
        application of the limitation imposed by this paragraph.  Any 
        amount carried forward from prior years must be allowed before 
        allowance of the offset for the current year calculated under 
        paragraph (b).  The corporate franchise tax offset limitation 
        must be calculated separately for (1) insurance companies 
        subject to assessment under sections 60C.01 to 60C.22, and (2) 
        insurance companies subject to assessment under Minnesota 
        Statutes 1992, sections 61B.01 to 61B.16, or sections 61B.18 to 
        61B.32.  When the corporate franchise tax offset is limited by 
        this provision, the commissioner of revenue will notify affected 
        insurance companies on a timely basis for purposes of completing 
        premium and corporate franchise tax returns.  The guaranty 
        associations created under sections 60C.01 to 60C.22, Minnesota 
        Statutes 1992, 61B.01 to 61B.16, and sections 61B.18 to 61B.32, 
        shall provide the commissioner of revenue with the necessary 
        information on guaranty association assessments.  The limitation 
        in this paragraph is effective for offsets allowable in 1999 and 
        thereafter. 
           (d) If the offset determined by the application of 
        paragraphs (a) to (c) exceeds the greater of the insurance 
        company's corporate franchise tax liability under this chapter 
        prior to allowance of the credit provided by subdivision 3 or 
        its premium tax liability under chapter 60A, then the insurance 
        company may carry forward the excess, referred to in this 
        subdivision as the "carryforward credit," to subsequent taxable 
        years.  The carryforward credit must be allowed as an offset 
        against corporate franchise tax liability for the first 
        succeeding year to the extent that the corporate franchise tax 
        liability for that year exceeds the amount of the allowable 
        offset for the year determined under paragraphs (a) to (c).  The 
        carryforward credit shall be reduced, but not below zero, by the 
        greater of the amount of the carryforward credit allowed as an 
        offset against the corporate franchise tax pursuant to this 
        paragraph or the amount of the carryforward credit allowed as an 
        offset against the insurance company's premium tax liability 
        under chapter 60A pursuant to section 60A.15, subdivision 15, 
        paragraph (d).  The remainder, if any, of the carryforward 
        credit must be carried forward to succeeding taxable years until 
        the entire carryforward credit has been credited against the 
        insurance company's liability for corporate franchise tax under 
        this chapter and premium tax under chapter 60A. 
           (e) A refund paid by the Minnesota life and health 
        insurance guaranty association to member insurers under 
        Minnesota Statutes 1992, section 61B.07, subdivision 6, or 
        section 61B.24, subdivision 6, with respect to an assessment 
        payment which has been offset against taxes shall reduce the 
        carryforward credit determined under paragraph (d) and, if the 
        refund exceeds the amount of the carryforward credit, shall be 
        repaid by the insurers to the extent of the offset to the state 
        in the manner the commissioner of revenue requires. 
           Sec. 21.  Minnesota Statutes 1992, section 297.01, is 
        amended by adding a subdivision to read: 
           Subd. 17.  [INTERNAL REVENUE CODE.] Unless specifically 
        defined otherwise, "Internal Revenue Code" means the Internal 
        Revenue Code of 1986, as amended through December 31, 1993. 
           Sec. 22.  Minnesota Statutes 1992, section 298.017, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEDUCTIONS ALLOWED.] (a) In calculating the net 
        proceeds for the purpose of determining the tax provided in 
        section 298.015, only those expenses specifically allowed in 
        this subdivision may be deducted from gross proceeds.  The 
        carryback or carryforward of deductions shall not be allowed.  
           (b) Ordinary and necessary expenses actually paid for the 
        mining, production, processing, beneficiation, smelting, or 
        refining of metal or mineral products for: 
           (1) labor, including wages, salaries, fringe benefits, 
        unemployment and workers' compensation insurance; 
           (2) machinery, equipment, and supplies, including any sales 
        and use tax paid on it, except that machinery and equipment 
        subject to depreciation shall only be deductible under clause 
        (b)(3); 
           (3) depreciation as defined and allowed by section 167 of 
        the Internal Revenue Code of 1986, as amended through December 
        31, 1986 1993; 
           (4) administrative expenses inside Minnesota; and 
           (5) reclamation costs actually incurred in Minnesota and 
        paid in a year of production, including the payment of bonds 
        required by the provisions of an environmental permit issued by 
        the state of Minnesota 
        are deductible.  
           (c) Ordinary and necessary expenses of transporting metal 
        or mineral products are allowed as a deduction if the costs are 
        included in the sale price of the products.  
           (d) Expenses of exploration, research, or development in 
        this state for the mining and processing of minerals within 
        Minnesota paid in a production year are deductible in the 
        production year.  
           (e) Expenses of exploration and development in Minnesota 
        incurred prior to production must be amortized and deducted on a 
        straight-line basis over the first five years of production.  
           Sec. 23.  [FEDERAL CHANGES.] 
           The changes made by sections 13115, 13131, 13144, 13145, 
        13146, 13148, 13149, and 13171 of the Omnibus Budget 
        Reconciliation Act of 1993, Public Law Number 103-66, which 
        affect the computation of corporate alternative minimum taxable 
        income as defined in Minnesota Statutes, section 290.0921, 
        subdivision 3; alternative minimum taxable income of 
        individuals, trusts, and estates as defined in Minnesota 
        Statutes, section 290.091, subdivision 2; unrelated business 
        taxable income, as defined in Minnesota Statutes, section 
        290.05, subdivision 3; and the Minnesota working family credit 
        in Minnesota Statutes, section 290.0671, shall be in effect at 
        the same time they become effective for federal income tax 
        purposes. 
           Sec. 24.  [INSTRUCTION TO REVISOR.] 
           In the next edition of Minnesota Statutes, the revisor of 
        statutes shall substitute the phrase "Internal Revenue Code"  
        for the words "Internal Revenue Code of 1986, as amended through 
        December 31, 1992," where the phrase occurs in chapters 289A, 
        290, 290A, 291, and 297, except for sections 290.01, subdivision 
        19; 290.091, subdivision 3; 290A.03, subdivision 15; and 
        291.005, subdivision 1. 
           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, 1993," for the words 
        "Internal Revenue Code of 1986, as amended through December 31, 
        1992," wherever the phrase occurs in sections 290A.03, 
        subdivision 15; 291.005, subdivision 1; 469.174, subdivision 20; 
        and chapter 298. 
           Sec. 25.  [REPEALER.] 
           (a) Minnesota Statutes 1992, sections 290.05, subdivision 
        6; and 290.067, subdivision 6, is repealed. 
           (b) Minnesota Statutes 1993 Supplement, section 289A.25, 
        subdivision 5a, is repealed. 
           Sec. 26.  [SEVERABILITY.] 
           If section 1 or 7 is for any reason found by a final 
        nonappealable order of a court of competent jurisdiction to be 
        unconstitutional or to have an unconstitutional effect on the 
        application of the insurance premiums tax to other insurance 
        companies, the legislature intends that only section 1 or 
        section 7, as appropriate, be invalid and the otherwise 
        applicable insurance premiums tax rates apply. 
           Sec. 27.  [EFFECTIVE DATE.] 
           Sections 1, 7, 13, 15, 16, and 22 are effective for taxable 
        years beginning after December 31, 1993. 
           Section 2 is effective to be used as an offset against 
        premium tax liabilities payable after November 30, 1995.  If a 
        guaranty association assessment was made before August 1, 1994, 
        under Minnesota Statutes 1992, sections 61B.01 to 61B.16, and is 
        revoked or invalidated, a subsequent assessment to pay the same 
        liabilities shall not be eligible for the offset as provided for 
        under Minnesota Statutes, section 60A.15, subdivision 15, and 
        shall not be used in any calculation to determine the offset 
        limitation under Minnesota Statutes, section 60A.15, subdivision 
        15, paragraph (c). 
           Sections 4 and 25, paragraph (b), are effective for 
        installments of estimated taxes due after the day following 
        enactment. 
           Section 5 is effective for taxable years beginning after 
        December 31, 1994. 
           Section 8 is effective for wages paid or incurred after 
        December 31, 1993. 
           Section 20 is effective to be used as an offset against tax 
        liabilities payable after June 30, 1995.  If a guaranty 
        association assessment was made before August 1, 1994, under 
        Minnesota Statutes 1992, sections 61B.01 to 61B.16 and is 
        revoked or invalidated, a subsequent assessment to pay the same 
        liabilities shall not be eligible for the offset as provided for 
        under Minnesota Statutes, section 290.35, subdivision 6, and 
        shall not be used in any calculation to determine the offset 
        limitation under Minnesota Statutes, section 290.35, subdivision 
        6, paragraph (c). 
                                   ARTICLE 2 
                   SALES, USE, AND MOTOR VEHICLE EXCISE TAXES 
           Section 1.  Minnesota Statutes 1993 Supplement, 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.  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.  In computing 
        the dollar amount of items on the return, the amounts are 
        rounded off to the nearest whole dollar, disregarding amounts 
        less than 50 cents and increasing amounts of 50 cents to 99 
        cents to the next highest dollar. 
           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 $18,500 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 $18,500 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 $18,500 is made and a return must be filed for 
        the preceding reporting period. 
           Sec. 2.  Minnesota Statutes 1993 Supplement, 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 purchased or 
        leased for use in this state and used by the purchaser or lessee 
        primarily for manufacturing, fabricating, mining, quarrying, or 
        refining tangible personal property, to be sold ultimately at 
        retail and 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 includes all machinery and equipment 
        that is essential to the integrated production process.  Capital 
        equipment includes, but is not limited to: 
           (1) machinery and equipment used or required to operate, 
        control, or regulate the production equipment; 
           (2) machinery and equipment used for research and 
        development, design, quality control, and testing activities; 
           (3) environmental control devices that are used to maintain 
        conditions such as temperature, humidity, light, or air pressure 
        when those conditions are essential to and are part of the 
        production process; or 
           (4) materials and supplies necessary to construct and 
        install machinery or equipment. 
           (c) 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, 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; 
           (2) motor vehicles taxed under chapter 297B; 
           (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, space 
        heating, lighting, or safety; 
           (6) "farm machinery" as defined by subdivision 15, "special 
        tooling" as defined by subdivision 17, and "aquaculture 
        production equipment" as defined by subdivision 19, and 
        "replacement capital equipment" as defined by subdivision 20; or 
           (7) any other item that is not essential to the integrated 
        process of manufacturing, fabricating, mining, quarrying, or 
        refining. 
           (d) For purposes of this subdivision: 
           (1) "Equipment" means independent devices or tools separate 
        from machinery but essential to an integrated production 
        process, including computers and software, used in operating 
        machinery and equipment; and any subunit or assembly comprising 
        a component of any machinery or accessory or attachment parts of 
        machinery, such as tools, dies, jigs, patterns, and molds. 
           (2) "Fabricating" means to make, build, create, produce, or 
        assemble components or property to work in a new or different 
        manner. 
           (3) "Machinery" means mechanical, electronic, or electrical 
        devices, including computers and software, that are purchased or 
        constructed to be used for the activities set forth in paragraph 
        (a), beginning with the removal of raw materials from inventory 
        through the completion of the product, including packaging of 
        the product. 
           (4) "Manufacturing" means an operation or series of 
        operations where raw materials are changed in form, composition, 
        or condition by machinery and equipment and which results in the 
        production of a new article of tangible personal property.  For 
        purposes of this subdivision, "manufacturing" includes the 
        generation of electricity or steam to be sold at retail. 
           (5) "Mining" means the extraction of minerals, ores, stone, 
        and peat. 
           (6) "On-line data retrieval system" means a system whose 
        cumulation of information is equally available and accessible to 
        all its customers. 
           (7) "Pollution control equipment" means machinery and 
        equipment used to eliminate, prevent, or reduce pollution 
        resulting from an activity described in paragraph (a). 
           (8) "Primarily" means machinery and equipment used 50 
        percent or more of the time in an activity described in 
        paragraph (a). 
           (9) "Refining" means the process of converting a natural 
        resource to a product, including the treatment of water to be 
        sold at retail. 
           (c) (e) 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) (f) 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. 3.  Minnesota Statutes 1992, section 297A.01, is 
        amended by adding a subdivision to read: 
           Subd. 20.  [REPLACEMENT CAPITAL EQUIPMENT.] (a) Replacement 
        capital equipment means machinery and equipment, as defined in 
        subdivision 16, that serves fundamentally or essentially the 
        same purpose or function or that produces the same or similar 
        end product as did the old equipment, even though it may 
        increase speed, efficiency, or production capacity. 
           (b) Replacement capital equipment includes: 
           (1) repair and replacement parts, including accessories, 
        whether purchased as spare parts, repair parts, or as upgrades 
        or modifications to machinery or equipment; 
           (2) replacement or enhanced software used or required to 
        operate, control, or regulate machinery or equipment; 
           (3) materials used for foundations that support machinery 
        or equipment or special purpose buildings used in the production 
        process; or 
           (4) all machinery and equipment that is replacing an 
        existing piece of machinery or equipment that is essential to 
        the integrated production process. 
           Sec. 4.  Minnesota Statutes 1992, section 297A.02, is 
        amended to read: 
           297A.02 [IMPOSITION OF TAX.] 
           Subdivision 1.  [GENERALLY.] Except as otherwise provided 
        in this chapter, there is imposed an excise tax of six 6.5 
        percent of the gross receipts from sales at retail made by any 
        person in this state. 
           Subd. 2.  [MACHINERY AND EQUIPMENT.] Notwithstanding the 
        provisions of subdivision 1, the rate of the excise tax imposed 
        upon sales of special tooling is four percent and upon sales of 
        farm machinery and aquaculture production equipment is two 2.5 
        percent. 
           Subd. 3.  [LIQUOR AND BEER SALES.] Notwithstanding the 
        provisions of subdivision 1, the rate of the excise tax imposed 
        upon sales of intoxicating liquor, as defined in section 
        340A.101, subdivision 14, and 3.2 percent malt liquor, as 
        defined in section 340A.101, subdivision 19, shall be 8.5 nine 
        percent.  The 3.2 percent malt liquor is subject to taxation 
        under this subdivision only when sold at an on-sale or off-sale 
        municipal liquor store or other establishment licensed to sell 
        any type of intoxicating liquor.  
           Subd. 4.  [MANUFACTURED HOUSING.] Notwithstanding the 
        provisions of subdivision 1, for sales at retail of manufactured 
        homes used for residential purposes the excise tax is imposed 
        upon 65 percent of the sales price of the home.  
           Subd. 5.  [REPLACEMENT CAPITAL EQUIPMENT.] Notwithstanding 
        the provisions of subdivision 1, the rate of excise tax imposed 
        upon retail sales of replacement capital equipment is: 
           for purchases after June 30, 1994, and prior to July 1, 
        1995, 5.0 percent, 
           for purchases after June 30, 1995, and prior to July 1, 
        1996, 4.0 percent, 
           for purchases after June 30, 1996, and prior to July 1, 
        1997, 3.8 percent, 
           for purchases after June 30, 1997, and prior to July 1, 
        1998, 2.9 percent, and 
           for purchases after June 30, 1998, 2.0 percent. 
           This subdivision shall cease to be operative on July 1, 
        2001, or on July 1 of the earliest year thereafter, if the total 
        employment in the manufacturing sector in this state, as 
        determined by the commissioner of jobs and training on the 
        preceding January 1, does not exceed by 4,500 the total 
        employment in the manufacturing sector in the state on January 
        1, 1994. 
           Sec. 5.  [297A.022] [COORDINATION OF STATE AND LOCAL SALES 
        TAX RATES.] 
           In preparing and distributing a sales tax schedule for use 
        within a local jurisdiction with a separate general sales tax, 
        the state department of revenue shall coordinate the state, 
        local option, and local sales tax so that a sale of $1 reflects 
        a tax equal to the combination of the state, local option, and 
        local sales tax rate.  The combined sales tax on other sales 
        amounts shall also reflect the coordinated rather than the 
        separate effects of the three sales taxes.  The schedule must be 
        coordinated as long as the local sales tax is in effect.  If the 
        sales tax percentage is changed for any of the taxes, the 
        schedule shall be adjusted to reflect the change. 
           Sec. 6.  Minnesota Statutes 1992, section 297A.135, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [TAX IMPOSED.] A tax of $7.50 is imposed on 
        the lease or rental in this state for not more than 28 days of a 
        passenger automobile as defined in section 168.011, subdivision 
        7, a van as defined in section 168.011, subdivision 28, or a 
        pickup truck as defined in section 168.011, subdivision 29.  The 
        tax is imposed at the rate of 6.2 percent of the sales price as 
        defined for the purpose of imposing the sales and use tax in 
        this chapter.  The tax does not apply to the lease or rental of 
        a hearse or limousine used in connection with a burial or 
        funeral service.  It applies whether or not the vehicle is 
        licensed in the state. 
           Sec. 7.  Minnesota Statutes 1992, section 297A.15, 
        subdivision 5, is amended to read: 
           Subd. 5.  [REFUND; APPROPRIATION.] Notwithstanding the 
        provisions of section sections 297A.02, subdivision 5, and 
        297A.25, subdivisions 42 and 50, the tax on sales of capital 
        equipment, replacement capital equipment, and construction 
        materials and supplies under section 297A.25, subdivision 50, 
        shall be imposed and collected as if the rates under sections 
        297A.02, subdivision 1, and 297A.021, applied.  Upon application 
        by the purchaser, on forms prescribed by the commissioner, a 
        refund equal to the reduction in the tax due as a result of the 
        application of the exemption under section 297A.25, subdivision 
        42 or 50, and the rates under sections 297A.02, subdivision 5, 
        and 297A.021 shall be paid to the purchaser.  In the case of 
        building materials qualifying under section 297A.25, subdivision 
        50, where the tax was paid by a contractor, application must be 
        made by the owner for the sales tax paid by all the contractors, 
        subcontractors, and builders for the project.  The application 
        must include sufficient information to permit the commissioner 
        to verify the sales tax paid for the project.  The application 
        shall include information necessary for the commissioner 
        initially to verify that the purchases qualified as capital 
        equipment under section 297A.25, subdivision 42, replacement 
        capital equipment under section 297A.01, subdivision 20, or 
        capital equipment or construction materials and supplies under 
        section 297A.25, subdivision 50.  No more than two applications 
        for refunds may be filed under this subdivision in a calendar 
        year.  No owner may apply for a refund based on the exemption 
        under section 297A.25, subdivision 50, before July 1, 1993.  
        Unless otherwise specifically provided by this subdivision, the 
        provisions of section 289A.40 apply to the refunds payable under 
        this subdivision.  There is annually appropriated to the 
        commissioner of revenue the amount required to make the refunds. 
           The amount to be refunded shall bear interest at the rate 
        in section 270.76 from the date the refund claim is filed with 
        the commissioner. 
           Sec. 8.  Minnesota Statutes 1992, section 297A.25, is 
        amended by adding a subdivision to read: 
           Subd. 53.  [SPECIAL TOOLING.] The gross receipts from the 
        sale of special tooling are exempt. 
           Sec. 9.  Minnesota Statutes 1992, section 297A.25, is 
        amended by adding a subdivision to read: 
           Subd. 54.  [USED FARM TIRES.] The first $5,000 of gross 
        receipts from the sales of used, remanufactured, or repaired 
        tires for farm machinery, by a sole proprietor, in a calendar 
        year are exempt provided that: 
           (1) the seller had gross receipts from all sales of less 
        than $10,000 in the previous year; and 
           (2) the tires are not retreaded. 
           Sec. 10.  Minnesota Statutes 1992, section 297A.25, is 
        amended by adding a subdivision to read: 
           Subd. 55.  [CONSTRUCTION MATERIALS; CORRUGATED RECYCLING 
        FACILITIES.] Construction materials and supplies are exempt from 
        the tax imposed under this chapter, regardless of whether 
        purchased by the owner or a contractor, subcontractor, or 
        builder if: 
           (1) the materials and supplies are used or consumed in 
        constructing a new facility which reduces the flow of solid 
        waste by creating a market for recycled corrugated waste; and 
           (2) the recycling process of the facility produces pulp or 
        paper from corrugated waste. 
           The exemption provided by this subdivision applies to 
        construction materials and supplies purchased prior to December 
        31, 1997. 
           Sec. 11.  Minnesota Statutes 1992, section 297A.25, is 
        amended by adding a subdivision to read: 
           Subd. 56.  [FIREFIGHTERS PERSONAL PROTECTIVE EQUIPMENT.] 
        The gross receipts from the sale of firefighters personal 
        protective equipment are exempt.  For purposes of this 
        subdivision, "personal protective equipment" includes:  helmets 
        (including face shields, chin straps, and neck liners), bunker 
        coats and pants (including pant suspenders), boots, gloves, head 
        covers or hoods, wildfire jackets, protective coveralls, 
        goggles, self-contained breathing apparatuses, canister filter 
        masks, personal alert safety systems, spanner belts, and all 
        safety equipment required by the Occupational Safety and Health 
        Administration. 
           Sec. 12.  Minnesota Statutes 1992, section 297A.25, is 
        amended by adding a subdivision to read: 
           Subd. 57.  [HORSES.] The gross receipts from the sale of 
        horses other than racehorses taxable under section 297A.01, 
        subdivision 3, paragraph (h), are exempt. 
           Sec. 13.  Minnesota Statutes 1992, section 297A.25, is 
        amended by adding a subdivision to read: 
           Subd. 58.  [PERSONAL COMPUTERS PRESCRIBED FOR USE BY 
        SCHOOL.] The gross receipts from the sale, or the storage, use 
        or consumption, of personal computers and related software sold 
        by a public or private school, college, university, or business 
        or trade school to students who are enrolled at the institutions 
        are exempt if: 
           (1) the use of the personal computer, or of a substantially 
        similar model of computer, and the related software is 
        prescribed by the institution in conjunction with a course of 
        study; and 
           (2) each student of the institution, or of a unit of the 
        institution in which the student is enrolled, is required by the 
        institution to purchase or otherwise to acquire and possess such 
        a personal computer and related software as a condition of 
        enrollment.  For the purposes of this subdivision, "public 
        school," "private school," and "business and trade schools" have 
        the meanings given in subdivision 21. 
           Sec. 14.  Minnesota Statutes 1992, section 297A.256, is 
        amended to read: 
           297A.256 [EXEMPTIONS FOR CERTAIN NONPROFIT GROUPS.] 
           Subdivision 1.  [FUNDRAISING SALES BY NONPROFIT GROUPS.] 
        Notwithstanding the provisions of this chapter, the following 
        sales made by a "nonprofit organization" are exempt from the 
        sales and use tax. 
           (a)(1) All sales made by an organization for fundraising 
        purposes if that organization exists solely for the purpose of 
        providing educational or social activities for young people 
        primarily age 18 and under.  This exemption shall apply only if 
        the gross annual sales receipts of the organization from 
        fundraising do not exceed $10,000. 
           (2) A club, association, or other organization of 
        elementary or secondary school students organized for the 
        purpose of carrying on sports, educational, or other 
        extracurricular activities is a separate organization from the 
        school district or school for purposes of applying the $10,000 
        limit.  This paragraph does not apply if the sales are derived 
        from admission charges or from activities for which the money 
        must be deposited with the school district treasurer under 
        section 123.38, subdivision 2, or be recorded in the same manner 
        as other revenues or expenditures of the school district under 
        section 123.38, subdivision 2b. 
           (b) All sales made by an organization for fundraising 
        purposes if that organization is a 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 and no part of the net earnings inure to the benefit of 
        any private shareholders.  This exemption shall apply only if 
        the gross annual sales receipts of the organization from 
        fundraising do not exceed $10,000. 
           (c) The gross receipts from the sales of tangible personal 
        property at, admission charges for, and sales of food, meals, or 
        drinks at fundraising events sponsored by a nonprofit 
        organization when the entire proceeds, except for the necessary 
        expenses therewith, will be used solely and exclusively for 
        charitable, religious, or educational purposes.  This exemption 
        does not apply to admission charges for events involving bingo 
        or other gambling activities or to charges for use of amusement 
        devices involving bingo or other gambling activities.  For 
        purposes of this clause, a "nonprofit organization" means any 
        unit of government, corporation, society, association, 
        foundation, or institution organized and operated for 
        charitable, religious, educational, civic, fraternal, senior 
        citizens' or veterans' purposes, no part of the net earnings of 
        which enures to the benefit of a private individual. 
           If the profits are not used solely and exclusively for 
        charitable, religious, or educational purposes, the entire gross 
        receipts are subject to tax. 
           Each nonprofit organization shall keep a separate 
        accounting record, including receipts and disbursements from 
        each fundraising event.  All deductions from gross receipts must 
        be documented with receipts and other records.  If records are 
        not maintained as required, the entire gross receipts are 
        subject to tax. 
           The exemption provided by this section does not apply to 
        any sale made by or in the name of a nonprofit corporation as 
        the active or passive agent of a person that is not a nonprofit 
        corporation. 
           The exemption for fundraising events under this section is 
        limited to no more than 24 days a year.  Fundraising events 
        conducted on premises leased or occupied for more than four days 
        but less than 30 days do not qualify for this exemption. 
           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, including a tournament conducted on premises 
        leased or occupied for more than four days. 
           Subd. 2.  [STATEWIDE AMATEUR ATHLETIC GAMES.] 
        Notwithstanding section 297A.01, subdivision 3, or any other 
        provision of this chapter, the gross receipts from the following 
        sales made to or by a nonprofit corporation designated by the 
        Minnesota amateur sports commission to conduct a series of 
        statewide amateur athletic games and related events, workshops, 
        clinics are exempt: 
           (1) sales of tangible personal property to or the storage, 
        use, or other consumption of tangible personal property by the 
        nonprofit corporation; and 
           (2) sales of tangible personal property, admission charges, 
        and sales of food, meals, and drinks by the nonprofit 
        corporation at fundraising events, athletic events, or athletic 
        facilities. 
           Sec. 15.  [297A.2572] [AGRICULTURE PROCESSING FACILITY 
        MATERIALS; EXEMPTION.] 
           Purchases of construction materials and supplies are exempt 
        from the sales and use taxes imposed under this chapter, 
        regardless of whether purchased by the owner or a contractor, 
        subcontractor, or builder, if the materials and supplies are 
        used or consumed in constructing an agriculture processing 
        facility as defined in section 469.1811 in which the total 
        capital investment in the processing facility is expected to 
        exceed $100,000,000.  The tax shall be imposed and collected as 
        if the rates under sections 297A.02, subdivision 1, and 
        297A.021, applied, and then refunded in the manner provided in 
        section 297A.15, subdivision 5. 
           Sec. 16.  Minnesota Statutes 1992, section 297A.44, 
        subdivision 1, is amended to read: 
           Subdivision 1.  (a) Except as provided in paragraphs (b), 
        (c), and (d), and subdivision 4, all revenues, including 
        interest and penalties, derived from the excise and use taxes 
        imposed by sections 297A.01 to 297A.44 shall be deposited by the 
        commissioner in the state treasury and credited to the general 
        fund.  
           (b) All excise and use taxes derived from sales and use of 
        property and services purchased for the construction and 
        operation of an agricultural resource project, from and after 
        the date on which a conditional commitment for a loan guaranty 
        for the project is made pursuant to section 41A.04, subdivision 
        3, shall be deposited in the Minnesota agricultural and economic 
        account in the special revenue fund.  The commissioner of 
        finance shall certify to the commissioner the date on which the 
        project received the conditional commitment.  The amount 
        deposited in the loan guaranty account shall be reduced by any 
        refunds and by the costs incurred by the department of revenue 
        to administer and enforce the assessment and collection of the 
        taxes.  
           (c) All revenues, including interest and penalties, derived 
        from the excise and use taxes imposed on sales and purchases 
        included in section 297A.01, subdivision 3, paragraphs (d) and 
        (l), clauses (1) and (2), must be deposited by the commissioner 
        in the state treasury, and credited as follows: 
           (1) first to the general obligation special tax bond debt 
        service account in each fiscal year the amount required by 
        section 16A.661, subdivision 3, paragraph (b); and 
           (2) after the requirements of clause (1) have been met, the 
        balance must be credited to the general fund. 
           (d) The revenues, including interest and penalties, derived 
        from the taxes imposed on solid waste collection services as 
        described in section 297A.45, except for the tax imposed under 
        section 297A.021, shall be deposited by the commissioner in the 
        state treasury and credited to the general fund to be used for 
        funding solid waste reduction and recycling programs. 
           Sec. 17.  Minnesota Statutes 1993 Supplement, section 
        297B.03, is amended to read: 
           297B.03 [EXEMPTIONS.] 
           There is specifically exempted from the provisions of this 
        chapter and from computation of the amount of tax imposed by it 
        the following:  
           (1) Purchase or use, including use under a lease purchase 
        agreement or installment sales contract made pursuant to section 
        465.71, of any motor vehicle by 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. 
           (8) Purchase of a motor vehicle by or for a public library, 
        as defined in section 134.001, subdivision 2, as a bookmobile or 
        library delivery vehicle. 
           Sec. 18.  [297B.032] [REFUND ON PARK TRAILERS; 
        APPROPRIATION.] 
           Notwithstanding the provisions of section 297B.02, or any 
        other law to the contrary, a portion of the motor vehicle excise 
        tax paid on park trailers, as defined in section 168.011, 
        subdivision 8, paragraph (b), under chapter 297B shall be 
        refunded by the commissioner of revenue provided the following 
        conditions are met: 
           (1) the park trailer is purchased after January 1, 1993; 
           (2) the owner paid the motor vehicle excise tax on the park 
        trailer; 
           (3) property taxes have been imposed upon the park trailer 
        for at least the last two taxes payable years; and 
           (4) property taxes on the park trailer for the years cited 
        in clause (3) have been paid by the owner of the park trailer. 
           Upon application by the purchaser, on forms prescribed by 
        the commissioner of revenue, a refund equal to 35 percent of the 
        actual taxes paid, shall be paid to the purchaser.  The 
        application must include sufficient information, including a 
        copy of the sales invoice for the park trailer, and the property 
        tax statements for the years cited in clause (3), or a 
        reproduction thereof, with a notation from the county treasurer 
        that the taxes have been paid on the park trailer. 
           The amounts required to make the refunds are annually 
        appropriated to the commissioner of revenue from the general 
        fund.  The amount to be refunded shall bear interest at the rate 
        in section 270.76 after 60 days after the refund claim was made 
        until the date the refund is paid. 
           Sec. 19.  Laws 1993, chapter 375, article 9, section 51, is 
        amended to read: 
           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 in the case of the mining or production 
        of taconite, Minnesota Statutes 1992, section 297A.01, 
        subdivision 16, paragraphs (a), (b), and (c), as amended or 
        added by section 25, are effective for refund claims filed after 
        May 17, 1993, and except that the extension of the exemption for 
        capital equipment used to produce an on-line computerized data 
        retrieval system and, as provided in section 25, paragraph (d), 
        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. 
           Sec. 20.  [ETHANOL MANUFACTURING FACILITY; EXEMPTIONS FOR 
        CAPITAL EQUIPMENT PURCHASES.] 
           Notwithstanding the provisions of Minnesota Statutes, 
        chapter 297A, the purchase of capital equipment by a contractor, 
        for installation in a new ethanol manufacturing facility, is 
        exempt from the sales and use tax.  "Capital equipment" means 
        equipment and machinery as defined in Minnesota Statutes, 
        section 297A.01, subdivision 16, but disregarding the provision 
        that the capital equipment must be used by the purchaser or 
        lessee.  The tax shall be imposed and refunded in the manner 
        provided in Minnesota Statutes, section 297A.15, subdivision 5.  
        The refund under this section is limited to a maximum of 
        $300,000. 
           Sec. 21.  [INSTRUCTION TO THE REVISOR.] 
           In the 1994 and subsequent editions of the Minnesota 
        Statutes, the revisor shall substitute the term "sales tax on 
        motor vehicles" for "motor vehicle excise tax" wherever it 
        appears. 
           Sec. 22.  [REPEALER.] 
           Minnesota Statutes 1992, sections 297A.021; 297A.44, 
        subdivision 4; and 297B.09, subdivision 3, are repealed. 
           Sec. 23.  [EFFECTIVE DATES.] 
           Sections 1, 14, and 19 are effective the day following 
        final enactment. 
           Sections 2, 3, 6 to 8, 11, 13, 15, and 17 are effective for 
        sales made after June 30, 1994, provided that no refunds shall 
        be paid under section 15 until after June 30, 1995. 
           Section 4, subdivision 5, and the part of subdivision 2 
        relating to special tooling are effective for sales made after 
        June 30, 1994.  
           Section 4, subdivisions 1, 3, 4, and the part of 
        subdivision 2 relating to farm machinery and aquaculture 
        production equipment are effective for sales made after June 30, 
        1996, only upon enactment of article 3, sections 6, 7, 8, 9, 11, 
        and 18, subdivision 2. 
           Section 5 is effective beginning August 1, 1994.  
           Section 10 is effective for sales made after January 1, 
        1994. 
           Section 12 is effective for sales made after June 30, 1995. 
           Sections 16 and 22 are effective July 1, 1996, only upon 
        enactment of article 3, sections 6, 7, 8, 9, 11, and 18, 
        subdivision 2. 
           Section 20 is effective for purchases made after July 1, 
        1993, but before July 1, 1995. 
                                   ARTICLE 3
                     LOCAL GOVERNMENT AIDS AND AID FUNDING 
           Section 1.  Minnesota Statutes 1992, section 16A.711, 
        subdivision 4, is amended to read: 
           Subd. 4.  [GENERAL FUND ADVANCES.] If the money in the 
        trust fund is insufficient to make payments on the dates 
        provided by law, but the commissioner estimates receipts for the 
        biennium will be sufficient, the commissioner shall advance 
        money from the general fund to the trust fund necessary to make 
        the payments.  On or before the close of the biennium When 
        sufficient revenues have accumulated in the trust fund, the 
        trust shall repay the advances to the general fund. 
           Sec. 2.  Minnesota Statutes 1992, section 16A.711, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ADJUSTMENTS FOR LOCAL GOVERNMENT TRUST FUND 
        REVENUES.] (a) For the second fiscal year of each biennium, the 
        commissioner of revenue shall make adjustments in aid amounts so 
        that the based on the difference between anticipated total 
        obligations of the local government trust fund are equal to and 
        anticipated total revenues of the local government trust 
        fund.  For purposes of this subdivision, obligations of the 
        trust fund for any biennium include obligations to repay 
        advances from the general fund in the previous biennium. 
           In the event that anticipated total obligations of the 
        trust fund exceed 102 percent of anticipated total revenues for 
        the biennium, each jurisdiction's aid will be reduced as 
        provided under section 477A.0132 by the amount of the 
        expenditures over 102 percent of revenues.  For fiscal year 1993 
        only, if reductions are necessary in an amount greater than 
        $6,700,000, the additional reduction for the shortfall beyond 
        $6,700,000 will be applied only to aids under section 477A.013. 
           In the event that anticipated total obligations of the 
        trust fund are less than 98 percent of anticipated total 
        revenues for the biennium, aid amounts for the following 
        programs will be proportionately increased to bring anticipated 
        total expenditures into conformance with up to 98 percent of 
        anticipated total revenues: 
           (1) local government aid and equalization aid under section 
        477A.013; 
           (2) community social services aid under section 256E.06; 
        and 
           (3) county criminal justice aid under section 477A.0121. 
           (b) For purposes of applying sections 16A.15 and 16A.152, 
        the commissioner shall combine the general fund and the local 
        government trust fund in determining whether there are 
        sufficient receipts to fund appropriations and allotments of the 
        two funds. 
           Sec. 3.  Minnesota Statutes 1993 Supplement, 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) (3) $105,000 annually to the commissioner of finance in 
        fiscal years 1993, 1994, and 1995 to administer the trust fund; 
        and 
           (5) (4) $25,000 annually to the advisory commission on 
        intergovernmental relations in fiscal years 1993, year 1994, and 
        1995 to pay nonlegislative members' per diem expenses and such 
        other expenses as the commission deems appropriate; and 
           (6) $350,000 in fiscal year 1993 and (5) $1,200,000 in 
        fiscal 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. 4.  Minnesota Statutes 1992, section 256E.06, 
        subdivision 5, is amended to read: 
           Subd. 5.  [COMMUNITY SOCIAL SERVICE LEVY.] In each calendar 
        year, for taxes payable the following year, a county board shall 
        levy upon all taxable property in the county a tax for community 
        social services at least equal to the amount determined in 
        subdivisions 1 and 2.  Money for community social services 
        provided to a county by a municipal levy may, for the purposes 
        of this section, be counted as partial fulfillment of the local 
        levy requirement.  All money available to counties pursuant to 
        this section may be used by counties to match federal money.  It 
        is the intention of the legislature that the aid paid to 
        counties under this section be used to provide property tax 
        relief within the county. 
           Sec. 5.  Minnesota Statutes 1993 Supplement, 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, 
        $50,762,000 in fiscal year 1994, and $49,499,000 in fiscal year 
        1995, and $50,499,000 in fiscal year 1996 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 1996 and thereafter must 
        be used to increase each county's aid proportionately over the 
        aid received in calendar year 1994.  For calendar year 1995 
        only, each county's aid will be adjusted to reflect the increase 
        that is required to occur in the second half of the calendar 
        year. 
           In fiscal year 1997 and subsequent years, the amount 
        appropriated shall be the amount appropriated under this section 
        in the previous year, adjusted for inflation as provided under 
        section 477A.03, subdivision 3. 
           Sec. 6.  Minnesota Statutes 1992, section 256E.06, is 
        amended by adding a subdivision to read: 
           Subd. 13.  [APPROPRIATION.] In fiscal years 1997 and 
        thereafter, there is appropriated from the general fund to the 
        commissioner of human services for payment of aid under this 
        section the amount appropriated in the previous year under this 
        section, adjusted for inflation as provided under section 
        477A.03, subdivision 3.  
           Notwithstanding subdivisions 1 and 2, the increased 
        appropriation available in fiscal year 1997 and thereafter must 
        be used to increase each county's aid proportionately over the 
        aid received in calendar year 1994. 
           Sec. 7.  Minnesota Statutes 1992, section 273.138, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [ANNUAL APPROPRIATION.] A sum sufficient to make 
        the payments required by this section to school districts is 
        annually appropriated from the general fund to the commissioner 
        of education.  A sum sufficient to make the payments required by 
        this section to counties is annually appropriated from the 
        general fund to the commissioner of revenue. 
           Sec. 8.  Minnesota Statutes 1992, section 273.1398, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [APPROPRIATION.] An amount sufficient to pay the 
        aids and credits provided under this section for school 
        districts, intermediate school districts, or any group of school 
        districts levying as a single taxing entity, is annually 
        appropriated from the general fund to the commissioner of 
        education.  An amount sufficient to pay the aids and credits 
        provided under this section for counties, cities, towns, and 
        special taxing districts is annually appropriated from the 
        general fund to the commissioner of revenue.  A jurisdiction's 
        aid amount may be increased or decreased based on any prior year 
        adjustments for homestead credit or other property tax credit or 
        aid programs. 
           Sec. 9.  Minnesota Statutes 1993 Supplement, section 
        273.166, is amended by adding a subdivision to read: 
           Subd. 5.  [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 general 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. 10.  Minnesota Statutes 1993 Supplement, 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, 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 determined under 
        section 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; 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.  
           (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. 11.  Minnesota Statutes 1993 Supplement, section 
        290A.23, is amended by adding a subdivision to read: 
           Subd. 3.  [ANNUAL APPROPRIATION.] For payments made after 
        July 1, 1996, there is annually appropriated from the general 
        fund to the commissioner of revenue the amount necessary to make 
        the payments required under section 290A.04, subdivisions 2 and 
        2h. 
           Sec. 12.  [462C.15] [MORTGAGE CREDIT CERTIFICATE AID.] 
           Subdivision 1.  [APPLICATION.] By May 15 of each year, a 
        city issuing mortgage credit certificates during the previous 
        calendar year shall report to the commissioner of trade and 
        economic development.  The report shall be in a form and contain 
        the information necessary to determine the aid amounts, as 
        prescribed by the commissioner.  The report shall contain, at 
        least, for each mortgage loan for which a mortgage credit 
        certificate was issued:  (1) the principal amount of the loan, 
        (2) the interest rate on the loan, (3) the term of the loan, and 
        (4) the credit rate. 
           Subd. 2.  [PAYMENT OF AID.] By July 15 of each year, the 
        commissioner of trade and economic development shall pay 
        mortgage credit certificate aid to each city issuing 
        certificates during the previous calendar year and submitting a 
        timely application under subdivision 1.  The amount of aid to be 
        paid to a city for a calendar year equals the sum of the aid for 
        each mortgage credit certificate issued by the city for a 
        mortgage loan that is outstanding during the calendar year, 
        assuming no prepayment of principal.  The amount of mortgage 
        credit certificate aid for each mortgage credit certificate 
        equals eight percent multiplied by the product of the credit 
        rate, the outstanding principal amount of the loan, and the 
        original interest rate on the loan.  For purposes of calculating 
        the aid for a variable rate loan, the original interest rate 
        means the interest rate that applies in the first year of the 
        loan.  For purposes of calculating the aid, the commissioner 
        shall assume level amortization with no prepayment of principal. 
           Subd. 3.  [USE OF AID.] The city shall transfer the aid to 
        its housing authority to be used to provide homeownership 
        programs to families or individuals whose incomes are at or 
        below 80 percent of the area median income. 
           Subd. 4.  [APPROPRIATION.] An amount sufficient to pay the 
        aid under this section is appropriated from the general fund to 
        the commissioner of trade and economic development. 
           Subd. 5.  [DEFINITIONS.] The definitions in section 462C.02 
        apply to this section. 
           Sec. 13.  [477A.0122] [FAMILY PRESERVATION AID.] 
           Subdivision 1.  [PURPOSE.] The purpose of family 
        preservation aid is to reduce the rate of increase in the costs 
        of out-of-home placement of children and concomitant increases 
        in county property taxes.  Aids paid under this section must be 
        used to fund family preservation programs. 
           Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
        following definitions apply: 
           (a) "Children in out-of-home placement" means the total 
        unduplicated number of children in out-of-home care as reported 
        pursuant to section 275.0725. 
           (b) "Family preservation programs" means family-based 
        services as defined in section 256F.03, subdivision 5, families 
        first services, parent and child education programs, and day 
        treatment services provided in cooperation with a school 
        district or other programs as defined by the commissioner of 
        human services. 
           (c) "Income maintenance caseload" means average monthly 
        number of AFDC cases for the calendar year. 
           By July 1, 1994, the commissioner of human services shall 
        certify to the commissioner of revenue the number of children in 
        out-of-home placement in 1991 and 1992 for each county and the 
        income maintenance caseload for each county for the most recent 
        year available.  By July 1 of each subsequent year, the 
        commissioner of human services shall certify to the commissioner 
        of revenue the income maintenance caseload for each county for 
        the most recent calendar year available. 
           Subd. 3.  [AID DISTRIBUTION; CALENDAR YEAR 1995.] For aid 
        paid in calendar year 1995 only, one-half of the aid amount 
        shall be paid to each county in the same proportion that the 
        county's number of children in out-of-home placement is to the 
        number of children in out-of-home placement for all counties 
        within the state for 1991 and 1992, and one-half of the aid 
        amount shall be paid to each county in the same proportion that 
        the county's income maintenance caseload is to the income 
        maintenance caseload for all counties within the state. 
           Subd. 4.  [AID DISTRIBUTION; CALENDAR YEAR 1996 AND 
        THEREAFTER.] For aid paid in calendar year 1996 and thereafter, 
        each county shall receive the same proportion of the total aid 
        it received in the prior year, multiplied by one plus the 
        percentage change in the county's share of the statewide income 
        maintenance caseload.  If the amount appropriated does not equal 
        the aid amounts calculated under this subdivision, the 
        commissioner of revenue shall proportionately reduce or increase 
        the aid amounts so that their sum equals the amount appropriated.
           Subd. 5.  [PAYMENT.] The commissioner of revenue shall pay 
        the amounts determined under this section as provided in section 
        477A.015. 
           Subd. 6.  [REPORT.] On or before March 15 of the year 
        following the year in which the distributions under this section 
        are received, each county shall file with the commissioner of 
        revenue and commissioner of human services a report on prior 
        year expenditures for out-of-home placement and family 
        preservation, including expenditures under this section. 
           Sec. 14.  Minnesota Statutes 1993 Supplement, 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, 
        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.  In 1994 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 1993 under this 
        section before any nonpermanent reductions made under section 
        477A.0132.  In 1995 each town that had levied for taxes payable 
        in 1993 a local tax rate of at least .008 shall receive a 
        distribution equal to 102 percent of the amount it received in 
        1994 under this section before any increases or reductions under 
        sections 16A.711, subdivision 5, and 477A.0132.  In 1996 and 
        subsequent years each town that had levied for taxes payable in 
        1993 a local tax rate of at least .008 shall receive a 
        distribution equal to the amount it received in the previous 
        year under this section, adjusted for inflation as provided 
        under section 477A.03, subdivision 3. 
           Sec. 15.  Minnesota Statutes 1993 Supplement, section 
        477A.013, subdivision 8, as amended by Laws 1994, chapter 416, 
        article 1, section 59, is amended to read: 
           Subd. 8.  [CITY FORMULA AID INCREASE.] (a) In calendar year 
        1994 and subsequent years, the formula 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.  No city may have a formula aid amount less 
        than zero.  The need increase percentage must be the same for 
        all cities.  
           Notwithstanding the prior sentence, in 1995 only, the need 
        increase percentage for a city shall be twice the need increase 
        percentage applicable to other cities if:  
           (1) the city, in 1992 or 1993, transferred an amount from 
        governmental funds to their sewer and water fund, and 
           (2) the amount transferred exceeded their net levy for 
        taxes payable in the year in which the transfer occurred. 
           The applicable need increase percentage must be the same 
        for all cities and or percentages 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 is limited to an amount such that the total 
        aid to the city does not exceed the sum of (1) ten percent of 
        the city's net levy for the year prior to the aid distribution 
        plus (2) the total aid it received in the previous year. 
           Sec. 16.  Minnesota Statutes 1993 Supplement, section 
        477A.013, subdivision 9, is amended to read: 
           Subd. 9.  [CITY AID DISTRIBUTION.] (a) In calendar year 
        1994 and thereafter, each city shall receive an aid distribution 
        equal to the sum of (1) the city formula aid increase under 
        subdivision 8, and (2) its city aid base multiplied by a 
        percentage equal to 100 minus the base reduction percentage. 
           (b) The percentage increase for a first class city in 
        calendar year 1995 and thereafter shall not exceed the 
        percentage increase in the sum of the aid to all cities under 
        this section in the current calendar year compared to the sum of 
        the aid to all cities in the previous year. 
           (c) The total aid for any city, except a first class city, 
        shall 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 
        total aid in the previous year before any increases or decreases 
        under sections 16A.711, subdivision 5, and 477A.0132. 
           (d) Notwithstanding paragraph (c), in 1995 only, for cities 
        which in 1992 or 1993 transferred an amount from governmental 
        funds to their sewer and water fund in an amount greater than 
        their net levy for taxes payable in the year in which the 
        transfer occurred, the total aid shall not exceed the sum of (1) 
        20 percent of the city's net levy for the year prior to the aid 
        distribution plus (2) its total aid in the previous year before 
        any increases or decreases under sections 16A.711, subdivision 
        5, and 477A.0132. 
           Sec. 17.  Minnesota Statutes 1992, section 477A.014, 
        subdivision 5, is amended to read: 
           Subd. 5.  [DEDUCTION FROM AID PAYMENTS.] The commissioner 
        of revenue shall deduct the amounts certified under subdivision 
        4 from the aid payments to be made to appropriate local units of 
        government in the next aid payment year.  Amounts must be 
        transferred from the local government trust fund to the general 
        fund. 
           Sec. 18.  Minnesota Statutes 1992, section 477A.03, as 
        amended by Laws 1993, chapter 375, article 4, section 20, is 
        amended to read: 
           477A.03 [APPROPRIATION.] 
           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, 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.  For aid 
        payable in 1995, the total aid paid to cities under section 
        477A.013, subdivision 9, is limited to $337,249,600.  For aid 
        payable in 1996 and thereafter, the total aid paid to cities 
        under section 477A.013, subdivision 9, is limited to the amount 
        paid in the previous year, adjusted for inflation as provided 
        under subdivision 3. 
           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.  Aid payments to counties 
        under section 477A.0121 are limited to $8,400,000 in 1994 and 
        $10,000,000 in 1995.  For aid payable in 1996 and thereafter, 
        payments to counties under section 477A.0121 are limited to the 
        amount paid in the previous year, adjusted for inflation as 
        provided under subdivision 3. 
           For aid payable in 1995, payments to counties under section 
        477A.0122 are limited to $1,500,000.  For aids payable in 1996 
        and thereafter, payments to counties under section 477A.0122 are 
        limited to the amount paid in the previous year, adjusted for 
        inflation as provided under subdivision 3. 
           Subd. 2.  [ANNUAL APPROPRIATION.] A sum sufficient to 
        discharge the duties imposed by sections 477A.011 to 477A.014 is 
        annually appropriated from the general fund to the commissioner 
        of revenue.  For aids payable in 1996 and thereafter, the total 
        aids paid under sections 477A.013, subdivision 9, 477A.0121, and 
        477A.0122 are the amounts certified to be paid in the previous 
        year, adjusted for inflation as provided under subdivision 3. 
           Subd. 3.  [INFLATION ADJUSTMENT.] In 1996 and thereafter, 
        the amount paid under each section to be adjusted for inflation 
        shall be increased by an amount equal to: 
           (a) the amount certified to be paid under that section in 
        the previous year multiplied by 
           (b) one plus the percentage increase in the implicit price 
        deflator for state and local government purchases of goods and 
        services prepared by the Bureau of Economic Analysis of the 
        United States Department of Commerce for the 12-month period 
        ending March 31 of the previous year.  The percentage increase 
        used in this subdivision shall be no less than 2.5 percent and 
        no greater than 5.0 percent. 
           Sec. 19.  [APPROPRIATIONS.] 
           Subdivision 1.  [SPECIAL EDUCATION AID.] $17,500,000 is 
        appropriated in fiscal year 1994 from the general fund to the 
        department of education for special education aid to school 
        districts.  This appropriation is available until June 30, 
        1995.  This amount is added to the appropriations for aid for 
        special education programs contained in Laws 1993, chapter 224, 
        article 3, section 38, subdivisions 2, 4, 8, 11, and 14.  This 
        amount is appropriated to eliminate the fiscal year 1993 
        deficiencies and reduce the fiscal year 1995 deficiencies in the 
        appropriations in those subdivisions.  The department must 
        reduce a school district's payable 1995 levy limitations by the 
        full amount of the aid payments made to the school district 
        according to this subdivision.  This appropriation shall not be 
        included in determining the amount of a deficiency in the 
        special education programs for fiscal year 1995 for the purpose 
        of allocating any excess appropriations to aid or grant programs 
        with insufficient appropriations as provided in Minnesota 
        Statutes, section 124.14, subdivision 7.  Notwithstanding 
        Minnesota Statutes, section 124.195, subdivision 10, 100 percent 
        of this appropriation must be paid in fiscal years 1994 and 
        1995.  This appropriation is not to be included in a base budget 
        for future fiscal years. 
           Subd. 2.  [ABATEMENT AID.] $2,500,000 is appropriated in 
        fiscal year 1995 from the general fund to the department of 
        education for abatement aid to school districts.  This amount is 
        added to the appropriation for abatement aid for fiscal year 
        1995 contained in Laws 1993, chapter 224, article 8, section 22, 
        subdivision 2.  This amount is appropriated to reduce a 
        deficiency in that appropriation.  The department must reduce a 
        school district's payable 1995 levy limitations by the full 
        amount of the aid payments made to the school district according 
        to this subdivision.  This appropriation shall not be included 
        in determining the amount of the deficiency in the abatement aid 
        program for fiscal year 1995 for the purpose of allocating any 
        excess appropriations to aid or grant programs with insufficient 
        appropriations as provided in Minnesota Statutes, section 
        124.14, subdivision 7.  Notwithstanding Minnesota Statutes, 
        section 124.195, subdivision 10, 100 percent of the 
        appropriation in this section must be paid in fiscal year 1995.  
        This appropriation is not to be included in a base budget for 
        future fiscal years. 
           Sec. 20.  [ELIMINATION OF LOCAL GOVERNMENT TRUST FUND.] 
           The local government trust fund is eliminated as a separate 
        fund in the state treasury as of July 1, 1996.  Any money or 
        deficit in the local government trust fund on that date is 
        transferred to the general fund. 
           Sec. 21.  [REPEALER.] 
           (a) Minnesota Statutes 1992, sections 3.862 and 477A.012, 
        subdivision 6 are repealed. 
           (b) Minnesota Statutes 1992, sections 16A.711, 273.1381, 
        273.1398, subdivision 7, and 477A.0132, as amended by Laws 1994, 
        chapter 416, article 1, section 60; and Minnesota Statutes 1993 
        Supplement, sections 16A.712, 256E.06, subdivision 12, 273.166, 
        subdivision 4, 290A.23, subdivision 2, 477A.03, subdivision 1, 
        and Laws 1973, chapter 650, article 24, section 6, as amended by 
        Laws 1974, chapter 257, section 4 are repealed. 
           Sec. 22.  [EFFECTIVE DATES.] 
           Sections 1 to 5, 12, 18, subdivisions 1 and 3, and 21, 
        paragraph (a) are effective July 1, 1994. 
           Except as otherwise provided, sections 6 to 11, 17, 18, 
        subdivision 2, 20, and 21, paragraph (b) are effective July 1, 
        1996. 
           Sections 6 to 11, 17, 18, subdivision 2, 20, and 21, 
        paragraph (b) are not severable, and each is effective only upon 
        final enactment of all of them. 
           Sections 13 to 16 are effective for aid payable in 1995 and 
        thereafter. 
           Section 19 is effective the day following final enactment. 
                                   ARTICLE 4
                              PROPERTY TAX REFUNDS 
           Section 1.  Minnesota Statutes 1992, section 290A.04, 
        subdivision 2, is amended to read: 
           Subd. 2.  [HOMEOWNERS.] A claimant whose property taxes 
        payable are in excess of the percentage of the household income 
        stated below shall pay an amount equal to the percent of income 
        shown for the appropriate household income level along with the 
        percent to be paid by the claimant of the remaining amount of 
        property taxes payable.  The state refund equals the amount of 
        property taxes payable that remain, up to the state refund 
        amount shown below.  
                              Percent           Percent    Maximum
        Household Income     of Income          Paid by     State
                                                Claimant    Refund
            $0 to   999     1.2 percent     22 18 percent  $400 $440
                  1,029
         1,000 to 1,999     1.3 percent     24 18 percent  $400 $440
         1,030 to 2,059
         2,000 to 2,999     1.4 percent     26 20 percent  $400 $440
         2,060 to 3,099
         3,000 to 3,999     1.6 percent     28 20 percent  $400 $440
         3,100 to 4,129
         4,000 to 4,999     1.7 percent     30 20 percent  $400 $440
         4,130 to 5,159
         5,000 to 5,999     1.9 percent     33 25 percent  $400 $440
         5,160 to 7,229
         6,000 to 6,999     1.9 percent        35 percent  $400
         7,000 to 7,999     2.1 percent     38 25 percent  $400 $440
         7,230 to 8,259
         8,000 to 8,999     2.2 percent     40 25 percent  $400 $440
         8,260 to 9,289
         9,000 to 9,999     2.3 percent     42 30 percent  $400 $440
         9,290 to 10,319
        10,000 to 10,999    2.4 percent     45 30 percent  $400 $440
        10,320 to 11,349
        11,000 to 11,999    2.5 percent     48 30 percent  $400 $440
        11,350 to 12,389
        12,000 to 13,999    2.6 percent     48 30 percent  $400 $440
        12,390 to 14,449
        14,000 to 14,999    2.8 percent     48 35 percent  $400 $440
        14,450 to 15,479
        15,000 to 15,999    3.0 percent     50 35 percent  $400 $440
        15,480 to 16,509
        16,000 to 16,999    3.2 percent     50 40 percent  $400 $440
        16,510 to 17,549
        17,000 to 20,999    3.3 percent     50 40 percent  $400 $440
        17,550 to 21,669
        21,000 to 23,999    3.4 percent     50 45 percent  $400 $440
        21,670 to 24,769
        24,000 to 24,999    3.5 percent        50 percent  $400
        25,000 to 27,999    3.5 percent        50 percent  $400
        28,000 to 29,999    3.5 percent     50 45 percent  $400 $440
        24,770 to 30,959
        30,000 to 34,999    3.5 percent     55 45 percent  $400 $440
        30,960 to 36,119
        35,000 to 39,999    3.7 percent     55 50 percent  $400 $440
        36,120 to 41,279 
        40,000 to 56,999    4.0 percent        55 percent  $400 
        57,000 to 57,999    4.0 percent     55 50 percent  $300 $440
        41,280 to 58,829
        58,000 to 58,999    4.0 percent     55 50 percent  $200 $310
        58,830 to 59,859
        59,000 to 59,999    4.0 percent     55 50 percent  $100 $210
        59,860 to 60,889
        60,890 to 61,929    4.0 percent        50 percent  $100 
           The payment made to a claimant shall be the amount of the 
        state refund calculated under this subdivision.  No payment is 
        allowed if the claimant's household income is $60,000 $61,930 or 
        more. 
           Sec. 2.  Minnesota Statutes 1992, section 290A.04, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [RENTERS.] A claimant whose rent constituting 
        property taxes exceeds the percentage of the household income 
        stated below must pay an amount equal to the percent of income 
        shown for the appropriate household income level along with the 
        percent to be paid by the claimant of the remaining amount of 
        rent constituting property taxes.  The state refund equals the 
        amount of rent constituting property taxes that remain, up to 
        the maximum state refund amount shown below.  
                              Percent           Percent    Maximum
        Household Income     of Income          Paid by     State
                                                Claimant    Refund
            $0 to   999     1.0 percent         9 5 percent     $1,000
                  3,099                                         $1,030 
         1,000 to 1,999     1.0 percent         9 percent       $1,000
         2,000 to 2,999     1.0 percent        10 percent       $1,000
         3,000 to 3,999     1.0 percent        10 percent       $1,000
         3,100 to 4,129                                         $1,030
         4,000 to 4,999     1.1 percent        11 10 percent    $1,000
         4,130 to 5,159                                         $1,030
         5,000 to 5,999     1.2 percent        12 percent       $1,000
         6,000 to 6,999     1.2 percent        13 10 percent    $1,000
         5,160 to 7,229                                         $1,030
         7,000 to 7,999     1.3 percent        14 15 percent    $1,000
         7,230 to 9,289                                         $1,030
         8,000 to 8,999     1.3 percent        15 percent       $1,000
         9,000 to 9,999     1.4 percent        16 15 percent    $1,000
         9,290 to 10,319                                        $1,030 
        10,000 to 10,999    1.4 percent        17 20 percent    $1,000
        10,320 to 11,349                                        $1,030 
        11,000 to 11,999    1.5 percent        19 percent       $1,000
        12,000 to 12,999    1.5 percent        21 20 percent    $1,000
        11,350 to 13,419                                        $1,030
        13,000 to 13,999    1.6 percent        23 20 percent    $1,000
        13,420 to 14,449                                        $1,030
        14,000 to 14,999    1.7 percent        24 25 percent    $1,000
        14,450 to 15,479                                        $1,030
        15,000 to 15,999    1.8 percent        26 percent       $1,000
        16,000 to 16,999    1.8 percent        27 25 percent    $1,000
        15,480 to 17,549                                        $1,030
        17,000 to 17,999    1.9 percent        28 30 percent    $1,000
        17,550 to 18,579                                        $1,030
        18,000 to 18,999    2.0 percent        30 percent       $1,000
        18,580 to 19,609                                        $1,030
        19,000 to 19,999    2.2 percent        32 30 percent    $1,000
        19,610 to 20,639                                        $1,030
        20,000 to 20,999    2.4 percent        34 30 percent    $1,000
        20,640 to 21,669                                        $1,030
        21,000 to 21,999    2.6 percent        36 35 percent    $1,000
        21,670 to 22,709                                        $1,030
        22,000 to 22,999    2.7 percent        37 35 percent    $1,000
        22,710 to 23,739                                        $1,030
        23,000 to 23,999    2.8 percent        38 35 percent    $1,000
        23,740 to 24,769                                        $1,030
        24,000 to 24,999    2.9 percent        40 percent       $1,000
        24,770 to 25,799                                        $1,030
        25,000 to 25,999    3.0 percent        43 40 percent    $1,000
        25,800 to 26,839                                        $1,030
        26,000 to 26,999    3.1 percent        43 40 percent    $1,000
        26,840 to 27,869                                        $1,030
        27,000 to 27,999    3.2 percent        45 40 percent    $1,000
        27,870 to 28,899                                        $1,030
        28,000 to 28,999    3.3 percent        47 45 percent    $  900
        28,900 to 29,929                                        $  930
        29,000 to 29,999    3.4 percent        47 45 percent    $  800
        29,930 to 30,959                                        $  830
        30,000 to 30,999    3.5 percent        48 45 percent    $  700
        30,960 to 31,999                                        $  720
        31,000 to 31,999    3.5 percent        48 50 percent    $  600
        32,000 to 33,029                                        $  620
        32,000 to 32,999    3.5 percent        50 percent       $  500
        33,030 to 34,059                                        $  520
        33,000 to 33,999    3.5 percent        50 percent       $  300
        34,060 to 35,089                                        $  310
        34,000 to 34,999    3.5 percent        50 percent       $  100
        35,090 to 36,119
           The payment made to a claimant is the amount of the state 
        refund calculated under this subdivision.  No payment is allowed 
        if the claimant's household income is $35,000 $36,120 or more. 
           Sec. 3.  Minnesota Statutes 1993 Supplement, section 
        290A.04, subdivision 2h, as amended by Laws 1994, chapter 383, 
        section 1, 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 on January 2 of both years, 
        and the amount of that increase is $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 60 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. 
           The maximum refund allowed under this subdivision 
        is $1,500 $1,000. 
           (b) For purposes of this subdivision, the following terms 
        have the meanings given: 
           (1) "Net property taxes payable" means property taxes 
        payable 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. 
           (d) On or before December 1, 1994 and 1995, the 
        commissioner shall estimate the cost of making the payments 
        provided by this subdivision for taxes payable in the following 
        year 1996.  Notwithstanding the open appropriation provision of 
        section 290A.23, if the estimated total refund claims for taxes 
        payable in 1995 and 1996 exceed $5,500,000, for each of the two 
        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 1995, or for taxes payable in 1996 first reduce the 60 
        percent refund rate enough, but to no lower a rate than 50 
        percent, so that the estimated total refund claims do not exceed 
        $5,500,000.  If the commissioner estimates that total claims 
        will exceed $5,500,000 at a 50 percent refund rate, the 
        commissioner shall also reduce the $1,000 maximum refund amount 
        by enough so that total estimated refund claims do not exceed 
        $5,500,000. 
           The determinations of the revised thresholds by the 
        commissioner are not rules subject to chapter 14.  
           (e) Upon request, the appropriate county official shall 
        make available the names and addresses of the property taxpayers 
        who may be eligible for the additional property tax refund under 
        this section.  The information shall be provided on a magnetic 
        computer disk.  The county may recover its costs by charging the 
        person requesting the information the reasonable cost for 
        preparing the data.  The information may not be used for any 
        purpose other than for notifying the homeowner of potential 
        eligibility and assisting the homeowner, without charge, in 
        preparing a refund claim. 
           Sec. 4.  Minnesota Statutes 1993 Supplement, section 
        290A.04, subdivision 6, is amended to read: 
           Subd. 6.  [INFLATION ADJUSTMENT.] Beginning for property 
        tax refunds payable in calendar year 1995 1996, 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 use the 
        appropriate percentage increase to annually adjust the income 
        thresholds and maximum refunds under subdivisions 2 and 2a for 
        inflation without regard to whether or not the income tax 
        brackets are adjusted for inflation in that year.  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 procedure act. 
           Sec. 5.  Minnesota Statutes 1993 Supplement, section 
        290A.23, subdivision 1, is amended to read: 
           Subdivision 1.  [RENTERS CREDIT.] 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, 
        subdivision 2a.  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. 
           Sec. 6.  [EFFECTIVE DATE.] 
           Sections 1 to 4 are effective for refunds based on property 
        taxes paid in 1995 and thereafter and for rent paid in 1994 and 
        thereafter. 
                                   ARTICLE 5
                                 PROPERTY TAXES
           Section 1.  Minnesota Statutes 1992, section 271.06, 
        subdivision 7, is amended to read: 
           Subd. 7.  [RULES.] (a) Except as provided in section 
        278.05, subdivision 6, the rules of evidence and civil procedure 
        for the district court of Minnesota shall govern the procedures 
        in the tax court, where practicable.  The tax court may adopt 
        rules under chapter 14.  The rules in effect on January 1, 1989, 
        apply until superseded.  
           (b) Notwithstanding paragraph (a), information, including 
        income and expense figures, verified net rentable areas, and 
        anticipated income and expenses, for income-producing property 
        which is not provided to the county assessor at least 45 days 
        before any hearing under this chapter, is not admissible except 
        if necessary to prevent undue hardship or when the failure to 
        provide it was due to the unavailability of the evidence at that 
        time. 
           (c) Notwithstanding paragraph (a) and provided that the 
        information as contained in paragraph (b) is timely submitted to 
        the county assessor, the county assessor shall furnish the 
        petitioner at least five days before the hearing under this 
        chapter with the property's appraisal, if any, which will be 
        presented to the court at the hearing.  The petitioner shall 
        furnish to the county assessor at least five days before the 
        hearing under this chapter with the property's appraisal, if 
        any, which will be presented to the court at the hearing.  An 
        appraisal of the petitioner's property done by or for the county 
        or by or for the petitioner shall not be admissible as evidence 
        if the provisions within this paragraph are not met. 
           Sec. 2.  Minnesota Statutes 1992, section 273.061, is 
        amended by adding a subdivision to read: 
           Subd. 8a.  [ADDITIONAL POWERS AND DUTIES OF THE 
        COMMISSIONER OF REVENUE, COUNTY ASSESSORS AND LOCAL 
        ASSESSORS.] Notwithstanding any provision of law to the 
        contrary, in order to promote a uniform assessment and review of 
        assessments, the commissioner of revenue, county assessors and 
        local assessors may exchange data on property which are 
        classified under chapter 13 as public, nonpublic or private.  
        The data for any property may include but is not limited to its 
        sales, income, expenses, vacancies, rentable or usable areas, 
        anticipated income and expenses, projected vacancies, lease 
        information, and private multiple listing service data.  Data 
        exchanged under this provision that is classified as nonpublic 
        or private data shall retain its classification. 
           Sec. 3.  Minnesota Statutes 1993 Supplement, section 
        273.11, subdivision 1a, is amended 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 
        subdivision 16. 
           The provisions of this subdivision shall be in effect only 
        for assessment years 1993 through 1998 1997. 
           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 subdivision 16, 
        shall be used. 
           Sec. 4.  Minnesota Statutes 1993 Supplement, section 
        273.11, subdivision 16, is amended 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 (1) the house is 
        at least 35 years old at the time of the improvement and (2) 
        either (a) the assessor's estimated market value of the house on 
        January 2 of the current year is equal to or less than $150,000, 
        or (b) if the estimated market value of the house is over 
        $150,000 market value but is less than $300,000 on January 2 of 
        the current year, the property qualifies if 
           (i) it is located in a city or town in which 50 percent or 
        more of the homes were constructed before 1960 based upon the 
        1990 federal census, and 
           (ii) the city or town's median family income based upon the 
        1990 federal census is less than the statewide median family 
        income based upon the 1990 federal census. 
           Any house which has an estimated market value of $300,000 
        or more on January 2 of the current year is not eligible to 
        receive any property valuation exclusion under this section.  
        For purposes of determining this eligibility, "house" means land 
        and buildings.  
           The age of a residence is the number of years that the 
        residence has existed at its present site.  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 prior to commencement of the improvement.  If 
        the property lies in a jurisdiction which is not subject to a 
        building permit process, the Any improvement must add at least 
        $1,000 to the value of the property to be eligible for exclusion 
        under this subdivision.  Only improvements to the structure 
        which is the residence of the qualifying homesteader or the 
        construction of or improvements to no more than one two-car 
        garage per residence qualify for the provisions of this 
        subdivision.  If an improvement was begun between January 2, 
        1992, and January 2, 1993, any value added from that improvement 
        for the January 1994 and subsequent assessments shall qualify 
        for exclusion under this subdivision provided that a building 
        permit was obtained for the improvement between January 2, 1992, 
        and January 2, 1993.  Whenever a building permit is issued for 
        property currently classified as homestead, the issuing 
        jurisdiction shall notify the assessor property owner of the 
        possibility of valuation exclusion under this subdivision.  The 
        assessor may shall require an application process and, including 
        documentation of the age of the house from the owner, if unknown 
        by the assessor.  The application may be filed subsequent to the 
        date of the building permit provided that the application is 
        filed prior to the next assessment date. 
           After the adjournment of the 1994 county board of 
        equalization meetings, no exclusion may be granted for an 
        improvement by a local board of review or county board of 
        equalization unless (1) a building permit was issued prior to 
        the commencement of the improvement if the jurisdiction requires 
        a building permit, and (2) an application was completed on a 
        timely basis.  No abatement of the taxes for qualifying 
        improvements may be granted by a county board unless (1) a 
        building permit was issued prior to commencement of the 
        improvement if the jurisdiction requires a building permit, and 
        (2) an application was completed on a timely basis. 
           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. 
        Improvements made by an occupant who is the purchaser of the 
        property under a conditional purchase contract do not qualify 
        under this subdivision unless the seller of the property is a 
        governmental entity.  The qualifying value of the property shall 
        be computed based upon the increase from that structure's market 
        value as of January 2 preceding the acquisition of the property 
        by the governmental entity. 
           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 subdivision may result from 
        up to three separate improvements to the homestead.  The 
        application shall state, in clear language, that if more than 
        three improvements are made to the qualifying property, a 
        taxpayer may choose which three improvements are eligible, 
        provided that after the taxpayer has made the choice and any 
        valuation attributable to those improvements has been excluded 
        from taxation, no further changes can be made by the taxpayer. 
           If 50 percent or more of the square footage of a structure 
        is voluntarily razed or removed, the valuation increase 
        attributable to any subsequent improvements to the remaining 
        structure does not qualify for the exclusion under this 
        subdivision.  If a structure is unintentionally or accidentally 
        destroyed by a natural disaster, the property is eligible for an 
        exclusion under this subdivision provided that the structure was 
        not completely destroyed.  The qualifying value on property 
        destroyed by a natural disaster shall be computed based upon the 
        increase from that structure's market value as determined on 
        January 2 of the year in which the disaster occurred.  A 
        property receiving benefits under the homestead disaster 
        provisions under section 273.123 is not disqualified from 
        receiving an exclusion under this subdivision.  If any 
        combination of improvements made to a structure after January 1, 
        1993, increases the size of the structure by 100 percent or 
        more, the valuation increase attributable to the portion of the 
        improvement that causes the structure's size to exceed 100 
        percent does not qualify for exclusion under this subdivision. 
           Sec. 5.  Minnesota Statutes 1993 Supplement, section 
        273.11, is amended by adding a subdivision to read: 
           Subd. 18.  [DISCLOSURE OF VALUATION EXCLUSION.] No seller 
        of real property shall sell or offer for sale property that, for 
        purposes of property taxation, has an exclusion from market 
        value for home improvements under 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. 6.  Minnesota Statutes 1992, section 273.111, 
        subdivision 11, is amended to read: 
           Subd. 11.  The payment of special local assessments levied 
        after June 1, 1967 for improvements made to any real property 
        described in subdivision 3 together with the interest thereon 
        shall, on timely application as provided in subdivision 8, be 
        deferred as long as such property meets the conditions contained 
        in subdivisions 3 and 6 or is transferred to an agricultural 
        preserve under sections 473H.02 to 473H.17.  If special 
        assessments against the property have been deferred pursuant to 
        this subdivision, the governmental unit shall file with the 
        county recorder in the county in which the property is located a 
        certificate containing the legal description of the affected 
        property and of the amount deferred.  When such property no 
        longer qualifies under subdivisions 3 and 6, all deferred 
        special assessments plus interest shall be payable in equal 
        installments spread over the time remaining until the last 
        maturity date of the bonds issued to finance the improvement for 
        which the assessments were levied.  If the bonds have matured, 
        the deferred special assessments plus interest shall be payable 
        within 90 days.  The provisions of section 429.061, subdivision 
        2, apply to the collection of these installments.  Penalty shall 
        not be levied on any such special assessments if timely paid.  
           Sec. 7.  Minnesota Statutes 1993 Supplement, 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, lawn 
        bowling, croquet, 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 a 
        lawn bowling or croquet green or an archery or firearms range; 
           (c)(1) operated by private individuals or, in the case of a 
        lawn bowling or croquet green, by private individuals or 
        corporations, 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 or open to the public, 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. 8.  Minnesota Statutes 1993 Supplement, 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.  
           Property of a trustee, beneficiary, or grantor of a trust 
        is not disqualified from receiving homestead benefits if the 
        homestead requirements under this chapter are satisfied. 
           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 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, father, or mother of the owner of the 
        agricultural property or a son or daughter of the spouse 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. 
           (e) In the case of property owned by a property owner who 
        is married, the assessor must not deny homestead treatment in 
        whole or in part if only one of the spouses occupies the 
        property and the other spouse is absent due to:  (1) marriage 
        dissolution proceedings, (2) legal separation, (3) employment or 
        self-employment in another location as provided under 
        subdivision 13, or (4) residence in a nursing home or boarding 
        care facility. 
           Sec. 9.  Minnesota Statutes 1993 Supplement, 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 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. 
           (c) Every property owner applying for homestead 
        classification must furnish to the county assessor the social 
        security number of each occupant who is listed as an owner of 
        the property on the homestead application deed of record, and 
        the name and address of each owner who does not occupy the 
        property., and the name and social security number of each 
        owner's spouse who occupies the property.  The application must 
        be signed by each owner who occupies the property and by each 
        owner's spouse who occupies the property, or, in the case of 
        property that qualifies as a homestead under subdivision 1, 
        paragraph (c), by the qualifying relative. 
           If a property owner occupies a homestead, the property 
        owner's spouse may not claim another property as a homestead 
        unless the property owner and the property owner's spouse file 
        with the assessor an affidavit or other proof required by the 
        assessor stating that the property owner's spouse does not 
        occupy the homestead because marriage dissolution proceedings 
        are pending, the spouses are legally separated, or the spouse's 
        employment or self-employment location requires the spouse to 
        have a separate homestead.  The assessor may require proof of 
        employment or self-employment and employment or self-employment 
        location, or proof of dissolution proceedings or legal 
        separation. 
           If the social security number or affidavit or other proof 
        is not provided, the county assessor shall classify the property 
        as nonhomestead. 
           The social security numbers or affidavits or other proofs 
        of the property owners and spouses 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. 
           (d) 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.  
           (e) 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 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. 
           (f) If the 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. 
           (g) 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 and the property owner's 
        spouse occupying the property, 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.  
           (h) 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. 
           (i) 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. 
           (j) 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. 
           (k) In addition to lists of homestead properties, the 
        commissioner may ask the counties to furnish lists of all 
        properties and the record owners. 
           Sec. 10.  Minnesota Statutes 1993 Supplement, section 
        273.13, subdivision 23, is amended to read: 
           Subd. 23.  [CLASS 2.] (a) Class 2a property is agricultural 
        land including any improvements that is homesteaded.  The market 
        value of the house and garage and immediately surrounding one 
        acre of land has the same class rates as class 1a property under 
        subdivision 22.  The value of the remaining land including 
        improvements up to $115,000 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 one 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 
        1.5 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; (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; or (4) a 
        landing area or public access area of a privately owned public 
        use airport.  Class 2b property has a net class rate of 1.5 
        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; 
        and 
           (5) game birds and waterfowl bred and raised for use on a 
        shooting preserve licensed under section 97A.115.  
           (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.  
           (g) To qualify for classification under paragraph (b), 
        clause (4), a privately owned public use airport must be 
        licensed as a public airport under section 360.018.  For 
        purposes of paragraph (b), clause (4), "landing area" means that 
        part of a privately owned public use airport properly cleared, 
        regularly maintained, and made available to the public for use 
        by aircraft and includes runways, taxi-ways, aprons, and sites 
        upon which are situated landing or navigational aids.  A landing 
        area also includes land underlying both the primary surface and 
        the approach surfaces that comply with all of the following:  
           (i) the land is properly cleared and regularly maintained 
        for the primary purposes of the landing, taking off, and taxiing 
        of aircraft; but that portion of the land that contains 
        facilities for servicing, repair, or maintenance of aircraft is 
        not included as a landing area; 
           (ii) the land is part of the airport property; and 
           (iii) the land is not used for commercial or residential 
        purposes. 
        The land contained in a landing area under paragraph (b), clause 
        (4), must be described and certified by the commissioner of 
        transportation.  The certification is effective until it is 
        modified, or until the airport or landing area no longer meets 
        the requirements of paragraph (b), clause (4).  For purposes of 
        paragraph (b), clause (4), "public access area" means property 
        used as an aircraft parking ramp, apron, or storage hangar, or 
        an arrival and departure building in connection with the airport.
           Sec. 11.  Minnesota Statutes 1993 Supplement, 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 three percent of the first $100,000 
        of market value 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.; and 
           (3) in the case of property owned by a nonprofit charitable 
        organization that qualifies for tax exemption under section 
        501(c)(3) of the Internal Revenue Code of 1986, as amended 
        through December 31, 1993, if the property is used as a business 
        incubator, the limitation to one parcel per owner per county for 
        the reduced class rate shall not apply, provided that the 
        reduced rate applies only to the first $100,000 of value per 
        parcel owned by the organization.  As used in this clause, a 
        "business incubator" is a facility used for the development of 
        nonretail businesses, offering access to equipment, space, 
        services, and advice to the tenant businesses, for the purpose 
        of encouraging economic development, diversification, and job 
        creation in the area served by the organization. 
           To receive the reduced class rate on additional parcels 
        under clauses clause (1) and, (2), or (3), the taxpayer must 
        notify the county assessor that the taxpayer owns more than one 
        parcel that qualifies under clause (1) or, (2), or (3). 
           (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. 12.  Minnesota Statutes 1992, section 273.165, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MINERAL INTEREST.] "Mineral interest," for 
        the purpose of this subdivision, means an interest in any 
        minerals, including but not limited to gas, coal, oil, or other 
        similar interest in real estate, which is owned separately and 
        apart from the fee title to the surface of such real property. 
        Mineral interests which are filed for record in the offices of 
        either the county recorder or registrar of titles, whether or 
        not filed pursuant to sections 93.52 to 93.58, are taxed as 
        provided in this subdivision unless specifically excluded by 
        this subdivision.  A tax of 25 40 cents per acre or portion of 
        an acre of mineral interest is imposed and is payable annually.  
        If an interest is a fractional undivided interest in an area, 
        the tax due on the interest per acre or portion of an acre is 
        equal to the product obtained by multiplying the fractional 
        interest times 25 40 cents, computed to the nearest cent.  
        However, the minimum annual tax on any mineral interest 
        is $2 $3.20.  No such tax on mineral interests is imposed on the 
        following:  (1) mineral interests valued and taxed under other 
        laws relating to the taxation of minerals, gas, coal, oil, or 
        other similar interests; or (2) mineral interests which are 
        exempt from taxation pursuant to constitutional or related 
        statutory provisions.  Taxes received under this subdivision 
        must be apportioned to the taxing districts included in the area 
        taxed in the same proportion as the surface interest local tax 
        rate of a taxing district bears to the total local tax rate 
        applicable to surface interests in the area taxed.  The tax 
        imposed by this subdivision is not included within any 
        limitations as to rate or amount of taxes which may be imposed 
        in an area to which the tax imposed by this subdivision 
        applies.  The tax imposed by this subdivision does not cause the 
        amount of other taxes levied or to be levied in the area, which 
        are subject to any such limitation, to be reduced in any 
        amount.  Twenty percent of the revenues received from the tax 
        imposed by this subdivision must be distributed under the 
        provisions of section 116J.64. 
           Sec. 13.  Minnesota Statutes 1993 Supplement, 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, 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 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 
        amount of market value excluded under section 273.11, 
        subdivision 16, if any, must also be listed on the tax 
        statement.  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 under section 
        273.11, subdivision 1; 
           (2) the property's taxable market value after reductions 
        under sections section 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); 
           (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; 
           (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; 
           (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"; and 
           (7) the net tax payable in the manner required in paragraph 
        (a).  
           The commissioner of revenue shall certify to the county 
        auditor the actual or estimated aids enumerated in clauses (3) 
        and (4) that local governments will receive in the following 
        year.  In the case of a county containing a city of the first 
        class, 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.  Minnesota Statutes 1993 Supplement, 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 on or before the 16th day of May March 31 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 April 1 of the year in which the taxes are payable. 
           Sec. 15.  Minnesota Statutes 1992, section 278.05, 
        subdivision 6, is amended to read: 
           Subd. 6.  [DISMISSAL OF PETITION; EXCLUSION OF CERTAIN 
        EVIDENCE.] (a) Information, including income and expense 
        figures, verified net rentable areas, and anticipated income and 
        expenses, for income-producing property which is not must be 
        provided to the county assessor at least 45 days before any 
        hearing within 60 days after the petition has been filed under 
        this chapter, is not admissible except if necessary to prevent 
        undue hardship or when.  Failure to provide the information 
        required in this paragraph shall result in the dismissal of the 
        petition, unless the failure to provide it was due to the 
        unavailability of the evidence at that time.  
           (b) Provided that the information as contained in paragraph 
        (a) is timely submitted to the county assessor, the county 
        assessor shall furnish the petitioner at least five days before 
        the hearing under this chapter with the property's appraisal, if 
        any, which will be presented to the court at the hearing.  The 
        petitioner shall furnish to the county assessor at least five 
        days before the hearing under this chapter with the property's 
        appraisal, if any, which will be presented to the court at the 
        hearing.  An appraisal of the petitioner's property done by or 
        for the county or by or for the petitioner shall not be 
        admissible as evidence if the county assessor does not comply 
        with the provisions within in this paragraph are not met.  The 
        petition shall be dismissed if the petitioner does not comply 
        with the provisions in this paragraph. 
           Sec. 16.  Minnesota Statutes 1992, section 298.26, is 
        amended to read: 
           298.26 [TAX ON UNMINED TACONITE AND IRON SULPHIDES.] 
           In any year in which at least 1,000 tons of iron ore 
        concentrate is not produced from any 40-acre tract or 
        governmental lot containing taconite or iron sulphides, a tax 
        may be assessed upon the taconite or iron sulphides therein at 
        the local tax rate prevailing in the taxing district and spread 
        against the net tax capacity of the taconite or iron sulphides, 
        such net tax capacity to be determined in accordance with 
        existing laws.  The amount of the tax spread under authority of 
        this section by reason of the taconite and iron sulphides in any 
        tract of land shall not exceed $10 $15 per acre. 
           Sec. 17.  Minnesota Statutes 1992, section 360.036, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ISSUANCE OF BONDS.] Any (a) Bonds to be issued 
        by any a municipality pursuant to the provisions of under 
        sections 360.011 to 360.076, shall be authorized and issued in 
        the manner and within the limitation, except as herein otherwise 
        provided, prescribed by the laws of this state or the charter of 
        the municipality for the issuance and authorization of 
        bonds thereof for public purposes generally, except as provided 
        in paragraphs (b) and (c). 
           (b) No election is required to authorize the issuance of 
        the bonds if (1) a board organized under section 360.042 
        recommends by a resolution adopted by a vote of not less than 60 
        percent of its members the issuance of bonds and (2) the bonds 
        are authorized by a resolution of the governing body of each of 
        the municipalities acting jointly pursuant to section 360.042, 
        adopted by a vote of not less than 60 percent of its members. 
           (c) If the bonds are general obligations of the 
        municipality, the levy of taxes required by section 475.61 to 
        pay principal and interest on the bonds is not included in 
        computing or applying any levy limitation applicable to the 
        municipality. 
           Sec. 18.  Minnesota Statutes 1992, section 360.036, 
        subdivision 3, is amended to read: 
           Subd. 3.  [IN EXCESS OF TAX LIMITATION.] Irrespective of 
        any limitation, by general or special law or charter, as to the 
        amount of bonds which may be issued, a municipality may issue 
        bonds for the purposes defined by sections 360.011 to 360.076, 
        in excess of such limitation, in such amount as may be 
        authorized by an ordinance or resolution referred to and 
        approved by the voters of such municipality by popular vote, at 
        any general election or special election called for that purpose 
        the governing body of the municipality as provided in 
        subdivision 2. 
           Sec. 19.  Minnesota Statutes 1992, section 360.037, 
        subdivision 2, is amended to read: 
           Subd. 2.  [IN EXCESS OF TAX LIMITATION.] A municipality may 
        levy taxes for the purposes authorized by sections 360.011 to 
        360.076, in such amount as may be authorized by an ordinance or 
        resolution referred to and approved by the voters of such 
        municipality by popular vote or as may be required to pay 
        principal of or interest on general obligation bonds of the 
        municipality issued under section 360.036. 
           Sec. 20.  Minnesota Statutes 1992, section 360.042, 
        subdivision 10, is amended to read: 
           Subd. 10.  [JOINT FUND.] For the purpose of providing funds 
        for necessary expenditures in carrying out the provisions of 
        this section, a joint fund shall be created and maintained, into 
        which each of the municipalities involved shall deposit its 
        proportionate share as provided by the joint agreement, such.  
        Funds to be deposited shall be provided for by bond issues, tax 
        levies, and appropriations made by each municipality in the same 
        manner as though it were acting separately under the authority 
        of sections 360.011 to 360.076, and into which.  However, a 
        municipality may issue bonds on behalf of other parties to the 
        joint agreement, which shall be treated as being issued by each 
        of the parties in proportion to their respective proportionate 
        share as provided by the joint agreement.  Each municipality 
        shall be paid also pay into the fund the revenues obtained from 
        the ownership, control, and operation of the airports and other 
        air navigation facilities jointly controlled, to be expended as 
        provided in section 360.037, subdivision 3;.  Revenues in excess 
        of cost of maintenance and operating expenses of the joint 
        properties to shall be divided as may be provided in the 
        original agreement for the joint venture.  When a county and a 
        city are parties to a joint agreement as provided in subdivision 
        1 and the city is located in whole or in part within the 
        geographic boundaries of the county, then the county's 
        proportionate share shall be based on the net tax capacity of 
        all property within the county, excepting the net tax capacity 
        of that property located within the city, and any levy for 
        airport purposes by the county shall not be levied against 
        taxable property in the city, other than a levy under section 
        475.61 to pay debt service on general obligation bonds of the 
        county. 
           Sec. 21.  Minnesota Statutes 1993 Supplement, section 
        383A.75, subdivision 3, is amended to read: 
           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 September 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. 
           Sec. 22.  [469.1811] [PROPERTY TAX EXEMPTION; AGRICULTURAL 
        PROCESSING FACILITIES.] 
           Subdivision 1.  [DEFINITIONS.] For purposes of this section:
           (1) "Agricultural processing facility" means land, 
        buildings, structures, fixtures, and improvements used or 
        operated primarily for the processing or production of 
        marketable products from agricultural crops, including waste and 
        residues from agricultural crops, but not including livestock or 
        livestock products, poultry or poultry products, or wood or wood 
        products.  As used in this subdivision, land is limited to land 
        on which the buildings, structures, fixtures, and improvements 
        are situated and the immediately surrounding land used for 
        storage or other functions directly related to the processing or 
        production, not including land used for the growing of 
        agricultural crops. 
           (2) "Qualifying property" means taxable property:  (i) that 
        consists of an agricultural processing facility; and (ii) for 
        which the agricultural processing facility project costs exceed 
        $100,000,000. 
           Subd. 2.  [CITY MAY EXEMPT.] The governing body of a home 
        rule or statutory city may by resolution exempt qualifying 
        property from property taxation.  The exemption may include the 
        entire market value of the qualifying property as determined by 
        the assessor, including the land and any improvements existing 
        at the time the exemption is granted, any increases in the value 
        of the land and improvements during the duration of the 
        exemption, and the value of any improvements constructed or 
        attached during the exemption period.  The property tax 
        exemption granted by the city may not exceed a ten-year period 
        beginning with taxes payable the year following the year the 
        exemption is granted.  At the expiration of the exemption 
        period, the facility shall be assessed and pay property taxes as 
        otherwise provided by law. 
           Subd. 3.  [APPLICATION; HEARING.] A person proposing to 
        construct an agricultural processing facility may apply for a 
        property tax exemption to the city clerk of the city where the 
        facility is proposed to be located.  The application must 
        contain a plan that includes a legal description of the real 
        estate on which the exemption is sought, a description of the 
        proposed facility, a detailed estimate of acquisition and 
        construction costs, a construction time schedule, and any other 
        information required by the city. 
           Before approving a tax exemption pursuant to this section, 
        the governing body of the city must hold a public hearing.  The 
        municipal clerk or auditor shall publish a notice in the 
        official newspaper of the time and place of a hearing to be held 
        by the governing body on the application, not less than 30 days 
        after the notice is published.  The notice shall state that the 
        applicant, local government officials, and any taxpayer of the 
        municipality may be heard or may present their views in writing 
        at or before the hearing.  The hearing may be adjourned from 
        time to time, but the governing body shall take action on the 
        application by resolution within 30 days after the hearing 
        ends.  If disapproved, the reasons shall be set forth in the 
        resolution.  If the application for a tax exemption is approved, 
        the city clerk shall forward a copy of the resolution approving 
        the tax exemption to the county assessor who shall exempt the 
        property from taxation under the terms of and for the period 
        contained in the resolution.  
           Subd. 4.  [CONDITIONS; REVOCATION.] (a) The governing body 
        of the city may set conditions to its approval or continuation 
        of a tax exemption under this section.  The conditions may 
        include construction specifications; time limits for 
        construction; traffic, parking, safety, or environmental 
        requirements; requirements as to the type and number of jobs to 
        be created; valuation or assessment requirements after the 
        exemption expires; or any other conditions reasonably required 
        by the city to safeguard the public welfare.  
           (b) If the city proposes to revoke its approval of a tax 
        exemption granted under this section, it must notify the owner 
        of the property and give the person an opportunity to be heard.  
        The city must give the person 30 days' notice before holding the 
        hearing.  A revocation by the city must be made by resolution 
        and must state the findings on which the revocation is based. 
           Sec. 23.  Minnesota Statutes 1992, section 473.341, is 
        amended to read: 
           473.341 [TAX EQUIVALENTS.] 
           In each of the four years after year in which the 
        metropolitan council or park district, county or municipality an 
        implementing agency as defined in section 473.351 acquires fee 
        simple title to any real property included in the regional 
        recreation open space system, the metropolitan council shall pay 
        to the municipality or township in which the property is 
        situated an amount equal to the grant sufficient funds to the 
        appropriate implementing agency to make the tax equivalent 
        payment required in this section.  The council shall determine 
        the total amount of the property taxes levied thereon on the 
        real property for municipal or township purposes for collection 
        in the year in which title passed, diminished by 20 percent for 
        each subsequent year to and including the year of payment; 
        provided that for any year in which taxes on the property, or on 
        the privilege of using or possessing it, are paid.  The 
        municipality or township in which the real property is situated 
        shall be paid 180 percent of the total tax amount determined by 
        the council.  If the implementing agency has granted a life 
        estate to the seller of the real property and the seller is 
        obligated to pay property taxes on the property, this tax 
        equivalent shall not be paid until the life estate ends.  All 
        amounts paid pursuant to this section are costs of acquisition 
        of the real property with respect to which they are 
        paid acquired. 
           Sec. 24.  Minnesota Statutes 1992, section 473H.05, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [RE-ENROLLING.] If an owner's property was 
        initially granted agricultural preserve status under subdivision 
        1 but the owner filed an agricultural preserve termination 
        notice on that property, the owner may re-enroll the property in 
        the program as provided in this subdivision.  In lieu of the 
        requirements in subdivision 1, the county may allow a property 
        owner to re-enroll by completing a one page form or affidavit, 
        as prepared by the county.  The county may require whatever 
        information is deemed necessary, except that approval by the 
        city or township, in which the property is located, shall be 
        required on the form or affidavit. 
           The county may charge the property owner a re-enrollment 
        fee, not to exceed $10, to defray any administrative cost. 
           Re-enrolling property under this subdivision shall be 
        allowed only if the same property owner or owners wish to 
        re-enroll the same property under the same conditions as was 
        originally approved under subdivision 1. 
           Sec. 25.  Minnesota Statutes 1992, section 473H.18, is 
        amended to read: 
           473H.18 [TRANSFER FROM AGRICULTURAL PROPERTY TAX LAW 
        TREATMENT.] 
           When land which has been receiving the special agricultural 
        valuation and tax deferment provided in section 273.111 becomes 
        an agricultural preserve pursuant to sections 473H.02 to 
        473H.17, the recapture of deferred tax and special assessments, 
        as provided in section 273.111, subdivisions 9 and 11, shall not 
        be made.  Special assessments deferred under section 273.111, at 
        the date of commencement of the preserve, shall continue to be 
        deferred for the duration of the preserve.  For purposes of this 
        section, "deferred special assessments" shall include the total 
        amount of deferred special assessments under section 273.111 on 
        the property, including any portion of the deferred special 
        assessments which have not yet been levied at the time the 
        property transfers to the agricultural preserves program under 
        this chapter.  All special assessments so deferred shall be 
        payable within 90 days of the date of expiration unless other 
        terms are mutually agreed upon by the authority and the owner.  
        In the event of early termination of a preserve or a portion of 
        it under section 473H.09, all special assessments accruing to 
        the terminated portion plus interest shall be payable within 90 
        days of the date of termination unless otherwise deferred or 
        abated by executive order of the governor.  In the event of a 
        taking under section 473H.15 all special assessments accruing to 
        the taken portion plus interest shall be payable within 90 days 
        of the date the final certificate is filed with the court 
        administrator of district court in accordance with section 
        117.205.  
           Sec. 26.  Minnesota Statutes 1992, section 580.23, as 
        amended by Laws 1993, chapter 40, section 2, is amended to read: 
           580.23 [REDEMPTION BY MORTGAGOR; AFFIDAVIT OF AGRICULTURAL 
        NONAGRICULTURAL USE; WAIVER.] 
           Subdivision 1.  [SIX-MONTH REDEMPTION PERIOD.] When lands 
        have been sold in conformity with the preceding sections of this 
        chapter, the mortgagor, the mortgagor's personal representatives 
        or assigns, within six months after such sale, except as 
        otherwise provided in subdivision 2 or section 582.032 or 
        582.32, may redeem such lands, as hereinafter provided, by 
        paying the sum of money for which the same were sold, with 
        interest from the time of sale at the rate provided to be paid 
        on the mortgage debt and, if no rate be provided in the mortgage 
        note, at the rate of six percent per annum, together with any 
        further sums which may be payable as provided in sections 582.03 
        and 582.031.  
           Subd. 2.  [12-MONTH REDEMPTION PERIOD.] Notwithstanding the 
        provisions of subdivision 1 hereof, when lands have been sold in 
        conformity with the preceding sections of this chapter, the 
        mortgagor, the mortgagor's personal representatives or assigns, 
        within 12 months after such sale, may redeem such lands in 
        accordance with the provisions of payment of subdivision 1 
        thereof, if: 
           (1) the mortgage was executed prior to July 1, 1967; 
           (2) the amount claimed to be due and owing as of the date 
        of the notice of foreclosure sale is less than 66-2/3 percent of 
        the original principal amount secured by the mortgage; 
           (3) the mortgage was executed prior to July 1, 1987, and 
        the mortgaged premises, as of the date of the execution of the 
        mortgage, exceeded ten acres in size; 
           (4) the mortgage was executed prior to August 1, 1994, and 
        the mortgaged premises, as of the date of the execution of the 
        mortgage, exceeded ten acres but did not exceed 40 acres in size 
        and was in agricultural use as defined in section 40A.02, 
        subdivision 3; or 
           (5) the mortgaged premises, as of the date of the execution 
        of the mortgage, exceeded 40 acres in size; or 
           (6) the mortgage was executed on or after August 1, 1994, 
        and the mortgaged premises, as of the date of the execution of 
        the mortgage, exceeded ten acres but did not exceed 40 acres in 
        size and was in agricultural use.  For purposes of this clause, 
        "in agricultural use" means that at least a portion of the 
        mortgaged premises was classified for ad valorem tax purposes as:
           (i) class 2a agricultural homestead property under section 
        273.13, subdivision 23; 
           (ii) class 2b rural or agricultural nonhomestead property 
        under section 273.13, subdivision 23; 
           (iii) class 1b agricultural homestead property under 
        section 273.13, subdivision 22; or 
           (iv) exempt wetlands under section 272.02, subdivision 1, 
        clause (10). 
           Subd. 3.  [AFFIDAVIT OF AGRICULTURAL NONAGRICULTURAL USE.] 
        (a) With respect to mortgages executed prior to August 1, 1994, 
        an affidavit signed by the mortgagor and a certificate signed by 
        the county assessor where the land is located stating that the 
        mortgaged premises as legally described in the affidavit and 
        certificate are not in agricultural use as defined in section 
        40A.02, subdivision 3, may be recorded in the office of the 
        county recorder or registrar of titles where the property is 
        located and are prima facie evidence of the facts contained in 
        the affidavit and certificate. 
           (b) With respect to mortgages executed on or after August 
        1, 1994, an affidavit signed by the mortgagor and a certificate 
        signed by the county assessor where the land is located, stating 
        that the mortgaged premises as legally described in the 
        affidavit and certificate are not in agricultural use, may be 
        recorded in the office of the county recorder or registrar of 
        titles where the property is located and are prima facie 
        evidence of the facts contained in the affidavit and 
        certificate.  For purposes of this paragraph, "not in 
        agricultural use" means that no portion of the mortgaged 
        premises, as legally described in the affidavit or certificate, 
        is currently classified for ad valorem tax purposes in any 
        classification listed in subdivision 2, clause (6), item (i), 
        (ii), (iii), or (iv). 
           Subd. 4.  [WAIVER OF 12-MONTH REDEMPTION BASED UPON 
        AGRICULTURAL USE.] A mortgagor, before or at the time of 
        granting a mortgage executed on or after August 1, 1994, may 
        waive in writing the mortgagor's right under subdivision 2, 
        clause (6), to have a 12-month redemption period based upon the 
        premises being in agricultural use as of the date of execution 
        of the mortgage.  The written waiver must be either a document 
        separate from the mortgage or a separately executed and 
        acknowledged addendum to the mortgage on a separate page.  If 
        the written waiver is a separate document, it must be in 
        recordable form and must either recite the recorded or filed 
        document number of the mortgage or recite the names of the 
        mortgagor and mortgagee, the legal description of the mortgaged 
        property, and the date of the mortgage.  If the written waiver 
        is a separate document, it must be recorded in the office of the 
        county recorder or filed in the office of the registrar of 
        titles no later than ten days after the recording or filing of 
        the mortgage.  Where there is a waiver of the rights under 
        subdivision 2, clause (6), the redemption period in subdivision 
        1 applies. 
           Sec. 27.  [RENTAL TAX EQUITY; SAINT PAUL PILOT PROJECT.] 
           Subdivision 1.  [PILOT; TERM.] A pilot project for rental 
        tax equity in the city of Saint Paul is established.  The 
        program is for property taxes payable in 1995.  The program is 
        available to owners of single- and two-family nonhomestead 
        property. 
           Subd. 2.  [PRIMARY OBJECTIVE.] The pilot project's primary 
        objective is to help stabilize costs for the conscientious, 
        industrious landlord who is already providing safe, decent, and 
        affordable housing.  The property tax reduction provided by the 
        program is intended to give an incentive to other landlords to 
        improve their tenant-occupied property and still offer 
        affordable housing. 
           Subd. 3.  [PROPERTY TAX TREATMENT.] (a) Single- and 
        two-family nonhomestead property located in the city of Saint 
        Paul and existing on the effective date of this section, that is 
        classified under Minnesota Statutes, section 273.13, subdivision 
        25, paragraph (b), clause (1), and that meets the requirements 
        of this section, is eligible for the property tax credit under 
        subdivision 8. 
           (b) The program is not a housing or building code 
        enforcement program.  
           (c) Participation in the program is voluntary. 
           (d) If reimbursements under subdivision 8 limit the number 
        of participants in this program, priority shall be given to 
        landlords who live in the city of Saint Paul. 
           Subd. 4.  [NOTIFICATION TO OWNERS.] The city of Saint Paul 
        shall notify the owner of each single- and two-family 
        nonhomestead property located in the city that the property may 
        be eligible to receive a property tax credit as provided in this 
        section. 
           Subd. 5.  [PROGRAM STEPS.] (a) A landlord who owns eligible 
        property and who wishes to participate must arrange for a 
        certified evaluator who is licensed by the city of Saint Paul to 
        evaluate the property. 
           (b) The landlord must notify the tenant of the evaluation 
        so that the tenant may be present if the tenant wishes. 
           (c) The evaluator must evaluate the property using program 
        guidelines adopted by resolution of the Saint Paul city council 
        prior to implementation of the program under this section. 
           (d) If the evaluator determines that repairs are necessary, 
        the landlord must make the repairs and call for a reinspection 
        by the evaluator.  If the evaluator identifies life or safety 
        hazards, the evaluator must notify appropriate city officials, 
        who shall take immediate action to require and enforce repair of 
        the life or safety hazard items. 
           (e) The evaluator must reinspect the property to see if the 
        program guidelines have been followed. 
           (f) The evaluator must submit a report on the property's 
        evaluation to the appropriate city officials, the landlord, and 
        the tenant.  A filing fee must be paid at the time the report is 
        submitted to the city. 
           (g) Appropriate city officials must review the report and 
        approve it or issue orders for further repair.  In so doing, 
        city staff members may make an on-site review.  The landlord may 
        withdraw from the program at any time without making required 
        repairs except those for life or safety hazards, which may be 
        otherwise required.  Property for which the evaluator's report 
        is approved must be certified by the appropriate city officials 
        to the county assessor.  The city must limit the number of 
        qualifying properties so that the credit payable under 
        subdivision 8 will not, in the city's estimate, exceed 
        $1,000,000. 
           (h) A landlord who chooses to participate must complete an 
        application for certification by November 1, 1994. 
           (i) An owner may apply this program to no more than two 
        nonhomestead, single- or two-family, tenant-occupied properties. 
           Subd. 6.  [APPEALS.] (a) The board of equalization must 
        serve as a board of review to hear appeals relating to the value 
        of improvements and properties.  Procedures for board actions 
        and for appeals from board decisions are as provided for other 
        matters decided by the board of equalization.  
           (b) The city may appoint a board of appeals to hear 
        disputes regarding qualification.  The board shall meet to hear 
        appeals under this program between November 1 and December 1, 
        1994. 
           Subd. 7.  [CITY FEES.] The landlord must pay the housing 
        evaluator a fee, as determined by the city, for the initial 
        inspection and necessary reinspections.  The evaluator must pay 
        a filing fee, as determined by the city, to file the evaluator's 
        report.  The evaluator may be reimbursed by the landlord for 
        this fee.  The landlord must pay the city a fee, as determined 
        by the city, to apply for recertification.  If additional 
        inspections are required, a reinspection fee, as determined by 
        the city, must be paid by the landlord. 
           Subd. 8.  [CREDIT AND REIMBURSEMENT.] (a) [CREDIT 
        PROVIDED.] Property that meets the requirements under this 
        section is eligible for a property tax credit equal to the 
        difference between (1) the tax on the property and (2) the tax 
        that would be payable if the property were classified under 
        Minnesota Statutes, section 273.13, subdivision 22, paragraph 
        (a). 
           (b) [PROPERTY TAX STATEMENTS.] The property tax statement 
        provided under Minnesota Statutes, section 276.04, to an owner 
        of property that receives the credit under this subdivision 
        shall include information on the amount of the credit given to 
        the property.  The Ramsey county treasurer shall notify the 
        commissioner of revenue on how the county plans to modify the 
        property tax statements to include the necessary information. 
           (c) [GENERAL FUND; REPLACEMENT OF REVENUE.] Payment from 
        the general fund shall be made as provided in this subdivision 
        for the purpose of replacing revenue lost as a result of the 
        reduction of property taxes provided in this subdivision. 
           The Ramsey county auditor shall certify to the commissioner 
        of revenue the amount of reduction resulting from this 
        subdivision.  This certification shall be submitted to the 
        commissioner of revenue as part of the abstracts of tax lists 
        required to be filed with the commissioner under the provisions 
        of Minnesota Statutes, section 275.29.  The commissioner of 
        revenue shall review the certification to determine its accuracy 
        and make changes in the certification as necessary or return the 
        certification to the county auditor for corrections. 
           Based on current year tax data reported in the abstracts of 
        tax lists, the commissioner of revenue shall determine the 
        taxing district distribution of the amounts certified.  The 
        commissioner of revenue shall pay to each taxing district, other 
        than school districts, its total payment for the year at the 
        times provided in Minnesota Statutes, section 473H.10.  The 
        credit reimbursement to school districts must be certified to 
        the commissioner of education and paid as provided under 
        Minnesota Statutes, section 273.1392. 
           The reimbursement paid under this subdivision shall be made 
        only in 1995, and is limited to $1,000,000.  To the extent the 
        amount of credit originally certified exceeds $1,000,000, 
        reimbursements to the taxing districts shall be prorated 
        according to the proportions of their levies so as not to exceed 
        $1,000,000. 
           Subd. 9.  [REPORT TO THE LEGISLATURE.] By January 15, 1995, 
        the Saint Paul city council shall provide a report to the 
        committee on housing and the committee on taxes and tax laws of 
        the senate and the housing committee and the tax committee of 
        the house of representatives on the program.  The report must 
        include the program guidelines, housing costs, rents and the 
        extent of participation in the program for the 1995 tax year. 
           Subd. 10.  [EFFECTIVE DATE.] This section is effective the 
        day following final enactment, upon compliance with Minnesota 
        Statutes, section 645.021, subdivision 3, by the city of Saint 
        Paul, and applies to property taxes payable in 1995 on 
        nonhomestead, single- and two-family rental properties existing 
        on the effective date. 
           Sec. 28.  [PILOT PROJECT STUDY FOR INFORMATION ON SQUARE 
        FOOTAGE OF PROPERTY.] 
           The commissioner of revenue shall coordinate a pilot 
        project study with the counties of Hennepin and Blue Earth.  The 
        primary purpose is to collect, by legal classification of real 
        property, information on the total square footage of land and 
        structures within the respective counties by taxing 
        jurisdiction.  The square footage shall be identified separately 
        for land and for structures. 
           By February 15, 1995, the commissioner shall provide a 
        report to the tax committee of the house of representatives and 
        the committee on taxes and tax laws of the senate.  Besides 
        reporting the basic data, the report shall discuss the 
        feasibility of developing a statewide system of property 
        taxation in which a property's tax base would be determined by 
        its square footage. 
           Sec. 29.  [STUDY OF HOMESTEAD PROPERTY TAX RELIEF.] 
           The commissioner of revenue shall conduct a study of the 
        methods of delivering property tax relief to homeowners.  The 
        study must specifically include an analysis of the 
        administrative feasibility, policy implications, and state 
        revenue impacts of proposals to: 
           (1) pay the additional property tax refund under Minnesota 
        Statutes, section 290A.04, subdivision 2h, as a state paid 
        property tax credit on the property tax statement, and 
           (2) pay the property tax refund under Minnesota Statutes, 
        section 290A.04, subdivision 2, as a state paid credit on the 
        property tax statement. 
           The study must also consider alternative computations of 
        the refund amounts wherein the additional property tax refund is 
        deducted before computation of the regular property tax refund. 
           The study must consider options to pay the credits as an 
        equal deduction from both of the property tax payments on the 
        property tax statement, and as a deduction only from the second 
        half payment, thus requiring a second property tax statement. 
           The study must determine income and other data needed to 
        implement the proposals and consider the forms, methods, and 
        dates by which the necessary data can be made available. 
           The study should consider the possibility of showing the 
        credit(s) on the property tax statement only or on both the 
        property tax statement and the notice of proposed property taxes.
           The study must also determine the changes in property tax 
        administration that would be necessary to implement the tax 
        credit proposals. 
           The study must separately estimate the costs to each county 
        necessary to implement and administer the tax credit proposals, 
        considering both initial start-up costs and ongoing 
        administrative expenses, including programming, form design, 
        data entry, and computer hardware costs, and must also estimate 
        the costs to the department of revenue. 
           The commissioner shall consult with the chair of the senate 
        committee on taxes and tax laws and with the chair of the house 
        of representatives committee on taxes, and with their staffs, in 
        planning and conducting the study. 
           On or before January 20, 1995, the commissioner of revenue 
        shall report to the legislature on the information collected, 
        and on the study's findings, including its policy and fiscal 
        implications to the state.  The report shall include a 
        discussion of the proposals and any statutory changes necessary 
        to implement them. 
           Sec. 30.  [EXTENSION OF PAYABLE 1995 LEVY CERTIFICATION 
        DATE.] 
           The July 1 dates specified in Laws 1994, chapter 416, 
        article 1, section 29, shall be extended to September 1, for the 
        purposes of the 1994 levy, payable in 1995, for (1) the Cross 
        Lake area water and sanitary sewer district under article 10, 
        (2) the Chisholm/Hibbing airport authority under article 11, and 
        (3) the airport municipal bonding under sections 17 to 20 of 
        this article. 
           Sec. 31.  [REPEALER.] 
           Minnesota Statutes 1993 Supplement, section 82.19, 
        subdivision 9, is repealed. 
           Sec. 32.  [EFFECTIVE DATE.] 
           Sections 1, 14, and 15 are effective for petitions relating 
        to property taxes payable in 1995, and thereafter.  
           Sections 2, 17 to 20, 27, and 30 are effective the day 
        following final enactment. 
           Section 4 is effective for the 1994 assessment, taxes 
        payable in 1995, except that the changes requiring an 
        application to be filed and the market value eligibility 
        provisions made in section 4 are effective July 1, 1994, and 
        thereafter.  
           Sections 5 and 31 are effective July 1, 1994. 
           Sections 6 and 25 are effective the day following final 
        enactment for property which transfers from the agricultural 
        property tax provisions under Minnesota Statutes, section 
        273.111, to the metropolitan agricultural preserves under 
        Minnesota Statutes, chapter 473H. 
           Sections 7, 8, 10 to 12, and 16 are effective for taxes 
        levied in 1994, payable in 1995, and thereafter. 
           Section 9 is only effective for homestead applications 
        filed after the day following final enactment, for property 
        taxes payable in 1995 and thereafter. 
           Section 13 is effective for property tax statements for 
        taxes payable in 1995, and thereafter. 
           Section 22 is effective the day following final enactment 
        and applies to agricultural processing facilities for which 
        construction is commenced after that date. 
           Section 23 is effective for tax equivalent payments due in 
        1995 and thereafter, and applies in the counties of Anoka, 
        Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. 
           Section 24 is effective for property re-enrolled in the 
        metropolitan agricultural preserve program on or after July 1, 
        1994. 
           Section 26 is effective August 1, 1994. 
                                   ARTICLE 6 
                               MINERALS TAXATION
           Section 1.  [297A.2573] [MINERAL PRODUCTION FACILITIES; 
        EXEMPTION.] 
           Materials, equipment, and supplies used or consumed in 
        constructing, or incorporated into the construction of exempted 
        facilities as defined in this section are exempt from the taxes 
        imposed under this chapter and from any sales and use tax 
        imposed by a local unit of government, notwithstanding any 
        ordinance or city charter provision. 
           As used in this section, "exempted facilities" means: 
           (1) a value added iron products plant, which may be either 
        a new plant or a facility incorporated into an existing plant 
        that produces iron upgraded to a minimum of 75 percent iron 
        content or any iron alloy with a total minimum metallic content 
        of 90 percent; 
           (2) a facility used for the manufacture of fluxed taconite 
        pellets as defined in section 298.24; 
           (3) a new capital project that has a total cost of over 
        $40,000,000 that is directly related to production, cost, or 
        quality at an existing taconite facility that does not qualify 
        under clause (1) or (2); and 
           (4) a new mine or minerals processing plant for any mineral 
        subject to the net proceeds tax imposed under section 298.015. 
           The tax shall be imposed and collected as if the rates 
        under sections 297A.02, subdivision 1, and 297A.021, applied, 
        and then refunded in the manner provided in section 297A.15, 
        subdivision 5. 
           Sec. 2.  Minnesota Statutes 1993 Supplement, section 
        298.227, is amended to read: 
           298.227 [TACONITE ECONOMIC DEVELOPMENT FUND.] 
           An amount equal to that distributed pursuant to each 
        taconite producer's taxable production and qualifying sales 
        under section 298.28, subdivision 9a, 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.  If a 
        taconite production facility is sold after operations at the 
        facility had ceased, any money remaining in the fund for the 
        former producer may be released to the purchaser of the facility 
        on the terms otherwise applicable to the former producer under 
        this section.  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. 3.  Minnesota Statutes 1992, section 298.24, 
        subdivision 1, is amended to read: 
           Subdivision 1.  (a) For concentrate produced in 1992 and, 
        1993, and 1994 there is imposed upon taconite and iron 
        sulphides, and upon the mining and quarrying thereof, and upon 
        the production of iron ore concentrate therefrom, and upon the 
        concentrate so produced, a tax of $2.054 per gross ton of 
        merchantable iron ore concentrate produced therefrom.  
           (b) For concentrates produced in 1994 1995 and subsequent 
        years, the tax rate shall be equal to the preceding year's tax 
        rate plus an amount equal to the preceding year's tax rate 
        multiplied by the percentage increase in the implicit price 
        deflator from the fourth quarter of the second preceding year to 
        the fourth quarter of the preceding year.  "Implicit price 
        deflator" for the gross national product means the implicit 
        price deflator prepared by the bureau of economic analysis of 
        the United States Department of Commerce.  
           (c) The tax shall be imposed on the average of the 
        production for the current year and the previous two years.  The 
        rate of the tax imposed will be the current year's tax rate.  
        This clause shall not apply in the case of the closing of a 
        taconite facility if the property taxes on the facility would be 
        higher if this clause and section 298.25 were not applicable.  
           (d) If the tax or any part of the tax imposed by this 
        subdivision is held to be unconstitutional, a tax of $2.054 per 
        gross ton of merchantable iron ore concentrate produced shall be 
        imposed.  
           (e) Consistent with the intent of this subdivision to 
        impose a tax based upon the weight of merchantable iron ore 
        concentrate, the commissioner of revenue may indirectly 
        determine the weight of merchantable iron ore concentrate 
        included in fluxed pellets by subtracting the weight of the 
        limestone, dolomite, or olivine derivatives or other basic flux 
        additives included in the pellets from the weight of the 
        pellets.  For purposes of this paragraph, "fluxed pellets" are 
        pellets produced in a process in which limestone, dolomite, 
        olivine, or other basic flux additives are combined with 
        merchantable iron ore concentrate.  No subtraction from the 
        weight of the pellets shall be allowed for binders, mineral and 
        chemical additives other than basic flux additives, or moisture. 
           (f) Notwithstanding any other provision of this 
        subdivision, for concentrates produced in 1994 through 1999, the 
        rate of the tax on direct reduced ore is determined under this 
        paragraph.  As used in this paragraph, "direct reduced ore" is 
        ore that results in a product that has an iron content of at 
        least 75 percent.  The rate to be applied to direct reduced ore 
        is 25 percent of the rate otherwise determined under this 
        subdivision for the first 500,000 of taxable tons for the 
        production year, and 50 percent of the rate otherwise determined 
        for any remainder.  If the taxpayer had no production in the two 
        years prior to the the current production year, the tonnage 
        eligible to be taxed at 25 percent of the rate otherwise 
        determined under this subdivision is the first 166,667 tons.  If 
        the taxpayer had some production in the year prior to the 
        current production year but no production in the second prior 
        year, the tonnage eligible to be taxed at 25 percent of the rate 
        otherwise determined under this subdivision is the first 333,333 
        tons. 
           Sec. 4.  Minnesota Statutes 1993 Supplement, 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, 1995, and 1996 shall be paid to the 
        taconite economic development fund.  No distribution shall be 
        made under this 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, is 
        amended by adding a subdivision to read: 
           Subd. 11a.  [PRORATED DISTRIBUTIONS.] For production years 
        1994 through 1999, distributions under this section that are 
        based on a number of cents per ton explicitly provided in this 
        section shall be reduced on a pro rata basis to reflect the 
        reduction in tax proceeds as a result of the tax rate reduction 
        applied to direct reduced ore under section 298.24, subdivision 
        1, paragraph (f). 
           Sec. 6.  Minnesota Statutes 1992, section 298.296, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EXPENDITURE OF FUNDS.] Before January 1, 2002, 
        funds may be expended on projects and for administration of the 
        trust fund only from the net interest, earnings, and dividends 
        arising from the investment of the trust at any time, including 
        net interest, earnings, and dividends that have arisen prior to 
        July 13, 1982, plus $10,000,000 made available for use in fiscal 
        year 1983, except that any amount required to be paid out of the 
        trust fund to provide the property tax relief specified in Laws 
        1977, chapter 423, article X, section 4, and to make school bond 
        payments and payments to recipients of taconite production tax 
        proceeds pursuant to section 298.225, may be taken from the 
        corpus of the trust.  Additionally, upon recommendation by the 
        board, up to $10,000,000 from the corpus of the trust may be 
        made available for use as provided in subdivision 4.  On and 
        after January 1, 2002, funds may be expended on projects and for 
        administration from any assets of the trust.  Annual 
        administrative costs, not including detailed engineering 
        expenses for the projects, shall not exceed five percent of the 
        net interest, dividends, and earnings arising from the trust in 
        the preceding fiscal year.  
           Principal and interest received in repayment of loans made 
        pursuant to this section, and earnings on other investments made 
        under section 298.292, subdivision 2, clause (4), shall be 
        deposited in the state treasury and credited to the trust.  
        These receipts are appropriated to the board for the purposes of 
        sections 298.291 to 298.298.  
           Sec. 7.  Minnesota Statutes 1992, section 298.296, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [TEMPORARY LOAN AUTHORITY.] The board may 
        recommend that up to $10,000,000 from the corpus of the trust 
        may be used for loans as provided in this subdivision.  The 
        money would be available for loans for construction and 
        equipping of facilities constituting (1) a value added iron 
        products plant, which may be either a new plant or a facility 
        incorporated into an existing plant that produces iron upgraded 
        to a minimum of 75 percent iron content or any iron alloy with a 
        total minimum metallic content of 90 percent; or (2) a new mine 
        or minerals processing plant for any mineral subject to the net 
        proceeds tax imposed under section 298.015.  A loan under this 
        subdivision may not exceed $5,000,000 for any facility.  The 
        authority to make loans under this subdivision terminates 
        December 31, 1995. 
           Sec. 8.  [EFFECTIVE DATE.] 
           Section 1 is effective for sales after June 30, 1994, 
        provided that no refunds will be paid under section 1 until 
        after June 30, 1995. 
                                   ARTICLE 7
                                BUDGETING REFORM
           Section 1.  [16A.102] [BUDGETING REVENUES RELATIVE TO 
        PERSONAL INCOME.] 
           Subdivision 1.  [GOVERNOR'S RECOMMENDATION.] By the fourth 
        Monday in January of each odd-numbered year, the governor shall 
        submit to the legislature a recommended revenue target for the 
        next two bienniums.  The recommended revenue target must specify 
           (1) the maximum share of Minnesota personal income to be 
        collected in taxes and other revenues to pay for state and local 
        government services; 
           (2) the division of the share between state and local 
        government revenues; and 
           (3) the appropriate mix and rates of income, sales, and 
        other state and local taxes and other revenues, other than 
        property taxes, and the amount of property taxes and the effect 
        of the recommendations on the incidence of the tax burden by 
        income class. 
        The recommendations must be based on the November forecast 
        prepared under section 2. 
           Subd. 2.  [LEGISLATIVE BUDGET RESOLUTION.] By March 15 of 
        each odd-numbered year, the legislature shall by concurrent 
        resolution adopt revenue targets for the next two bienniums.  
        The resolution must specify: 
           (1) the maximum share of Minnesota personal income to be 
        collected in taxes and other revenues to pay for state and local 
        government services; 
           (2) the division of the share between state and local 
        government services; and 
           (3) the appropriate mix and rates of income, sales, and 
        other state and local taxes and other revenues, other than 
        property taxes, and the amount of property taxes and the effect 
        of the resolution on the incidence of the tax burden by income 
        class. 
        The resolution must be based on the February forecast prepared 
        under section 2 and take into consideration the revenue targets 
        recommended by the governor under subdivision 1.  
           Subd. 3.  [EVEN-NUMBERED YEAR AND SPECIAL SESSIONS.] The 
        governor or the legislature may elect to modify their revenue 
        targets in a special session or an even-numbered year regular 
        session.  The requirements of subdivisions 1 and 2 apply, except 
        that within ten days of the start of the session the dates 
        provided in those subdivisions must be modified to be consistent 
        with the planned date of adjournment. 
           Sec. 2.  [16A.103] [FORECASTS OF REVENUE AND EXPENDITURES.] 
           Subdivision 1.  [STATE REVENUE AND EXPENDITURES.] In 
        February and November each year, the commissioner shall prepare 
        and deliver to the governor and legislature a forecast of state 
        revenue and expenditures.  The forecast must assume the 
        continuation of current laws and reasonable estimates of 
        projected growth in the national and state economies and 
        affected populations.  Revenue must be estimated for all sources 
        provided for in current law.  Expenditures must be estimated for 
        all obligations imposed by law and those projected to occur as a 
        result of inflation and variables outside the control of the 
        legislature.  In addition, the commissioner shall forecast 
        Minnesota personal income for each of the years covered by the 
        forecast and include these estimates in the forecast documents.  
        A forecast prepared during the first fiscal year of a biennium 
        must cover that biennium and the next biennium.  A forecast 
        prepared during the second fiscal year of a biennium must cover 
        that biennium and the next two bienniums. 
           Subd. 2.  [LOCAL REVENUE.] In February and November of each 
        year, the commissioner of revenue shall prepare and deliver to 
        the governor and the legislature forecasts of revenue to be 
        received by school districts as a group, counties as a group, 
        and the group of cities and towns that have a population of more 
        than 2,500.  The forecasts must assume the continuation of 
        current laws, projections of valuation changes in real property, 
        and reasonable estimates of projected growth in the national and 
        state economies and affected populations.  Revenue must be 
        estimated for property taxes, state and federal aids, local 
        sales taxes, if any, and a single projection for all other 
        revenue for each group of affected local governmental units.  As 
        part of the February forecast, the commissioner of revenue shall 
        report to the governor and legislature on which groups of local 
        government units exceeded the revenue targets of the governor 
        and legislature in the most recent biennium. 
           Subd. 3.  [SEPARATE ESTIMATES OF FEE REVENUES.] In 
        preparing the November estimates under subdivision 1, the 
        commissioner shall separately report the amount of departmental 
        earnings as defined in section 16A.1285.  In preparing the 
        estimates under subdivision 2, the commissioner of revenue shall 
        separately estimate local government revenues similar to 
        departmental earnings as defined in section 16A.1285. 
           Sec. 3.  Minnesota Statutes 1992, section 124.196, is 
        amended to read: 
           124.196 [CHANGE IN PAYMENT OF AIDS AND CREDITS.] 
           If the commissioner of finance determines that 
        modifications in the payment schedule are required to avoid 
        would reduce the need for state short-term borrowing, the 
        commissioner of education shall modify payments to school 
        districts according to this section.  The modifications shall 
        begin no sooner than September 1 of each fiscal year, and shall 
        remain in effect until no later than May 30 of that same fiscal 
        year.  In calculating the payment to a school district pursuant 
        to section 124.195, subdivision 3, the commissioner may subtract 
        the sum specified in that subdivision, plus an additional amount 
        no greater than the following: 
           (1) the net cash balance in the district's four operating 
        funds on June 30 of the preceding fiscal year; minus 
           (2) the product of $150 times the number of actual pupil 
        units in the preceding fiscal year; minus 
           (3) the amount of payments made by the county treasurer 
        during the preceding fiscal year, pursuant to section 276.11, 
        which is considered revenue for the current school year.  
        However, no additional amount shall be subtracted if the total 
        of the net unappropriated fund balances in the district's four 
        operating funds on June 30 of the preceding fiscal year, is less 
        than the product of $350 times the number of actual pupil units 
        in the preceding fiscal year.  The net cash balance shall 
        include all cash and investments, less certificates of 
        indebtedness outstanding, and orders not paid for want of funds. 
           A district may appeal the payment schedule established by 
        this section according to the procedures established in section 
        124.195, subdivision 3a. 
           Sec. 4.  [275.064] [ESTIMATED PERSONAL INCOME INCREASE.] 
           By July 1 of each year, the commissioner of revenue shall 
        estimate the percentage increase in Minnesota personal income 
        for the next calendar year over the current calendar year, using 
        the most recent forecast prepared by the commissioner of 
        finance.  The commissioner of revenue shall notify each local 
        government subject to the requirements of section 275.065 of 
        this percentage by July 15. 
           Sec. 5.  Minnesota Statutes 1993 Supplement, 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, 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.  The notice must include the estimated 
        percentage increase in Minnesota personal income, provided by 
        the commissioner of revenue under section 275.064, in a way to 
        facilitate comparison of the proposed budget and levy increases 
        with the increase in personal income.  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 determined under 
        section 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; 
           (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.  
           (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. 6.  [EFFECTIVE DATE.] 
           Sections 1 to 3 are effective the day following final 
        enactment.  Sections 4 and 5 apply beginning for notices of 
        proposed property taxes for taxes payable in 1995. 
                                   ARTICLE 8
                 BOARD OF GOVERNMENT INNOVATION AND COOPERATION
           Section 1.  Minnesota Statutes 1993 Supplement, section 
        465.795, subdivision 7, is amended to read: 
           Subd. 7.  [SCOPE.] As used in sections 465.795 to 465.799 
        and sections 465.80 465.801 to 465.87, the terms defined in this 
        section have the meanings given them. 
           Sec. 2.  Minnesota Statutes 1993 Supplement, section 
        465.796, subdivision 2, is amended to read: 
           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 465.797, 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 465.798 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 465.799, 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 
        465.801, 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. 
           Sec. 3.  Minnesota Statutes 1993 Supplement, section 
        465.797, subdivision 1, is amended to read: 
           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, in 
        concept, the proposed waiver or exemption request by resolution 
        at a meeting required to be public under section 471.705.  A 
        local government unit or two or more units acting jointly may 
        apply for a waiver or exemption on behalf of a nonprofit 
        organization providing services to clients whose costs are paid 
        by the unit or units.  A waiver or exemption granted to a 
        nonprofit organization under this section applies to services 
        provided to all the organization's clients. 
           (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.  
           Sec. 4.  Minnesota Statutes 1993 Supplement, section 
        465.797, subdivision 2, is amended to read: 
           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; and 
           (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 to represent 
        employees who provide the service or program affected by the 
        requested waiver or exemption. 
           Sec. 5.  Minnesota Statutes 1993 Supplement, section 
        465.797, subdivision 3, is amended to read: 
           Subd. 3.  [REVIEW PROCESS.] (a) 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.  
           (b) The board shall determine whether a law from which an 
        exemption for enforcement is sought is a procedural law, 
        specifying how a local government unit is to achieve an outcome, 
        rather than a substantive law prescribing the outcome or 
        otherwise establishing policy.  In making its determination, the 
        board shall consider whether the law specifies such requirements 
        as: 
           (1) who must deliver a service; 
           (2) where the service must be delivered; 
           (3) to whom and in what form reports regarding the service 
        must be made; and 
           (4) how long or how often the service must be made 
        available to a given recipient. 
           (c) If the commissioner of finance, the commissioner of 
        administration, or the state auditor has jurisdiction over a 
        rule or law affected by an application, the chief administrative 
        law judge, as soon as practicable after receipt of the 
        application, shall designate a third administrative law judge to 
        serve as a member of the board in place of that official while 
        the board is deciding whether to grant the waiver or exemption. 
           (d) 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 
           (e) Within 15 days after receipt of 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.  An agency's failure to do so 
        is considered agreement to the waiver or exemption.  The board 
        shall decide whether to grant a waiver or exemption at its next 
        regularly scheduled meeting following its receipt of an agency's 
        response or the end of the 60-day response period.  If 
        consideration of an application is not concluded at that 
        meeting, the matter may be carried over to the next meeting of 
        the board.  Interested persons may submit written comments to 
        the board on the waiver or exemption request within 60 days of 
        the board's receipt of up to the time of its vote on 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.  
           (f) If the exclusive representative of the affected 
        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. 
           Sec. 6.  Minnesota Statutes 1993 Supplement, section 
        465.797, subdivision 4, is amended to read: 
           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. 
           Sec. 7.  Minnesota Statutes 1993 Supplement, section 
        465.797, subdivision 5, is amended to read: 
           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.  The 
        board may reconsider or renegotiate the agreement if the rule or 
        law affected by the waiver or exemption is amended or repealed 
        during the term of the original agreement.  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. 
           Sec. 8.  Minnesota Statutes 1993 Supplement, section 
        465.798, is amended to read: 
           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 
        a local unit of government acting in conjunction with a local 
        unit of government an organization or a state agency, or an 
        organization established by two or more local units of 
        government under a joint powers agreement may apply to the board 
        of government innovation and management for a grant to be used 
        to develop models for innovative service budget management.  A 
        copy of the application must be provided by the units to the 
        exclusive representatives certified under section 179A.12 to 
        represent employees who provide the service or program affected 
        by the application.  
           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 board 
        shall award grants on the basis of each qualified applicant's 
        score under the scoring system in section 465.802.  The amount 
        of a grant under this section shall may not exceed $50,000. 
           Sec. 9.  Minnesota Statutes 1993 Supplement, section 
        465.799, is amended to read: 
           465.799 [COOPERATION PLANNING GRANTS.] 
           Two or more local government units; an association of local 
        governments; a local unit of government acting in conjunction 
        with the metropolitan council, an organization, or a state 
        agency; or an organization formed by two or more local units of 
        government under a joint powers agreement 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.  A copy of the 
        application must be submitted by the applicants to the exclusive 
        representatives certified under section 179A.12 to represent 
        employees who provide the service or program affected by the 
        application.  
           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, and the board may disseminate it to other local 
        units of government or interested groups.  If the board finds 
        that the grantee has failed to implement the plan according to 
        the terms of the agreement, it may require the grantee to repay 
        all or a portion of the grant.  The board shall award grants on 
        the basis of each qualified applicant's score under the scoring 
        system in section 465.802.  The amount of a grant under this 
        section shall may not exceed $50,000. 
           Sec. 10.  [465.801] [SERVICE SHARING GRANTS.] 
           Two or more local units of government; an association of 
        local governments; a local unit of government acting in 
        conjunction with the metropolitan council, an organization, or a 
        state agency; or an organization established by two or more 
        local units of government under a joint powers agreement may 
        apply to the board of government innovation and cooperation for 
        a grant to be used to meet the start-up costs of providing 
        shared services or functions.  Agreements solely to make joint 
        purchases are not sufficient to qualify under this section.  A 
        copy of the application must be provided by the applicants to 
        the exclusive representatives certified under section 179A.12 to 
        represent employees who provide the service or program affected 
        by the application. 
           The proposal must include plans fully to integrate a 
        service or function provided by two or more local government 
        units.  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 grantee has 
        failed to implement the plan according to the terms of the 
        agreement, it may require the grantee to repay all or a portion 
        of the grant.  The board shall award grants on the basis of each 
        qualified applicant's score under the scoring system in section 
        465.802.  The amount of a grant under this section may not 
        exceed $100,000. 
           Sec. 11.  [465.802] [SCORING SYSTEM.] 
           In deciding whether to award a grant under section 465.798, 
        465.799, or 465.801, the board shall use the following scoring 
        system: 
           (1) Up to 15 points shall be awarded to reflect the extent 
        to which the application demonstrates creative thinking, careful 
        planning, cooperation, involvement of the clients of the 
        affected service, and commitment to assume risk. 
           (2) Up to 20 points shall be awarded to reflect the extent 
        to which the proposed project is likely to improve the quality 
        of the service and to have benefits for other local governments. 
           (3) Up to 15 points shall be awarded to reflect the extent 
        to which the application's budget provides sufficient detail, 
        maximizes the use of state funds, documents the need for 
        financial assistance, commits to local financial support, and 
        limits expenditures to essential activities. 
           (4) Up to 20 points shall be awarded to reflect the extent 
        to which the application reflects the statutory goal of the 
        grant program. 
           (5) Up to 15 points shall be awarded to reflect the merit 
        of the proposed project and the extent to which it warrants the 
        state's financial participation. 
           (6) Up to five points shall be awarded to reflect the 
        cost/benefit ratio projected for the proposed project. 
           (7) Up to five points shall be awarded to reflect the 
        number of government units participating in the proposal. 
           (8) Up to five points shall be awarded to reflect the 
        minimum length of time the application commits to implementation.
           Sec. 12.  [APPROPRIATION.] 
           $2,200,000 is appropriated from the general fund to the 
        board of government innovation and cooperation to implement and 
        administer the programs of the board in fiscal year 1995. 
           Sec. 13.  [REPEALER.] 
           Minnesota Statutes 1992, section 465.80, subdivision 3, is 
        repealed.  Minnesota Statutes 1993 Supplement, section 465.80, 
        subdivisions 1, 2, 4, and 5, are repealed. 
                                   ARTICLE 9 
                                   LOCAL LAWS
           Section 1.  Minnesota Statutes 1992, section 466A.02, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ADDITIONAL AREA ELIGIBLE FOR INCLUSION IN 
        TARGETED NEIGHBORHOOD.] (a) The city may add to the area 
        designated as a targeted neighborhood under subdivision 2 a 
        contiguous area of one-half mile in all directions from the 
        designated targeted neighborhood.  
           (b) Assisted housing is also considered a targeted 
        neighborhood.  
           (c) A neighborhood that is partially targeted may be 
        considered wholly targeted. 
           Sec. 2.  Minnesota Statutes 1992, section 469.004, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [RAMSEY COUNTY AUTHORITY.] Ramsey county may 
        exercise the powers of a housing and redevelopment authority. 
        Before the commencement of a project by Ramsey county acting as 
        a housing and redevelopment authority, the governing body of the 
        municipality in which the project is to be located shall, by 
        majority vote, approve the project as recommended by the 
        authority.  The authority granted to Ramsey county under this 
        subdivision and subdivision 1 terminates June 30, 1994, 
        providing that obligations incurred by the county before that 
        date shall remain in effect according to their terms.  A 
        resolution of the county board may provide that the board will 
        constitute the county housing and redevelopment authority. 
           Sec. 3.  [469.0775] [MANKATO; PORT AUTHORITY.] 
           The governing body of the city of Mankato may exercise all 
        the powers of a port authority provided by sections 469.048 to 
        469.068, as if the city were a port authority; and the city may 
        exercise all the powers relating to a port authority granted to 
        a city by sections 469.048 to 469.068, or other law. 
           Sec. 4.  Laws 1969, chapter 499, section 2, is amended to 
        read: 
           Sec. 2.  Notwithstanding any provisions of the charter of 
        the city of Minneapolis, or of any statutory enactments, 
        the said city may provide for the collection of special charges, 
        fees or taxes for all or any part of the cost of 
           (1) any service to streets, sidewalks, or other property, 
        street oiling, street flushing and cleaning,; 
           (2) sewer charges; 
           (3) water charges; 
           (4) solid waste disposal charges; 
           (5) any other charges for abatement of nuisance conditions 
        as defined by the city; and 
           (6) any and all other services or improvements specified in 
        said Chapter 429, Minnesota Statutes, section 429.101; 
        in the same manner as a special assessment against the property 
        benefitted.  The procedure for the levy of said special 
        assessment shall, if the city elects to proceed under the 
        provisions of said the service charges may be defined by 
        ordinance or the city may, at its option, elect the procedure 
        set forth in Minnesota Statutes, chapter 429, be as provided in 
        said Chapter 429. 
           Sec. 5.  [BENTON COUNTY; ECONOMIC DEVELOPMENT AUTHORITY; 
        ESTABLISHMENT AND POWERS.] 
           Subdivision 1.  [ESTABLISHMENT.] The board of county 
        commissioners of Benton county may establish an economic 
        development authority in the manner provided in Minnesota 
        Statutes, sections 469.090 to 469.1081, and may impose limits on 
        the authority enumerated in Minnesota Statutes, section 
        469.092.  The economic development authority has all of the 
        powers and duties granted to or imposed upon economic 
        development authorities under Minnesota Statutes, sections 
        469.090 to 469.1081.  The county economic development authority 
        may create and define the boundaries of economic development 
        districts at any place or places within the county, provided 
        that a project as recommended by the county authority that is to 
        be located within the corporate limits of a city may not be 
        commenced without the approval of the governing body of the 
        city.  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. 2.  [POWERS.] If an economic development authority is 
        established as provided in subdivision 1, 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, or other law, including a tax levy to 
        support the activities of the authority. 
           Subd. 3.  [LOCAL APPROVAL.] This section is effective the 
        day after the Benton county board complies with Minnesota 
        Statutes, section 645.021, subdivision 3. 
           Sec. 6.  [SPECIAL SERVICE DISTRICT; CITY OF EAGAN.] 
           Subdivision 1.  [DEFINITIONS.] (a) For the purposes of this 
        section, the terms defined have the meanings given them. 
           (b) "City" means the city of Eagan. 
           (c) "Special services" means: 
           (1) the promotion and management of a special service 
        district as a trade or shopping area with the ability to provide 
        the following special services within the boundaries of the 
        district to be rendered or contracted for by the city; 
           (2) signage identifying the overall retail area; 
           (3) preparation, mowing, maintenance, and repair of 
        landscaping on public right-of-way; 
           (4) installation, maintenance, and repair of street and 
        pedestrian lighting in excess of the city standard; 
           (5) installation, maintenance, and repair of public parking 
        facilities; 
           (6) provision and coordination of public safety services in 
        excess of the city standard; 
           (7) repair, maintenance, operation, rerouting, and 
        replacement of existing public improvements, and those 
        authorized by Minnesota Statutes, section 429.021, within the 
        boundaries of the special service district established under 
        subdivision 2; and 
           (8) administration, coordination, and preparation of 
        studies and designs for the defined special services. 
        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. 
           Subd. 2.  [ESTABLISHMENT OF SPECIAL SERVICE DISTRICT.] The 
        governing body of the city of Eagan may adopt ordinances 
        establishing special service districts.  The provisions of 
        Minnesota Statutes, chapter 428A govern the establishment and 
        operation of the special service districts in the city. 
           Subd. 3.  [EFFECTIVE DATE; LOCAL APPROVAL.] This section is 
        effective the day after the governing body of the city of Eagan 
        complies with Minnesota Statutes, section 645.021, subdivision 3.
           Sec. 7.  [SPECIAL SERVICE DISTRICT; CITY OF GAYLORD.] 
           Subdivision 1.  [DEFINITIONS.] (a) For the purposes of this 
        section, the terms defined have the meanings given them. 
           (b) "City" means the city of Gaylord. 
           (c) "Special services" means: 
           (1) the promotion and management of a special service 
        district as a trade or shopping area; 
           (2) snow removal services rendered or contracted for by the 
        city; and 
           (3) the repair, maintenance, operation, and replacement of 
        improvements, within the boundaries of a special service 
        district established under subdivision 2. 
           Subd. 2.  [ESTABLISHMENT OF A SPECIAL SERVICE 
        DISTRICT.] The governing body of the city of Gaylord may adopt 
        ordinances establishing special service districts.  The 
        provisions of Minnesota Statutes, chapter 428A, govern the 
        establishment and operation of special service districts in the 
        city. 
           Subd. 3.  [LOCAL APPROVAL.] This section is effective the 
        day after the governing body of the city of Gaylord complies 
        with Minnesota Statutes, section 645.021, subdivision 3. 
           Sec. 8.  [ITASCA COUNTY CEMETERY ASSOCIATION.] 
           Subdivision 1.  [TAX LEVIES.] Notwithstanding Minnesota 
        Statutes, section 471.24, each of the following cities or towns 
        is authorized to levy a tax and make an appropriation not to 
        exceed $15,000 annually to the Lakeview Cemetery Association, 
        operated by the town of Iron Range, for cemetery purposes:  the 
        city of Coleraine, the city of Bovey, and each town which is a 
        member of the cemetery association. 
           Subd. 2.  [EFFECTIVE DATE.] This section is effective for 
        taxes levied in 1994, payable in 1995, and thereafter. 
           Sec. 9.  [CITY-COUNTY RURAL DEVELOPMENT FINANCE AUTHORITY; 
        KOOCHICHING COUNTY.] 
           Subdivision 1.  [ESTABLISHMENT.] The Koochiching county 
        board and any or all of the cities of Koochiching county may, by 
        adopting a written enabling resolution, establish a city-county 
        rural development finance authority that, subject to subdivision 
        2, has the following powers:  powers of an economic development 
        authority under Minnesota Statutes, sections 469.090 to 469.107, 
        and powers of a rural development financing authority under 
        Minnesota Statutes, sections 469.142 to 469.151. 
           Subd. 2.  [ECONOMIC DEVELOPMENT AUTHORITY POWERS.] If the 
        city-county rural development finance authority exercises the 
        powers of an economic development authority, the county may 
        exercise all of the powers relating to an economic development 
        authority granted to a city under Minnesota Statutes, sections 
        469.090 to 469.108.  The levy imposed by the county board under 
        Minnesota Statutes, section 469.107, may be levied in addition 
        to levies otherwise authorized by law.  The city-county rural 
        development finance authority may create and define the 
        boundaries of economic development districts at any place or 
        places within the county.  Minnesota Statutes, section 469.174, 
        subdivision 10, and the contiguity requirement specified under 
        Minnesota Statutes, section 469.101, subdivision 1, do not apply 
        to limit the areas that may be designated as city-county 
        economic development districts.  The authority may acquire real 
        property from Koochiching county or any other source. 
           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 
        enabling resolution. 
           (b) The enabling resolution may be modified at any time, 
        but may not be applied in a manner that impairs contracts 
        executed before the modification is made.  All modifications to 
        the enabling resolution must be by written resolution. 
           (c) Before the commencement of a project by the authority, 
        the board shall by majority vote of six approve the project. 
           (d) Any project within a municipality requires approval of 
        its city council; any project outside the corporate limits of a 
        municipality shall require the approval of the county board. 
           (e) The authority may employ the personnel it deems 
        necessary. 
           Subd. 4.  [BOARD OF DIRECTORS.] (a) The authority consists 
        of a board of ten directors.  The directors shall be appointed 
        as follows: 
           (1) one resident each from the cities of Ranier, Big Falls, 
        and Little Fork appointed by the mayor of the city and confirmed 
        by the city council; 
           (2) one resident of either the city of Northome or Mizpah 
        appointed, as agreed by the mayors of the two cities, and 
        confirmed by the two city councils; 
           (3) three members, one of whom must be from the 
        Birchdale-Loman area and one from the city of International 
        Falls, appointed by the board of commissioners of Koochiching 
        county to be confirmed by the entire board, one of whom shall be 
        designated as chair of the Koochiching development authority 
        board.  The Koochiching county board may appoint one of its 
        commissioners whose district is not within any portion of the 
        corporate limits of the city of International Falls to be a 
        director; and 
           (4) three residents from the city of International Falls 
        appointed by the mayor and confirmed by the city council, one of 
        which may be an elected official. 
           (b) Any vacancy must be filled in the manner in which the 
        original appointment was made.  A vacancy occurs if a director 
        no longer meets the residency requirements for a seat.  No 
        director shall be an officer, employee, director, shareholder, 
        or member of any corporation, firm, or association with which 
        the authority has entered into any operating lease, or other 
        agreement.  The directors may be removed by the appointing 
        authority for the reasons and in the manner provided under 
        Minnesota Statutes, section 469.010.  Directors shall have no 
        personal liability for obligations of the authority or the 
        methods of enforcement and collection of the obligations. 
           (c) The directors and employees of the authority shall 
        receive both travel and per diem expense payments as are allowed 
        by a vote of 60 percent of the full membership of the 
        authority's board. 
           (d) No director of the authority shall simultaneously serve 
        in an elective public office, except that one of the 
        appointments by the mayor of the city of International Falls may 
        be a member of the International Falls city council and one of 
        the appointments by the Koochiching county board may be a member 
        of the Koochiching county board whose district is not within any 
        portion of the corporate limits of the city of International 
        Falls.  Neither of such elected officials shall serve as chair 
        of the Koochiching city-county rural development finance 
        authority board. 
           Subd. 5.  [BONDING, OCCUPATION TAX RECEIPTS; ASSETS.] (a) 
        Notwithstanding Minnesota Statutes, section 469.102, or other 
        law, authorization to issue general obligation bonds for 
        economic development purposes must be approved by 80 percent of 
        the county board, as must all property tax levies that are only 
        for economic development purposes. 
           (b) All money received by Koochiching county under 
        Minnesota Statutes, chapter 298, not otherwise allocated by 
        statute for a specific purpose must be appropriated by the 
        county board to the authority established in subdivision 1.  The 
        money must be used for the express purpose of furthering 
        economic development of Koochiching county as defined by the 
        Koochiching development authority board. 
           (c) Assets and obligations held by the authority repealed 
        by subdivision 6 including, but not limited to, outstanding 
        loans, buildings, and land must be transferred to the authority 
        established in subdivision 1 within 90 days of the effective 
        date of this section. 
           Subd. 6.  [REPEALER.] Laws 1987, chapter 182, is repealed 
        with the passage of the resolution specified in subdivision 7. 
           Subd. 7.  [EFFECTIVE DATE.] This section is effective upon 
        approval by the affirmative resolution of the Koochiching county 
        board. 
           Sec. 10.  [NASHWAUK AREA AMBULANCE DISTRICT.] 
           Subdivision 1.  [AGREEMENT; POWERS; GENERAL 
        DESCRIPTION.] (a) The cities of Nashwauk, Keewatin, Marble, 
        Taconite, and Calumet, and the towns of Feely, Goodland, Iron 
        Range, Greenway, Lone Pine, Lawrence, Nashwauk, Balsam, and 
        Bearville, may by resolution of their city councils and town 
        boards establish the Nashwauk area ambulance district.  The 
        district may consist of the territories described as follows: 
           (1) Feely:  Township 54 North, Range 23 West, Sections 1 to 
        3, 11 to 14, and 24; 
           (2) Goodland:  Township 55 North, Range 22 West; 
           (3) Iron Range:  Township 56 North, Range 24 West, Sections 
        1 to 4, 9 to 16, 22 to 26, and 36; 
           (4) Greenway:  Township 56 North, Range 23 West; 
           (5) Lone Pine:  Township 56 North, Range 22 West; 
           (6) Lawrence:  Township 57 North, Range 24 West, Sections 1 
        to 3, 10 to 15, 22 to 27, and 34 to 36; 
           (7) Nashwauk:  Township 57 North, Range 23 West, and 
        Township 57 North, Range 22 West; 
           (8) Balsam:  Township 58 North, Range 24 West, Sections 1 
        to 5, 8 to 16, 21 to 24, 27 to 29, and 34 to 36; 
           (9) Balsam:  all of Township 58 North, Range 23 West, that 
        is organized; 
           (10) Bearville:  Township 60 North, Range 22 West, Sections 
        1 to 5, and 7 to 36; 
           (11) Bearville:  Township 61 North, Range 22 West, Sections 
        24 to 26, and 34 to 36; 
           (12) Township 55 North, Range 23 West, Sections 1 to 17, 21 
        to 28, and 34 to 36; 
           (13) Township 58 North, Range 22 West; 
           (14) all of the east part of Township 58 North, Range 23 
        West, that is organized; 
           (15) Township 59 North, Range 22 West; 
           (16) Township 59 North, Range 23 West, Sections 1 to 5, and 
        7 to 36; 
           (17) Township 60 North, Range 23 West, Sections 13, 23 to 
        27, and 33 to 36; and 
           (18) Township 59 North, Range 24 West, Sections 13, 14, 22 
        to 29, and 32 to 36. 
           (b) The Itasca county board may by resolution provide that 
        property located in unorganized territories described in 
        paragraph (a), clauses (12) to (18), or any part of them, may be 
        included within the district.  
           (c) The district shall make payments of the proceeds of the 
        tax authorized in this section to the city of Nashwauk, which 
        shall provide ambulance services throughout the district and may 
        exercise all the powers of the cities and towns that relate to 
        ambulance service anywhere within its territory.  
           (d) 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 appointment and one-half the first Monday 
        in January in the second year.  The terms of those initially 
        appointed must be determined by lot.  If an additional member is 
        added because an additional city or town joins the district, the 
        member's term must 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.  The Itasca county auditor and treasurer shall 
        collect the tax and pay it to the Nashwauk 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 cities of Nashwauk, Keewatin, Marble, Taconite, and Calumet, 
        and the towns of Feely, Goodland, Iron Range, Greenway, Lone 
        Pine, Lawrence, Nashwauk, Balsam, and Bearville the day after 
        compliance with Minnesota Statutes, section 645.021, subdivision 
        3, by the governing body of each.  This section is effective for 
        unorganized territories described in subdivision 1, paragraph 
        (a), clauses (12) to (18), the day after compliance with 
        Minnesota Statutes, section 645.021, subdivision 3, by the 
        Itasca county board. 
           Sec. 11.  [TWO HARBORS LODGING TAX.] 
           Notwithstanding Minnesota Statutes, section 477A.016, or 
        other law, in addition to a tax authorized in Minnesota 
        Statutes, section 469.190, the city of Two Harbors may impose, 
        by ordinance, a tax of up to one percent on the gross receipts 
        subject to the lodging tax under Minnesota Statutes, section 
        469.190.  The proceeds of the tax shall be dedicated and used to 
        provide preservation, display, and interpretation of the tug 
        boat Edna G.  The total tax imposed by the city under this 
        section and under Minnesota Statutes, section 469.190, shall not 
        exceed three percent. 
           Sec. 12.  [MAHNOMEN COUNTY BONDING.] 
           Subdivision 1.  [AUTHORIZATION; PURPOSES.] The county of 
        Mahnomen may issue its general obligation bonds in a principal 
        amount not to exceed $800,000 to (1) fund or refund certain 
        existing warrants and loans of the county incurred in connection 
        with its ownership and operation of the Mahnomen County and 
        Village Hospital, Nursing Home, and Clinic, and (2) provide 
        working capital for the Mahnomen County and Village Hospital, 
        Nursing Home, and Clinic. 
           Subd. 2.  [EXISTING LAW.] The bonds shall be issued 
        according to Minnesota Statutes, chapter 475, except that (1) 
        the bonds shall not constitute net debt within the meaning of 
        Minnesota Statutes, section 475.53, or a debt of the county 
        within the meaning of any other statutory provision, and (2) 
        Minnesota Statutes, section 475.58, does not apply. 
           Subd. 3.  [EFFECTIVE DATE.] This section is effective the 
        day following final enactment, upon compliance by the Mahnomen 
        county board with Minnesota Statutes, section 645.021. 
           Sec. 13.  [CITY OF LAKE CRYSTAL; TIF DISTRICT.] 
           Subdivision 1.  [DURATION.] Notwithstanding the provisions 
        of Minnesota Statutes, section 469.176, subdivisions 1 and 1b, 
        the authority may extend the duration of city of Lake Crystal 
        tax increment financing district No. 2-1 through December 31, 
        2018. 
           Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
        compliance by the governing body of the city of Lake Crystal 
        with Minnesota Statutes, section 645.021, subdivision 3. 
           Sec. 14.  [BROOKLYN CENTER; REDEVELOPMENT DISTRICT.] 
           Subdivision 1.  [ESTABLISHMENT.] The city of Brooklyn 
        Center may establish an redevelopment tax increment financing 
        district in which 15 percent of the revenues generated from tax 
        increment in any year is deposited in the housing development 
        account of the authority and expended according to the tax 
        increment financing plan. 
           Subd. 2.  [ELIGIBLE ACTIVITIES.] The authority must 
        identify in the plan the housing activities that will be 
        assisted by the housing development account.  Housing activities 
        may include rehabilitation, acquisition, demolition, and 
        financing of new or existing single family or multifamily 
        housing.  Housing activities listed in the plan need not be 
        located within the district or project area but must be 
        activities that meet the requirements of a qualified housing 
        district under Minnesota Statutes, section 273.1399 or 469.1761, 
        subdivision 2. 
           Subd. 3.  [HOUSING ACCOUNT.] Tax increment to be expended 
        for housing activities under this section must be segregated by 
        the authority into a special account on its official books and 
        records.  The account may also receive funds from other public 
        and private sources. 
           Subd. 4.  [EXEMPTION.] The district established under this 
        section is exempt from the provisions of Minnesota Statutes, 
        section 273.1399. 
           Subd. 5.  [LOCAL APPROVAL.] This section is effective upon 
        approval by the governing body of the city of Brooklyn Center 
        under Minnesota Statutes, section 645.021, subdivision 2. 
           Sec. 15.  [CITY OF MINNEAPOLIS; SEWARD SOUTH URBAN RENEWAL 
        AREA.] 
           The Minneapolis community development agency may establish 
        an economic development tax increment financing district under 
        Minnesota Statutes, sections 469.174 to 469.178, for the 
        retention and expansion of a private educational campus located 
        within a certain area of Seward South urban renewal area which 
        was incorporated into the urban renewal area pursuant to a 
        modification no. 9 which was adopted by the city of Minneapolis 
        as of April 12, 1985.  The district established under this 
        section is not subject to the limitations of Minnesota Statutes, 
        section 469.176, subdivision 4c.  The proceeds of the levy by 
        Hennepin county on captured net tax capacity within the district 
        established under this section will be paid to Hennepin county 
        unless the Hennepin county board approves the implementation of 
        tax increment financing with respect to the county's levy within 
        and for the purposes of the district. 
           Sec. 16.  [CITY OF MINNEAPOLIS; NORTH WASHINGTON INDUSTRIAL 
        PARK REDEVELOPMENT PROJECT.] 
           (a) A hazardous substance subdistrict may be established by 
        the Minneapolis community development agency and the city of 
        Minneapolis within the North Washington industrial park 
        redevelopment project in the city of Minneapolis.  The district 
        would be subject to the provisions of this section. 
           (b) In addition to the uses of tax increment revenues 
        authorized in Minnesota Statutes, section 469.176, subdivision 
        4e, the city of Minneapolis or the Minneapolis community 
        development agency may use tax increment revenues derived from 
        the hazardous substance subdistrict to acquire property within 
        the hazardous substance subdistrict. 
           (c) At any time on or after approval of the tax increment 
        financing plan for the hazardous substance subdistrict, the 
        Minneapolis community development agency may elect to designate 
        any tax increment revenues from the hazardous substance 
        subdistrict to be tax increment revenues generated solely from 
        the hazardous substance subdistrict.  This paragraph does not 
        allow extension of the duration of the redevelopment project 
        under Minnesota Statutes, section 469.176, subdivision 1c, or 
        the use of revenues derived from increment from the project 
        after April 1, 2001, except as provided under Minnesota 
        Statutes, section 469.176, subdivision 1c, and by other general 
        law. 
           (d) A parcel described in the tax increment financing plan 
        or plan amendment may be designated and certified for inclusion 
        in the hazardous substance subdistrict without approval of a 
        development action response plan. 
           (e) Minnesota Statutes, section 273.1399, does not apply to 
        the hazardous substance subdistrict. 
           Sec. 17.  [SOUTH ST. PAUL; TAX INCREMENT FINANCING.] 
           Subdivision 1.  [DISTRICT EXTENSION.] Notwithstanding 
        Minnesota Statutes, section 469.176, subdivision 1c, the housing 
        and redevelopment authority may collect and expend tax increment 
        from the Concord Street redevelopment tax increment financing 
        district, located within the city of South St. Paul, after April 
        1, 2001, for eligible activities within the redevelopment area.  
        The authority under this section expires December 31, 2006. 
           Subd. 2.  [LOCAL APPROVAL.] This section is effective upon 
        compliance by the South St. Paul city council with Minnesota 
        Statutes, section 645.021, subdivision 2. 
           Sec. 18.  [CITY OF DAWSON; TAX INCREMENT FINANCING 
        DISTRICT.] 
           Subdivision 1.  [DISTRICT EXTENSION.] Notwithstanding the 
        provisions of Minnesota Statutes, section 469.176, subdivision 
        1b, and Laws 1991, chapter 291, article 10, sections 22 and 23, 
        the authority may extend the duration of city of Dawson tax 
        increment financing district number four for up to ten years 
        from the effective date of this section.  The duration of 
        district number four may not exceed eight years after the 
        receipt by the authority of the first tax increment.  The 
        authority may waive the receipt of the tax increment for any 
        year. 
           Subd. 2.  [LOCAL APPROVAL.] This section is effective upon 
        compliance by the governing body of the city of Dawson with 
        Minnesota Statutes, section 645.021, subdivision 2. 
           Sec. 19.  [CITY OF FERGUS FALLS; ECONOMIC DEVELOPMENT.] 
           Subdivision 1.  [TAX INCREMENT FINANCING.] The Fergus Falls 
        port authority may establish an economic development tax 
        increment financing district in Industrial Authority Areas I-1 
        and I-2 for industrial and manufacturing projects.  The district 
        is established under and subject to Minnesota Statutes, sections 
        469.174 to 469.178, except: 
           (1) Minnesota Statutes, section 273.1399, does not apply; 
           (2) The city must pay at least ten percent of the project 
        costs from its general fund, property tax levy, or other 
        unrestricted money (other than tax increments); 
           (3) The authority may not establish the tax increment 
        financing district under this section unless the tax increment 
        financing plan is approved by resolution of the governing body 
        of Otter Tail county; 
           (4) The duration limit for the district is 14 years after 
        receipt of the first increment and the authority may elect to 
        waive receipt of the first year of increment. 
           Subd. 2.  [LOCAL APPROVAL.] This section is effective upon 
        compliance by the governing body of the city of Fergus Falls 
        with Minnesota Statutes, section 645.021, subdivision 2. 
           Sec. 20.  [BROOKLYN PARK; ECONOMIC DEVELOPMENT DISTRICT.] 
           Subdivision 1.  [ESTABLISHMENT.] The city of Brooklyn Park 
        may establish an economic development tax increment financing 
        district in which 15 percent of the revenue generated from tax 
        increment in any year is deposited in the housing development 
        account of the authority and expended according to the tax 
        increment financing plan. 
           Subd. 2.  [ELIGIBLE ACTIVITIES.] The authority must 
        identify in the plan the housing activities that will be 
        assisted by the housing development account.  Housing activities 
        may include rehabilitation, acquisition, demolition, and 
        financing of new or existing single family or multifamily 
        housing.  Housing activities listed in the plan need not be 
        located within the district or project area but must be 
        activities that meet the requirements of a qualified housing 
        district under Minnesota Statutes, section 273.1399 or 469.1761, 
        subdivision 2. 
           Subd. 3.  [HOUSING ACCOUNT.] Tax increment to be expended 
        for housing activities under this section must be segregated by 
        the authority into a special account on its official books and 
        records.  The account may also receive funds from other public 
        and private sources. 
           Subd. 4.  [EXEMPTION.] The district established under this 
        act is exempt from the provisions of Minnesota Statutes, section 
        273.1399. 
           Sec. 21.  [CITY OF PARK RAPIDS; ECONOMIC DEVELOPMENT.] 
           Subdivision 1.  [TAX INCREMENT DISTRICT.] The city of Park 
        Rapids may establish an economic development tax increment 
        financing district under and subject to Minnesota Statutes, 
        sections 469.174 to 469.178, except that: 
           (1) Minnesota Statutes, section 273.1399, does not apply to 
        that district; and 
           (2) the city must pay at least five percent of the project 
        costs from its general fund, a property tax levy, or other 
        unrestricted money (other than tax increments). 
           Subd. 2.  [LOCAL APPROVAL.] This section is effective the 
        day after compliance by the governing body of the city of Park 
        Rapids with Minnesota Statutes, section 645.021, subdivision 2. 
           Sec. 22.  [HOPKINS HOUSING IMPROVEMENT AREA; DEFINITIONS.] 
           Subdivision 1.  [APPLICABILITY.] As used in sections 22 to 
        31, the terms defined in this section have the meanings given 
        them. 
           Subd. 2.  [CITY.] "City" means the city of Hopkins. 
           Subd. 3.  [ENABLING ORDINANCE.] "Enabling ordinance" means 
        the ordinance adopted by the city council establishing the 
        housing improvement area. 
           Subd. 4.  [HOUSING IMPROVEMENTS.] "Housing improvements" 
        has the meaning given in the city's enabling ordinance.  Housing 
        improvements may include improvements to common elements of a 
        condominium. 
           Subd. 5.  [HOUSING IMPROVEMENT AREA.] "Housing improvement 
        area" means a defined area within the city where housing 
        improvements are made or constructed and the costs of the 
        improvements are paid in whole or in part from fees imposed 
        within the area. 
           Subd. 6.  [HOUSING UNIT.] "Housing unit" means real 
        property and improvements thereon consisting of a one-dwelling 
        unit, or an apartment as described in Minnesota Statutes, 
        chapter 515 or 515A, that is occupied by a person or family for 
        use as a residence. 
           Sec. 23.  [PETITION REQUIRED.] 
           No action may be taken under sections 24 and 25 unless 
        owners of 25 percent or more of the housing units that would be 
        subject to fees in the proposed housing improvement area file a 
        petition requesting a public hearing on the proposed action with 
        the city clerk.  No action may be taken under section 25 to 
        impose a fee unless owners of 25 percent or more of the housing 
        units subject to the proposed fee file a petition requesting a 
        public hearing on the proposed fee with the city clerk. 
           Sec. 24.  [ESTABLISHMENT OF HOUSING IMPROVEMENT AREA.] 
           Subdivision 1.  [ORDINANCE.] The governing body of the city 
        may adopt an ordinance establishing a housing improvement area.  
        The ordinance must specifically describe the portion of the city 
        to be included in the area, the basis for the imposition of the 
        fees, and the number of years the fee will be in effect.  In 
        addition, the ordinance must include findings that without the 
        housing improvement area, the proposed improvements could not be 
        made by the condominium associations or housing unit owners, and 
        the designation is needed to maintain and preserve the housing 
        units within the housing improvement area.  The ordinance may 
        not be adopted until a public hearing has been held regarding 
        the ordinance.  The ordinance may be amended by the governing 
        body of the city, provided the governing body complies with the 
        public hearing notice provisions of subdivision 2. 
           Subd. 2.  [PUBLIC HEARING.] The notice of public hearing 
        must include the time and place of hearing, a map showing the 
        boundaries of the proposed area, and a statement that all 
        persons owning housing units in the proposed area that would be 
        subject to a fee for housing improvements will be given an 
        opportunity to be heard at the hearing.  Notice of the hearing 
        must be given by publication in the official newspaper of the 
        city.  The public hearing must be held at least seven days after 
        the publication.  Not less than ten days before the hearing, 
        notice must also be mailed to the owner of each housing unit 
        within the proposed area.  For the purpose of giving mailed 
        notice, owners are those shown on the records of the county 
        auditor.  Other records may be used to supply the necessary 
        information.  At the public hearing a person owning property in 
        the proposed housing improvement area may testify on any issues 
        relevant to the proposed area.  The hearing may be adjourned 
        from time to time.  The ordinance establishing the area may be 
        adopted at any time within six months after the date of the 
        conclusion of the hearing by a vote of the majority of the 
        governing body of the city. 
           Subd. 3.  [PROPOSED HOUSING IMPROVEMENTS.] At the public 
        hearing held under subdivision 2, the city shall provide a 
        preliminary listing of the housing improvements to be made in 
        the area.  The listing shall identify those improvements, if 
        any, that are proposed to be made to all or a portion of the 
        common elements of a condominium.  The listing shall also 
        identify those housing units that have completed the proposed 
        housing improvements and are proposed to be exempted from a 
        portion of the fee.  In preparing the list the city shall 
        consult with the residents of the area and the condominium 
        associations. 
           Subd. 4.  [BENEFIT; OBJECTION.] Before the ordinance is 
        adopted or at the hearing at which it is to be adopted, the 
        owner of a housing unit in the proposed housing improvement area 
        may file a written objection with the city clerk asserting that 
        the owner's property should not be included in the area or 
        should not be subjected to a fee and objecting to the inclusion 
        of the housing unit in the area, for the reason that the 
        property would not benefit from the improvements. 
           The governing body shall make a determination of the 
        objection within 60 days of its filing.  Pending its 
        determination, the governing body may delay adoption of the 
        ordinance or it may adopt the ordinance with a reservation that 
        the landowner's property may be excluded from the housing 
        improvement area or fee when the determination is made. 
           Subd. 5.  [APPEAL TO DISTRICT COURT.] Within 30 days after 
        the determination of the objection, any person aggrieved, who is 
        not precluded by failure to object before or at the hearing, or 
        whose failure to object is due to a reasonable cause, may appeal 
        to the district court by serving a notice upon the mayor or city 
        clerk.  The notice shall be filed with the court administrator 
        of the district court within ten days after its service.  The 
        city clerk shall furnish the appellant a certified copy of the 
        findings and determination of the governing body.  The court may 
        affirm the action objected to or, if the appellant's objections 
        have merit, modify or cancel it.  If the appellant does not 
        prevail upon the appeal, the costs incurred are taxed to the 
        appellant by the court and judgment entered for them.  All 
        objections are deemed waived unless presented on appeal. 
           Sec. 25.  [IMPROVEMENT FEES AUTHORITY; NOTICE AND HEARING.] 
           Subdivision 1.  [AUTHORITY.] Fees may be imposed by the 
        city on the housing units within the housing improvement area at 
        a rate, term, or amount sufficient to produce revenue required 
        to provide housing improvements in the area.  The fee can be 
        imposed on the basis of the tax capacity of the housing unit, or 
        the total amount of square footage of the housing unit, or a 
        method determined by the council and specified in the resolution.
        Before the imposition of the fees, a hearing must be held and 
        notice must be published in the official newspaper at least 
        seven days before the hearing and shall be mailed at least seven 
        days before the hearing to any housing unit owner subject to a 
        fee.  For purposes of this section, the notice must also include:
           (1) a statement that all interested persons will be given 
        an opportunity to be heard at the hearing regarding a proposed 
        housing improvement fee; 
           (2) the estimated cost of improvements including 
        administrative costs to be paid for in whole or in part by the 
        fee imposed under the ordinance; 
           (3) the amount to be charged against the particular 
        property; 
           (4) the right of the property owner to prepay the entire 
        fee; 
           (5) the number of years the fee will be in effect; and 
           (6) a statement that the petition requirements of section 
        23 have either been met or do not apply to the proposed fee; 
           Within six months of the public hearing, the city may adopt 
        a resolution imposing a fee within the area not exceeding the 
        amount expressed in the notice issued under this section. 
           Prior to adoption of the resolution approving the fee, the 
        condominium associations located in the housing improvement area 
        shall submit to the city a financial plan prepared by an 
        independent third party, acceptable to the city and 
        associations, that provides for the associations to finance 
        maintenance and operation of the common elements in the 
        condominium and a long-range plan to conduct and finance capital 
        improvements. 
           Subd. 2.  [LEVY LIMIT.] Fees imposed under this section are 
        not included in the calculation of levies or limits on levies 
        imposed under any law or charter. 
           Sec. 26.  [COLLECTION OF FEES.] 
           The city may provide for the collection of the housing 
        improvement fees according to the terms of Minnesota Statutes, 
        section 428A.05. 
           Sec. 27.  [BONDS.] 
           At any time after a contract for the construction of all or 
        part of an improvement authorized under sections 22 to 31 has 
        been entered into or the work has been ordered, the governing 
        body of the city may issue obligations in the amount it deems 
        necessary to defray in whole or in part the expense incurred and 
        estimated to be incurred in making the improvement, including 
        every item of cost from inception to completion and all fees and 
        expenses incurred in connection with the improvement or the 
        financing. 
           The obligations are payable primarily out of the proceeds 
        of the fees imposed under section 25, or from any other special 
        assessments or revenues available to be pledged for their 
        payment under charter or statutory authority, or from two or 
        more of those sources.  The governing body may, by resolution 
        adopted prior to the sale of obligations, pledge the full faith, 
        credit, and taxing power of the city to assure payment of the 
        principal and interest if the proceeds of the fees in the area 
        are insufficient to pay the principal and interest.  The 
        obligations must be issued in accordance with Minnesota 
        Statutes, chapter 475, except that an election is not required, 
        and the amount of the obligations are not included in 
        determination of the net debt of the city under the provisions 
        of any law or charter limiting debt. 
           Sec. 28.  [ADVISORY BOARD.] 
           The governing body of the city may create and appoint an 
        advisory board for the housing improvement area in the city to 
        advise the governing body in connection with the planning and 
        construction of housing improvements.  In appointing the board, 
        the council shall consider for membership, members of 
        condominium associations located in the housing improvement 
        area.  The advisory board shall make recommendations to the 
        governing body to provide improvements or impose fees within the 
        housing improvement area.  Before the adoption of a proposal by 
        the governing body to provide improvements within the housing 
        improvement area, the advisory board of the housing improvement 
        area shall have an opportunity to review and comment upon the 
        proposal. 
           Sec. 29.  [VETO POWERS OF OWNERS.] 
           Subdivision 1.  [NOTICE OF RIGHT TO FILE OBJECTIONS.] The 
        effective date of any ordinance or resolution adopted under 
        sections 24 and 25 must be at least 45 days after it is adopted. 
        Within five days after adoption of the ordinance or resolution, 
        a summary of the ordinance or resolution shall be mailed to the 
        owner of each housing unit included in the housing improvement 
        area.  The mailing shall include a notice that owners subject to 
        a fee have a right to veto the ordinance or resolution by filing 
        the required number of objections with the city clerk before the 
        effective date of the ordinance or resolution and that a copy of 
        the ordinance or resolution is on file with the city clerk for 
        public inspection. 
           Subd. 2.  [REQUIREMENTS FOR VETO.] If owners of 35 percent 
        or more of the housing units in the area subject to the fee file 
        an objection to the ordinance adopted by the city under section 
        24 with the city clerk before the effective date of the 
        ordinance, the ordinance does not become effective.  If owners 
        of 35 percent or more of the housing units' tax capacity subject 
        to the fee under section 25 file an objection with the city 
        clerk before the effective date of the resolution, the 
        resolution does not become effective. 
           Sec. 30.  [ANNUAL REPORTS.] 
           Each condominium association located within the housing 
        improvement area must, by August 15 annually, submit a copy of 
        its audited financial statements to the city.  The city may 
        also, as part of the enabling ordinance, require the submission 
        of other relevant information from the associations. 
           Sec. 31.  [SPECIAL ASSESSMENTS.] 
           Within a housing improvement area, the governing body of 
        the city may, in addition to the fee authorized in section 25, 
        special assess housing improvements to benefited property.  The 
        governing body of the city may by ordinance adopt regulations 
        consistent with this section. 
           Sec. 32.  [RED WING TAX INCREMENT DISTRICT.] 
           Notwithstanding any restrictions otherwise applicable 
        pursuant to Minnesota Statutes, section 469.176, subdivision 1c, 
        the duration of the two city tax increment financing districts 
        within Development Districts I and II, located within the city 
        of Red Wing, may be extended by resolution of the Red Wing City 
        Council to August 1, 2009. 
           Sec. 33.  [LOCAL APPROVAL.] 
           Section 3 is effective the day after the governing body of 
        the city of Mankato complies with section 645.021, subdivision 3.
                                   ARTICLE 10
                     CROSS LAKE AREA WATER AND SEWER BOARD
           Section 1.  [DEFINITIONS.] 
           Subdivision 1.  For the purposes of this article, the terms 
        defined in this section have the meanings given them. 
           Subd. 2.  "Cross Lake area water and sanitary sewer 
        district" and "district" mean the area over which the Cross Lake 
        area water and sanitary sewer board has jurisdiction, including 
        the towns of Pokegama and Chengwatana and Pine City in Pine 
        county, but only that part within 1,000 feet of the high 
        waterline of Cross Lake in those townships. 
           Subd. 3.  "Water and sanitary sewer board" or "board" means 
        the Cross Lake area water and sanitary sewer board established 
        for the district as provided in subdivision 2. 
           Subd. 4.  "Person" means an individual, partnership, 
        corporation, limited liability company, cooperative, or other 
        organization or entity, public or private. 
           Subd. 5.  "Local governmental unit" or "governmental unit" 
        means the towns of Pokegama, Chengwatana, and Pine City. 
           Subd. 6.  "Acquisition" and "betterment" have the meanings 
        given in Minnesota Statutes, chapter 475. 
           Subd. 7.  "Agency" means the Minnesota pollution control 
        agency created in Minnesota Statutes, chapter 116. 
           Subd. 8.  "Sewage" means all liquid or water-carried waste 
        products from whatever sources derived, together with any 
        groundwater infiltration and surface water as may be present. 
           Subd. 9.  "Pollution of water" and "sewer system" have the 
        meanings given in Minnesota Statutes, section 115.01. 
           Subd. 10.  "Treatment works" and "disposal system" have the 
        meanings given in Minnesota Statutes, section 115.01. 
           Subd. 11.  "Interceptor" means a sewer and its necessary 
        appurtenances, including but not limited to mains, pumping 
        stations, and sewage flow-regulating and -measuring stations, 
        that is: 
           (1) designed for or used to conduct sewage originating in 
        more than one local governmental unit; 
           (2) designed or used to conduct all or substantially all 
        the sewage originating in a single local governmental unit from 
        a point of collection in that unit to an interceptor or 
        treatment works outside that unit; or 
           (3) determined by the board to be a major collector of 
        sewage used or designed to serve a substantial area in the 
        district. 
           Subd. 12.  "District disposal system" means any and all 
        interceptors or treatment works owned, constructed, or operated 
        by the board unless designated by the board as local water and 
        sanitary sewer facilities. 
           Subd. 13.  "Municipality" means any home rule charter or 
        statutory city or town. 
           Subd. 14.  "Total costs of acquisition and betterment" and 
        "costs of acquisition and betterment" mean all acquisition and 
        betterment expenses permitted to be financed out of stopped bond 
        proceeds issued in accordance with section 13, whether or not 
        the expenses are in fact financed out of the bond proceeds. 
           Subd. 15.  "Current costs of acquisition, betterment, and 
        debt service" means interest and principal estimated to be due 
        during the budget year on bonds issued to finance said 
        acquisition and betterment and all other costs of acquisition 
        and betterment estimated to be paid during the year from funds 
        other than bond proceeds and federal or state grants. 
           Subd. 16.  [RESIDENT.] "Resident" means the owner of a 
        dwelling located in the district and receiving water or sewer 
        service. 
           Sec. 2.  [WATER AND SANITARY SEWER BOARD.] 
           Subdivision 1.  [ESTABLISHMENT.] A water and sewer district 
        is established for the towns of Pokegama, Chengwatana, and Pine 
        City in Pine county, to be known as the Cross Lake area water 
        and sanitary sewer district.  The water and sewer district is 
        under the control and management of the Cross Lake area water 
        and sanitary sewer board.  The board is established as a public 
        corporation and political subdivision of the state with 
        perpetual succession and all the rights, powers, privileges, 
        immunities, and duties that may be validly granted to or imposed 
        upon a municipal corporation, as provided in this article. 
           Subd. 2.  [MEMBERS AND SELECTION.] The board is composed of 
        seven members selected as follows:  the town boards of the 
        governmental units each shall meet to appoint two members of the 
        water and sanitary sewer board and each board member has one 
        vote.  One member must be selected by the city of Pine City.  
        The first terms must be as follows:  two for one year, two for 
        two years, and three for three years, fixed by lot at the 
        district's first meeting.  Thereafter, all terms are for three 
        years. 
           Subd. 3.  [TIME LIMITS FOR SELECTION.] The board members 
        must be selected as provided in subdivision 2 within 60 days 
        after this article becomes effective.  The successor to each 
        board member must be selected at any time within 60 days before 
        the expiration of the member's term in the same manner as the 
        predecessor was selected.  A vacancy on the board must be filled 
        within 60 days after it occurs. 
           Subd. 4.  [VACANCIES.] If the office of a board member 
        becomes vacant, the vacancy must be filled for the unexpired 
        term in the manner provided for selection of the member who 
        vacated the office.  The office is deemed vacant under the 
        conditions specified in Minnesota Statutes, section 351.02. 
           Subd. 5.  [REMOVAL.] A board member may be removed by the 
        unanimous vote of the governing body appointing the member, with 
        or without cause, or for malfeasance or nonfeasance in the 
        performance of official duties as provided by Minnesota 
        Statutes, sections 351.14 to 351.23. 
           Subd. 6.  [QUALIFICATIONS.] One board member representing a 
        town must be a resident of the district and the other member 
        representing that town must be a resident of the township, and 
        each may, but need not be, an elected public official. 
           Subd. 7.  [CERTIFICATES OF SELECTION; OATH OF OFFICE.] A 
        certificate of selection of every board member selected under 
        subdivision 2 stating the term for which selected, must be made 
        by the respective town clerks.  The certificates, with the 
        approval appended by other authority, if required, must be filed 
        with the secretary of state.  Counterparts thereof must be 
        furnished to the board member and the secretary of the board.  
        Each member shall qualify by taking and subscribing the oath of 
        office prescribed by the Minnesota Constitution, article 5, 
        section 8.  The oath, duly certified by the official 
        administering the same, must be filed with the secretary of 
        state and the secretary of the board. 
           Subd. 8.  [BOARD MEMBERS' COMPENSATION.] Each board member, 
        except the chair, must be paid a per diem compensation of $35 
        for meetings and for other services as are specifically 
        authorized by the board, not to exceed $1,000 in any one year.  
        The chair must be paid a per diem compensation of $45 for 
        meetings and for other services specifically authorized by the 
        board, not to exceed $1,500 in any one year.  All members of the 
        board must be reimbursed for all reasonable and necessary 
        expenses actually incurred in the performance of duties. 
           Sec. 3.  [GENERAL PROVISIONS FOR ORGANIZATION AND OPERATION 
        OF BOARD.] 
           Subdivision 1.  [ORGANIZATION; OFFICERS; MEETINGS; 
        SEAL.] After the selection and qualification of all board 
        members, they shall meet to organize the board at the call of 
        any two board members, upon seven days' notice by registered 
        mail to the remaining board members, at a time and place within 
        the district specified in the notice.  A majority of the members 
        shall constitute a quorum at that meeting and all other meetings 
        of the board, but a lesser number may meet and adjourn from time 
        to time and compel the attendance of absent members.  At the 
        first meeting the board shall select its officers and conduct 
        other organizational business as may be necessary.  Thereafter 
        the board shall meet regularly at the time and place that the 
        board designates by resolution.  Special meetings may be held at 
        any time upon call of the chair or any two members, upon written 
        notice sent by mail to each member at least three days before 
        the meeting, or upon other notice as the board by resolution may 
        provide, or without notice if each member is present or files 
        with the secretary a written consent to the meeting either 
        before or after the meeting.  Except as otherwise provided in 
        this article, any action within the authority of the board may 
        be taken by the affirmative vote of a majority of the board and 
        may be taken by regular or adjourned regular meeting or at a 
        duly held special meeting, but in any case only if a quorum is 
        present.  Meetings of the board must be open to the public.  The 
        board may adopt a seal, which must be officially and judicially 
        noticed, to authenticate instruments executed by its authority, 
        but omission of the seal does not affect the validity of any 
        instrument. 
           Subd. 2.  [CHAIR.] The board shall elect a chair from its 
        membership.  The term of the first chair of the board shall 
        expire on January 1, 1996, and the terms of successor chairs 
        expire on January 1 of each succeeding year.  The chair shall 
        preside at all meetings of the board, if present, and shall 
        perform all other duties and functions usually incumbent upon 
        such an officer, and all administrative functions assigned to 
        the chair by the board.  The board shall elect a vice-chair from 
        its membership to act for the chair during temporary absence or 
        disability. 
           Subd. 3.  [SECRETARY AND TREASURER.] The board shall select 
        a person or persons who may, but need not be, a member or 
        members of the board, to act as its secretary and treasurer.  
        The secretary and treasurer shall hold office at the pleasure of 
        the board, subject to the terms of any contract of employment 
        that the board may enter into with the secretary or treasurer.  
        The secretary shall record the minutes of all meetings of the 
        board, and be the custodian of all books and records of the 
        board except those that the board entrusts to the custody of a 
        designated employee.  The treasurer is the custodian of all 
        money received by the board except as the board otherwise 
        entrusts to the custody of a designated employee.  The board may 
        appoint a deputy to perform any and all functions of either the 
        secretary or the treasurer.  No secretary or treasurer who is 
        not a member of the board or a deputy of either shall have any 
        right to vote. 
           Subd. 4.  [EXECUTIVE DIRECTOR.] The board shall appoint an 
        executive director, selected solely upon the basis of training, 
        experience, and other qualifications and who shall serve at the 
        pleasure of the board and at a compensation to be determined by 
        the board.  The executive director need not be a resident of the 
        district.  The executive director may also be selected by the 
        board to serve as either secretary or treasurer, or both, of the 
        board.  The executive director shall attend all meetings of the 
        board, but shall not vote, and shall have the following powers 
        and duties: 
           (1) to see that all resolutions, rules, regulations, or 
        orders of the board are enforced; 
           (2) to appoint and remove, upon the basis of merit and 
        fitness, all subordinate officers and regular employees of the 
        board except the secretary and the treasurer and their deputies; 
           (3) to present to the board plans, studies, and other 
        reports prepared for board purposes and recommend to the board 
        for adoption the measures the executive director deems necessary 
        to enforce or carry out the powers and the duties of the board, 
        or the efficient administration of the affairs of the board; 
           (4) to keep the board fully advised as to its financial 
        condition, and to prepare and submit to the board and to the 
        governing bodies of the local governmental units, the board's 
        annual budget and other financial information the board may 
        request; 
           (5) to recommend to the board for adoption rules and 
        regulations the executive director deems necessary for the 
        efficient operation of the district disposal system; and 
           (6) to perform other duties prescribed by the board. 
           Subd. 5.  [PUBLIC EMPLOYEES.] The executive director and 
        other persons employed by the district are public employees and 
        have all the rights and duties conferred on public employees 
        under Minnesota Statutes, sections 179A.01 to 179A.25.  The 
        board may elect to have employees become members of either the 
        public employees retirement association or the Minnesota state 
        retirement system.  The compensation and conditions of 
        employment of the employees must be governed by rules applicable 
        to state employees in the classified service and to the 
        provisions of Minnesota Statutes, chapter 15A. 
           Subd. 6.  [PROCEDURES.] The board shall adopt resolutions 
        or bylaws establishing procedures for board action, personnel 
        administration, keeping records, approving claims, authorizing 
        or making disbursements, safekeeping funds, and auditing all 
        financial operations of the board. 
           Subd. 7.  [SURETY BONDS AND INSURANCE.] The board may 
        procure surety bonds for its officers and employees, in amounts 
        deemed necessary to ensure proper performance of their duties 
        and proper accounting for funds in their custody.  It may 
        procure insurance against risks to property and liability of the 
        board and its officers, agents, and employees for personal 
        injuries or death and property damage and destruction, in 
        amounts deemed necessary or desirable, with the force and effect 
        stated in Minnesota Statutes, chapter 466. 
           Sec. 4.  [GENERAL POWERS OF BOARD.] 
           Subdivision 1.  [SCOPE.] The board has all powers necessary 
        or convenient to discharge the duties imposed upon it by law.  
        The powers include those specified in this section, but the 
        express grant or enumeration of powers does not limit the 
        generality or scope of the grant of powers contained in this 
        subdivision. 
           Subd. 2.  [SUIT.] The board may sue or be sued. 
           Subd. 3.  [CONTRACT.] The board may enter into any contract 
        necessary or proper for the exercise of its powers or the 
        accomplishment of its purposes. 
           Subd. 4.  [RULEMAKING.] The board may adopt rules relating 
        to its responsibilities and may provide penalties for their 
        violation, not exceeding the maximum that may be specified for a 
        misdemeanor, and the cost of prosecution may be added to the 
        penalties imposed.  Any rule prescribing a penalty for violation 
        must be published at least once in a newspaper having general 
        circulation in the district.  The violations may be prosecuted 
        before any court in the district having jurisdiction of 
        misdemeanors, and every court having misdemeanor jurisdiction 
        has jurisdiction of the violations.  Any constable or other 
        peace officer of any governmental unit in the district may make 
        arrests for violations committed anywhere in the district in 
        like manner and with like effect as for violations of city 
        ordinances or for statutory misdemeanors.  Fines collected in 
        cases arising under this subdivision must be deposited in the 
        treasury of the board, or may be allocated between the board and 
        the governmental unit in which the prosecution occurs on a basis 
        as the board and the governmental unit agree. 
           Subd. 5.  [GIFTS, GRANTS, LOANS.] The board may accept 
        gifts, apply for and accept grants or loans of money or other 
        property from the United States, the state, or any person for 
        any of its purposes, enter into any agreement required in 
        connection with them, and hold, use, and dispose of the money or 
        property in accordance with the terms of the gift, grant, loan, 
        or agreement relating to it.  With respect to loans or grants of 
        funds or real or personal property or other assistance from any 
        state or federal government or its agency or instrumentality, 
        the board may contract to do and perform all acts and things 
        required as a condition or consideration for the gift, grant, or 
        loan pursuant to state or federal law or regulations, whether or 
        not included among the powers expressly granted to the board in 
        this article. 
           Subd. 6.  [COOPERATIVE ACTION.] The board may act under 
        Minnesota Statutes, section 471.59, or any other appropriate law 
        providing for joint or cooperative action between governmental 
        units. 
           Subd. 7.  [STUDIES AND INVESTIGATIONS.] The board may 
        conduct research studies and programs, collect and analyze data, 
        prepare reports, maps, charts, and tables, and conduct all 
        necessary hearings and investigations in connection with the 
        design, construction, and operation of the district disposal 
        system. 
           Subd. 8.  [EMPLOYEES, TERMS.] The board may employ on terms 
        it deems advisable, persons or firms performing engineering, 
        legal, or other services of a professional nature; require any 
        employee to obtain and file with it an individual bond or 
        fidelity insurance policy; and procure insurance in amounts it 
        deems necessary against liability of the board or its officers 
        or both, for personal injury or death and property damage or 
        destruction, with the force and effect stated in Minnesota 
        Statutes, chapter 466, and against risks of damage to or 
        destruction of any of its facilities, equipment, or other 
        property as it deems necessary. 
           Subd. 9.  [PROPERTY RIGHTS, POWERS.] The board may acquire 
        by purchase, lease, condemnation, gift, or grant, any real or 
        personal property including positive and negative easements and 
        water and air rights, and it may construct, enlarge, improve, 
        replace, repair, maintain, and operate any interceptor, 
        treatment works, or water facility determined to be necessary or 
        convenient for the collection and disposal of sewage in the 
        district.  Any local governmental unit and the commissioners of 
        transportation and natural resources are authorized to convey to 
        or permit the use of any of the above-mentioned facilities owned 
        or controlled by it, by the board, subject to the rights of the 
        holders of any bonds issued with respect to those facilities, 
        with or without compensation, without an election or approval by 
        any other governmental unit or agency.  All powers conferred by 
        this subdivision may be exercised both within or without the 
        district as may be necessary for the exercise by the board of 
        its powers or the accomplishment of its purposes.  The board may 
        hold, lease, convey, or otherwise dispose of the above-mentioned 
        property for its purposes upon the terms and in the manner it 
        deems advisable.  Unless otherwise provided, the right to 
        acquire lands and property rights by condemnation may be 
        exercised only in accordance with Minnesota Statutes, sections 
        117.011 to 117.232, and shall apply to any property or interest 
        in the property owned by any local governmental unit.  No 
        property devoted to an actual public use at the time, or held to 
        be devoted to such a use within a reasonable time, shall be so 
        acquired unless a court of competent jurisdiction determines 
        that the use proposed by the board is paramount to the existing 
        use.  Except in the case of property in actual public use, the 
        board may take possession of any property on which condemnation 
        proceedings have been commenced at any time after the issuance 
        of a court order appointing commissioners for its condemnation. 
           Subd. 10.  [RELATIONSHIP TO OTHER PROPERTIES.] The board 
        may construct or maintain its systems or facilities in, along, 
        on, under, over, or through public waters, streets, bridges, 
        viaducts, and other public rights-of-way without first obtaining 
        a franchise from a county or municipality having jurisdiction 
        over them.  However, the facilities must be constructed and 
        maintained in accordance with the ordinances and resolutions of 
        the county or municipality relating to constructing, installing, 
        and maintaining similar facilities on public properties and must 
        not unnecessarily obstruct the public use of those rights-of-way.
           Subd. 11.  [DISPOSAL OF PROPERTY.] The board may sell, 
        lease, or otherwise dispose of any real or personal property 
        acquired by it which is no longer required for accomplishment of 
        its purposes.  The property may be sold in the manner provided 
        by Minnesota Statutes, section 469.065, insofar as practical.  
        The board may give notice of sale as it deems appropriate.  When 
        the board determines that any property or any part of the 
        district disposal system acquired from a local governmental unit 
        without compensation is no longer required but is required as a 
        local facility by the governmental unit from which it was 
        acquired, the board may by resolution transfer it to that 
        governmental unit. 
           Subd. 12.  [AGREEMENTS WITH OTHER GOVERNMENTAL UNITS.] The 
        board may contract with the United States or any agency thereof, 
        any state or agency thereof, or any regional public planning 
        body in the state with jurisdiction over any part of the 
        district, or any other municipal or public corporation, or 
        governmental subdivision or agency or political subdivision in 
        any state, for the joint use of any facility owned by the board 
        or such entity, for the operation by that entity of any system 
        or facility of the board, or for the performance on the board's 
        behalf of any service, including but not limited to planning, on 
        terms as may be agreed upon by the contracting parties.  Unless 
        designated by the board as a local water and sanitary sewer 
        facility, any treatment works or interceptor jointly used, or 
        operated on behalf of the board, as provided in this 
        subdivision, is deemed to be operated by the board for purposes 
        of including those facilities in the district disposal system. 
           Sec. 5.  [COMPREHENSIVE PLAN.] 
           Subdivision 1.  [BOARD PLAN AND PROGRAM.] The board shall 
        adopt a comprehensive plan for the collection, treatment, and 
        disposal of sewage in the district for a designated period the 
        board deems proper and reasonable.  The board shall prepare and 
        adopt subsequent comprehensive plans for the collection, 
        treatment, and disposal of sewage in the district for each 
        succeeding designated period as the board deems proper and 
        reasonable.  The first plan, as modified by the board, and any 
        subsequent plan shall take into account the preservation and 
        best and most economic use of water and other natural resources 
        in the area; the preservation, use, and potential for use of 
        lands adjoining waters of the state to be used for the disposal 
        of sewage; and the impact the disposal system will have on 
        present and future land use in the area affected.  The plans 
        shall include the general location of needed interceptors and 
        treatment works, a description of the area that is to be served 
        by the various interceptors and treatment works, a long-range 
        capital improvements program, and any other details as the board 
        deems appropriate.  In developing the plans, the board shall 
        consult with persons designated for the purpose by governing 
        bodies of any governmental unit within the district to represent 
        the entities and shall consider the data, resources, and input 
        offered to the board by the entities and any planning agency 
        acting on behalf of one or more of the entities.  Each plan, 
        when adopted, must be followed in the district and may be 
        revised as often as the board deems necessary. 
           Subd. 2.  [COMPREHENSIVE PLANS; HEARING.] Before adopting 
        any subsequent comprehensive plan, the board shall hold a public 
        hearing on the proposed plan at a time and place in the district 
        that it selects.  The hearing may be continued from time to 
        time.  Not less than 45 days before the hearing, the board shall 
        publish notice of the hearing in a newspaper having general 
        circulation in the district, stating the date, time, and place 
        of the hearing, and the place where the proposed plan may be 
        examined by any interested person.  At the hearing, all 
        interested persons must be permitted to present their views on 
        the plan. 
           Subd. 3.  [GOVERNMENTAL UNIT PLANS AND PROGRAMS; 
        COORDINATION WITH BOARD'S RESPONSIBILITIES.] Once the board's 
        plan is adopted, no construction project involving the 
        construction of new sewers or other disposal facilities may be 
        undertaken by the local governmental unit unless its governing 
        body shall first find the project to be in accordance with the 
        governmental unit's comprehensive plan and program as approved 
        by the board.  Before approval by the board of the comprehensive 
        plan and program of any local governmental unit in the district, 
        no water and sanitary sewer construction project may be 
        undertaken by the governmental unit unless approval of the 
        project is first secured from the board as to those features of 
        the project affecting the board's responsibilities as determined 
        by the board. 
           Sec. 6.  [POWERS TO ISSUE OBLIGATIONS AND IMPOSE SPECIAL 
        ASSESSMENTS.] 
           The Cross Lake area water and sanitary sewer board, in 
        order to implement the powers granted under this article to 
        establish, maintain, and administer the Cross Lake area water 
        and sanitary sewer district, may issue obligations and impose 
        special assessments against benefited property within the limits 
        of the district benefited by facilities constructed under this 
        article in the manner provided for local governments by 
        Minnesota Statutes, chapter 429. 
           Sec. 7.  [SYSTEM EXPANSION; APPLICATION TO CITIES.] 
           The authority of the water and sanitary sewer board to 
        establish water or sewer or combined water and sewer systems 
        under this section extends to areas within the Cross Lake area 
        water and sanitary sewer district organized into cities when 
        requested by resolution of the governing body of the affected 
        city or when ordered by the Minnesota pollution control agency 
        after notice and hearing.  For the purpose of any petition filed 
        or special assessment levied with respect to any system, the 
        entire area to be served within a city must be treated as if it 
        were owned by a single person, and the governing body shall 
        exercise all the rights and be subject to all the duties of an 
        owner of the area, and shall have power to provide for the 
        payment of all special assessments and other charges imposed 
        upon the area with respect to the system by the appropriation of 
        money, the collection of service charges, or the levy of taxes, 
        which shall be subject to no limitation of rate or amount. 
           Sec. 8.  [SEWAGE COLLECTION AND DISPOSAL; POWERS.] 
           Subdivision 1.  [POWERS.] In addition to all other powers 
        conferred upon the board in this article, it has the powers 
        specified in this section. 
           Subd. 2.  [DISCHARGE OF TREATED SEWAGE.] The board may 
        discharge the effluent from any treatment works operated by it 
        into any waters of the state, subject to approval of the agency 
        if required and in accordance with any effluent or water quality 
        standards lawfully adopted by the agency, any interstate agency, 
        or any federal agency having jurisdiction. 
           Subd. 3.  [UTILIZATION OF DISTRICT SYSTEM.] The board may 
        require any person or local governmental unit to provide for the 
        discharge of any sewage, directly or indirectly, into the 
        district disposal system, or to connect any disposal system or a 
        part of it with the district disposal system wherever reasonable 
        opportunity for connection is provided; may regulate the manner 
        in which the connections are made; may require any person or 
        local governmental unit discharging sewage into the disposal 
        system to provide preliminary treatment for it; may prohibit the 
        discharge into the district disposal system of any substance 
        that it determines will or may be harmful to the system or any 
        persons operating it; and may require any local governmental 
        unit to discontinue the acquisition, betterment, or operation of 
        any facility for the unit's disposal system wherever and so far 
        as adequate service is or will be provided by the district 
        disposal system. 
           Subd. 4.  [SYSTEM OF COST RECOVERY TO COMPLY WITH 
        APPLICABLE REGULATIONS.] Any charges, connection fees, or other 
        cost-recovery techniques imposed on persons discharging sewage 
        directly or indirectly into the district disposal system must 
        comply with applicable state and federal law, including state 
        and federal regulations governing grant applications. 
           Sec. 9.  [BUDGET.] 
           The board shall prepare and adopt, on or before October 1 
        in 1995 and each year thereafter, a budget showing for the 
        following calendar year or other fiscal year determined by the 
        board, sometimes referred to in this article as the budget year, 
        estimated receipts of money from all sources, including but not 
        limited to payments by each local governmental unit, federal or 
        state grants, taxes on property, and funds on hand at the 
        beginning of the year, and estimated expenditures for: 
           (1) costs of operation, administration, and maintenance of 
        the district disposal system; 
           (2) cost of acquisition and betterment of the district 
        disposal system; and 
           (3) debt service, including principal and interest, on 
        general obligation bonds and certificates issued pursuant to 
        section 13, and any money judgments entered by a court of 
        competent jurisdiction.  Expenditures within these general 
        categories, and any other categories as the board may from time 
        to time determine, must be itemized in detail as the board 
        prescribes.  The board and its officers, agents, and employees 
        shall not spend money for any purpose other than debt service 
        without having set forth the expense in the budget nor in excess 
        of the amount set forth in the budget for it.  No obligation to 
        make an expenditure of the above-mentioned type is enforceable 
        except as the obligation of the person or persons incurring it.  
        The board may amend the budget at any time by transferring from 
        one purpose to another any sums except money for debt service 
        and bond proceeds or by increasing expenditures in any amount by 
        which actual cash receipts during the budget year exceed the 
        total amounts designated in the original budget.  The creation 
        of any obligation under section 13 or the receipt of any federal 
        or state grant is a sufficient budget designation of the 
        proceeds for the purpose for which it is authorized, and of the 
        tax or other revenue pledged to pay the obligation and interest 
        on it, whether or not specifically included in any annual budget.
           Sec. 10.  [ALLOCATION OF COSTS.] 
           Subdivision 1.  [DEFINITION OF CURRENT COSTS.] The 
        estimated cost of administration, operation, maintenance, and 
        debt service of the district disposal system to be paid by the 
        board in each fiscal year and the estimated costs of acquisition 
        and betterment of the system that are to be paid during the year 
        from funds other than state or federal grants and bond proceeds 
        and all other previously unallocated payments made by the board 
        pursuant to this article to be allocated in the fiscal year are 
        referred to as current costs and must be allocated by the board 
        as provided in subdivision 2 in the budget for that year. 
           Subd. 2.  [METHOD OF ALLOCATION OF CURRENT COSTS.] Current 
        costs must be allocated in the district on an equitable basis as 
        the board may determine by resolution to be in the best 
        interests of the district.  The adoption or revision of any 
        method of allocation used by the board must be by the 
        affirmative vote of at least two-thirds of the members of the 
        board. 
           Sec. 11.  [TAX LEVIES.] 
           To accomplish any duty imposed on it the board may, in 
        addition to the powers granted in this article and in any other 
        law or charter, exercise the powers granted any municipality by 
        Minnesota Statutes, chapters 117, 412, 429, 475, sections 
        115.46, 444.075, and 471.59, with respect to the area in the 
        district.  The board may levy taxes upon all taxable property in 
        the district for all or a part of the amount payable to the 
        board, pursuant to section 10, to be assessed and extended as a 
        tax upon that taxable property by the county auditor for the 
        next calendar year, free from any limitation of rate or amount 
        imposed by law or charter.  The tax must be collected and 
        remitted in the same manner as other general taxes. 
           Sec. 12.  [PUBLIC HEARING AND SPECIAL ASSESSMENTS.] 
           Subdivision 1.  [PUBLIC HEARING REQUIREMENT ON SPECIFIC 
        PROJECT.] Before the board orders any project involving the 
        acquisition or betterment of any interceptor or treatment works, 
        all or a part of the cost of which will be allocated pursuant to 
        section 10 as current costs, the board shall hold a public 
        hearing on the proposed project.  The hearing must be held 
        following two publications in a newspaper having general 
        circulation in the district, stating the time and place of the 
        hearing, the general nature and location of the project, the 
        estimated total cost of acquisition and betterment, that portion 
        of costs estimated to be paid out of federal and state grants, 
        and that portion of costs estimated to be allocated.  The 
        estimates must be best available at the time of the meeting and 
        if costs exceed the estimate, the project cannot proceed until 
        an additional public hearing is held, with notice as required at 
        the initial meeting.  The two publications must be a week apart 
        and the hearing at least three days after the last publication.  
        Not less than 45 days before the hearing, notice of the hearing 
        must also be mailed to each clerk of all local governmental 
        units in the district, but failure to give mailed notice or any 
        defects in the notice does not invalidate the proceedings.  The 
        project may include all or part of one or more interceptors or 
        treatment works.  No hearing may be held on any project unless 
        the project is within the area covered by the comprehensive plan 
        adopted by the board pursuant to section 5 except that the 
        hearing may be held simultaneously with a hearing on a 
        comprehensive plan.  A hearing is not required with respect to a 
        project, no part of the costs of which are to be allocated as 
        the current costs of acquisition, betterment, and debt service. 
           Subd. 2.  [NOTICE TO BENEFITED PROPERTY OWNERS.] If the 
        board proposes to assess against benefited property within the 
        district all or any part of the allocable costs of the project 
        as provided in subdivision 5, the board shall, not less than ten 
        days before the hearing provided for in subdivision 1, cause 
        mailed notice of the hearing to be given to the owner of each 
        parcel within the area proposed to be specially assessed and 
        shall also give one week's published notice of the hearing.  The 
        notice of hearing must contain the same information provided in 
        the notice published by the board pursuant to subdivision 1, and 
        a description of the area proposed to be assessed.  For the 
        purpose of giving mailed notice, owners are those shown to be 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.  For properties that are tax exempt or subject 
        to taxation on a gross earnings basis and not listed on the 
        records of the county auditor or the county treasurer, the 
        owners must be ascertained by any practicable means and mailed 
        notice given them as herein provided.  Failure to give mailed 
        notice or any defects in the notice does not invalidate the 
        proceedings of the board. 
           Subd. 3.  [BOARD PROCEEDINGS PERTAINING TO HEARING.] Before 
        adoption of the resolution calling for a hearing under this 
        section, the board shall secure from the district engineer or 
        some other competent person of the board's selection a report 
        advising it in a preliminary way as to whether the proposed 
        project is feasible and whether it should be made as proposed or 
        in connection with some other project and the estimated costs of 
        the project as recommended.  No error or omission in the report 
        invalidates the proceeding.  The board may also take other steps 
        before the hearing, as will in its judgment provide helpful 
        information in determining the desirability and feasibility of 
        the project, including but not limited to preparation of plans 
        and specifications and advertisement for bids on them.  The 
        hearing may be adjourned from time to time and a resolution 
        ordering the project may be adopted at any time within six 
        months after the date of hearing.  In ordering the project the 
        board may reduce but not increase the extent of the project as 
        stated in the notice of hearing and shall find that the project 
        as ordered is in accordance with the comprehensive plan and 
        program adopted by the board pursuant to section 5. 
           Subd. 4.  [EMERGENCY ACTION.] If the board by resolution 
        adopted by the affirmative vote of not less than two-thirds of 
        its members determines that an emergency exists requiring the 
        immediate purchase of materials or supplies or the making of 
        emergency repairs, it may order the purchase of those supplies 
        and materials and the making of the repairs before any hearing 
        required under this section, provided that the board shall set 
        as early a date as practicable for the hearing at the time it 
        declares the emergency.  All other provisions of this section 
        must be followed in giving notice of and conducting the 
        hearing.  Nothing herein may be construed as preventing the 
        board or its agents from purchasing maintenance supplies or 
        incurring maintenance costs without regard to the requirements 
        of this section. 
           Subd 5.  [POWER OF THE BOARD TO SPECIALLY ASSESS.] The 
        board may specially assess all or any part of the costs of 
        acquisition and betterment as herein provided, of any project 
        ordered pursuant to this section.  The special assessments must 
        be levied in accordance with the provisions of Minnesota 
        Statutes, sections 429.051 to 429.081, except as otherwise 
        provided in this subdivision.  No other provisions of Minnesota 
        Statutes, chapter 429, apply.  For purposes of levying the 
        special assessments, the hearing on the project required in 
        subdivision 1 serves as the hearing on the making of the 
        original improvement provided for by Minnesota Statutes, section 
        429.051.  The area assessed may be less than but may not exceed 
        the area proposed to be assessed as stated in the notice of 
        hearing on the project provided for in subdivision 2. 
           Sec. 13.  [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.] 
           Subdivision 1.  [BUDGET ANTICIPATION CERTIFICATES OF 
        INDEBTEDNESS.] At any time after adoption of its annual budget 
        and in anticipation of the collection of tax and other revenues 
        estimated and set forth by the board in the budget, except in 
        the case of deficiency taxes levied under this subdivision and 
        taxes levied for the payment of certificates issued under 
        subdivision 2, the board may, by resolution, authorize the 
        issuance, negotiation, and sale, in accordance with subdivision 
        4 in the form and manner and upon terms it determines, of its 
        negotiable general obligation certificates of indebtedness in 
        aggregate principal amounts not exceeding 50 percent of the 
        total amount of tax collections and other revenues, and maturing 
        not later than three months after the close of the budget year 
        in which issued.  The proceeds of the sale of the certificates 
        must be used solely for the purposes for which the tax 
        collections and other revenues are to be expended pursuant to 
        the budget. 
           All the tax collections and other revenues included in the 
        budget for the budget year, after the expenditure of the tax 
        collections and other revenues in accordance with the budget, 
        must be irrevocably pledged and appropriated to a special fund 
        to pay the principal and interest on the certificates when due.  
        If for any reason the tax collections and other revenues are 
        insufficient to pay the certificates and interest when due, the 
        board shall levy a tax in the amount of the deficiency on all 
        taxable property in the district and shall appropriate this 
        amount when received to the special fund. 
           Subd. 2.  [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in 
        any budget year the receipts of tax and other revenues should 
        for some unforeseen cause become insufficient to pay the board's 
        current expenses, or if any public emergency should subject it 
        to the necessity of making extraordinary expenditures, the board 
        may by resolution authorize the issuance, negotiation, and sale, 
        in accordance with subdivision 4 in the form and manner and upon 
        the terms and conditions it determines, of its negotiable 
        general obligation certificates of indebtedness in an amount 
        sufficient to meet the deficiency.  The board shall levy on all 
        taxable property in the district a tax sufficient to pay the 
        certificates and interest on the certificates and shall 
        appropriate all collections of the tax to a special fund created 
        for the payment of the certificates and the interest on them.  
        Certificates issued under this subdivision mature not later than 
        April 1 in the year following the year in which the tax is 
        collectible. 
           Subd. 3.  [GENERAL OBLIGATION BONDS.] The board may by 
        resolution authorize the issuance of general obligation bonds 
        for the acquisition or betterment of any part of the district 
        disposal system, including but without limitation the payment of 
        interest during construction and for a reasonable period 
        thereafter, or for the refunding of outstanding bonds, 
        certificates of indebtedness, or judgments.  The board shall 
        pledge its full faith and credit and taxing power for the 
        payment of the bonds and shall provide for the issuance and sale 
        and for the security of the bonds in the manner provided in 
        Minnesota Statutes, chapter 475.  The board has the same powers 
        and duties as a municipality issuing bonds under that law, 
        except that no election is required and the debt limitations of 
        Minnesota Statutes, chapter 475, do not apply to the bonds.  The 
        board may also pledge for the payment of the bonds and deduct 
        from the amount of any tax levy required under Minnesota 
        Statutes, section 475.61, subdivision 1, and any revenues 
        receivable under any state and federal grants anticipated by the 
        board and may covenant to refund the bonds if and when and to 
        the extent that for any reason the revenues, together with other 
        funds available and appropriated for that purpose, are not 
        sufficient to pay all principal and interest due or about to 
        become due, provided that the revenues have not been anticipated 
        by the issuance of certificates under subdivision 1. 
           Subd. 4.  [MANNER OF SALE AND ISSUANCE OF CERTIFICATES.] 
        Certificates issued under subdivisions 1 and 2 may be issued and 
        sold by negotiation, without public sale, and may be sold at a 
        price equal to the percentage of the par value of the 
        certificates, plus accrued interest, and bearing interest at the 
        rate determined by the board.  No election is required to 
        authorize the issuance of the certificates.  The certificates 
        must bear the same rate of interest after maturity as before and 
        the full faith and credit and taxing power of the board must be 
        pledged to the payment of the certificates. 
           Sec. 14.  [DEPOSITORIES.] 
           The board shall designate one or more national or state 
        banks, or trust companies authorized to do a banking business, 
        as official depositories for money of the board, and shall 
        require the treasurer to deposit all or a part of the money in 
        those institutions.  The designation must be in writing and set 
        forth all the terms and conditions upon which the deposits are 
        made, and must be signed by the chair and treasurer and made a 
        part of the minutes of the board.  A designated bank or trust 
        company shall qualify as a depository by furnishing a corporate 
        surety bond or collateral in the amounts required by Minnesota 
        Statutes, section 118.01.  No bond or collateral is required to 
        secure any deposit insofar as it is insured under federal law. 
           Sec. 15.  [MONEY, ACCOUNTS, AND INVESTMENTS.] 
           Subdivision 1.  [RECEIPT AND APPLICATION.] Money received 
        by the board must be deposited or invested by the treasurer and 
        disposed of as the board may direct in accordance with its 
        budget; provided that any money that has been pledged or 
        dedicated by the board to the payment of obligations or interest 
        on the obligations or expenses incident thereto, or for any 
        other specific purpose authorized by law, must be paid by the 
        treasurer into the fund to which it has been pledged. 
           Subd. 2.  [FUNDS AND ACCOUNTS.] (a) The board's treasurer 
        shall establish funds and accounts as may be necessary or 
        convenient to handle the receipts and disbursements of the board 
        in an orderly fashion. 
           (b) The funds and accounts must be audited annually by a 
        certified public accountant at the expense of the district. 
           Subd. 3.  [DEPOSIT AND INVESTMENT.] The money on hand in 
        those funds and accounts may be deposited in the official 
        depositories of the board or invested as provided in this 
        subdivision.  Any amount not currently needed or required by law 
        to be kept in cash on deposit may be invested in obligations 
        authorized for the investment of municipal sinking funds by 
        Minnesota Statutes, section 475.66.  The money may also be held 
        under certificates of deposit issued by any official depository 
        of the board. 
           Subd. 4.  [BOND PROCEEDS.] The use of proceeds of all bonds 
        issued by the board for the acquisition and betterment of the 
        district disposal system, and the use, other than investment, of 
        all money on hand in any sinking fund or funds of the board, is 
        governed by the provisions of Minnesota Statutes, chapter 475, 
        the provisions of this article, and the provisions of 
        resolutions authorizing the issuance of the bonds.  When 
        received, the bond proceeds must be transferred to the treasurer 
        of the board for safekeeping, investment, and payment of the 
        costs for which they were issued. 
           Subd. 5.  [AUDIT.] The board shall provide for and pay the 
        cost of an independent annual audit of its official books and 
        records by the state auditor or a public accountant authorized 
        to perform that function under Minnesota Statutes, chapter 6. 
           Sec. 16.  [SERVICE CONTRACTS WITH GOVERNMENTAL ENTITIES 
        OUTSIDE THE JURISDICTION OF THE BOARD.] 
           (a) The board may contract with the United States or any 
        agency of the federal government, any state or its agency, or 
        any municipal or public corporation, governmental subdivision or 
        agency or political subdivision in any state, outside the 
        jurisdiction of the board, for furnishing services to those 
        entities, including but not limited to planning for and the 
        acquisition, betterment, operation, administration, and 
        maintenance of any or all interceptors, treatment works, and 
        local water and sanitary sewer facilities.  The board may 
        include as one of the terms of the contract that the entity must 
        pay to the board an amount agreed upon as a reasonable estimate 
        of the proportionate share properly allocable to the entity of 
        costs of acquisition, betterment, and debt service previously 
        allocated in the district.  When payments are made by entities 
        to the board, they must be applied in reduction of the total 
        amount of costs thereafter allocated in the district, on an 
        equitable basis as the board deems to be in the best interests 
        of the district, applying so far as practicable and appropriate 
        the criteria set forth in section 10, subdivision 2.  A 
        municipality in the state of Minnesota may enter into a contract 
        and perform all acts and things required as a condition or 
        consideration therefor consistent with the purposes of this 
        article, whether or not included among the powers otherwise 
        granted to the municipality by law or charter. 
           (b) The board shall contract with the city of Pine City, or 
        another qualified entity to make necessary inspections on the 
        district facilities, and to otherwise process or assist in 
        processing any of the work of the district. 
           Sec. 17.  [CONTRACTS FOR CONSTRUCTION, MATERIALS, SUPPLIES, 
        AND EQUIPMENT.] 
           Subdivision 1.  [PLANS AND SPECIFICATIONS.] When the board 
        orders a project involving the acquisition or betterment of a 
        part of the district disposal system, it shall cause plans and 
        specifications of the project to be made, or if previously made, 
        to be modified, if necessary, and to be approved by the agency 
        if required, and after any required approval by the agency, one 
        or more contracts for work and materials called for by the plans 
        and specification may be awarded as provided in this section. 
           Subd. 2.  [CONTRACTS IN EXCESS OF $5,000.] No contract for 
        construction work, or for the purchase of materials, supplies, 
        or equipment, estimated to cost more than $5,000 may be made by 
        the board without publishing once in a newspaper having general 
        circulation in the district and once in a trade paper or legal 
        newspaper published in any city of the first class, not less 
        than 14 days before the last day for submission of bids, notice 
        that bids or proposals will be received.  The notice must state 
        the nature of the work or purchase, the terms and conditions 
        upon which the contract is to be awarded, and the time and place 
        where bids will be received, opened, and read publicly.  After 
        the bids have been duly received, opened, read publicly, and 
        recorded, the board shall within a reasonable time award the 
        contract to the lowest responsible bidder or it may reject all 
        bids and readvertise.  Each contract must be duly executed in 
        writing and the party to whom the contract is awarded shall give 
        sufficient bond or security to the board for the faithful 
        performance of the contract as required by law.  If the board by 
        an affirmative vote of not less than two-thirds of its members 
        declares that an emergency exists requiring the immediate 
        purchase of materials or supplies or in making emergency 
        repairs, at a cost estimated to be in excess of $5,000, it shall 
        not be necessary to advertise for bids. 
           Subd. 3.  [CONTRACTS OR PURCHASES FOR $5,000 OR LESS.] The 
        board may, without advertising for bids, enter into any contract 
        or purchase any materials, supplies, or equipment of the type 
        referred to in subdivision 2, the cost of which is estimated to 
        be $5,000 or less, or it may authorize the executive director to 
        enter into a contract on behalf of the board for that work or to 
        make those purchases without prior approval of the board and 
        without advertising for bids. 
           Subd. 4.  [UNIFORM MUNICIPAL CONTRACTING LAW.] Except as 
        otherwise provided in this section, Minnesota Statutes, section 
        471.345, shall apply. 
           Sec. 18.  [PROPERTY EXEMPT FROM TAXATION.] 
           Any properties, real or personal, owned, leased, 
        controlled, used, or occupied by the water and sanitary sewer 
        board for any purpose under this article are declared to be 
        acquired, owned, leased, controlled, used, and occupied for 
        public, governmental, and municipal purposes, and are exempt 
        from taxation by the state or any political subdivision of the 
        state, provided that the properties are subject to special 
        assessments levied by a political subdivision for a local 
        improvement in amounts proportionate to and not exceeding the 
        special benefit received by the properties from the 
        improvement.  No possible use of any properties in any manner 
        different from their use as part of a disposal system at the 
        time may be considered in determining the special benefit 
        received by the properties.  All assessments are subject to 
        final approval by the board, whose determination of the benefits 
        is conclusive upon the political subdivision levying the 
        assessment. 
           Sec. 19.  [RELATION TO EXISTING LAWS.] 
           The provisions of this article must be given full effect 
        notwithstanding the provisions of any law or charter 
        inconsistent with this article.  The powers conferred on the 
        board under this article do not in any way diminish or supersede 
        the powers conferred on the agency by Minnesota Statutes, 
        chapters 115 to 116. 
           Sec. 20.  Laws 1993, chapter 55, section 1, is amended to 
        read: 
           Section 1.  [TEMPORARY RESOLUTION, EXTENSION.] 
           In addition to the periods allowed by Minnesota Statutes, 
        section 394.34, the Pine county board of commissioners may by 
        resolution extend a prior resolution on the subdivision of land 
        by plat and by exemption certificate that was originally adopted 
        by the board on March 13, 1991, for a one-year period, and 
        extended on March 11, 1992.  The resolution adopted under this 
        section may extend the prior resolution for an additional period 
        ending not later than March 13, 1994 April 1, 1995. 
           Sec. 21.  [EFFECTIVE DATE.] 
           Subdivision 1.  This article is effective the day following 
        final enactment as to the city of Pine City when approved by the 
        Pine City council and upon compliance with Minnesota Statutes, 
        section 645.021. 
           Subd. 2.  This article is effective the day following final 
        enactment as to the towns of Pokegama, Chengwatana, and Pine 
        City when approved by the town boards of each town and upon 
        compliance with Minnesota Statutes, section 645.021. 
           Subd. 3.  Section 20 is effective the day following final 
        enactment. 
                                   ARTICLE 11
                            CHISHOLM/HIBBING AIRPORT
           Section 1.  [DEFINITIONS.] 
           Subdivision 1.  [SCOPE.] For the purpose of this article, 
        the words and terms defined in this section have the meanings 
        given them.  
           Subd. 2.  [AERONAUTICS.] "Aeronautics" means the 
        transportation by aircraft; the operation, construction, repair, 
        or maintenance of aircraft, air equipment, power plants, and 
        accessories; the design, establishment, construction, operation, 
        improvement, repair, or maintenance of airports, restricted 
        landing areas, or other air navigation facilities and 
        construction; and powers incidental to these activities.  
           Subd. 3.  [AIRPORT.] (a) "Airport" means any locality of 
        land or water, including intermediate landing fields, that is 
        used or intended to be used for the landing and take-off of 
        aircraft, whether or not facilities have been provided for the 
        shelter, servicing, or repair of aircraft, or for receiving or 
        discharging passengers or cargo.  The term also includes any 
        facility used in, available for use in, or designed for use in 
        air navigation or to aid air navigation, including without 
        limitation landing areas; lights; any apparatus or equipment for 
        disseminating weather information, for signaling, for 
        radio-directional finding, or for radio or other electrical 
        communication; and any other structure or mechanism having a 
        similar purpose for guiding or controlling flight in the air or 
        for the landing or take-off of aircraft.  The term also includes 
        without limitation access roads, park areas, and those lands 
        contiguous or not as may be required for installations necessary 
        for safe and efficient operation, buildings, structures, 
        hangars, shops, and any personal property usually used in 
        connection with operating airports, including specifically, but 
        not exclusively, snow-removal or impacting equipment, fire and 
        ambulance equipment, motor vehicles, and equipment for 
        buildings, structures, hangars, and shops.  
           (b) Whenever the words "airport" or "airport facilities" 
        are used in this article, they have the meaning given them in 
        paragraph (a) and specifically include the Chisholm/Hibbing 
        airport, including any land, buildings, or other appurtenances 
        incidental and necessary to the operation of that airport, and 
        any land, buildings, or other appurtenances that may be acquired 
        in the future for those purposes by the authority.  
           Subd. 4.  [AUTHORITY.] "Authority" means the 
        Chisholm/Hibbing airport authority created under this article. 
           Subd. 5.  [CITIES.] "Cities" means the city of Chisholm and 
        the city of Hibbing, in and for which an airport authority is 
        created under this article.  
           Subd. 6.  [CITY COUNCILS; COUNCILS.] "City councils" or 
        "councils" means the governing bodies of the city of Chisholm as 
        established under the home rule charter of that city and the 
        city of Hibbing, a statutory city.  
           Subd. 7.  [DIRECTOR.] "Director" means a person appointed 
        or otherwise selected as, and after qualification, acting as a 
        member of the authority.  
           Subd. 8.  [DIRECTORS.] "Directors" means a quorum of the 
        members of the authority. 
           Subd. 9.  [PERSON.] "Person" means an individual, firm, 
        copartnership, corporation, company, limited liability company, 
        association, joint stock association, or body politic; and 
        includes its trustee, receiver, assignee, or other similar 
        representative. 
           Sec. 2.  [AIRPORT AUTHORITY CREATED.] 
           For the purposes set forth in this article, the 
        Chisholm/Hibbing airport authority is created in and for the 
        city of Chisholm and the city of Hibbing. 
           Sec. 3.  [DIRECTORS.] 
           Subdivision 1.  [APPOINTMENTS; GENERAL POWERS 
        AUTHORIZED.] The members of the authority created under this 
        article shall consist of six directors, three of whom shall be 
        appointed to membership in the authority by the city council of 
        the city of Chisholm and three of whom shall be appointed to 
        membership in the authority by the city council of the city of 
        Hibbing.  The members of the authority may exercise the powers 
        and perform the duties set forth in this article.  
           Subd. 2.  [TERMS; TRANSITION.] The members of the 
        Chisholm/Hibbing airport commission as of the day before the 
        effective date of this article shall be the original directors 
        of the authority and shall serve until the remainder of their 
        term and until their respective successors are appointed and 
        qualified.  Subsequent terms of directors are for three years, 
        and all terms must expire on December 31 of the appropriate year.
        Directors shall serve until their respective successors are 
        appointed and qualified.  
           Subd. 3.  [EXPENSE REIMBURSEMENTS.] Each director may be 
        paid a per diem for attending monthly, executive, and special 
        meetings.  Each director shall be reimbursed for reasonable and 
        authorized out-of-pocket expenses incurred in the fulfillment of 
        their duties.  
           Subd. 4.  [VACANCY.] When a vacancy occurs in the 
        membership of the authority by means of resignation, death, 
        removal from the city, or removal for failure or neglect to 
        perform the duties of a director, the vacancy must be filled for 
        the unexpired term in the same manner as the predecessor was 
        appointed. 
           Subd. 5.  [OATH.] Appointments and removals of the 
        directors of the authority must be made by the respective city 
        councils evidenced by resolution.  An appointee who fails within 
        ten days after notification of appointment to file with the city 
        clerk of the appointing city the oath or affirmation to perform 
        faithfully, honestly, and impartially the duties of office, is 
        deemed to have refused the appointment, and another person must 
        be appointed in the manner prescribed in this section.  
           Subd. 6.  [INITIAL APPOINTMENTS.] Within 30 days after the 
        effective date of this article, the original directors must be 
        appointed as provided in subdivision 2.  Upon filing the oath of 
        office required by subdivision 5, each director assumes all the 
        rights, privileges, and powers of a director duly appointed as 
        provided in this article.  
           Subd. 7.  [ORGANIZING MEETING; QUORUM; RULES AND 
        REGULATIONS.] Within 20 days after members of the authority have 
        qualified for office, the authority shall meet and organize.  
        The members shall adopt, and thereafter may amend, rules and 
        regulations for the conduct of the authority as the authority 
        deems in the public interest and most likely to advance, 
        enhance, foster, and promote air transportation in the airports 
        of the city of Chisholm and the city of Hibbing.  The rules and 
        regulations must at all times be consistent with this article.  
        At this organizing meeting, and at all subsequent meetings of 
        the authority, four directors constitutes a quorum for the 
        transaction of business, and the affirmative vote of the 
        majority of the directors present is required for the passage of 
        any measure.  The quorum must be present to act on any measure.  
           Subd. 8.  [OFFICERS.] The directors shall elect from among 
        their members a president, a vice-president, and a treasurer. 
        They shall also elect a secretary, who may or may not be a 
        director.  No two offices may be held by one director.  The 
        officers shall have the duties and powers usually attendant upon 
        the holders of those offices and other duties and powers not 
        inconsistent with this article and as may be provided by the 
        authority.  
           Subd. 9.  [EXECUTIVE DIRECTOR.] As soon after the 
        organization meeting as possible, the authority shall appoint an 
        executive director to be the executive and operating officer of 
        the authority.  The executive director shall serve at the 
        pleasure of the authority and receive compensation as may be 
        fixed by it.  The executive director must be experienced with 
        aviation and meet the requirement of a written, 
        authority-approved job description kept on file with the 
        authority.  Under the supervision of the authority, the 
        executive director is responsible for the operation, management, 
        and promotion of all activities with which the authority is 
        charged, together with other duties as may be prescribed by the 
        authority.  The executive director has those powers necessary 
        and incidental to the performance of duties, and other powers as 
        may be granted by the authority.  
           Sec. 4.  [FINANCIAL MATTERS.] 
           Subdivision 1.  [TREASURER; BUDGET; ACCOUNTING; FINANCIAL 
        STATEMENT.] The treasurer shall receive and retain custody of 
        all money of the authority.  That money is deemed public funds.  
        The authority shall prepare an annual budget before the joint 
        meeting of the city councils to approve the levy and a copy of 
        the annual budget must be provided to the councils at the joint 
        meeting.  The treasurer shall disburse funds only in accordance 
        with the annual budget of the authority and only upon written 
        orders drawn against those funds, signed by the executive 
        director and approved by the president of the authority, or in 
        the president's absence, the vice-president of the authority or 
        other employee of the authority as may be authorized or directed 
        so to do.  Each order must state the name of the payee and the 
        nature of the claim for which the order is issued.  The 
        treasurer shall keep an account of all money received, showing 
        the source of all receipts and the nature, purpose, and 
        authority of all disbursements.  At least four times each year, 
        in the form to be determined by the directors, the authority 
        shall file with the city clerks of the cities of Chisholm and 
        Hibbing a financial statement from the authority, showing all 
        receipts and disbursements, the nature and purposes of those 
        receipts and disbursements, the money on hand, the credits and 
        assets of the authority, and its outstanding liability. 
           Subd. 2.  [SPENDING POWER.] Within the total budget 
        approved as provided in subdivision 1, the authority has the 
        exclusive power to receive, control, and order the expenditure 
        of money in the control and management of the airport facilities 
        of the authority.  
           Subd. 3.  [AUDIT.] A complete examination and audit of all 
        books and accounts of the authority must be done at least 
        annually by a certified public accountant.  One copy of the 
        yearly audit must be filed with each city clerk as a public 
        document. 
           Sec. 5.  [POWERS.] 
           Subdivision 1.  [SUITS; CONTRACTS; EMINENT DOMAIN; 
        OPERATION; ACCEPT GIFTS; LEVY AND TAX.] Notwithstanding any law 
        or charter or ordinance provision to the contrary, the following 
        powers and duties are conferred upon the authority: 
           (1) to sue and be sued; 
           (2) to enter into and execute agreements, instruments, and 
        other arrangements necessary, proper, and convenient to the 
        exercise of its powers; 
           (3) to acquire: 
           (i) by purchase, lease, or gift any personal property, 
        franchises, easements, or other rights in its own name that may 
        be necessary or proper for the operation of the Chisholm/Hibbing 
        airport, or any airport facilities that may be acquired in the 
        future; 
           (ii) real property for use as airport terminal facilities, 
        maintenance facilities, parking facilities, runway or taxiway 
        facilities with approval of the city councils; and 
           (iii) other facilities used or useful for operating the 
        airport; 
           (4) to acquire, construct, equip, improve, operate, and 
        maintain airports and airport terminal facilities, maintenance 
        facilities, runways and taxiways, parking areas, and other 
        facilities useful for or related to operating an airport; 
           (5) to lease to or contract with any person or operator for 
        the use of any real or personal property under the authority's 
        control; provided, however, that the authority does not have the 
        power to make agreements for the sale of any real estate under 
        its control without the approval by resolution of the city 
        councils; 
           (6) to accept gifts, grants, or loans of money or other 
        property from the United States, the state, or any person or 
        entity, and for those purposes may enter into any agreement 
        required to do so, subject to prior notice to the city councils; 
        and 
           (7) to levy a tax on all taxable property, according to the 
        total tax capacity in each city, in the city of Chisholm and in 
        the city of Hibbing, to provide funds for the operation of the 
        authority.  A joint meeting of the city councils must be 
        convened annually for the purpose of either adopting or 
        rejecting the proposed levy.  Each city council shall vote 
        separately on the proposed levy.  If the proposed levy is 
        rejected by either city council, the authority shall revise the 
        levy and resubmit the proposal for consideration by the city 
        councils who shall either reject or approve the revised proposed 
        levy.  This procedure shall continue until a levy is approved by 
        resolution of both city councils.  No later than September 15 
        each year, the secretary of the authority shall certify to the 
        auditor of St. Louis county the total levy approved by the city 
        councils, accompanied by a certified copy of the resolution of 
        each city approving the levy.  The auditor shall add the total 
        levy made by the authority to other tax levies of the county on 
        taxable property in the cities of Chisholm and Hibbing for 
        collection by the county auditor with other taxes.  When 
        collected, the county auditor shall make settlement of those 
        taxes with the treasurer of the authority in the same manner as 
        other taxes are distributed to political subdivisions.  
           Subd. 2.  [MANAGEMENT CONTRACTS.] Notwithstanding other 
        provisions of this article to the contrary, the authority is 
        authorized, in lieu of directly operating the Chisholm/Hibbing 
        airports or any part of them, to enter into management contracts 
        with persons for managing the airports or any part of them, for 
        a period of time, for purposes, and under any compensation and 
        other terms and conditions as deemed advisable and proper by the 
        authority.  The agreement is subject to the approval by 
        resolution of the city councils.  
           Sec. 6.  [ADDITIONAL POWERS.] 
           The authority is authorized: 
           (1) when not in conflict with this article, to adopt and 
        alter bylaws and rules and regulations that it deems necessary 
        for conducting the business of the authority, for using and 
        operating the Chisholm/Hibbing airports and the facilities of 
        the authority, and for carrying out the objects of this article; 
           (2) to appoint the executive director, engineers and other 
        consultants, accountants, attorneys, and other officers, agents, 
        and employees as it deems necessary, who shall perform duties 
        and receive compensation as the authority may determine and who 
        are removable at the pleasure of the authority; 
           (3) to prescribe or provide for a policy or policies of 
        insurance for the defense and indemnification of the cities of 
        Chisholm and Hibbing and their officers and employees, and the 
        authority's directors, executive director, and other employees 
        against claims arising against them out of the performance of 
        duty, whether the claims be groundless or otherwise, with 
        premiums for any policies of insurance required by this article 
        to be paid out of the funds of the authority; 
           (4) to authorize and direct the treasurer to invest, in the 
        manner provided by law, any funds held in reserve, sinking 
        funds, or any funds not required for immediate disbursement; and 
           (5) to fix, alter, change, and collect fees, rentals, and 
        all other charges to be made for all services or facilities 
        furnished by the authority to the public, to any persons, or to 
        public or private agencies leasing any and all facilities at the 
        Chisholm/Hibbing airports.  
           Sec. 7.  [EXECUTIVE DIRECTOR.] 
           Subdivision 1.  [CUSTODY OF MONEY COLLECTED DAILY.] The 
        executive director of the authority is responsible for the 
        custody and control of all money received and collected from the 
        daily operations of the Chisholm/Hibbing airports until that 
        money is delivered to the treasurer and the executive director 
        has obtained a receipt for it, or until the money is deposited 
        in a bank account under the control of the treasurer.  
           Subd. 2.  [INSURANCE.] In addition to other insurance 
        provisions of this article, the executive director shall provide 
        for insurance on any of the Chisholm/Hibbing airports' property, 
        rights, revenue, workers' compensation, public liability, or any 
        other risk or hazard arising from its activities; and the 
        premiums for that insurance must be paid for out of funds of the 
        Chisholm/Hibbing airport authority.  
           Sec. 8.  [TAX-EXEMPT PROPERTY.] 
           Notwithstanding other law to the contrary, the property, 
        money, and other assets of the authority, or revenues or other 
        income of the authority are exempt from all taxation, licensing, 
        fees, or charges of any kind imposed by the state of Minnesota, 
        or by any county, municipality, political subdivision, taxing 
        district, or other public agency or body of the state.  
           Sec. 9.  [REVENUE BONDS.] 
           Subdivision 1.  [AUTHORITY TO ISSUE.] Notwithstanding any 
        limitations imposed by law or by the charter of the city of 
        Chisholm, the authority is authorized to issue negotiable 
        revenue bonds for any one or more of its purposes.  Revenue 
        bonds under this section shall be issued in the amounts, times, 
        and series to the authority determined by resolution.  No 
        election is necessary to authorize the issuance of the revenue 
        bonds.  Except as otherwise provided by this section, the 
        maturities, any right of prior redemption, execution, paying 
        agency, provision for interest, and other terms of the bonds, 
        are subject to Minnesota Statutes, sections 475.54 and 475.56.  
           Subd. 2.  [PLEDGED FROM REVENUES.] Revenue bonds issued 
        under this section do not constitute a debt of the city of 
        Chisholm or the city of Hibbing, and no tax levy may be 
        compelled for their payment.  The bonds are payable only from 
        the revenues of the Chisholm/Hibbing airport pledged by the 
        authority; to payment of principal of and interest on the bonds; 
        and they must so recite.  At or before the issuance of revenue 
        bonds, the authority, by resolution, shall pledge and 
        appropriate to the payment of principal and interest the net 
        revenues of the Chisholm/Hibbing airports, or some part of those 
        airports, after provision for reasonable and necessary expenses 
        of operation and maintenance, as described and defined in the 
        authorizing resolution. 
           Subd. 3.  [RESOLUTION.] By the authorizing resolution, the 
        authority may provide covenants for the protection of the 
        bondholders relating to disposition of bond proceeds and 
        revenues; their reserves and investment; construction, 
        acquisition, repair, replacement, operation and insurance of the 
        Chisholm/Hibbing airports facilities; accounting and reports; 
        issuance of parity or subordinate lien bonds, rates and charges 
        to be established or maintained; and other covenants the 
        authority finds to be usual and reasonably necessary for the 
        protection of the airport revenue bondholders. 
           Subd. 4.  [DEFAULT.] The authority may also define the 
        event or events of default and other requisites for suit by 
        bondholders or their representatives, conditions upon which any 
        covenant may be amended.  Any terms, covenants, or conditions of 
        revenue bonds to be provided by resolution of the authority may 
        be set forth in a trust indenture with a corporation having 
        trust powers appointed by the authority, to represent and act 
        for bondholders, to hold and disburse pledged revenues, and to 
        perform other duties as may be provided in the trust indenture.  
        However, the trust indenture must not confer or authorize any 
        mortgage lien on the real or operating properties or general 
        funds of the authority. 
           Subd. 5.  [PUBLIC INSTRUMENTALITY.] Revenue bonds of the 
        authority are deemed and must be treated as instrumentalities of 
        the public government agency; and as such, together with 
        interest on the bonds, are exempt from taxation. 
           Sec. 10.  [GENERAL OBLIGATION BONDS.] 
           Subdivision 1.  [AUTHORITY TO ISSUE.] The authority may 
        request the issuance of general obligation bonds to improve or 
        construct, and equip, terminal facilities, maintenance and 
        hangar facilities, runway or taxiway facilities, parking areas, 
        or similar facilities used or useful in connection with the 
        operation by the authority of the Chisholm/Hibbing airports, or 
        any part of them. 
           Subd. 2.  [RESOLUTION.] General obligation bonds under this 
        section shall be issued in the amounts, at times, and in a 
        series as the cities shall determine by joint resolution.  
        Except as otherwise provided by this section, the maturities, 
        any right of prior redemption, execution, paying agency, 
        provision for interest, or other terms of the bonds, are subject 
        to Minnesota Statutes, sections 475.54 and 475.56. 
           Subd. 3.  [PLEDGED WITH TAXES.] General obligation bonds 
        issued according to the total tax capacity in each city under 
        this section constitute a debt of the city of Chisholm and the 
        city of Hibbing for which the full faith and credit of the city 
        is pledged.  A tax levy must be compelled for their payment and 
        the bonds must recite that. 
           Sec. 11.  [PROPERTY TRANSACTIONS.] 
           Subdivision 1.  [EMINENT DOMAIN.] If it becomes necessary 
        for any of the purposes provided in this article to exercise the 
        power of eminent domain, that power must not be exercised by the 
        authority.  However, the city of Chisholm and the city of 
        Hibbing shall, at the request of the authority, acquire any of 
        the properties allowed pursuant to this article and necessary 
        for the conduct and operation of the authority, or for the 
        purpose of acquiring any land, waters, easements, or other 
        rights or interests in them by the exercise of the power of 
        eminent domain, either as provided for under the home rule 
        charter of the city of Chisholm, or under Minnesota Statutes, 
        chapter 117.  An exercise of the power of eminent domain by the 
        cities must be at the request and expense of the authority.  The 
        fact that the property is owned by a public service corporation 
        organized for the purpose specified in Minnesota Statutes, 
        section 300.03, or is already devoted to a public use, or to use 
        by a corporation, or was acquired for a public use by 
        condemnation, does not prevent its acquisition by the cities for 
        the authority by condemnation.  The cities, on behalf of the 
        authority, may take possession of any property for which 
        condemnation proceedings have been commenced at any time after 
        the filing of the petition describing the property in the 
        proceedings.  After the condemnation is completed, the cities 
        shall transfer the property condemned to the authority. 
           Subd. 2.  [PROPERTY TRANSFERS.] Subject to prior notice to 
        the city councils, any state department or other agency of the 
        state government, or any county, municipality, or other public 
        agency, may sell, lease, grant, transfer, or convey to the 
        authority, with or without consideration, any facilities or any 
        part of the facilities, or any interest in real or personal 
        property, which may be useful to the authority for any 
        authorized purpose. 
           Sec. 12.  [LIMITED REGULATION BY OTHER GOVERNMENTAL UNITS.] 
           The exercise by the authority and the city councils of the 
        powers provided in this article are not subject to regulation by 
        the jurisdiction or control of any other public body or agency, 
        whether state, county, or municipal, except as specifically 
        provided in this article.  However, the authority is subject to 
        rules administered by the state department of public safety, 
        division of aeronautics, and to laws of the United States or 
        regulations of the Federal Aviation Administration of the United 
        States Department of Transportation, as may be applicable to the 
        operations of the Chisholm/Hibbing airports. 
           Sec. 13.  [PROPERTY TRANSFERRED BY THIS ARTICLE.] 
           On the effective date of this article, the Chisholm/Hibbing 
        airport commission is dissolved and the title to all real and 
        personal property presently used and occupied by the 
        Chisholm/Hibbing airport commission vests in the authority.  The 
        city of Chisholm and the city of Hibbing shall execute all deeds 
        or other appropriate documents necessary to confirm the vesting 
        of title in the Chisholm/Hibbing airport authority.  If the 
        authority is dissolved, the fair market value of all real estate 
        owned by the city of Hibbing prior to the formation of the 
        Chisholm/Hibbing joint airport commission in 1957 including 
        improvements on that real estate prior to that time must be 
        credited to the city of Hibbing. 
           Sec. 14.  [EFFECTIVE DATE.] 
           This article is effective after its approval by a majority 
        of the city council of the city of Chisholm and a majority of 
        the city council of the city of Hibbing, and upon compliance 
        with the provisions of Minnesota Statutes, section 645.021, 
        subdivision 3. 
                                   ARTICLE 12 
                                 MISCELLANEOUS 
           Section 1.  Minnesota Statutes 1993 Supplement, section 
        84.794, subdivision 1, is amended to read: 
           Subdivision 1.  [REGISTRATION REVENUE.] Fees from the 
        registration of off-highway motorcycles and the unrefunded 
        gasoline tax attributable to off-highway motorcycle use under 
        section 296.16 must be deposited in the state treasury and 
        credited to the off-highway motorcycle account in the natural 
        resources fund. 
           Sec. 2.  Minnesota Statutes 1993 Supplement, section 
        84.803, subdivision 1, is amended to read: 
           Subdivision 1.  [REGISTRATION REVENUE.] Fees from the 
        registration of off-road vehicles and unrefunded gasoline tax 
        attributable to off-road vehicle use under section 296.16 must 
        be deposited in the state treasury and credited to the off-road 
        vehicle account in the natural resources fund. 
           Sec. 3.  Minnesota Statutes 1993 Supplement, section 
        270.78, is amended to read: 
           270.78 [PENALTY FOR FAILURE TO MAKE PAYMENT BY ELECTRONIC 
        FUNDS TRANSFER.] 
           (a) 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. 
           (b) The penalty under paragraph (a) does not apply if the 
        taxpayer pays by other means the amount due at least three 
        business days before the date the payment is due.  This 
        paragraph does not apply after December 31, 1997. 
           Sec. 4.  Minnesota Statutes 1993 Supplement, section 
        270.91, subdivision 4, is amended to read: 
           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, or (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; or (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 unless 
        paragraph (d) applies.  
           (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. 5.  Minnesota Statutes 1993 Supplement, section 
        270.94, is amended to read: 
           270.94 [EXEMPTIONS.] 
           (a) The tax imposed by sections 270.91 to 270.98 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 270.91 to 270.98 does not 
        apply to the contamination value of a parcel that is 
        attributable to asbestos, if: 
           (1) the work has been completed under an asbestos abatement 
        plan or the property owner is implementing a proactive in-place 
        asbestos management program consistent with the rules, 
        requirements, and formal policies of the United States 
        Environmental Protection Agency; and 
           (2) the property owner provides the assessor with an 
        affidavit stating the work under the abatement plan has been 
        completed, or the asbestos management plan is being implemented, 
        and any other evidence or information the assessor requests. 
           Sec. 6.  Minnesota Statutes 1993 Supplement, section 
        289A.60, subdivision 21, is amended to read: 
           Subd. 21.  [PENALTY FOR FAILURE TO MAKE PAYMENT BY 
        ELECTRONIC FUNDS TRANSFER.] (a) 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. 
           (b) The penalty under paragraph (a) does not apply if the 
        taxpayer pays by other means the amount due at least three 
        business days before the date the payment is due.  This 
        paragraph does not apply after December 31, 1997. 
           Sec. 7.  Minnesota Statutes 1993 Supplement, section 
        296.02, subdivision 1a, is amended to read: 
           Subd. 1a.  [TRANSIT SYSTEMS AND ALTERNATIVE FUELS EXEMPT.] 
        The provisions of subdivision 1 do not apply to (1) gasoline 
        purchased by a transit system or transit provider receiving 
        financial assistance or reimbursement under section 174.24, 
        256B.0625, subdivision 17, or 473.384 or (2) sales of compressed 
        natural gas or propane for use in vehicles displaying a valid 
        annual alternate fuel permit.  
           Sec. 8.  Minnesota Statutes 1993 Supplement, section 
        296.025, subdivision 1a, is amended to read: 
           Subd. 1a.  [TRANSIT SYSTEMS AND ALTERNATIVE FUELS EXEMPT.] 
        The provisions of subdivision 1 do not apply to (1) special fuel 
        purchased by a transit system or transit provider receiving 
        financial assistance or reimbursement under section 174.24, 
        256B.0625, subdivision 17, or 473.384 or (2) sales of compressed 
        natural gas or propane for use in vehicles displaying a valid 
        annual alternate fuel permit.  
           Sec. 9.  [296.0261] [PERMIT FOR ALTERNATE FUEL VEHICLE.] 
           Subdivision 1.  [ANNUAL ALTERNATE FUEL PERMIT.] A person 
        owning a motor vehicle propelled by compressed natural gas, 
        propane, or any other manner except gasoline or special fuel, 
        shall obtain an annual permit for that vehicle in accordance 
        with subdivision 2 or 3.  The period for which the alternate 
        fuel permit is valid must coincide with the motor vehicle 
        registration period of the vehicle.  A person shall obtain all 
        required permits within 30 days of becoming a user of compressed 
        natural gas, propane, or any other method of propulsion except 
        gasoline or special fuel. 
           Subd. 2.  [PERMIT FEES FOR ALTERNATE FUEL VEHICLES.] The 
        fees for annual alternate fuel permits are based on the 
        vehicle's gross weight as follows: 
           (1) under 6,001 pounds, $175; 
           (2) 6,001-12,000 pounds, $350; 
           (3) 12,001-26,000 pounds, $390; and 
           (4) over 26,000 pounds, $540. 
           Subd. 3.  [PERMIT FEES FOR DUAL FUEL VEHICLES.] The owner 
        of a motor vehicle capable of being propelled by gasoline as 
        well as compressed natural gas or propane shall pay a permit fee 
        equal to one-half the fee determined under subdivision 2. 
           Subd. 4.  [PRO RATA FEE CALCULATION.] The fee for a permit 
        required by this section must be calculated based on the number 
        of unexpired months remaining in the registration year of the 
        vehicle as measured from the date of the occurrence of the event 
        requiring the permit. 
           Subd. 5.  [PERMIT APPLICATION; CONTENT.] A person shall 
        apply for an annual alternate fuel permit for each motor vehicle 
        specified in this section each time the vehicle is registered.  
        The commissioner of public safety shall prescribe the form of 
        the application.  The form must require the applicant to provide 
        the following information: 
           (1) the name and address of the owner or person licensing 
        the vehicle; 
           (2) a description of the vehicle, including the make, model 
        and year, vehicle identification number, and the type of fuel 
        used; and 
           (3) other information the commissioner determines necessary 
        for the proper implementation of this section. 
           A completed application must be submitted to the department 
        of public safety.  The department of public safety shall issue 
        an alternate fuel permit and collect the fee provided in this 
        section. 
           Subd. 6.  [PERMIT STICKERS.] The alternate fuel permit 
        required by this section must be a gummed sticker prepared by 
        the department of public safety.  The permit must be attached to 
        the lower left corner of the windshield of the motor vehicle for 
        which it was issued.  The permit must provide a space to enter 
        the license number of the motor vehicle for which the permit is 
        issued.  The permit must show the year for which it is issued 
        and the date of expiration of the permit. 
           Subd. 7.  [PERMIT NOT TRANSFERABLE.] An alternate fuel 
        permit is not transferable, either to a new vehicle or to a new 
        owner.  Upon the transfer of ownership of a motor vehicle with a 
        permit, the department of public safety shall credit the 
        transferor with the number of unexpired months remaining in the 
        registration period, except that when the vehicle is transferred 
        within the same month in which acquired, no credit for the month 
        is allowed.  If a transferor acquires another motor vehicle for 
        which an alternate fuel permit is required at the time of 
        transfer, the credit provided by this section must be applied 
        toward payment of the alternate fuel permit fee then due; 
        otherwise the transferor may file a claim for the amount of the 
        credit with the commissioner on a form prescribed by the 
        commissioner.  The department shall pay the claim from the 
        undistributed alternate fuel permit fees. 
           Subd. 8.  [MOTOR VEHICLE CONVERSION REPORT.] A person who 
        installs equipment in a motor vehicle to permit it to be powered 
        by compressed natural gas or propane shall report the 
        installation to the department of public safety within 30 days.  
        The report must include the name and address of the owner of the 
        vehicle; the make, model, and identification number of the 
        vehicle; the type of fuel that the vehicle was equipped to use 
        before the installation; and, if the vehicle is registered, the 
        license plate number of the vehicle. 
           Subd. 9.  [FEES DEPOSITED IN HIGHWAY USER FUND.] The permit 
        fees collected under subdivision 2 are in lieu of the gasoline 
        and special fuels excise taxes imposed by sections 296.02 and 
        296.025.  Compressed natural gas or propane sold as fuel for 
        motor vehicles displaying valid annual alternate fuel permit 
        stickers is not subject to any additional tax at the time of 
        sale.  All alternate fuel permit fees collected by the 
        department of public safety must be deposited in the state 
        treasury and credited to the highway user tax distribution fund. 
           Sec. 10.  Minnesota Statutes 1992, section 296.16, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [INTENT; GASOLINE USE.] All gasoline 
        received in this state and all gasoline produced in or brought 
        into this state except aviation gasoline and marine gasoline 
        shall be determined to be intended for use in motor vehicles in 
        this state. 
           Approximately 1-1/2 percent of all gasoline received in 
        this state and 1-1/2 percent of all gasoline produced or brought 
        into this state, except gasoline used for aviation purposes, is 
        being used as fuel for the operation of motorboats on the waters 
        of this state and of the total revenue derived from the 
        imposition of the gasoline fuel tax for uses other than for 
        aviation purposes, 1-1/2 percent of such revenues is the amount 
        of tax on fuel used in motorboats operated on the waters of this 
        state.  
           Approximately three-fourths of one percent of all gasoline 
        received in and produced or brought into this state, except 
        gasoline used for aviation purposes, is being used as fuel for 
        the operation of snowmobiles in this state, and of the total 
        revenue derived from the imposition of the gasoline fuel tax for 
        uses other than for aviation purposes, three-fourths of one 
        percent of such revenues is the amount of tax on fuel used in 
        snowmobiles operated in this state. 
           Approximately 0.15 of one percent of all gasoline received 
        in or produced or brought into this state, except gasoline used 
        for aviation purposes, is being used for the operation of 
        all-terrain vehicles in this state, and of the total revenue 
        derived from the imposition of the gasoline fuel tax, 0.15 of 
        one percent is the amount of tax on fuel used in all-terrain 
        vehicles operated in this state. 
           Approximately 0.046 of one percent of all gasoline received 
        or produced in or brought into this state, except gasoline used 
        for aviation purposes, is being used for the operation of 
        off-highway motorcycles in this state, and of the total revenue 
        derived from the imposition of the gasoline fuel tax for uses 
        other than for aviation purposes, 0.046 of one percent is the 
        amount of tax on fuel used in off-highway motorcycles operated 
        in this state. 
           Approximately .164 of one percent of all gasoline received 
        or produced in or brought into this state, except gasoline used 
        for aviation purposes, is being used for the off-road operation 
        of off-road vehicles, as defined in section 84.797, in this 
        state, and of the total revenue derived from the imposition of 
        the gasoline fuel tax for uses other than aviation purposes, 
        .164 of one percent is the amount of tax on fuel used for 
        off-road operation of off-road vehicles in this state. 
           Sec. 11.  Minnesota Statutes 1992, section 297C.03, 
        subdivision 6, is amended to read: 
           Subd. 6.  [INFORMATIONAL RETURNS REPORTS.] The following 
        persons shall file with the commissioner a monthly informational 
        report in the manner and on the form prescribed by the 
        commissioner:  
           (a) manufacturers, wholesalers, and importers licensed to 
        ship distilled spirits or wine into Minnesota shall file with 
        the commissioner a monthly informational report on a form 
        prescribed by the commissioner.; 
           (b) persons who manufacture distilled spirits or wine 
        within the state; 
           (c) all other persons who import distilled spirits or wine 
        into Minnesota; 
           (d) those who possess, receive, store, or warehouse 
        distilled spirits or wine in Minnesota, upon which the tax 
        imposed by section 297C.02, subdivision 1, has not been paid; 
        and 
           (e) those who possess, receive, store, or warehouse 
        distilled spirits or wine in Minnesota, which are required to 
        give bond pursuant to Internal Revenue Code, subtitle E, chapter 
        51. 
           No payment of any tax is required to be remitted with this 
        report.  The report must be filed on or before the tenth day 
        following the end of each calendar month, regardless of whether 
        or not any shipments were made the person shipped, manufactured, 
        possessed, received, stored, or warehoused any distilled spirits 
        or wine into or within Minnesota during the previous month, 
        unless the commissioner determines that a longer filing period 
        is appropriate for a particular manufacturer, wholesaler, or 
        importer person.  A person failing to file this report is 
        subject to the provisions of section 297C.14, subdivision 
        8.  This subdivision does not apply to the lawful importation of 
        wine and distilled spirits pursuant to section 297C.09, nor to 
        any lawful manufacture of wine or distilled spirits within the 
        state for personal consumption. 
           Sec. 12.  [469.301] [DEFINITIONS.] 
           Subdivision 1.  [GENERALLY.] In sections 469.301 to 
        469.308, the terms defined in this section have the meanings 
        given them, unless the context indicates a different meaning. 
           Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
        commissioner of jobs and training. 
           Subd. 3.  [ENTERPRISE ZONE.] "Enterprise zone" means an 
        area in the state designated as such by the commissioner. 
           Subd. 4.  [CITY.] "City" means any city that contains an 
        area that meets the criteria for designation as a federal 
        empowerment zone or enterprise community and meets the 
        eligibility criteria in section 469.303, or a city of the second 
        class that is designated as an economically depressed area by 
        the United States Department of Commerce. 
           Subd. 5.  [GOVERNING BODY.] "Governing body" means the city 
        council or other body designated by its charter. 
           Subd. 6.  [RESIDENT.] "Resident" means an individual 
        residing within the enterprise zone that meets the income 
        guidelines in Public Law Number 103-66. 
           Subd. 7.  [BUSINESS.] "Business" means any for-profit 
        business entity. 
           Subd. 8.  [MINIMUM WAGE.] "Minimum wage" means the minimum 
        wage that is required by federal law. 
           Sec. 13.  [469.302] [DESIGNATIONS OF ENTERPRISE ZONES.] 
           Subdivision 1.  [PROCESS.] The commissioner shall designate 
        an area as an enterprise zone if: 
           (1) the application is made by the governing body of the 
        city as prescribed by section 469.304; 
           (2) the area is determined by the commissioner to be 
        eligible for designation under section 469.303. 
           Subd. 2.  [DURATION.] The designation of an area as an 
        enterprise zone is effective for ten years after the date of 
        designation. 
           Subd. 3.  [DATE OF DESIGNATION.] Designation is effective 
        immediately following approval of the enterprise zone 
        application by the commissioner. 
           Sec. 14.  [469.303] [ELIGIBILITY REQUIREMENTS.] 
           An area within the city is eligible for designation as an 
        enterprise zone if the area is (1) designated as a proposed 
        federal empowerment zone or enterprise community by the city in 
        an application to the United States Department of Housing and 
        Urban Development under Public Law Number 103-66, provided the 
        city can demonstrate that it can meet the maximum zone 
        population standard under the federal empowerment zone program 
        for cities with a population under 500,000 or (2) an area within 
        a city of the second class that is designated as an economically 
        depressed area by the United States Department of Commerce. 
           Sec. 15.  [469.304] [APPLICATION FOR ENTERPRISE ZONE 
        DESIGNATION.] 
           Subdivision 1.  [SUBMISSION OF APPLICATIONS.] An applicant 
        may seek enterprise zone designation by submitting an 
        application to the commissioner.  The commissioner shall 
        establish procedures and forms for the submission of 
        applications for enterprise zone designation.  The commissioner 
        may promulgate rules for the administration of the program.  The 
        commissioner of revenue shall establish a schedule to determine 
        the tax credits in section 469.305. 
           Subd. 2.  [APPLICATIONS; CONTENTS.] The application for 
        designation as an enterprise zone must contain, at a minimum: 
           (1) verification that the area is eligible for designation 
        pursuant to section 469.303; 
           (2) identification of the agency or unit of government that 
        will implement the program; 
           (3) any additional information required by the 
        commissioner; and 
           (4) any additional information that the municipality 
        considers relevant to the designation of the area as an 
        enterprise zone. 
           Subd. 3.  [CERTIFICATION.] The governing body must certify 
        to the commissioner that activity within the municipality's 
        enterprise zone will not transfer existing employment from other 
        municipalities within the state. 
           Sec. 16.  [469.305] [ENTERPRISE ZONE CREDITS.] 
           Subdivision 1.  [INCOME OR FRANCHISE TAX CREDIT.] An income 
        or corporate franchise tax credit is available to businesses 
        located in an enterprise zone that meet the conditions of this 
        section.  Each city designated as an enterprise zone is 
        allocated $3,000,000 to be used to provide credits under this 
        section for the duration of the program.  Each city of the 
        second class designated as an economically depressed area by the 
        United States Department of Commerce is allocated $300,000 to be 
        used to provide credits under this section for the duration of 
        the program.  For fiscal year 1998 and subsequent years, the 
        proration in section 21 shall continue to apply until the amount 
        designated in this subdivision is expended. 
           The credit is in an amount equal to 20 percent of the wages 
        paid to an employee, not to exceed $5,000 per employee per 
        taxable year.  The credit is available to an employer for a zone 
        resident employed in the zone at full-time wage levels of not 
        less than 170 percent of minimum wage.  The credit is not 
        available to workers employed in construction or employees of 
        financial institutions, gambling enterprises, public utilities, 
        sports, fitness, and health facilities, or racetracks.  The 
        employee must be employed at that rate at the time the business 
        applies for a tax credit, and must have been employed for at 
        least one year at the business.  The credit applies to new jobs; 
        for purposes of this section, a "new job" is a job that did not 
        exist in Minnesota before the effective date of this section.  
        The credit is applicable to the five taxable years after the 
        application has been approved to the extent the allocation to 
        the city remains available to fund the credit, and provided that 
        the city certifies to the commissioner on an annual basis that 
        the business is in compliance with the plan to recruit, hire, 
        train, and retain zone residents. 
           Subd. 2.  [REFUNDABLE CREDITS.] To the extent the credit 
        provided under subdivision 1 exceeds the business' tax liability 
        under chapter 290, the credit is refundable. 
           Subd. 3.  [REVIEW AND ANALYSIS.] The city must submit the 
        proposed tax credit proposal to the commissioner for approval.  
        The proposal shall include a plan to recruit, hire, train, and 
        retain zone residents.  The tax credit proposal shall be 
        approved unless the commissioner finds that the proposal is not 
        in conformity with the provisions of sections 469.301 to 469.308.
           If the city submits the tax credit proposal to the 
        commissioner before the expiration of the zone designation under 
        section 469.302, subdivision 2, the authority of the 
        commissioner to approve the tax credit proposal continues until 
        the commissioner acts on the proposal. 
           Sec. 17.  [469.306] [REVOCATION.] 
           The commissioner may revoke a business' tax credit if the 
        applicant has not proceeded in good faith with its operations in 
        a manner which is consistent with the purpose of sections 
        469.301 to 469.308 and is possible under circumstances 
        reasonably within the control of the applicant. 
           The commissioner may reconsider the revocation of the tax 
        credit if the business provides evidence that circumstances of 
        its failure to proceed were beyond its control or that it did 
        not act in bad faith. 
           Sec. 18.  [469.307] [RECAPTURE.] 
           Subdivision 1.  [TERMINATION OF OPERATIONS; OTHER 
        VIOLATIONS.] Any business that receives a tax credit authorized 
        by section 469.305 and ceases to operate or otherwise violates 
        the criteria for obtaining the credit for its facility located 
        within the enterprise zone within seven years after the first 
        receipt of a credit by the business shall repay the portion of 
        the tax credit received as provided in the following schedule: 
             Termination of Operations           Repayment of Portion
                 or Other Violations
             Less than two years                      100 percent
             Between two years and four years         75 percent
             Between four years and seven years       50 percent
             More than seven years                    0 percent
           Subd. 2.  [REPAYMENT.] The repayment must be paid to the 
        state.  The amount repaid must be credited to the amount 
        certified as available for tax credits in the zone under section 
        469.305. 
           Subd. 3.  [LIEN.] If an event occurs that creates an 
        obligation under subdivision 1 to repay all or part of the tax 
        credit, the repayment obligation immediately becomes a lien 
        against the business's real and personal property located in 
        Minnesota, including the property of subsidiaries, parents, and 
        related corporations.  A lien against real property under this 
        subdivision has the same legal effect and must be collected in 
        the same manner as unpaid real property taxes.  
           Sec. 19.  [469.308] [ADMINISTRATION.] 
           Subdivision 1.  [TECHNICAL ASSISTANCE.] The commissioner 
        shall provide technical assistance to the city seeking an 
        enterprise zone designation. 
           Subd. 2.  [ADMINISTRATIVE PROCEDURE ACT.] Chapter 14 does 
        not apply to the designation of enterprise zones. 
           Subd. 3.  [REPORTING.] The commissioner shall require 
        cities receiving enterprise zone designations to report to the 
        state regarding the economic activity that has occurred in the 
        zone following the designation. 
           Subd. 4.  [REPORT TO THE LEGISLATURE.] The commissioner of 
        jobs and training, in consultation with the commissioner of 
        revenue and any cities receiving the designation, shall evaluate 
        the enterprise zone program and assess options for expansion of 
        the enterprise zone program to businesses throughout the 
        metropolitan area that hire zone residents.  The commissioner of 
        jobs and training shall submit its findings in a report to the 
        1996 session of the legislature. 
           Sec. 20.  [469.309] [RURAL JOB CREATION CREDIT.] 
           Subdivision 1.  [CREDIT FOR JOB CREATION.] The commissioner 
        of trade and economic development may approve a credit against 
        the tax due under chapter 290 for an eligible business beginning 
        with the first taxable year after December 31, 1994.  The 
        maximum credit available is $5,000 per eligible employee.  The 
        actual credit is based on the following schedule: 
           $2,000 for each eligible employee with wages greater than 
        or equal to 170 percent and less than 200 percent of the minimum 
        wage; 
           $3,000 for each eligible employee with wages greater than 
        or equal to 200 percent and less than 250 percent of the minimum 
        wage; 
           $4,000 for each eligible employee with wages greater than 
        or equal to 250 percent and less than 300 percent of the minimum 
        wage; and 
           $5,000 for each eligible employee with wages greater than 
        or equal to 300 percent of the minimum wage. 
           The total credit for an employer is equal to the actual 
        credit multiplied by the number of employees eligible for that 
        credit.  For purposes of this section "minimum wage" means the 
        minimum wage that is required by federal law.  An eligible 
        business may apply for a rural job creation credit only once for 
        each new job.  The credit is refundable. 
           Subd. 2.  [ELIGIBLE BUSINESS.] An employer eligible for a 
        job credit under this section must (1) be located outside the 
        metropolitan area as defined under section 473.121 (2) create at 
        least ten qualifying new jobs in a two-year period, and (3) 
        consist of a for-profit business.  For the purposes of this 
        section, a "qualifying new job" is a job that did not exist in 
        Minnesota before the effective date of this section. 
           Subd. 3.  [ELIGIBLE EMPLOYEE.] To be eligible for a credit, 
        the employee must be employed full-time by an eligible business 
        at a wage level of not less than 170 percent of the minimum wage 
        at the time the eligible business applies for the credit and 
        must have been employed there at that wage level for a minimum 
        of 12 months.  The credit applies only to new jobs created at 
        the eligible business after the effective date of this section. 
           Subd. 4.  [RESTRICTIONS.] The tax credits provided by this 
        section do not apply to racetracks, financial institutions, 
        gambling enterprises, public utilities, or sports, fitness, and 
        health facilities.  An employer is not eligible for a tax credit 
        if the commissioner determines that the position held by the 
        employee for which the business is seeking a credit was 
        transferred from an enterprise conducted by substantially the 
        same business enterprise at another site in the state. 
           Sec. 21.  [469.31] [LIMIT ON TAX CREDITS.] 
           The maximum amount of tax credits allowable under Minnesota 
        Statutes, sections 469.305 and 469.309 is $900,000 for fiscal 
        year 1997.  Of that amount, one-third must be allocated to the 
        city of Minneapolis, one-third to the city of St. Paul, and 
        one-third to the remaining cities.  Of the amounts allocated to 
        the cities of Minneapolis and St. Paul, $25,000 must be 
        subtracted from each city's allocation and is appropriated to 
        the commissioner of jobs and training for administration of this 
        program, provided that $25,000 of the appropriation is for 
        fiscal year 1996 and $25,000 is for fiscal year 1997.  Of the 
        amount allocated to the remaining cities, a minimum of $60,000 
        must be allocated to the city of South St. Paul.  No tax credits 
        are allowable before fiscal year 1997.  If the commissioner of 
        revenue estimates by March 1, 1996, that tax credits for fiscal 
        year 1997 will exceed $900,000, the commissioner shall 
        proportionately reduce each city's allocation to remain within 
        the limit. 
           Sec. 22.  [473.197] [HOUSING BOND CREDIT ENHANCEMENT 
        PROGRAM.] 
           Subdivision 1.  [AUTHORIZATION.] The metropolitan council 
        may establish a housing bond credit enhancement program as 
        provided in this section.  The council may pledge its full faith 
        and credit and taxing powers to the payment of bonds issued 
        under section 469.034 for qualified housing development projects 
        in the metropolitan area, as provided in this section.  A 
        "qualified housing development project" has the meaning given 
        that term in section 469.034, subdivision 2, paragraph (e), 
        except that the council is substituted for "general jurisdiction 
        governmental unit" in clause (3) and "60 percent of the median 
        family income" is substituted for "80 percent of the median 
        family income."  
           Subd. 2.  [PROJECT SELECTION.] Before pledging its full 
        faith and credit, the council must establish criteria for 
        selecting appropriate qualified housing development projects for 
        the credit enhancement program.  The council may award 
        preferences for qualified housing development projects that meet 
        criteria for preferences established by the council.  The 
        council must establish the criteria in consultation with housing 
        providers in the metropolitan area.  In developing priorities 
        for projects for the credit enhancement program, the council 
        shall give priority to projects that develop or redevelop 
        housing for low income households.  The council shall consider 
        the extent to which projects for the credit enhancement program 
        are developed in collaboration with Minnesota Youth-Build under 
        sections 268.361 to 268.367; or training for housing programs 
        for homeless adults under Laws 1992, chapter 376, article 6; or 
        other employment training programs. 
           Subd. 3.  [LIMITATION.] The aggregate principal amount of 
        bonds that may be secured by a pledge of the council's full 
        faith and credit under this section may not exceed $20,000,000.  
        The bonds must be payable from revenues derived from the project 
        or projects financed under the credit enhancement program, or 
        from income of the authority or authorities that participate in 
        the program, including earnings on any reserves established for 
        the program.  The council must find that the pledged revenues 
        will equal or exceed 110 percent of the principal and interest 
        due on the bonds. 
           Subd. 4.  [DEBT RESERVE; LEVY.] To provide money to pay 
        debt service on bonds issued under the credit enhancement 
        program if pledged revenues are insufficient to pay debt 
        service, the council must maintain a debt reserve fund in the 
        manner and with the effect provided by section 475.66 for public 
        debt service funds.  To provide funds for the debt reserve fund, 
        the council may use up to $3,000,000 of the proceeds of solid 
        waste bonds issued by the council under section 473.831 before 
        its repeal.  To provide additional funds for the debt reserve 
        fund, the council may levy a tax on all taxable property in the 
        metropolitan area and must levy the tax if sums in the debt 
        reserve fund are insufficient to cure any deficiency in the debt 
        service fund established for the bonds.  The tax authorized by 
        this section does not affect the amount or rate of taxes that 
        may be levied by the council for other purposes and is not 
        subject to limit as to rate or amount. 
           Subd. 5.  [AGREEMENTS.] The council and each authority that 
        participates in the credit enhancement program may enter into 
        agreements they determine to be necessary to implement the 
        credit enhancement program.  The agreements may extend over any 
        period, notwithstanding any law to the contrary. 
           Sec. 23.  [APPROPRIATION.] 
           $225,000 is appropriated from the general fund to the 
        commissioner of revenue for the costs of administering Laws 
        1994, chapter 383, and the provisions of this act.  This amount 
        does not cancel and is available until July 1, 1995. 
           Sec. 24.  [EFFECTIVE DATE.] 
           Section 1 is effective July 1, 1994. 
           Section 2 is effective July 1, 1995. 
           Sections 3 and 6 are effective for payments due after the 
        date of final enactment.  
           Sections 4 and 5 are effective for taxes levied in 1994, 
        payable in 1995, and thereafter. 
           Section 10 applies to gasoline received or produced in or 
        brought into this state (1) on or after July 1, 1994, in the 
        case of gasoline used in off-highway motorcycles, and (2) on or 
        after July 1, 1995, in the case of gasoline used for off-road 
        operation of off-road vehicles. 
           Section 11 is effective for informational reports due on or 
        after August 10, 1994. 
           Sections 12 to 21, and 23 are effective the day following 
        final enactment. 
           Section 22 is effective the day following final enactment 
        and applies to the counties of Anoka, Carver, Dakota, Hennepin, 
        Ramsey, Scott, and Washington. 
           Presented to the governor May 2, 1994 
           Signed by the governor May 5, 1994, 6:00 p.m.

700 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155 ♦ Phone: (651) 296-2868 ♦ TTY: 1-800-627-3529 ♦ Fax: (651) 296-0569