Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1995, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 264-H.F.No. 1864
An act relating to the financing and operation of
government in this state; adopting federal income tax
law changes; modifying certain tax rates, credits,
refunds, bases, and exemptions; modifying property tax
exemption, valuation, and classification provisions;
providing for deduction of property tax refunds from
property taxes; modifying or restricting certain
requirements or uses of tax increment financing;
modifying certain motor vehicle registration taxes;
establishing a sales tax advisory council; authorizing
certain local taxes, special districts and other local
authority; modifying provisions relating to local
excise taxes; modifying certain duties imposed on
local units of government and the department of
revenue; authorizing issuance of bonds and tax
anticipation certificates; modifying certain taconite
occupation and production provisions; modifying the
duties of the board of government innovation and
cooperation; changing certain aids to local
governments; modifying revenue recapture rules;
changing the property tax treatment of certain wind
property; adjusting the amount of the budget reserve;
providing for dedication of certain revenues; making
technical changes, corrections, and clarifications;
making tax policy, collection, and administrative
changes; requiring studies; imposing penalties;
appropriating money; amending Minnesota Statutes 1994,
sections 14.61; 14.62, by adding a subdivision;
15.039, by adding a subdivision; 16A.152, subdivision
1; 60A.15, subdivisions 1 and 12; 60A.199,
subdivisions 8 and 10; 69.021, subdivisions 2 and 5;
124.2131, by adding a subdivision; 124.918,
subdivisions 1 and 2; 168.012, subdivision 9; 168.013,
subdivision 1a; 168.017, subdivision 3, and by adding
a subdivision; 216C.01, subdivisions 1a and 1b;
246.18, subdivision 4, as amended, and by adding a
subdivision; 270.47; 270.48; 270.485; 270.494; 270.50;
270.52; 270.53; 270.69, subdivision 10; 270.72,
subdivisions 1, 2, and 3; 270.79, subdivision 4;
270A.03, subdivision 7; 270A.07, subdivision 2;
270A.09, by adding a subdivision; 270A.11; 270B.03,
subdivision 1; 270B.12, subdivision 2, and by adding a
subdivision; 270B.14, subdivision 11; 272.02,
subdivision 1; 272.115, subdivision 1; 272.121,
subdivision 2; 273.11, subdivision 16; 273.124,
subdivisions 1, 3, 6, 11, and 13; 273.13, subdivisions
24 and 25; 273.1398, subdivision 1, and by adding a
subdivision; 273.1399, subdivisions 1, 2, 6, and by
adding subdivisions; 273.17, subdivision 2; 273.37, by
adding a subdivision; 274.01, subdivision 1; 274.14;
275.065, subdivisions 1, 3, and 6; 275.07, subdivision
1; 275.08, subdivision 1b; 276.04, subdivision 2;
276.09; 276.111; 276.131; 279.01, subdivision 1, and
by adding a subdivision; 284.28, subdivision 2;
289A.18, subdivisions 2 and 4; 289A.20, subdivision 2;
289A.26, subdivision 2a; 289A.38, subdivision 7;
289A.40, subdivision 1; 289A.43; 289A.50, subdivision
1, and by adding a subdivision; 289A.55, subdivision
7; 289A.60, subdivisions 2, 12, and by adding a
subdivision; 290.01, subdivisions 7b and 19; 290.015,
subdivision 1; 290.032, subdivisions 1 and 2; 290.067,
subdivision 1, as amended; 290.191, subdivisions 1, 5,
and 6; 290.92, subdivisions 1 and 23; 290.9201,
subdivision 3; 290A.03, subdivisions 6 and 13;
290A.04, subdivisions 2h, 3, and 6; 290A.07; 290A.15;
290A.18; 294.09, subdivisions 1 and 4; 295.50,
subdivisions 1 and 4; 295.53, subdivisions 1, 2, and
5; 295.55, by adding a subdivision; 295.57; 296.01,
subdivisions 30, 34, and by adding subdivisions;
296.02, subdivisions 1, 1a, and 1b; 296.025,
subdivisions 1, 1a, and by adding a subdivision;
296.0261, by adding a subdivision; 296.12,
subdivisions 3, 4, and 11; 296.141, subdivisions 1, 2,
and 6; 296.17, subdivisions 1, 3, 5, and 11; 296.18,
subdivisions 1, 2, and 5; 297.08, subdivisions 1 and
3; 297.35, subdivision 1; 297.43, subdivision 2;
297A.01, subdivision 3, and by adding a subdivision;
297A.02, subdivision 4; 297A.135, subdivision 1;
297A.15, by adding a subdivision; 297A.25,
subdivisions 9, 11, 57, 59, and by adding
subdivisions; 297A.45; 297B.01, subdivision 5;
297B.02, subdivision 3; 297B.025, subdivision 2;
297B.032; 297C.02, subdivision 2; 297C.07; 297C.14,
subdivision 2; 297E.02, subdivisions 1, 6, and 11;
297E.031, subdivision 1; 297E.11, subdivision 4;
297E.12, subdivision 2; 297E.13, subdivision 5;
298.01, subdivision 4; 298.227; 298.24, subdivision 1;
298.25; 298.28, subdivision 9a; 298.296, subdivision
4; 298.75, subdivision 2; 299F.26, subdivisions 1 and
4; 325D.33, subdivision 4; 349.12, subdivision 25;
349.163, subdivision 5; 349A.10, subdivision 5;
375.192, by adding a subdivision; 375.83; 428A.01,
subdivision 5; 428A.03, by adding a subdivision;
428A.05; 465.795, subdivision 7; 465.796, subdivision
2; 465.797, subdivision 5; 465.798; 465.799; 465.801;
465.81, subdivision 1; 465.82, subdivision 2; 465.84;
465.85; 465.87; 469.169, subdivision 9, and by adding
a subdivision; 469.174, subdivisions 4, 19, 21, and by
adding subdivisions; 469.175, subdivisions 1, 3, 5, 6,
and 6a; 469.176, subdivisions 4b, 4c, 7, and by adding
a subdivision; 469.1763, subdivisions 2 and 4;
469.177, subdivisions 1, 1a, 2, 6, 9, and by adding a
subdivision; 469.1771, subdivision 1; 473.446,
subdivision 1; 473.711, subdivision 2; 477A.011,
subdivision 36; 477A.0121, subdivision 4; 477A.0132;
and 477A.03, subdivision 2; Laws 1985, chapter 302,
section 2, subdivision 1, as amended; Laws 1986,
chapter 400, section 44; Laws 1991, chapter 291,
article 8, section 28, subdivision 1; Laws 1992,
chapter 511, article 2, sections 45, subdivisions 1,
7, and by adding a subdivision; and 46, subdivisions
1, 7, and by adding a subdivision; Laws 1993, chapter
375, article 5, sections 40, subdivision 3; and 44;
Laws 1994, chapter 587, articles 1, section 27; 3,
section 21; 5, section 27; and 9, section 10,
subdivision 6; proposing coding for new law in
Minnesota Statutes, chapters 16A; 270; 272; 276; 282;
290A; 296; 340A; 410; 465; 469; and 473; repealing
Minnesota Statutes 1994, sections 60A.15, subdivision
7; 168.013, subdivision 1j; 245.48; 270.49; 270.493;
270.70, subdivisions 8, 9, and 10; 290A.04,
subdivision 2i; 296.0261; 297A.136; 297A.212; 297A.38;
and 469.175, subdivision 7a; Laws 1988, chapter 698,
section 5; and Laws 1989, First Special Session
chapter 1, article 7, section 9.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
INCOME AND FRANCHISE TAXES
Section 1. Minnesota Statutes 1994, section 289A.50, is
amended by adding a subdivision to read:
Subd. 10. [LIMITATION ON REFUND.] If an addition to
federal taxable income under section 290.01, subdivision 19a,
clause (1), is judicially determined to discriminate against
interstate commerce, the legislature intends that the
discrimination be remedied by adding interest on obligations of
Minnesota governmental units and Indian tribes to federal
taxable income. This subdivision applies beginning with the
taxable years that begin during the calendar year in which the
court's decision is final. Other remedies apply for previous
taxable years.
Sec. 2. Minnesota Statutes 1994, 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 net income of a designated settlement fund as defined
in section 468B(d) of the Internal Revenue Code means the gross
income as defined in section 468B(b) 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 sections 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.
The provision of section 741 of Legislation to Implement
Uruguay Round of General Agreement on Tariffs and Trade, Public
Law Number 103-465, and the provisions of sections 1, 2, and 3,
of the Self-Employed Health Insurance Act of 1995, Public Law
Number 104-7, shall become effective at the time they become
effective for federal purposes.
The Internal Revenue Code of 1986, as amended through
December 31, 1994, shall be in effect for taxable years
beginning after December 31, 1994.
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. 3. [FEDERAL CHANGES.]
The changes made by sections 721, 722, 723, and 744 of
Legislation to Implement Uruguay Round of General Agreement on
Tariffs and Trade, Public Law Number 103-465 and section 4 of
the Self-Employed Health Insurance Act of 1995, Public Law
Number 104-7, which affect the computation of the Minnesota
working family credit under Minnesota Statutes, section
290.0671, subdivision 1, and the computation of the substantial
understatement of liability penalty of Minnesota Statutes,
section 289A.60, subdivision 4, shall become effective at the
same time the changes become effective for federal purposes.
Sec. 4. [INSTRUCTION TO REVISOR.]
In the next edition of Minnesota Statutes, the revisor of
statutes shall substitute the phrase "Internal Revenue Code of
1986, as amended through April 15, 1995," for the words
"Internal Revenue Code of 1986, as amended through December 31,
1993," wherever the phrase occurs in chapters 289A, 290, 290A,
291, 297, 298, and 469, except section 290.01, subdivision 19.
Sec. 5. [EFFECTIVE DATE.]
Section 1 is effective the day following final enactment.
ARTICLE 2
SALES AND EXCISE TAX
Section 1. Minnesota Statutes 1994, section 15.039, is
amended by adding a subdivision to read:
Subd. 8. [TRANSFER OF PROPERTY; SALES TAX.] All transfers
of motor vehicles or other tangible personal property between
agencies or political subdivisions under this section are exempt
from the motor vehicle sales tax under chapter 297B and the
general sales tax under chapter 297A.
Sec. 2. Minnesota Statutes 1994, section 168.013,
subdivision 1a, is amended to read:
Subd. 1a. [PASSENGER AUTOMOBILES; HEARSES.] (a) On
passenger automobiles as defined in section 168.011, subdivision
7, and hearses, except as otherwise provided, the tax shall be
$10 plus an additional tax equal to 1.25 percent of the base
value.
(b) Subject to the classification provisions herein, "base
value" means the manufacturer's suggested retail price of the
vehicle including destination charge as reflected on the price
listing affixed to the vehicle in conformity with United States
Code, title 15, sections 1231 to 1233 (Public Law Number 85-506)
or otherwise suggested using list price information published by
the manufacturer or determined by the registrar if no suggested
retail price exists, and shall not include the cost of each
accessory or item of optional equipment separately added to the
vehicle and the suggested retail price.
(c) If the manufacturer's list price information contains a
single vehicle identification number followed by various
descriptions and suggested retail prices, the registrar shall
select from those listings only the lowest price for determining
base value.
(d) If unable to determine the base value because the
vehicle is specially constructed, or for any other reason, the
registrar may establish such value upon the cost price to the
purchaser or owner as evidenced by a certificate of cost but not
including Minnesota sales or use tax or any local sales or other
local tax.
(d) (e) The registrar shall classify every vehicle in its
proper base value class as follows:
FROM TO
$ 0 $199.99
200 399.99
and thereafter a series of classes successively set in brackets
having a spread of $200 consisting of such number of classes as
will permit classification of all vehicles.
(e) (f) The base value for purposes of this section shall
be the middle point between the extremes of its class.
(f) (g) The registrar shall establish the base value, when
new, of every passenger automobile and hearse registered prior
to the effective date of Extra Session Laws 1971, chapter 31,
using list price information published by the manufacturer or
any nationally recognized firm or association compiling such
data for the automotive industry. If unable to ascertain the
base value of any registered vehicle in the foregoing manner,
the registrar may use any other available source or method. The
tax on all previously registered vehicles shall be computed upon
the base value thus determined taking into account the
depreciation provisions of paragraph (g) (h).
(g) (h) Except as provided in paragraph (h) (i), the annual
additional tax computed upon the base value as provided herein,
during the first and second years of vehicle life shall be
computed upon 100 percent of the base value; for the third and
fourth years, 90 percent of such value; for the fifth and sixth
years, 75 percent of such value; for the seventh year, 60
percent of such value; for the eighth year, 40 percent of such
value; for the ninth year, 30 percent of such value; for the
tenth year, ten percent of such value; for the 11th and each
succeeding year, the sum of $25.
In no event shall the annual additional tax be less than
$25.
(h) (i) The annual additional tax under paragraph (g) (h)
on a motor vehicle on which the first annual tax was paid before
January 1, 1990, must not exceed the tax that was paid on that
vehicle the year before.
Sec. 3. Minnesota Statutes 1994, section 168.017,
subdivision 3, is amended to read:
Subd. 3. [EXCEPTIONS.] All vehicles subject to
registration under the monthly series system shall be registered
by the registrar for a period of 12 consecutive calendar months,
except as follows:
(a) if the application is an original rather than renewal
application; or,
(b) if the applicant is a licensed motor vehicle lessor
under section 168.27, in which case the applicant may apply for
original registration of a group of ten or more vehicles vehicle
for a period of four or more months, the month of expiration to
be designated by the applicant at the time of registration.
However, to qualify for this exemption, the applicant must
present the application to the registrar at St. Paul, or at
deputy registrar offices as the registrar may designate.
In any instance except that of a licensed motor vehicle
lessor, the registrar may register the vehicle which is the
subject of the application for a period of not less than three
nor more than 15 calendar months, when the registrar determines
that to do so will help to equalize the registration and renewal
work load of the department.
Sec. 4. Minnesota Statutes 1994, section 168.017, is
amended by adding a subdivision to read:
Subd. 5. (a) Notwithstanding subdivisions 3 and 4, a
person leasing for at least one year a vehicle registered under
this section may obtain an extension of the motor vehicle's
registration period for the unexpired portion of the lease
period, for a period not to exceed 11 months beyond the
expiration of the registration period.
(b) In order to obtain an extension under this subdivision
a lessee must
(1) apply to the registrar on a form the registrar
prescribes,
(2) submit to the registrar a copy of the lease,
(3) pay an administrative fee of $5, and
(4) pay a tax of one-twelfth of the tax for the
registration period being extended for each month of the
extension.
(c) On an applicant's compliance with paragraph (b) the
registrar shall issue the applicant a license plate tab or
sticker designating the new month of expiration of the
registration. The extended registration expires on the tenth
day of the month following the month designated on the tab or
sticker.
(d) All fees collected under paragraph (b), clause (3),
must be deposited in the highway user tax distribution fund.
Sec. 5. Minnesota Statutes 1994, section 216C.01,
subdivision 1a, is amended to read:
Subd. 1a. [ALTERNATIVE FUEL.] "Alternative fuel" means
natural gas; liquefied petroleum gas; hydrogen; coal-derived
liquefied fuels; electricity; methanol, denatured ethanol, and
other alcohols; mixtures containing 85 percent or more, or other
percentage as may be set by regulation by the Secretary of the
United States Department of Energy, by volume of methanol,
denatured ethanol, and other alcohols with gasoline or other
fuels; fuels other than alcohol that are derived from biological
materials; and other fuel that the Secretary of the United
States Department of Energy determines by regulation to be an
alternative fuel within the meaning of section 301(2) of the
National Energy Policy Act of 1992 and intended for use in motor
vehicles.
Sec. 6. Minnesota Statutes 1994, section 216C.01,
subdivision 1b, is amended to read:
Subd. 1b. [ALTERNATIVE FUEL VEHICLE.] "Alternative fuel
vehicle" means a dedicated, flexible, or a dual-fuel vehicle
operated primarily on an alternative fuel.
Sec. 7. Minnesota Statutes 1994, section 296.01, is
amended by adding a subdivision to read:
Subd. 5. [ALTERNATIVE FUEL VEHICLE.] "Alternative fuel
vehicle" means a dedicated, flexible, or dual-fuel vehicle
operated primarily on alternative transportation fuel.
Sec. 8. Minnesota Statutes 1994, section 296.01, is
amended by adding a subdivision to read:
Subd. 11a. [COMPRESSED NATURAL GAS.] "Compressed natural
gas" or CNG means natural gas, primarily methane, condensed
under high pressure and stored in specially designed storage
tanks at between 2,000 and 3,600 pounds per square inch. For
purposes of this chapter, the energy content of CNG will be
considered to be 1,000 BTUs per cubic foot.
Sec. 9. Minnesota Statutes 1994, section 296.01, is
amended by adding a subdivision to read:
Subd. 15c. [E85.] "E85" means a petroleum product that is
a blend of agriculturally derived denatured ethanol and gasoline
that typically contains 85 percent ethanol by volume, but at a
minimum must contain at least 60 percent ethanol by volume. For
the purposes of this chapter, the energy content of E85 will be
considered to be 82,000 BTUs per gallon.
Sec. 10. Minnesota Statutes 1994, section 296.01, is
amended by adding a subdivision to read:
Subd. 23a. [LIQUEFIED NATURAL GAS.] "Liquefied natural gas"
or LNG means natural gas, primarily methane, which has been
condensed through a cryogenic cooling process and is stored in
special pressurized and insulated storage tanks. For purposes
of this chapter, the energy content of LNG will be considered to
be 69,000 BTUs per gallon.
Sec. 11. Minnesota Statutes 1994, section 296.01, is
amended by adding a subdivision to read:
Subd. 23b. [LIQUEFIED PETROLEUM GAS.] "Liquefied petroleum
gas" or LPG or propane means a product made of short hydrocarbon
chains and containing primarily propane and butane that is
stored in specialized tanks at moderate pressure. For purposes
of this chapter, the energy content of LPG or propane will be
considered to be 86,000 BTUs per gallon.
Sec. 12. Minnesota Statutes 1994, section 296.01, is
amended by adding a subdivision to read:
Subd. 24b. [M85.] "M85" means a petroleum product that is
a liquid fuel blend of methanol and gasoline that contains at
least 85 percent methanol by volume. For the purposes of this
chapter, the energy content of M85 will be considered to be
65,000 BTUs per gallon.
Sec. 13. Minnesota Statutes 1994, section 296.01,
subdivision 30, is amended to read:
Subd. 30. [PETROLEUM PRODUCTS.] "Petroleum products" means
all of the products defined in subdivisions 2, 7, 8, 10, 13, 14,
15c, and 17 to 22, and 24b.
Sec. 14. Minnesota Statutes 1994, section 296.01,
subdivision 34, is amended to read:
Subd. 34. [SPECIAL FUEL.] "Special fuel" means (1) all
combustible gases and liquid petroleum products or substitutes
therefor including clear diesel fuel, except gasoline, gasoline
blended with ethanol, and agricultural alcohol gasoline which
are delivered into the supply tank of a licensed motor vehicle
or into storage tanks maintained by an owner or operator of a
licensed motor vehicle as a source of supply for such vehicle;
(2) all combustible gases and liquid petroleum products or
substitutes therefor, except gasoline, gasoline blended with
ethanol, and agricultural alcohol gasoline, when delivered to a
licensed special fuel dealer or to the retail service station
storage of a distributor who has elected to pay the special fuel
excise tax as provided in section 296.12, subdivision 3; (3) all
combustible gases and liquid petroleum products or substitutes
therefor, except gasoline, which are used as aviation fuel; or
(4) dyed fuel that is being used illegally in a licensed motor
vehicle.
Sec. 15. Minnesota Statutes 1994, section 296.02,
subdivision 1, is amended to read:
Subdivision 1. [TAX IMPOSED; EXCEPTION FOR QUALIFIED
SERVICE STATION.] There is imposed an excise tax on gasoline,
gasoline blended with ethanol, and agricultural alcohol
gasoline, used in producing and generating power for propelling
motor vehicles used on the public highways of this state. For
purposes of this section, gasoline is defined in section 296.01,
subdivisions 10, 15b, 18, 19, 20, and 24a. This tax is payable
at the times, in the manner, and by persons specified in this
chapter. The tax is payable at the rate specified in
subdivision 1b, subject to the exceptions and reductions
specified in this section.
(a) Notwithstanding any other provision of law to the
contrary, the tax imposed on special fuel sold by a qualified
service station may not exceed, or the tax on gasoline delivered
to a qualified service station must be reduced to, a rate not
more than three cents per gallon above the state tax rate
imposed on such products sold by a service station in a
contiguous state located within the distance indicated in clause
(b).
(b) A "qualifying service station" means a service station
located within 7.5 miles, measured by the shortest route by
public road, from a service station selling like product in the
contiguous state.
(c) A qualified service station shall be allowed a credit
by the supplier or distributor, or both, for the amount of
reduction computed in accordance with clause (a).
A qualified service station, before receiving the credit,
shall be registered with the commissioner of revenue.
Sec. 16. Minnesota Statutes 1994, 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. 17. Minnesota Statutes 1994, section 296.02,
subdivision 1b, is amended to read:
Subd. 1b. [RATES IMPOSED.] The gasoline excise tax is
imposed at the following rate rates:
(1) E85 is taxed at the rate of 14.2 cents per gallon;
(2) M85 is taxed at the rate of 11.4 cents per gallon; and
(3) For the period on and after May 1, 1988, all other
gasoline is taxed at the rate of 20 cents per gallon.
Sec. 18. Minnesota Statutes 1994, section 296.025,
subdivision 1, is amended to read:
Subdivision 1. [TAX IMPOSED.] There is hereby imposed an
excise tax of the same rate per gallon as the gasoline excise
tax on all special fuel at the rates specified in subdivision 1b.
For clear diesel fuel, the tax is imposed on the first
distributor who received the product in Minnesota. For dyed
fuel being used illegally in a licensed motor vehicle, the tax
is imposed on the owner or operator of the motor vehicle, or in
some instances, on the dealer who supplied the fuel. For dyed
fuel used in a motor vehicle but subject to a federal exemption,
although no federal tax may be imposed, the fuel is subject to
the state tax. For other fuels, including jet fuel, propane,
and compressed natural gas, the tax is imposed on the
distributor, special fuel dealer, or bulk purchaser. This tax
is payable at the time and in the manner specified in this
chapter. For purposes of this section, "owner or operator"
means the operation of licensed motor vehicles, whether loaded
or empty, whether for compensation or not for compensation, and
whether owned by or leased to the motor carrier who operates
them or causes them to be operated.
Sec. 19. Minnesota Statutes 1994, 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. 20. Minnesota Statutes 1994, section 296.025, is
amended by adding a subdivision to read:
Subd. 1b. [TAX RATES.] The special fuel excise tax is
imposed at the following rates:
(1) Liquefied petroleum gas or propane is taxed at the rate
of 15 cents per gallon.
(2) Liquefied natural gas is taxed at the rate of 12 cents
per gallon.
(3) Compressed natural gas is taxed at the rate of $1.739
per thousand cubic feet; or 20 cents per gasoline equivalent, as
defined by the National Conference on Weights and Measures,
which is 5.66 pounds of natural gas.
(4) All other special fuel is taxed at the same rate as the
gasoline excise tax.
Sec. 21. Minnesota Statutes 1994, section 296.0261, is
amended by adding a subdivision to read:
Subd. 10. [CREDIT; REFUNDS.] (a) A purchaser of an
alternative fuel vehicle permit under subdivisions 1 to 9, prior
to July 1, 1995, shall receive a credit for the unused portion
of the permit fee. The amount of the credit shall be equal to
the original permit fee and prorated to the number of months
from July 1, 1995, until the expiration date of the permit. The
credit shall reduce the amount of the vehicle's annual motor
vehicle registration tax as calculated under section 168.013.
The credit shall be applied to the first motor vehicle
registration tax payable after July 1, 1995.
(b) If the amount of the credit calculated under paragraph
(a) exceeds the amount of motor vehicle registration tax due,
the registrar shall pay to the vehicle owner a cash refund equal
to the difference between the motor vehicle registration tax and
the credit due. The amount necessary to pay the refunds under
this paragraph is appropriated for fiscal year 1996 to the
commissioner of public safety from the highway user tax
distribution fund. The appropriation is available until the
refunds have been paid.
Sec. 22. Minnesota Statutes 1994, section 297A.01,
subdivision 3, is amended to read:
Subd. 3. A "sale" and a "purchase" includes, but is not
limited to, each of the following transactions:
(a) Any transfer of title or possession, or both, of
tangible personal property, whether absolutely or conditionally,
and the leasing of or the granting of a license to use or
consume tangible personal property other than manufactured homes
used for residential purposes for a continuous period of 30 days
or more, for a consideration in money or by exchange or barter;
(b) The production, fabrication, printing, or processing of
tangible personal property for a consideration for consumers who
furnish either directly or indirectly the materials used in the
production, fabrication, printing, or processing;
(c) The furnishing, preparing, or serving for a
consideration of food, meals, or drinks. "Sale" does not
include:
(1) meals or drinks served to patients, inmates, or persons
residing at hospitals, sanitariums, nursing homes, senior
citizens homes, and correctional, detention, and detoxification
facilities;
(2) meals or drinks purchased for and served exclusively to
individuals who are 60 years of age or over and their spouses or
to the handicapped and their spouses by governmental agencies,
nonprofit organizations, agencies, or churches or pursuant to
any program funded in whole or part through 42 USCA sections
3001 through 3045, wherever delivered, prepared or served; or
(3) meals and lunches served at public and private schools,
universities, or colleges. Notwithstanding section 297A.25,
subdivision 2, taxable food or meals include, but are not
limited to, the following:
(i) heated food or drinks;
(ii) sandwiches prepared by the retailer;
(iii) single sales of prepackaged ice cream or ice milk
novelties prepared by the retailer;
(iv) hand-prepared or dispensed ice cream or ice milk
products including cones, sundaes, and snow cones;
(v) soft drinks and other beverages prepared or served by
the retailer;
(vi) gum;
(vii) ice;
(viii) all food sold in vending machines;
(ix) party trays prepared by the retailers; and
(x) all meals and single servings of packaged snack food,
single cans or bottles of pop, sold in restaurants and bars;
(d) The granting of the privilege of admission to places of
amusement, recreational areas, or athletic events, except a
world championship football game sponsored by the national
football league, and the privilege of having access to and the
use of amusement devices, tanning facilities, reducing salons,
steam baths, turkish baths, health clubs, and spas or athletic
facilities;
(e) The furnishing for a consideration of lodging and
related services by a hotel, rooming house, tourist court, motel
or trailer camp and of the granting of any similar license to
use real property other than the renting or leasing thereof for
a continuous period of 30 days or more;
(f) The furnishing for a consideration of electricity, gas,
water, or steam for use or consumption within this state, or
local exchange telephone service, intrastate toll service, and
interstate toll service, if that service originates from and is
charged to a telephone located in this state. Telephone service
includes paging services and private communication service, as
defined in United States Code, title 26, section 4252(d), except
for private communication service purchased by an agent acting
on behalf of the state lottery. The furnishing for a
consideration of access to telephone services by a hotel to its
guests is a sale under this clause. Sales by municipal
corporations in a proprietary capacity are included in the
provisions of this clause. The furnishing of water and sewer
services for residential use shall not be considered a sale.
The sale of natural gas to be used as a fuel in vehicles
propelled by natural gas shall not be considered a sale for the
purposes of this section;
(g) The furnishing for a consideration of cable television
services, including charges for basic service, charges for
premium service, and any other charges for any other
pay-per-view, monthly, or similar television services;
(h) Notwithstanding section 297A.25, subdivisions 9 and 12,
the sales of racehorses including claiming sales and fees paid
for breeding racehorses or horses previously used for racing
shall be considered a "sale" and a "purchase." "Racehorse"
means a horse that is or is intended to be used for racing and
whose birth has been recorded by the Jockey Club or the United
States Trotting Association or the American Quarter Horse
Association. "Sale" does not include fees paid for breeding
horses that are not racehorses;
(i) The furnishing for a consideration of parking services,
whether on a contractual, hourly, or other periodic basis,
except for parking at a meter;
(j) (i) The furnishing for a consideration of services
listed in this paragraph:
(i) laundry and dry cleaning services including cleaning,
pressing, repairing, altering, and storing clothes, linen
services and supply, cleaning and blocking hats, and carpet,
drapery, upholstery, and industrial cleaning. Laundry and dry
cleaning services do not include services provided by coin
operated facilities operated by the customer;
(ii) motor vehicle washing, waxing, and cleaning services,
including services provided by coin-operated facilities operated
by the customer, and rustproofing, undercoating, and towing of
motor vehicles;
(iii) building and residential cleaning, maintenance, and
disinfecting and exterminating services;
(iv) services provided by detective agencies, security
services, burglar, fire alarm, and armored car services not
including services performed within the jurisdiction they serve
by off-duty licensed peace officers as defined in section
626.84, subdivision 1;
(v) pet grooming services;
(vi) lawn care, fertilizing, mowing, spraying and sprigging
services; garden planting and maintenance; tree, bush, and shrub
pruning, bracing, spraying, and surgery; tree, bush, shrub and
stump removal; and tree trimming for public utility lines.
Services performed under a construction contract for the
installation of shrubbery, plants, sod, trees, bushes, and
similar items are not taxable;
(vii) mixed municipal solid waste collection and disposal
management services as described in section 297A.45;
(viii) massages, except when provided by a licensed health
care facility or professional or upon written referral from a
licensed health care facility or professional for treatment of
illness, injury, or disease; and
(ix) the furnishing for consideration of lodging, board and
care services for animals in kennels and other similar
arrangements, but excluding veterinary and horse boarding
services.
The services listed in this paragraph are taxable under section
297A.02 if the service is performed wholly within Minnesota or
if the service is performed partly within and partly without
Minnesota and the greater proportion of the service is performed
in Minnesota, based on the cost of performance. In applying the
provisions of this chapter, the terms "tangible personal
property" and "sales at retail" include taxable services and the
provision of taxable services, unless specifically provided
otherwise. Services performed by an employee for an employer
are not taxable under this paragraph. Services performed by a
partnership or association for another partnership or
association are not taxable under this paragraph if one of the
entities owns or controls more than 80 percent of the voting
power of the equity interest in the other entity. Services
performed between members of an affiliated group of corporations
are not taxable. For purposes of this section, "affiliated
group of corporations" includes those entities that would be
classified as a member of an affiliated group under United
States Code, title 26, section 1504, and who are eligible to
file a consolidated tax return for federal income tax purposes;
(k) (j) A "sale" and a "purchase" includes the transfer of
computer software, meaning information and directions that
dictate the function performed by data processing equipment. A
"sale" and a "purchase" does not include the design,
development, writing, translation, fabrication, lease, or
transfer for a consideration of title or possession of a custom
computer program; and
(l) (k) The granting of membership in a club, association,
or other organization if:
(1) the club, association, or other organization makes
available for the use of its members sports and athletic
facilities (without regard to whether a separate charge is
assessed for use of the facilities); and
(2) use of the sports and athletic facilities is not made
available to the general public on the same basis as it is made
available to members.
Granting of membership includes both one-time initiation fees
and periodic membership dues. Sports and athletic facilities
include golf courses, tennis, racquetball, handball and squash
courts, basketball and volleyball facilities, running tracks,
exercise equipment, swimming pools, and other similar athletic
or sports facilities. The provisions of this paragraph do not
apply to camps or other recreation facilities owned and operated
by an exempt organization under section 501(c)(3) of the
Internal Revenue Code of 1986, as amended through December 31,
1992, for educational and social activities for young people
primarily age 18 and under.
Sec. 23. Minnesota Statutes 1994, section 297A.01, is
amended by adding a subdivision to read:
Subd. 21. [MIXED MUNICIPAL SOLID WASTE MANAGEMENT
SERVICES.] "Mixed municipal solid waste management services" or
"waste management services" means services relating to the
management of mixed municipal solid waste from collection to
disposal, including transportation and management at waste
facilities. The definitions in section 115A.03 apply to this
subdivision.
Sec. 24. Minnesota Statutes 1994, section 297A.02,
subdivision 4, is amended to read:
Subd. 4. [MANUFACTURED HOUSING AND PARK TRAILERS.]
Notwithstanding the provisions of subdivision 1, for sales at
retail of new manufactured homes used for residential purposes
and new or used park trailers, as defined in section 168.011,
subdivision 8, paragraph (b), the excise tax is imposed upon 65
percent of the sales price of the home or park trailer.
Sec. 25. Minnesota Statutes 1994, section 297A.135,
subdivision 1, is amended to read:
Subdivision 1. [TAX IMPOSED.] A tax 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. A
van designed or adapted primarily for transporting property
rather than passengers is exempt from the tax imposed under this
section. 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. 26. Minnesota Statutes 1994, section 297A.15, is
amended by adding a subdivision to read:
Subd. 7. [REFUND; APPROPRIATION; ADULT AND JUVENILE
CORRECTIONAL FACILITIES.] (a) If construction materials and
supplies described in paragraph (b) are purchased by a
contractor, subcontractor, or builder as part of a lump-sum
contract or similar type of contract with a price covering both
labor and materials for use in the project, a refund equal to 20
percent of the taxes paid by the contractor, subcontractor, or
builder must be paid to the governmental subdivision. An
application must be submitted by the governmental subdivision
and must include sufficient information to permit the
commissioner to verify the sales taxes paid for the project.
The contractor, subcontractor, or builder must furnish to the
governmental subdivision a statement of the cost of the
construction materials and supplies and the sales taxes paid on
them. The amount required to make the refunds is annually
appropriated to the commissioner. Interest must be paid on the
refund at the rate in section 270.76 from 60 days after the date
the refund claim is filed with the commissioner.
(b) Construction materials and supplies qualify for the
refund under this section if: (1) the materials and supplies
are for use in a project to construct or improve an adult or
juvenile correctional facility in a county, home rule charter
city, or statutory city, and (2) the project is mandated by
state or federal law, rule, or regulation. The refund applies
regardless of whether the materials and supplies are purchased
by the city or county, or by a contractor, subcontractor, or
builder under a contract with the city or county.
Sec. 27. Minnesota Statutes 1994, section 297A.25,
subdivision 9, is amended to read:
Subd. 9. [MATERIALS CONSUMED IN PRODUCTION.] The gross
receipts from the sale of and the storage, use, or consumption
of all materials, including chemicals, fuels, petroleum
products, lubricants, packaging materials, including returnable
containers used in packaging food and beverage products, feeds,
seeds, fertilizers, electricity, gas and steam, used or consumed
in agricultural or industrial production of personal property
intended to be sold ultimately at retail, whether or not the
item so used becomes an ingredient or constituent part of the
property produced are exempt. Seeds, trees, fertilizers, and
herbicides purchased for use by farmers in the Conservation
Reserve Program under United States Code, title 16, section
590h, the Integrated Farm Management Program under section 1627
of Public Law Number 101-624, the Wheat and Feed Grain Programs
under sections 301 to 305 and 401 to 405 of Public Law Number
101-624, and the conservation reserve program under sections
103F.505 to 103F.531, are included in this exemption. Sales to
a veterinarian of materials used or consumed in the care,
medication, and treatment of agricultural production animals and
horses used in agricultural production are exempt under this
subdivision. Chemicals used for cleaning food processing
machinery and equipment are included in this exemption.
Materials, including chemicals, fuels, and electricity purchased
by persons engaged in agricultural or industrial production to
treat waste generated as a result of the production process are
included in this exemption. Such production shall include, but
is not limited to, research, development, design or production
of any tangible personal property, manufacturing, processing
(other than by restaurants and consumers) of agricultural
products whether vegetable or animal, commercial fishing,
refining, smelting, reducing, brewing, distilling, printing,
mining, quarrying, lumbering, generating electricity and the
production of road building materials. Such production shall
not include painting, cleaning, repairing or similar processing
of property except as part of the original manufacturing
process. Machinery, equipment, implements, tools, accessories,
appliances, contrivances, furniture and fixtures, used in such
production and fuel, electricity, gas or steam used for space
heating or lighting, are not included within this exemption;
however, accessory tools, equipment and other short lived items,
which are separate detachable units used in producing a direct
effect upon the product, where such items have an ordinary
useful life of less than 12 months, are included within the
exemption provided herein. Electricity used to make snow for
outdoor use for ski hills, ski slopes, or ski trails is included
in this exemption.
Sec. 28. Minnesota Statutes 1994, section 297A.25,
subdivision 11, is amended to read:
Subd. 11. [SALES TO GOVERNMENT.] The gross receipts from
all sales, including sales in which title is retained by a
seller or a vendor or is assigned to a third party under an
installment sale or lease purchase agreement under section
465.71, of tangible personal property to, and all storage, use
or consumption of such property by, the United States and its
agencies and instrumentalities, the University of Minnesota,
state universities, community colleges, technical colleges,
state academies, the Minnesota center for arts education, and
school districts are exempt.
As used in this subdivision, "school districts" means
public school entities and districts of every kind and nature
organized under the laws of the state of Minnesota, including,
without limitation, school districts, intermediate school
districts, education districts, educational cooperative service
units, secondary vocational cooperative centers, special
education cooperatives, joint purchasing cooperatives,
telecommunication cooperatives, regional management information
centers, technical colleges, joint vocational technical
districts, and any instrumentality of a school district, as
defined in section 471.59.
Sales exempted by this subdivision include sales under
section 297A.01, subdivision 3, paragraph (f), but do not
include sales under section 297A.01, subdivision 3, paragraph
(j), clause (vii).
Sales to hospitals and nursing homes owned and operated by
political subdivisions of the state are exempt under this
subdivision.
The sales to and exclusively for the use of libraries of
books, periodicals, audio-visual materials and equipment,
photocopiers for use by the public, and all cataloging and
circulation equipment, and cataloging and circulation software
for library use are exempt under this subdivision. For purposes
of this paragraph "libraries" means libraries as defined in
section 134.001, county law libraries under chapter 134A, the
state library under section 480.09, and the legislative
reference library.
Sales of supplies and equipment used in the operation of an
ambulance service owned and operated by a political subdivision
of the state are exempt under this subdivision provided that the
supplies and equipment are used in the course of providing
medical care. Sales to a political subdivision of repair and
replacement parts for emergency rescue vehicles and fire trucks
and apparatus are exempt under this subdivision.
Sales to a political subdivision of machinery and
equipment, except for motor vehicles, used directly for mixed
municipal solid waste collection and disposal management
services at a solid waste disposal facility as defined in
section 115A.03, subdivision 10, are exempt under this
subdivision.
Sales to political subdivisions of chore and homemaking
services to be provided to elderly or disabled individuals are
exempt.
Sales of telephone services to the department of
administration that are used to provide telecommunications
services through the intertechnologies revolving fund are exempt
under this subdivision.
This exemption shall not apply to building, construction or
reconstruction materials purchased by a contractor or a
subcontractor as a part of a lump-sum contract or similar type
of contract with a guaranteed maximum price covering both labor
and materials for use in the construction, alteration, or repair
of a building or facility. This exemption does not apply to
construction materials purchased by tax exempt entities or their
contractors to be used in constructing buildings or facilities
which will not be used principally by the tax exempt entities.
This exemption does not apply to the leasing of a motor
vehicle as defined in section 297B.01, subdivision 5, except for
leases entered into by the United States or its agencies or
instrumentalities.
The tax imposed on sales to political subdivisions of the
state under this section applies to all political subdivisions
other than those explicitly exempted under this subdivision,
notwithstanding section 115A.69, subdivision 6, 116A.25,
360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2,
469.127, 473.394, 473.448, 473.545, or 473.608 or any other law
to the contrary enacted before 1992.
Sales exempted by this subdivision include sales made to
other states or political subdivisions of other states, if the
sale would be exempt from taxation if it occurred in that state,
but do not include sales under section 297A.01, subdivision 3,
paragraphs (c) and (e).
Sec. 29. Minnesota Statutes 1994, section 297A.25,
subdivision 57, is amended to read:
Subd. 57. [HORSES.] The gross receipts from the sale of
horses other than, including racehorses taxable under section
297A.01, subdivision 3, paragraph (h), and all sales to persons
who raise or board horses, of all materials, including feed and
bedding, used or consumed in the breeding, raising, and keeping
of horses, are exempt. Machinery, equipment, implements, tools,
appliances, furniture, and fixtures, used in the breeding,
raising, and keeping of horses, are not included within this
exemption.
Sec. 30. Minnesota Statutes 1994, section 297A.25,
subdivision 59, is amended to read:
Subd. 59. [FARM MACHINERY.] From July 1, 1994, until June
30, 1995 1996, the gross receipts from the sale of used farm
machinery are exempt.
Sec. 31. Minnesota Statutes 1994, section 297A.25, is
amended by adding a subdivision to read:
Subd. 60. [CONSTRUCTION MATERIALS; STATE CONVENTION
CENTER.] 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 improvements to a state convention center located
in a city located outside of the metropolitan area as defined in
section 473.121, subdivision 2, and the center is governed by an
11-person board of which four are appointed by the governor; and
(2) the improvements are financed in whole or in part by
nonstate resources including, but not limited to, revenue or
general obligations issued by the state convention center board
of the city in which the center is located.
The exemption provided by this subdivision applies to
construction materials and supplies purchased prior to December
31, 1998.
Sec. 32. Minnesota Statutes 1994, section 297A.25, is
amended by adding a subdivision to read:
Subd. 61. [CONSTRUCTION MATERIALS FOR INDOOR ICE ARENAS.]
The gross receipts from the sale of construction materials and
supplies are exempt if:
(1) the materials and supplies are to be used in
constructing an indoor ice arena intended to be used
predominantly for youth athletic activities; and
(2) a school district is a party to a joint powers
agreement that governs the ownership, operation, and maintenance
of the facility.
This exemption applies regardless of whether the purchases
are made by the owner of the facility or a contractor.
Sec. 33. Minnesota Statutes 1994, section 297A.45, is
amended to read:
297A.45 [MIXED MUNICIPAL SOLID WASTE COLLECTION AND
DISPOSAL MANAGEMENT SERVICES.]
Subdivision 1. [DEFINITIONS.] The definitions in sections
115A.03 and 297A.01 apply to this section.
Subd. 2. [APPLICATION.] The taxes imposed by sections
297A.02 and 297A.021 apply to all public and private mixed
municipal solid waste collection and disposal management
services.
Notwithstanding section 297A.25, subdivision 11, a
political subdivision that purchases collection or disposal
waste management services on behalf of its citizens shall pay
the taxes.
If a political subdivision provides collection or disposal
services a waste management service to its residents at a cost
in excess of the total direct charge to the residents for the
service, the political subdivision shall pay the taxes based on
its cost of providing the service in excess of the direct
charges.
A person who transports mixed municipal solid waste
generated by that person or by another person without
compensation shall pay the taxes at the disposal or resource
recovery waste facility based on the disposal charge or tipping
fee.
Subd. 3. [EXEMPTIONS.] (a) The cost of a service or the
portion of a service to collect and manage recyclable materials
separated from mixed municipal solid waste by the waste
generator is exempt from the taxes imposed in sections 297A.02
and 297A.021.
(b) The amount of a surcharge or fee imposed under section
115A.919, 115A.921, 115A.923, or 473.843 is exempt from the
taxes imposed in sections 297A.02 and 297A.021.
(c) Waste from a recycling facility that separates or
processes recyclable materials and that reduces the volume of
the waste by at least 85 percent is exempt from the taxes
imposed in sections 297A.02 and 297A.021. To qualify for the
exemption under this paragraph, the waste exempted must be
collected and disposed of managed separately from other solid
waste.
(d) The following costs are exempt from the taxes imposed
in sections 297A.02 and 297A.021:
(1) costs of providing educational materials and other
information to residents;
(2) costs of managing solid waste other than mixed
municipal solid waste, including household hazardous waste; and
(3) costs of court litigation and associated damages.
(e) The cost of a waste management service is exempt from
the taxes imposed in sections 297A.02 and 297A.021 to the extent
that the cost was previously subject to the tax.
Subd. 4. [CITY SALES TAX MAY NOT BE IMPOSED.]
Notwithstanding any other law or charter provision to the
contrary, a home rule charter or statutory city that imposes a
general sales tax may not impose the sales tax on solid waste
disposal and collection management services that are subject to
the tax under this section. This subdivision does not apply to
a tax imposed under section 297A.021.
Subd. 5. [SEPARATE ACCOUNTING.] The commissioner shall
account for revenue collected from public and private mixed
municipal solid waste collection and disposal management
services under this section separately from other tax revenue
collected under this chapter.
Sec. 34. Minnesota Statutes 1994, section 297B.01,
subdivision 5, is amended to read:
Subd. 5. [MOTOR VEHICLE.] "Motor vehicle" means any
self-propelled vehicle not operated exclusively upon railroad
tracks and any vehicle propelled or drawn by a self-propelled
vehicle for which registration is required by chapter 168.
Motor vehicle includes vehicles known as trackless trolleys
which are propelled by electric power obtained from overhead
trolley wires but not operated upon rails and motor vehicles
that are purchased on Indian reservations where the tribal
council has entered into a sales tax on motor vehicles refund
agreement with the state of Minnesota. Motor vehicle does not
include snowmobiles or manufactured homes. For purposes of
taxation only under this section, "motor vehicle" includes a
park trailer as defined in section 168.011, subdivision 8,
paragraph (b).
Sec. 35. Minnesota Statutes 1994, section 297B.02,
subdivision 3, is amended to read:
Subd. 3. [IN LIEU FOR COLLECTOR VEHICLES.] In lieu of the
tax imposed in subdivision 1, there is imposed a tax of $90 on
the purchase price of a passenger automobile or a fire truck
described in section 297B.025, subdivision 2.
Sec. 36. Minnesota Statutes 1994, section 297B.025,
subdivision 2, is amended to read:
Subd. 2. [COLLECTOR VEHICLES.] A passenger automobile that
is registered under section 168.10, subdivision 1a, 1b, 1c, 1d,
or 1h, or a fire truck registered under section 168.10,
subdivision 1c, shall be taxed under section 297B.02,
subdivision 3, and the registrar shall not designate as an
above-market automobile a passenger automobile or a fire truck
registered under those subdivisions. If the vehicle is
subsequently registered in another class not under section
168.10, subdivision 1a, 1b, 1c, 1d, or 1h, within one year of
the date of registration under those subdivisions, it shall be
subject to the full excise tax imposed under subdivision 1.
Sec. 37. Minnesota Statutes 1994, section 297B.032, is
amended to read:
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 sales tax on motor
vehicles paid on park trailers, as defined in section 168.011,
subdivision 8, paragraph (b), under this chapter shall be
refunded by the commissioner of revenue provided the following
conditions are met:
(1) the park trailer is purchased after January 1, 1993,
and before January 1, 1997;
(2) the owner paid the sales tax on motor vehicles 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. 38. Laws 1991, chapter 291, article 8, section 28,
subdivision 1, is amended to read:
Subdivision 1. [AUTHORIZATION.] Notwithstanding Minnesota
Statutes, section 469.190, 477A.016, or other law, in addition
to the tax authorized in Minnesota Statutes, section 469.190,
the city of Winona may, by ordinance, impose a tax of up to one
percent on the gross receipts from the furnishing for
consideration of lodging at a hotel, motel, rooming house,
tourist court, or resort, other than the renting or leasing of
it for a continuous period of 30 days or more. The city may, by
ordinance, impose the tax authorized under this section on the
camping site receipts of a municipal campground.
Fifty percent of the proceeds of this tax shall be used to
retire the indebtedness of the Julius C. Wilke Steamboat
Center and. Upon retirement of the debt, 50 percent of the
proceeds shall be used as directed in Minnesota Statutes,
section 469.190, subdivision 3. The balance shall be used in
the manner of the tax proceeds may be used to promote tourist
activities, as determined by resolution of the council, for the
following purposes:
(1) improvements to the levee and its adjacent area;
(2) improvements to Prairie Island shoreline;
(3) improvements to the municipal marina; or
(4) as directed in Minnesota Statutes, section 469.190,
subdivision 3. Upon retirement of the debt, the council shall
by ordinance reduce the tax by one-half percent or dedicate the
entire one percent in the manner directed in Minnesota Statutes,
section 469.190, subdivision 3.
The tax shall be collected in the same manner as other
taxes authorized under Minnesota Statutes, section 469.190.
Sec. 39. Laws 1986, chapter 400, section 44, is amended to
read:
Sec. 44. [DOWNTOWN TAXING AREA.]
If a bill is enacted into law in the 1986 legislative
session which authorizes the city of Minneapolis to issue bonds
and expend certain funds including taxes to finance the
acquisition and betterment of a convention center and related
facilities, which authorizes certain taxes to be levied in a
downtown taxing area, then, notwithstanding the provisions of
that law "downtown taxing area" shall mean the geographic area
bounded by the portion of the Mississippi River between I-35W
and Washington Avenue, the portion of Washington Avenue between
the river and I-35W, the portion of I-35W between Washington
Avenue and 8th Street South, the portion of 8th Street South
between I-35W and Portland Avenue South, the portion of Portland
Avenue South between 8th Street South and I-94, the portion of
I-94 from the intersection of Portland Avenue South to the
intersection of I-94 and the Burlington Northern Railroad
tracks, the portion of the Burlington Northern Railroad tracks
from I-94 to Main Street and including Nicollet Island, and the
portion of Main Street to Hennepin Avenue and the portion of
Hennepin Avenue between Main Street and 2nd Street S.E., and the
portion of 2nd Street S.E. between Main Street and Bank Street,
and the portion of Bank Street between 2nd Street S.E. and
University Avenue S.E., and the portion of University Avenue
S.E. between Bank Street and I-35W, and by I-35W from University
Avenue S.E., to the river. The downtown taxing area excludes
the area bounded on the south and west by Oak Grove Street, on
the east by Spruce Place, and on the north by West 15th Street.
Sec. 40. [EVALUATION.]
The commissioner of revenue shall conduct an evaluation to
determine the accuracy of taxes paid by counties on solid waste
collection and disposal services as required by Minnesota
Statutes 1994, section 297A.45. The commissioner shall report,
by January 1, 1996, the results of the evaluation, both in the
aggregate and by county, to the chairs of the house committee on
taxes and the senate committee on taxes and tax laws, and to the
co-chairs of the legislative commission on waste management.
The final results of the evaluation are classified as public
data. The commissioner shall not initiate or continue any
action to collect any underpayment from counties, or to
reimburse any overpayment to counties, of taxes on solid waste
collection and disposal services pursuant to Minnesota Statutes
1994, section 297A.45, until June 1, 1996. The statute of
limitations for assessing, collecting, or refunding taxes
subject to the provisions of this section is tolled from the
date of enactment until June 1, 1996.
Sec. 41. [AGRICULTURE PROCESSING FACILITY MATERIALS;
EXEMPTION.]
Subdivision 1. [EXEMPTION; DEFINITION.] 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, if the materials and
supplies are used or consumed in constructing an agriculture
processing facility that meets the requirements of this
section. For purposes of this section, "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. For purposes of this
section, "agricultural processing facility" does not include an
ethanol production facility.
Subd. 2. [QUALIFICATIONS.] An agricultural processing
facility qualifies for the exemption provided under this section
if it meets each of the following requirements:
(a) The total investment in the facility must be at least
$8,500,000.
(b) The facility must be located in a municipality that has
a median household income that does not exceed $18,000 according
to the 1990 federal census information on income and poverty
status in 1989.
(c) The total investment in the facility must exceed an
amount equal to $12,000 per resident of the municipality in
which the facility is located.
Subd. 3. [COLLECTION AND REFUND OF TAX.] 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.
Subd. 4. [EFFECTIVE DATE.] This section is effective for
sales made after March 31, 1995, and before March 31, 1996.
Sec. 42. [ADVISORY COUNCIL; SALES TAX.]
Subdivision 1. [CREATION; MEMBERSHIP.] (a) A state
advisory council is established to study the general and motor
vehicle sales and use taxes under Minnesota Statutes 1994,
chapters 297A and 297B, and to make recommendations to the 1996
legislature. The study shall be completed and findings reported
to the legislature by February 1, 1996.
(b) The advisory council consists of 17 members who serve
at the pleasure of the appointing authority as follows:
(1) ten legislators; five members of the senate, including
two members of the minority party, appointed by the subcommittee
on committees of the committee on rules and administration and
five members of the house of representatives, including two
members of the minority party, appointed by the speaker;
(2) the commissioner of revenue or the commissioner's
designee; and
(3) six members of the public; two appointed by the
subcommittee on committees of the committee on rules and
administration of the senate, two appointed by the speaker of
the house, and two appointed by the governor. At least one
member of the public that is appointed by each entity must
represent a consumer interest group or other private citizen
group, public policy organization, or university department of
public policy or economics.
Subd. 2. [SCOPE OF STUDY.] (a) The purpose of the advisory
council is to:
(1) develop a framework of appropriate tax policy goals,
including but not limited to goals related to issues of equity,
efficiency, and understandability, to be used in evaluating the
overall sales tax system;
(2) evaluate the current sales and use tax system as it
relates to these policy goals, including identification of
current inconsistencies in treatment of various industries,
problems with compliance and administration, and the economic
impact of the system;
(3) analyze changes in the global and regional economy and
the potential problems that might arise in sales tax collection
and administration due to these changes, including but not
limited to impacts of international trade agreements (GATT and
NAFTA), and changes in technology and telecommunications;
(4) suggest options for changing the sales tax system,
including eliminating or changing exemptions, broadening the tax
base, or replacing it with an alternative tax system such as
value added tax or another form of consumption tax. The options
should be evaluated in terms of advancing the policy goals
established under clause (1).
(b) The advisory council's report to the legislature must
include recommendations for modifying the sales and use tax
system in light of the tax policy goals established by the
council. The report must also establish a tax policy framework
for evaluating other proposed changes in the sales tax.
Subd. 3. [STAFF.] The department of revenue and
legislative staff shall provide administrative and staff
assistance when requested by the advisory council.
Subd. 4. [COOPERATION BY OTHER AGENCIES.] The
commissioners of the department of trade and economic
development, the department of finance, and any other state
department or agency shall, upon request by the advisory
council, provide data or other information that is collected or
possessed by their agencies and that is necessary or useful in
conducting the study and preparing the report required by this
section.
Sec. 43. [REPEALER.]
(a) Minnesota Statutes 1994, section 296.0261, is repealed.
(b) Minnesota Statutes 1994, section 297A.136, is repealed.
Sec. 44. [EFFECTIVE DATE.]
Section 1 is effective the day following final enactment.
Sections 3 and 4 are effective June 1, 1995. Section 4 is
repealed June 1, 2000.
Sections 5 to 21 and 43, paragraph (a), are effective July
1, 1995.
Sections 23, 28, 33, 40, 42, and the part of section 22
amending language in paragraph (i), clause (vii), are effective
the day following final enactment.
Sections 24 and 34 are effective for sales made after
December 31, 1996.
Section 25 is effective beginning with leases or rentals
made after June 30, 1995.
Section 26 is effective retroactively for sales after May
31, 1992.
Section 27 is effective for sales made after June 30, 1995.
Section 29 and the part of section 22 striking the language
after paragraph (h) are effective for sales after June 30, 1995.
Section 32 is effective for sales made after June 30, 1995,
and before July 1, 1996.
Sections 35 and 36 are effective for sales or transfers
made after June 30, 1995.
Section 38 is effective the day after the governing body of
the city of Winona complies with Minnesota Statutes,section
645.021, subdivision 3.
Section 39 is effective upon compliance by the Minneapolis
city council with Minnesota Statutes, section 645.021,
subdivision 3.
Section 43, paragraph (b), is effective for sales of 900
information services made after June 30, 1995.
ARTICLE 3
PROPERTY TAXES
Section 1. Minnesota Statutes 1994, section 124.918,
subdivision 1, is amended to read:
Subdivision 1. [CERTIFY LEVY LIMITS.] By September 1 8,
the commissioner shall notify the school districts of their levy
limits. The commissioner shall certify to the county auditors
the levy limits for all school districts headquartered in the
respective counties together with adjustments for errors in
levies not penalized pursuant to section 124.918, subdivision 3,
as well as adjustments to final pupil unit counts. A school
district may require the commissioner to review the
certification and to present evidence in support of modification
of the certification.
The county auditor shall reduce levies for any excess of
levies over levy limitations pursuant to section 275.16. Such
reduction in excess levies may, at the discretion of the school
district, be spread over two calendar years.
Sec. 2. Minnesota Statutes 1994, section 124.918,
subdivision 2, is amended to read:
Subd. 2. [NOTICE TO COMMISSIONER; FORMS.] By September
15 30 of each year each district shall notify the commissioner
of education of the proposed levies in compliance with the levy
limitations of this chapter and chapters 124A, 124B, 136C, and
136D. By January 15 of each year each district shall notify the
commissioner of education of the final levies certified. The
commissioner of education shall prescribe the form of these
notifications and may request any additional information
necessary to compute certified levy amounts.
Sec. 3. Minnesota Statutes 1994, section 168.012,
subdivision 9, is amended to read:
Subd. 9. [MANUFACTURED HOMES AND PARK TRAILERS.]
Manufactured homes and park trailers shall not be taxed as motor
vehicles using the public streets and highways and shall be
exempt from the motor vehicle tax provisions of this chapter.
Except as provided in section 273.125, manufactured homes and
park trailers shall be taxed as personal property. The
provisions of Minnesota Statutes 1957, section 272.02 or any
other act providing for tax exemption shall be inapplicable to
manufactured homes and park trailers, except such manufactured
homes as are held by a licensed dealer and exempted as
inventory. Travel trailers not conspicuously displaying current
registration plates on the property tax assessment date shall be
taxed as manufactured homes if occupied as human dwelling
places. Park trailers not used on the highway during any
calendar year must be taxed as manufactured homes if occupied as
human dwelling places. Park trailers used on the highway during
any calendar year must be taxed under section 168.013,
subdivision 1j.
Sec. 4. Minnesota Statutes 1994, section 272.02,
subdivision 1, is amended to read:
Subdivision 1. All property described in this section to
the extent herein limited shall be exempt from taxation:
(1) All public burying grounds.
(2) All public schoolhouses.
(3) All public hospitals.
(4) All academies, colleges, and universities, and all
seminaries of learning.
(5) All churches, church property, and houses of worship.
(6) Institutions of purely public charity except parcels of
property containing structures and the structures described in
section 273.13, subdivision 25, paragraph (c), clauses (1), (2),
and (3), or paragraph (d), other than those that qualify for
exemption under clause (25).
(7) All public property exclusively used for any public
purpose.
(8) Except for the taxable personal property enumerated
below, all personal property and the property described in
section 272.03, subdivision 1, paragraphs (c) and (d), shall be
exempt.
The following personal property shall be taxable:
(a) personal property which is part of an electric
generating, transmission, or distribution system or a pipeline
system transporting or distributing water, gas, crude oil, or
petroleum products or mains and pipes used in the distribution
of steam or hot or chilled water for heating or cooling
buildings and structures;
(b) railroad docks and wharves which are part of the
operating property of a railroad company as defined in section
270.80;
(c) personal property defined in section 272.03,
subdivision 2, clause (3);
(d) leasehold or other personal property interests which
are taxed pursuant to section 272.01, subdivision 2; 273.124,
subdivision 7; or 273.19, subdivision 1; or any other law
providing the property is taxable as if the lessee or user were
the fee owner;
(e) manufactured homes and sectional structures, including
storage sheds, decks, and similar removable improvements
constructed on the site of a manufactured home, sectional
structure, park trailer or travel trailer as provided in section
273.125, subdivision 8, paragraph (f); and
(f) flight property as defined in section 270.071.
(9) Personal property used primarily for the abatement and
control of air, water, or land pollution to the extent that it
is so used, and real property which is used primarily for
abatement and control of air, water, or land pollution as part
of an agricultural operation, as a part of a centralized
treatment and recovery facility operating under a permit issued
by the Minnesota pollution control agency pursuant to chapters
115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730,
and 7045.0020 to 7045.1260, as a wastewater treatment facility
and for the treatment, recovery, and stabilization of metals,
oils, chemicals, water, sludges, or inorganic materials from
hazardous industrial wastes, or as part of an electric
generation system. For purposes of this clause, personal
property includes ponderous machinery and equipment used in a
business or production activity that at common law is considered
real property.
Any taxpayer requesting exemption of all or a portion of
any real property or any equipment or device, or part thereof,
operated primarily for the control or abatement of air or water
pollution shall file an application with the commissioner of
revenue. The equipment or device shall meet standards, rules,
or criteria prescribed by the Minnesota pollution control
agency, and must be installed or operated in accordance with a
permit or order issued by that agency. The Minnesota pollution
control agency shall upon request of the commissioner furnish
information or advice to the commissioner. On determining that
property qualifies for exemption, the commissioner shall issue
an order exempting the property from taxation. The equipment or
device shall continue to be exempt from taxation as long as the
permit issued by the Minnesota pollution control agency remains
in effect.
(10) Wetlands. For purposes of this subdivision,
"wetlands" means: (i) land described in section 103G.005,
subdivision 18; (ii) land which is mostly under water, produces
little if any income, and has no use except for wildlife or
water conservation purposes, provided it is preserved in its
natural condition and drainage of it would be legal, feasible,
and economically practical for the production of livestock,
dairy animals, poultry, fruit, vegetables, forage and grains,
except wild rice; or (iii) land in a wetland preservation area
under sections 103F.612 to 103F.616. "Wetlands" under items (i)
and (ii) include adjacent land which is not suitable for
agricultural purposes due to the presence of the wetlands, but
do not include woody swamps containing shrubs or trees, wet
meadows, meandered water, streams, rivers, and floodplains or
river bottoms. Exemption of wetlands from taxation pursuant to
this section shall not grant the public any additional or
greater right of access to the wetlands or diminish any right of
ownership to the wetlands.
(11) Native prairie. The commissioner of the department of
natural resources shall determine lands in the state which are
native prairie and shall notify the county assessor of each
county in which the lands are located. Pasture land used for
livestock grazing purposes shall not be considered native
prairie for the purposes of this clause. Upon receipt of an
application for the exemption provided in this clause for lands
for which the assessor has no determination from the
commissioner of natural resources, the assessor shall refer the
application to the commissioner of natural resources who shall
determine within 30 days whether the land is native prairie and
notify the county assessor of the decision. Exemption of native
prairie pursuant to this clause shall not grant the public any
additional or greater right of access to the native prairie or
diminish any right of ownership to it.
(12) Property used in a continuous program to provide
emergency shelter for victims of domestic abuse, provided the
organization that owns and sponsors the shelter is exempt from
federal income taxation pursuant to section 501(c)(3) of the
Internal Revenue Code of 1986, as amended through December 31,
1992, notwithstanding the fact that the sponsoring organization
receives funding under section 8 of the United States Housing
Act of 1937, as amended.
(13) If approved by the governing body of the municipality
in which the property is located, property not exceeding one
acre which is owned and operated by any senior citizen group or
association of groups that in general limits membership to
persons age 55 or older and is organized and operated
exclusively for pleasure, recreation, and other nonprofit
purposes, no part of the net earnings of which inures to the
benefit of any private shareholders; provided the property is
used primarily as a clubhouse, meeting facility, or recreational
facility by the group or association and the property is not
used for residential purposes on either a temporary or permanent
basis.
(14) To the extent provided by section 295.44, real and
personal property used or to be used primarily for the
production of hydroelectric or hydromechanical power on a site
owned by the state or a local governmental unit which is
developed and operated pursuant to the provisions of section
103G.535.
(15) If approved by the governing body of the municipality
in which the property is located, and if construction is
commenced after June 30, 1983:
(a) a "direct satellite broadcasting facility" operated by
a corporation licensed by the federal communications commission
to provide direct satellite broadcasting services using direct
broadcast satellites operating in the 12-ghz. band; and
(b) a "fixed satellite regional or national program service
facility" operated by a corporation licensed by the federal
communications commission to provide fixed satellite-transmitted
regularly scheduled broadcasting services using satellites
operating in the 6-ghz. band.
An exemption provided by clause (15) shall apply for a period
not to exceed five years. When the facility no longer qualifies
for exemption, it shall be placed on the assessment rolls as
provided in subdivision 4. Before approving a tax exemption
pursuant to this paragraph, the governing body of the
municipality shall provide an opportunity to the members of the
county board of commissioners of the county in which the
facility is proposed to be located and the members of the school
board of the school district in which the facility is proposed
to be located to meet with the governing body. The governing
body shall present to the members of those boards its estimate
of the fiscal impact of the proposed property tax exemption.
The tax exemption shall not be approved by the governing body
until the county board of commissioners has presented its
written comment on the proposal to the governing body or 30 days
have passed from the date of the transmittal by the governing
body to the board of the information on the fiscal impact,
whichever occurs first.
(16) Real and personal property owned and operated by a
private, nonprofit corporation exempt from federal income
taxation pursuant to United States Code, title 26, section
501(c)(3), primarily used in the generation and distribution of
hot water for heating buildings and structures.
(17) Notwithstanding section 273.19, state lands that are
leased from the department of natural resources under section
92.46.
(18) Electric power distribution lines and their
attachments and appurtenances, that are used primarily for
supplying electricity to farmers at retail.
(19) Transitional housing facilities. "Transitional
housing facility" means a facility that meets the following
requirements. (i) It provides temporary housing to individuals,
couples, or families. (ii) It has the purpose of reuniting
families and enabling parents or individuals to obtain
self-sufficiency, advance their education, get job training, or
become employed in jobs that provide a living wage. (iii) It
provides support services such as child care, work readiness
training, and career development counseling; and a
self-sufficiency program with periodic monitoring of each
resident's progress in completing the program's goals. (iv) It
provides services to a resident of the facility for at least
three months but no longer than three years, except residents
enrolled in an educational or vocational institution or job
training program. These residents may receive services during
the time they are enrolled but in no event longer than four
years. (v) It is owned and operated or under lease from a unit
of government or governmental agency under a property
disposition program and operated by one or more organizations
exempt from federal income tax under section 501(c)(3) of the
Internal Revenue Code of 1986, as amended through December 31,
1992. This exemption applies notwithstanding the fact that the
sponsoring organization receives financing by a direct federal
loan or federally insured loan or a loan made by the Minnesota
housing finance agency under the provisions of either Title II
of the National Housing Act or the Minnesota housing finance
agency law of 1971 or rules promulgated by the agency pursuant
to it, and notwithstanding the fact that the sponsoring
organization receives funding under Section 8 of the United
States Housing Act of 1937, as amended.
(20) Real and personal property, including leasehold or
other personal property interests, owned and operated by a
corporation if more than 50 percent of the total voting power of
the stock of the corporation is owned collectively by: (i) the
board of regents of the University of Minnesota, (ii) the
University of Minnesota Foundation, an organization exempt from
federal income taxation under section 501(c)(3) of the Internal
Revenue Code of 1986, as amended through December 31, 1992, and
(iii) a corporation organized under chapter 317A, which by its
articles of incorporation is prohibited from providing pecuniary
gain to any person or entity other than the regents of the
University of Minnesota; which property is used primarily to
manage or provide goods, services, or facilities utilizing or
relating to large-scale advanced scientific computing resources
to the regents of the University of Minnesota and others.
(21)(a) Wind energy conversion systems, as defined in
section 216C.06, subdivision 12, installed after January 1,
1991, and before January 2, 1995, and used as an electric power
source, are exempt.
(b) Wind energy conversion systems, as defined in section
216C.06, subdivision 12, installed after January 1, 1995,
including the foundation or support pad, which are (i) used as
an electric power source; (ii) located within one county and
owned by the same owner; and (iii) produce two megawatts or less
of electricity as measured by nameplate ratings, are exempt.
(c) Wind energy conversion systems, as defined in section
216C.06, subdivision 12, installed after January 1, 1995, and
used as an electric power source but not exempt under item (b),
are treated as follows: (i) the foundation and support pad are
taxable; (ii) the associated supporting and protective
structures are exempt for the first five assessment years after
they have been constructed, and thereafter, 30 percent of the
market value of the associated supporting and protective
structures are taxable; and (iii) the turbines, blades,
transformers, and its related equipment, are exempt.
(22) Containment tanks, cache basins, and that portion of
the structure needed for the containment facility used to
confine agricultural chemicals as defined in section 18D.01,
subdivision 3, as required by the commissioner of agriculture
under chapter 18B or 18C.
(23) Photovoltaic devices, as defined in section 216C.06,
subdivision 13, installed after January 1, 1992, and used to
produce or store electric power.
(24) Real and personal property owned and operated by a
private, nonprofit corporation exempt from federal income
taxation pursuant to United States Code, title 26, section
501(c)(3), primarily used for an ice arena or ice rink, and used
primarily for youth and high school programs.
(25) A structure that is situated on real property that is
used for:
(i) housing for the elderly or for low- and moderate-income
families as defined in Title II of the National Housing Act, as
amended through December 31, 1990, and funded by a direct
federal loan or federally insured loan made pursuant to Title II
of the act; or
(ii) housing lower income families or elderly or
handicapped persons, as defined in section 8 of the United
States Housing Act of 1937, as amended.
In order for a structure to be exempt under (i) or (ii), it
must also meet each of the following criteria:
(A) is owned by an entity which is operated as a nonprofit
corporation organized under chapter 317A;
(B) is owned by an entity which has not entered into a
housing assistance payments contract under section 8 of the
United States Housing Act of 1937, or, if the entity which owns
the structure has entered into a housing assistance payments
contract under section 8 of the United States Housing Act of
1937, the contract provides assistance for less than 90 percent
of the dwelling units in the structure, excluding dwelling units
intended for management or maintenance personnel;
(C) operates an on-site congregate dining program in which
participation by residents is mandatory, and provides assisted
living or similar social and physical support services for
residents; and
(D) was not assessed and did not pay tax under chapter 273
prior to the 1991 levy, while meeting the other conditions of
this clause.
An exemption under this clause remains in effect for taxes
levied in each year or partial year of the term of its permanent
financing.
(26) Real and personal property that is located in the
Superior National Forest, and owned or leased and operated by a
nonprofit organization that is exempt from federal income
taxation under section 501(c)(3) of the Internal Revenue Code of
1986, as amended through December 31, 1992, and primarily used
to provide recreational opportunities for disabled veterans and
their families.
(27) Manure pits and appurtenances, which may include
slatted floors and pipes, installed or operated in accordance
with a permit, order, or certificate of compliance issued by the
Minnesota pollution control agency. The exemption shall
continue for as long as the permit, order, or certificate issued
by the Minnesota pollution control agency remains in effect.
(28) Notwithstanding clause (8), item (a), attached
machinery and other personal property which is part of a
facility containing a cogeneration system as described in
section 216B.166, subdivision 2, paragraph (a), if the
cogeneration system has met the following criteria: (i) the
system utilizes natural gas as a primary fuel and the
cogenerated steam initially replaces steam generated from
existing thermal boilers utilizing coal; (ii) the facility
developer is selected as a result of a procurement process
ordered by the public utilities commission; and (iii)
construction of the facility is commenced after July 1, 1994,
and before July 1, 1997.
(29) Real property acquired by a home rule charter city,
statutory city, county, town, or school district under a lease
purchase agreement or an installment purchase contract during
the term of the lease purchase agreement as long as and to the
extent that the property is used by the city, county, town, or
school district and devoted to a public use and to the extent it
is not subleased to any private individual, entity, association,
or corporation in connection with a business or enterprise
operated for profit.
Sec. 5. [272.027] [PERSONAL PROPERTY USED TO GENERATE
ELECTRICITY FOR PRODUCTION AND RESALE.]
Personal property used to generate electric power is exempt
from property taxation if the electric power is used to
manufacture or produce goods, products, or services, other than
electric power, by the owner of the electric generation plant.
The exemption does not apply to property used to produce
electric power for sale to others and does not apply to real
property. In determining the value subject to tax, a
proportionate share of the value of the generating facilities,
equal to the proportion that the power sold to others bears to
the total generation of the plant, is subject to the general
property tax in the same manner as other property. Power
generated in such a plant and exchanged for an equivalent amount
of power that is used for the manufacture or production of
goods, products, or services other than electric power by the
owner of the generating plant is considered to be used by the
owner of the plant.
Sec. 6. Minnesota Statutes 1994, section 272.115,
subdivision 1, is amended to read:
Subdivision 1. Whenever any real estate is sold for a
consideration in excess of $1,000, whether by warranty deed,
quitclaim deed, contract for deed or any other method of sale,
the grantor, grantee or the legal agent of either shall file a
certificate of value with the county auditor in the county in
which the property is located when the deed or other document is
presented for recording. Contract for deeds are subject to
recording under section 507.235, subdivision 1. Value shall, in
the case of any deed not a gift, be the amount of the full
actual consideration thereof, paid or to be paid, including the
amount of any lien or liens assumed. The items and value of
personal property transferred with the real property must be
listed and deducted from the sale price. The certificate of
value shall include the classification to which the property
belongs for the purpose of determining the fair market value of
the property. The certificate shall include financing terms and
conditions of the sale which are necessary to determine the
actual, present value of the sale price for purposes of the
sales ratio study. The commissioner of revenue shall promulgate
administrative rules specifying the financing terms and
conditions which must be included on the certificate. Pursuant
to the authority of the commissioner of revenue in section
270.066, the certificate of value must include the social
security number or the federal employer identification number of
the grantors and grantees. The identification numbers of the
grantors and grantees are private data on individuals or
nonpublic data as defined in section 13.02, subdivisions 9 and
12, but, notwithstanding that section, the private or nonpublic
data may be disclosed to the commissioner of revenue for
purposes of tax administration.
Sec. 7. Minnesota Statutes 1994, 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 and paragraph (f), "relative"
means a parent, stepparent, child, stepchild, 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 will not be reclassified as a homestead unless it is
occupied as a homestead by the owner; this delay prohibition
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, 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 must not 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.
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 qualifying 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, or (5) other personal circumstances causing the
spouses to live separately, not including an intent to obtain
two homestead classifications for property tax purposes. To
qualify under clause (3), the spouse's place of employment or
self-employment must be at least 50 miles distant from the other
spouse's place of employment, and the homesteads must be at
least 50 miles distant from each other. Homestead treatment, in
whole or in part, shall not be denied to the spouse of an owner
if he or she previously occupied the residence with the owner
and the absence of the owner is due to one of the exceptions
provided in this paragraph.
(f) If an individual is purchasing property with the intent
of claiming it as a homestead and is required by the terms of
the financing agreement to have a relative shown on the deed as
a coowner, the assessor shall allow a full homestead
classification. This provision only applies to first-time
purchasers, whether married or single, or to a person who had
previously been married and is purchasing as a single individual
for the first time. The application for homestead benefits must
be on a form prescribed by the commissioner and must contain the
data necessary for the assessor to determine if full homestead
benefits are warranted.
Sec. 8. Minnesota Statutes 1994, 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 deed of record, 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 qualifies as a homestead under subdivision 1,
paragraph (e).
If the social security number or affidavit or other proof
is not provided, the county assessor shall classify the property
as nonhomestead. Owners or spouses occupying residences owned
by their spouses and previously occupied with the other spouse,
either of whom fail to include the other spouse's name and
social security number of the homestead application or provide
the affidavits or other proof requested, will be deemed to have
elected to receive only partial homestead treatment of their
residence. The remainder of the residence will be classified as
nonhomestead residential. When an owner or spouse's name and
social security number appear on homestead applications for two
separate residences and only one application is signed, the
owner or spouse will be deemed to have elected to homestead the
residence for which the application was signed.
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, or, for purposes of proceeding
under the revenue recapture act to recover personal property
taxes owing, to the county treasurer.
(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, the spouse of the owner, 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,
the spouse of 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 may be claiming
more than one a fraudulent 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. In the case of a manufactured home, the amount
shall be certified to the current year's tax list for collection.
(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. 9. Minnesota Statutes 1994, 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;
(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 clause (1), (2), or (3), the taxpayer must notify the
county assessor that the taxpayer owns more than one parcel that
qualifies under clause (1), (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.
(c) Structures which are (i) located on property classified
as class 3a, (ii) constructed under an initial building permit
issued after January 2, 1996, (iii) located in a transit zone as
defined under section 473.3915, subdivision 3, (iv) located
within the boundaries of a school district, and (v) not
primarily used for retail or transient lodging purposes, shall
have a class rate of four percent on that portion of the market
value in excess of $100,000 and any market value under $100,000
that does not qualify for the three percent class rate under
paragraph (a). As used in item (v), a structure is primarily
used for retail or transient lodging purposes if over 50 percent
of its square footage is used for those purposes. The four
percent rate shall also apply to improvements to existing
structures that meet the requirements of items (i) to (v) if the
improvements are constructed under an initial building permit
issued after January 2, 1996, even if the remainder of the
structure was constructed prior to January 2, 1996. For the
purposes of this paragraph, a structure shall be considered to
be located in a transit zone if any portion of the structure
lies within the zone. If any property once eligible for
treatment under this paragraph ceases to remain eligible due to
revisions in transit zone boundaries, the property shall
continue to receive treatment under this paragraph for a period
of three years.
Sec. 10. Minnesota Statutes 1994, section 273.13,
subdivision 25, is amended to read:
Subd. 25. [CLASS 4.] (a) Class 4a is residential real
estate containing four or more units and used or held for use by
the owner or by the tenants or lessees of the owner as a
residence for rental periods of 30 days or more. Class 4a also
includes hospitals licensed under sections 144.50 to 144.56,
other than hospitals exempt under section 272.02, and contiguous
property used for hospital purposes, without regard to whether
the property has been platted or subdivided. Class 4a property
in a city with a population of 5,000 or less, that is (1)
located outside of the metropolitan area, as defined in section
473.121, subdivision 2, or outside any county contiguous to the
metropolitan area, and (2) whose city boundary is at least 15
miles from the boundary of any city with a population greater
than 5,000 has a class rate of 3.5 percent of market value for
taxes payable in 1992, and 3.4 2.3 percent of market value for
taxes payable in 1993 1996 and thereafter. All other class 4a
property has a class rate of 3.4 percent of market value for
taxes payable in 1996 and thereafter. For purposes of this
paragraph, population has the same meaning given in section
477A.011, subdivision 3.
(b) Class 4b includes:
(1) residential real estate containing less than four
units, other than seasonal residential, and recreational;
(2) manufactured homes not classified under any other
provision;
(3) a dwelling, garage, and surrounding one acre of
property on a nonhomestead farm classified under subdivision 23,
paragraph (b).
Class 4b property has a class rate of 2.8 percent of market
value for taxes payable in 1992, 2.5 percent of market value for
taxes payable in 1993, and 2.3 percent of market value for taxes
payable in 1994 and thereafter.
(c) Class 4c property includes:
(1) a structure that is:
(i) situated on real property that is used for housing for
the elderly or for low- and moderate-income families as defined
in Title II, as amended through December 31, 1990, of the
National Housing Act or the Minnesota housing finance agency law
of 1971, as amended, or rules promulgated by the agency and
financed by a direct federal loan or federally insured loan made
pursuant to Title II of the Act; or
(ii) situated on real property that is used for housing the
elderly or for low- and moderate-income families as defined by
the Minnesota housing finance agency law of 1971, as amended, or
rules adopted by the agency pursuant thereto and financed by a
loan made by the Minnesota housing finance agency pursuant to
the provisions of the act.
This clause applies only to property of a nonprofit or
limited dividend entity. Property is classified as class 4c
under this clause for 15 years from the date of the completion
of the original construction or substantial rehabilitation, or
for the original term of the loan.
(2) a structure that is:
(i) situated upon real property that is used for housing
lower income families or elderly or handicapped persons, as
defined in section 8 of the United States Housing Act of 1937,
as amended; and
(ii) owned by an entity which has entered into a housing
assistance payments contract under section 8 which provides
assistance for 100 percent of the dwelling units in the
structure, other than dwelling units intended for management or
maintenance personnel. Property is classified as class 4c under
this clause for the term of the housing assistance payments
contract, including all renewals, or for the term of its
permanent financing, whichever is shorter; and
(3) a qualified low-income building as defined in section
42(c)(2) of the Internal Revenue Code of 1986, as amended
through December 31, 1990, that (i) receives a low-income
housing credit under section 42 of the Internal Revenue Code of
1986, as amended through December 31, 1990; or (ii) meets the
requirements of that section and receives public financing,
except financing provided under sections 469.174 to 469.179,
which contains terms restricting the rents; or (iii) meets the
requirements of section 273.1317. Classification pursuant to
this clause is limited to a term of 15 years. The public
financing received must be from at least one of the following
sources: government issued bonds exempt from taxes under
section 103 of the Internal Revenue Code of 1986, as amended
through December 31, 1993, the proceeds of which are used for
the acquisition or rehabilitation of the building; programs
under section 221(d)(3), 202, or 236, of Title II of the
National Housing Act; rental housing program funds under Section
8 of the United States Housing Act of 1937 or the market rate
family graduated payment mortgage program funds administered by
the Minnesota housing finance agency that are used for the
acquisition or rehabilitation of the building; public financing
provided by a local government used for the acquisition or
rehabilitation of the building, including grants or loans from
federal community development block grants, HOME block grants,
or residential rental bonds issued under chapter 474A; or other
rental housing program funds provided by the Minnesota housing
finance agency for the acquisition or rehabilitation of the
building.
For all properties described in clauses (1), (2), and (3)
and in paragraph (d), the market value determined by the
assessor must be based on the normal approach to value using
normal unrestricted rents unless the owner of the property
elects to have the property assessed under Laws 1991, chapter
291, article 1, section 55. If the owner of the property elects
to have the market value determined on the basis of the actual
restricted rents, as provided in Laws 1991, chapter 291, article
1, section 55, the property will be assessed at the rate
provided for class 4a or class 4b property, as appropriate.
Properties described in clauses (1)(ii), (3), and (4) may apply
to the assessor for valuation under Laws 1991, chapter 291,
article 1, section 55. The land on which these structures are
situated has the class rate given in paragraph (b) if the
structure contains fewer than four units, and the class rate
given in paragraph (a) if the structure contains four or more
units. This clause applies only to the property of a nonprofit
or limited dividend entity.
(4) a parcel of land, not to exceed one acre, and its
improvements or a parcel of unimproved land, not to exceed one
acre, if it is owned by a neighborhood real estate trust and at
least 60 percent of the dwelling units, if any, on all land
owned by the trust are leased to or occupied by lower income
families or individuals. This clause does not apply to any
portion of the land or improvements used for nonresidential
purposes. For purposes of this clause, a lower income family is
a family with an income that does not exceed 65 percent of the
median family income for the area, and a lower income individual
is an individual whose income does not exceed 65 percent of the
median individual income for the area, as determined by the
United States Secretary of Housing and Urban Development. For
purposes of this clause, "neighborhood real estate trust" means
an entity which is certified by the governing body of the
municipality in which it is located to have the following
characteristics:
(a) it is a nonprofit corporation organized under chapter
317A;
(b) it has as its principal purpose providing housing for
lower income families in a specific geographic community
designated in its articles or bylaws;
(c) it limits membership with voting rights to residents of
the designated community; and
(d) it has a board of directors consisting of at least
seven directors, 60 percent of whom are members with voting
rights and, to the extent feasible, 25 percent of whom are
elected by resident members of buildings owned by the trust; and
(5) except as provided in subdivision 22, paragraph (c),
real property devoted to temporary and seasonal residential
occupancy for recreation purposes, including real property
devoted to temporary and seasonal residential occupancy for
recreation purposes and not devoted to commercial purposes for
more than 250 days in the year preceding the year of
assessment. For purposes of this clause, property is devoted to
a commercial purpose on a specific day if any portion of the
property is used for residential occupancy, and a fee is charged
for residential occupancy. Class 4c also includes commercial
use real property used exclusively for recreational purposes in
conjunction with class 4c property devoted to temporary and
seasonal residential occupancy for recreational purposes, up to
a total of two acres, provided the property is not devoted to
commercial recreational use for more than 250 days in the year
preceding the year of assessment and is located within two miles
of the class 4c property with which it is used. Class 4c
property classified in this clause also includes the remainder
of class 1c resorts. Owners of real property devoted to
temporary and seasonal residential occupancy for recreation
purposes and all or a portion of which was devoted to commercial
purposes for not more than 250 days in the year preceding the
year of assessment desiring classification as class 1c or 4c,
must submit a declaration to the assessor designating the cabins
or units occupied for 250 days or less in the year preceding the
year of assessment by January 15 of the assessment year. Those
cabins or units and a proportionate share of the land on which
they are located will be designated class 1c or 4c as otherwise
provided. The remainder of the cabins or units and a
proportionate share of the land on which they are located will
be designated as class 3a. The first $100,000 of the market
value of the remainder of the cabins or units and a
proportionate share of the land on which they are located shall
have a class rate of three percent. The owner of property
desiring designation as class 1c or 4c property must provide
guest registers or other records demonstrating that the units
for which class 1c or 4c designation is sought were not occupied
for more than 250 days in the year preceding the assessment if
so requested. The portion of a property operated as a (1)
restaurant, (2) bar, (3) gift shop, and (4) other nonresidential
facility operated on a commercial basis not directly related to
temporary and seasonal residential occupancy for recreation
purposes shall not qualify for class 1c or 4c;
(6) real property up to a maximum of one acre of land owned
by a nonprofit community service oriented organization; provided
that the property is not used for a revenue-producing activity
for more than six days in the calendar year preceding the year
of assessment and the property is not used for residential
purposes on either a temporary or permanent basis. For purposes
of this clause, a "nonprofit community service oriented
organization" means any corporation, society, association,
foundation, or institution organized and operated exclusively
for charitable, religious, fraternal, civic, or educational
purposes, and which is exempt from federal income taxation
pursuant to section 501(c)(3), (10), or (19) of the Internal
Revenue Code of 1986, as amended through December 31, 1990. For
purposes of this clause, "revenue-producing activities" shall
include but not be limited to property or that portion of the
property that is used as an on-sale intoxicating liquor or 3.2
percent malt liquor establishment licensed under chapter 340A, a
restaurant open to the public, bowling alley, a retail store,
gambling conducted by organizations licensed under chapter 349,
an insurance business, or office or other space leased or rented
to a lessee who conducts a for-profit enterprise on the
premises. Any portion of the property which is used for
revenue-producing activities for more than six days in the
calendar year preceding the year of assessment shall be assessed
as class 3a. The use of the property for social events open
exclusively to members and their guests for periods of less than
24 hours, when an admission is not charged nor any revenues are
received by the organization shall not be considered a
revenue-producing activity;
(7) post-secondary student housing of not more than one
acre of land that is owned by a nonprofit corporation organized
under chapter 317A and is used exclusively by a student
cooperative, sorority, or fraternity for on-campus housing or
housing located within two miles of the border of a college
campus; and
(8) manufactured home parks as defined in section 327.14,
subdivision 3.
Class 4c property has a class rate of 2.3 percent of market
value, except that (i) for each parcel of seasonal residential
recreational property not used for commercial purposes under
clause (5) has a class rate of 2.2 percent of market value for
taxes payable in 1992, and for taxes payable in 1993 and
thereafter, the first $72,000 of market value on each parcel has
a class rate of two 1.9 percent for taxes payable in 1997 and
1.8 percent for taxes payable in 1998 and thereafter, and the
market value of each parcel that exceeds $72,000 has a class
rate of 2.5 percent, and (ii) manufactured home parks assessed
under clause (8) have a class rate of two percent for taxes
payable in 1993, 1994, and 1995 only 1996, and thereafter.
(d) Class 4d property includes:
(1) a structure that is:
(i) situated on real property that is used for housing for
the elderly or for low and moderate income families as defined
by the Farmers Home Administration;
(ii) located in a municipality of less than 10,000
population; and
(iii) financed by a direct loan or insured loan from the
Farmers Home Administration. Property is classified under this
clause for 15 years from the date of the completion of the
original construction or for the original term of the loan.
The class rates in paragraph (c), clauses (1), (2), and (3)
and this clause apply to the properties described in them, only
in proportion to occupancy of the structure by elderly or
handicapped persons or low and moderate income families as
defined in the applicable laws unless construction of the
structure had been commenced prior to January 1, 1984; or the
project had been approved by the governing body of the
municipality in which it is located prior to June 30, 1983; or
financing of the project had been approved by a federal or state
agency prior to June 30, 1983. For those properties, 4c or 4d
classification is available only for those units meeting the
requirements of section 273.1318.
Classification under this clause is only available to
property of a nonprofit or limited dividend entity.
In the case of a structure financed or refinanced under any
federal or state mortgage insurance or direct loan program
exclusively for housing for the elderly or for housing for the
handicapped, a unit shall be considered occupied so long as it
is actually occupied by an elderly or handicapped person or, if
vacant, is held for rental to an elderly or handicapped person.
(2) For taxes payable in 1992, 1993, and 1994, only,
buildings and appurtenances, together with the land upon which
they are located, leased by the occupant under the community
lending model lease-purchase mortgage loan program administered
by the Federal National Mortgage Association, provided the
occupant's income is no greater than 60 percent of the county or
area median income, adjusted for family size and the building
consists of existing single family or duplex housing. The lease
agreement must provide for a portion of the lease payment to be
escrowed as a nonrefundable down payment on the housing. To
qualify under this clause, the taxpayer must apply to the county
assessor by May 30 of each year. The application must be
accompanied by an affidavit or other proof required by the
assessor to determine qualification under this clause.
(3) Qualifying buildings and appurtenances, together with
the land upon which they are located, leased for a period of up
to five years by the occupant under a lease-purchase program
administered by the Minnesota housing finance agency or a
housing and redevelopment authority authorized under sections
469.001 to 469.047, provided the occupant's income is no greater
than 80 percent of the county or area median income, adjusted
for family size, and the building consists of two or less
dwelling units. The lease agreement must provide for a portion
of the lease payment to be escrowed as a nonrefundable down
payment on the housing. The administering agency shall verify
the occupants income eligibility and certify to the county
assessor that the occupant meets the income criteria under this
paragraph. To qualify under this clause, the taxpayer must
apply to the county assessor by May 30 of each year. For
purposes of this section, "qualifying buildings and
appurtenances" shall be defined as one or two unit residential
buildings which are unoccupied and have been abandoned and
boarded for at least six months.
Class 4d property has a class rate of two percent of market
value except that property classified under clause (3), shall
have the same class rate as class 1a property.
(e) Residential rental property that would otherwise be
assessed as class 4 property under paragraph (a); paragraph (b),
clauses (1) and (3); paragraph (c), clause (1), (2), (3), or
(4), is assessed at the class rate applicable to it under
Minnesota Statutes 1988, section 273.13, if it is found to be a
substandard building under section 273.1316. Residential rental
property that would otherwise be assessed as class 4 property
under paragraph (d) is assessed at 2.3 percent of market value
if it is found to be a substandard building under section
273.1316.
Sec. 11. Minnesota Statutes 1994, section 273.1398,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] (a) In this section, the
terms defined in this subdivision have the meanings given them.
(b) "Unique taxing jurisdiction" means the geographic area
subject to the same set of local tax rates.
(c) "Net tax capacity" means the product of (i) the
appropriate net class rates for the year in which the aid is
payable, except that for aid payable in 1993 1996 the class rate
applicable to all class 4a shall be 3.5 3.4 percent; and the
class rate applicable to class 4b shall be 2.65 percent; and for
aid payable in 1994 the class rate applicable to class 4b shall
be 2.4 percent and the class rate applicable to class 2a
property over $115,000 market value and less than 320 acres is
1.15 percent, and (ii) estimated market values for the
assessment two years prior to that in which aid is payable. The
exclusion of the value of the house, garage, and one acre from
the first tier of agricultural homestead property must not be
considered in determining net tax capacity for purposes of this
paragraph for aids payable in 1994. "Total net tax capacity"
means the net tax capacities for all property within the unique
taxing jurisdiction. The total net tax capacity used shall be
reduced by the sum of (1) the unique taxing jurisdiction's net
tax capacity of commercial industrial property as defined in
section 473F.02, subdivision 3, multiplied by the ratio
determined pursuant to section 473F.08, subdivision 6, for the
municipality, as defined in section 473F.02, subdivision 8, in
which the unique taxing jurisdiction is located, (2) the net tax
capacity of the captured value of tax increment financing
districts as defined in section 469.177, subdivision 2, and (3)
the net tax capacity of transmission lines deducted from a local
government's total net tax capacity under section 273.425. For
purposes of determining the net tax capacity of property
referred to in clauses (1), (2), and (3), the net tax capacity
shall be multiplied by the ratio of the highest class rate for
class 3a property for taxes payable in the year in which the aid
is payable to the highest class rate for class 3a property in
the prior year. Net tax capacity cannot be less than zero.
(d) "Previous net tax capacity" means the product of the
appropriate net class rates for the year previous to the year in
which the aid is payable, and estimated market values for the
assessment two years prior to that in which aid is payable.
"Total previous net tax capacity" means the previous net tax
capacities for all property within the unique taxing
jurisdiction. The total previous net tax capacity shall be
reduced by the sum of (1) the unique taxing jurisdiction's
previous net tax capacity of commercial-industrial property as
defined in section 473F.02, subdivision 3, multiplied by the
ratio determined pursuant to section 473F.08, subdivision 6, for
the municipality, as defined in section 473F.02, subdivision 8,
in which the unique taxing jurisdiction is located, (2) the
previous net tax capacity of the captured value of tax increment
financing districts as defined in section 469.177, subdivision
2, and (3) the previous net tax capacity of transmission lines
deducted from a local government's total net tax capacity under
section 273.425. Previous net tax capacity cannot be less than
zero.
(e) "Equalized market values" are market values that have
been equalized by dividing the assessor's estimated market value
for the second year prior to that in which the aid is payable by
the assessment sales ratios determined by class in the
assessment sales ratio study conducted by the department of
revenue pursuant to section 124.2131 in the second year prior to
that in which the aid is payable. The equalized market values
shall equal the unequalized market values divided by the
assessment sales ratio.
(f) "Equalized school levies" means the amounts levied for:
(1) general education under section 124A.23, subdivision 2;
(2) supplemental revenue under section 124A.22, subdivision
8a;
(3) capital expenditure facilities revenue under section
124.243, subdivision 3;
(4) capital expenditure equipment revenue under section
124.244, subdivision 2;
(5) basic transportation under section 124.226, subdivision
1; and
(6) referendum revenue under section 124A.03.
(g) "Current local tax rate" means the quotient derived by
dividing the taxes levied within a unique taxing jurisdiction
for taxes payable in the year prior to that for which aids are
being calculated by the total previous net tax capacity of the
unique taxing jurisdiction.
(h) For purposes of calculating and allocating homestead
and agricultural credit aid authorized pursuant to subdivision 2
and the disparity reduction aid authorized in subdivision 3,
"gross taxes levied on all properties," "gross taxes," or "taxes
levied" means the total net tax capacity based taxes levied on
all properties except that levied on the captured value of tax
increment districts as defined in section 469.177, subdivision
2, and that levied on the portion of commercial industrial
properties' assessed value or gross tax capacity, as defined in
section 473F.02, subdivision 3, subject to the areawide tax as
provided in section 473F.08, subdivision 6, in a unique taxing
jurisdiction. "Gross taxes" are before any reduction for
disparity reduction aid but "taxes levied" are after any
reduction for disparity reduction aid. Gross taxes levied or
taxes levied cannot be less than zero.
"Taxes levied" excludes equalized school levies.
(i) "Human services aids" means:
(1) aid to families with dependent children under sections
256.82, subdivision 1, and 256.935, subdivision 1;
(2) medical assistance under sections 256B.041, subdivision
5, and 256B.19, subdivision 1;
(3) general assistance medical care under section 256D.03,
subdivision 6;
(4) general assistance under section 256D.03, subdivision
2;
(5) work readiness under section 256D.03, subdivision 2;
(6) emergency assistance under section 256.871, subdivision
6;
(7) Minnesota supplemental aid under section 256D.36,
subdivision 1;
(8) preadmission screening and alternative care grants;
(9) work readiness services under section 256D.051;
(10) case management services under section 256.736,
subdivision 13;
(11) general assistance claims processing, medical
transportation and related costs; and
(12) medical assistance, medical transportation and related
costs.
(j) "Household adjustment factor" means the number of
households for the second most recent year preceding that in
which the aids are payable divided by the number of households
for the third most recent year. The household adjustment factor
cannot be less than one.
(k) "Growth adjustment factor" means the household
adjustment factor in the case of counties. In the case of
cities, towns, school districts, and special taxing districts,
the growth adjustment factor equals one. The growth adjustment
factor cannot be less than one.
(l) For aid payable in 1992 and subsequent years,
"homestead and agricultural credit base" means the previous
year's certified homestead and agricultural credit aid
determined under subdivision 2 less any permanent aid reduction
in the previous year to homestead and agricultural credit aid
under section 477A.0132, plus, for aid payable in 1992, fiscal
disparity homestead and agricultural credit aid under
subdivision 2b.
(m) "Net tax capacity adjustment" means (1) the total
previous net tax capacity minus the total net tax capacity,
multiplied by (2) the unique taxing jurisdiction's current local
tax rate. The net tax capacity adjustment cannot be less than
zero.
(n) "Fiscal disparity adjustment" means the difference
between (1) a taxing jurisdiction's fiscal disparity
distribution levy under section 473F.08, subdivision 3, clause
(a), for taxes payable in the year prior to that for which aids
are being calculated, and (2) the same distribution levy
multiplied by the ratio of the highest class rate for class 3
property for taxes payable in the year prior to that for which
aids are being calculated to the highest class rate for class 3
property for taxes payable in the second prior year to that for
which aids are being calculated. In the case of school
districts, the fiscal disparity distribution levy shall exclude
that part of the levy attributable to equalized school levies.
Sec. 12. Minnesota Statutes 1994, section 273.37, is
amended by adding a subdivision to read:
Subd. 3. Taxable wind energy conversion systems, as
defined in section 216C.06, subdivision 12, which are not owned,
operated, and exclusively controlled by the owner of the land
upon which the system is situated, must be listed and assessed
as personal property in the name of the owner of the system in
the taxing district where it is situated.
Sec. 13. Minnesota Statutes 1994, section 274.01,
subdivision 1, is amended to read:
Subdivision 1. [ORDINARY BOARD; MEETINGS, DEADLINES,
GRIEVANCES.] (a) The town board of a town, or the council or
other governing body of a city, is the board of review except in
cities whose charters provide for a board of equalization. The
county assessor shall fix a day and time when the board or the
board of equalization shall meet in the assessment districts of
the county. On or before February 15 of each year the assessor
shall give written notice of the time to the city or town
clerk. Notwithstanding the provisions of any charter to the
contrary, the meetings must be held between April 1 and May 31
each year. The clerk shall give published and posted notice of
the meeting at least ten days before the date of the meeting.
If in any county, at least 25 percent of the total net tax
capacity of a city or town is noncommercial seasonal residential
recreational property classified under section 273.13,
subdivision 25, the county must hold two county-wide
informational meetings on Saturdays. The meetings will allow
noncommercial seasonal residential recreational taxpayers to
discuss their property valuation with the appropriate assessment
staff. These Saturday informational meetings must be scheduled
to allow the owner of the noncommercial seasonal residential
recreational property the opportunity to attend one of the
meetings prior to the scheduled board of review for their city
or town. The Saturday meeting dates must be contained on the
notice of valuation of real property under section 273.121. The
board shall meet at the office of the clerk to review the
assessment and classification of property in the town or city.
No changes in valuation or classification which are intended to
correct errors in judgment by the county assessor may be made by
the county assessor after the board of review or the county
board of equalization has adjourned; however, corrections of
errors that are merely clerical in nature or changes that extend
homestead treatment to property are permitted after adjournment
until the tax extension date for that assessment year. The
changes must be fully documented and maintained in the
assessor's office and must be available for review by any
person. A copy of the changes made during this period must be
sent to the county board no later than December 31 of the
assessment year.
(b) The board shall determine whether the taxable property
in the town or city has been properly placed on the list and
properly valued by the assessor. If real or personal property
has been omitted, the board shall place it on the list with its
market value, and correct the assessment so that each tract or
lot of real property, and each article, parcel, or class of
personal property, is entered on the assessment list at its
market value. No assessment of the property of any person may
be raised unless the person has been duly notified of the intent
of the board to do so. On application of any person feeling
aggrieved, the board shall review the assessment or
classification, or both, and correct it as appears just.
(c) A local board of review may reduce assessments upon
petition of the taxpayer but the total reductions must not
reduce the aggregate assessment made by the county assessor by
more than one percent. If the total reductions would lower the
aggregate assessments made by the county assessor by more than
one percent, none of the adjustments may be made. The assessor
shall correct any clerical errors or double assessments
discovered by the board of review without regard to the one
percent limitation.
(d) A majority of the members may act at the meeting, and
adjourn from day to day until they finish hearing the cases
presented. The assessor shall attend, with the assessment books
and papers, and take part in the proceedings, but must not
vote. The county assessor, or an assistant delegated by the
county assessor shall attend the meetings. The board shall list
separately, on a form appended to the assessment book, all
omitted property added to the list by the board and all items of
property increased or decreased, with the market value of each
item of property, added or changed by the board, placed opposite
the item. The county assessor shall enter all changes made by
the board in the assessment book.
(e) If a person fails to appear in person, by counsel, or
by written communication before the board after being duly
notified of the board's intent to raise the assessment of the
property, or if a person feeling aggrieved by an assessment or
classification fails to apply for a review of the assessment or
classification, the person may not appear before the county
board of equalization for a review of the assessment or
classification. This paragraph does not apply if an assessment
was made after the board meeting, as provided in section 273.01,
or if the person can establish not having received notice of
market value at least five days before the local board of review
meeting.
(f) The board of review or the board of equalization must
complete its work and adjourn within 20 days from the time of
convening stated in the notice of the clerk, unless a longer
period is approved by the commissioner of revenue. No action
taken after that date is valid. All complaints about an
assessment or classification made after the meeting of the board
must be heard and determined by the county board of
equalization. A nonresident may, at any time, before the
meeting of the board of review file written objections to an
assessment or classification with the county assessor. The
objections must be presented to the board of review at its
meeting by the county assessor for its consideration.
Sec. 14. Minnesota Statutes 1994, section 275.065,
subdivision 1, is amended to read:
Subdivision 1. [PROPOSED LEVY.] (a) Notwithstanding any
law or charter to the contrary, on or before September 15, each
taxing authority, other than a school district, shall adopt a
proposed budget and each taxing authority shall certify to the
county auditor the proposed or, in the case of a town, the final
property tax levy for taxes payable in the following year.
(b) On or before September 30, each school district shall
certify to the county auditor the proposed property tax levy for
taxes payable in the following year. The school district may
certify the proposed levy as (1) a specific dollar amount, or
(2) an amount equal to the maximum levy limitation certified by
the commissioner of education to the county auditor according to
section 124.918, subdivision 1.
(c) If the board of estimate and taxation or any similar
board that establishes maximum tax levies for taxing
jurisdictions within a first class city certifies the maximum
property tax levies for funds under its jurisdiction by charter
to the county auditor by September 15, the city shall be deemed
to have certified its levies for those taxing jurisdictions.
(d) For purposes of this section, "taxing authority"
includes all home rule and statutory cities, towns, counties,
school districts, and special taxing districts as defined in
section 275.066. Intermediate school districts that levy a tax
under chapter 124 or 136D, joint powers boards established under
sections 124.491 to 124.495, and common school districts No.
323, Franconia, and No. 815, Prinsburg, are also special taxing
districts for purposes of this section.
Sec. 15. Minnesota Statutes 1994, 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. For the purposes of this subdivision, "school
district excess referenda levy" means school district taxes for
operating purposes approved at referendums, including those
taxes based on net tax capacity as well as those based on market
value. "School district excess referenda levy" does not include
school district taxes for capital expenditures approved at
referendums or school district taxes to pay for the debt service
on bonds approved at referenda. 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) 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, 473.446, 473.521, 473.547, or 473.834;
(2) metropolitan airports commission under section 473.667,
473.671, or 473.672; and
(3) 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. 16. Minnesota Statutes 1994, section 276.131, is
amended to read:
276.131 [DISTRIBUTION OF PENALTIES, INTEREST, AND COSTS.]
The penalties, interest, and costs collected on special
assessments and real and personal property taxes must be
distributed as follows:
(1) all penalties and interest collected on special
assessments against real or personal property must be
distributed to the taxing jurisdiction that levied the
assessment;
(2) 50 percent of all penalties and interest collected on
real and personal property taxes must be distributed to the
county in which the property is located, and the other 50
percent must be distributed to the school district in which the
property is located districts within the county. The
distribution to the school district must be in accordance with
the provisions of section 124.10; and
(3) all costs collected by the county on special
assessments and on delinquent real and personal property taxes
must be distributed to the county in which the property is
located.
Sec. 17. [276.20] [WIND ENERGY TAX; DEFINITIONS.]
Subdivision 1. [TERMS.] For the purposes of this section
and section 276.21, the following terms shall have these
meanings, unless otherwise provided to the contrary.
Subd. 2. [WIND ENERGY SYSTEM.] "Wind energy system" means
a wind energy conversion system defined under section 216C.06,
subdivision 12, which is used as an electric power source.
Subd. 3. [AREA.] "Area" means the counties of Lincoln and
Pipestone.
Subd. 4. [HOME COUNTY.] "Home county" means the county of
Pipestone.
Subd. 5. [MUNICIPALITY.] "Municipality" means any city or
town that is located in the area.
Subd. 6. [QUALIFYING WIND ENERGY SYSTEM NET TAX
CAPACITY.] "Qualifying wind energy system net tax capacity"
means:
(a) the taxable portion of the net tax capacity of any wind
energy system located in the area installed after January 1,
1995;
(b) the portion of the hypothetical net tax capacity of a
wind energy system located in the area installed after January
1, 1991, and before January 2, 1995, that would be computed if
the property were subject to taxation under section 272.02,
subdivision 1, clause (21), paragraph (c).
Sec. 18. [276.21] [WIND ENERGY TAX.]
Subdivision 1. [DETERMINING LOCAL TAX RATES.] In
determining the local tax rate under section 275.08 for the
county and for any municipality in which one or more wind energy
systems are located, the county auditor shall deduct the
qualifying wind energy system net tax capacity as defined under
section 276.20, subdivision 6, clause (a), from the total net
tax capacity of the county and each municipality containing this
property.
Subd. 2. [COUNTY WIND ENERGY TAX.] Each county auditor
shall determine the county wind energy tax by multiplying the
county tax rate times the net tax capacity of the taxable wind
energy system property located within the county. The sum of
these amounts for each county in the area shall be called the
"county wind energy distribution pool."
Subd. 3. [MUNICIPAL WIND ENERGY TAX.] Each county auditor
shall determine the municipal wind energy tax by multiplying
each municipality's tax rate times the net tax capacity of the
taxable wind energy system property located within the
municipality. The sum of these amounts for all municipalities
in the area shall be called the "municipal wind energy
distribution pool."
Subd. 4. [COUNTY WIND ENERGY DISTRIBUTION.] Each county
within the area is entitled to receive a distribution from the
county wind energy distribution pool equal to its proportion of
qualifying wind energy system net tax capacity relative to the
total for all counties in the area, provided that each county in
the area shall be entitled to a distribution equal to the
greater of (a) ten percent of the total county wind energy
distribution pool, or (b) 50 percent of the county's wind energy
tax.
Subd. 5. [MUNICIPAL WIND ENERGY DISTRIBUTION.] Each
municipality within the area is entitled to receive a
distribution from the municipal wind energy distribution pool
equal to its proportion of qualifying wind energy system net tax
capacity relative to the total for all municipalities in the
area.
Subd. 6. [WIND ENERGY TAX SETTLEMENT; PAYMENT.] The home
county auditor shall determine for each county in the area the
difference between the amount of the county wind energy tax
under subdivision 2 and the county wind energy distribution
under subdivision 4. The home county auditor shall also
determine for each municipality within each county in the area,
the difference between the amount of the municipal wind energy
tax under subdivision 3 and the municipal wind energy
distribution under subdivision 5. On or before May 16 of each
year, the home county shall certify the differences so
determined to each county auditor in the area. In addition, the
home county auditor shall certify to those county auditors in
the area whose county and municipal wind energy tax exceeds the
total county and municipal wind energy tax distribution, the
settlement the county is to make to the other counties. On or
before June 15 and November 15 of each year, each county
treasurer in a county in the area having a total wind energy tax
in excess of the total wind energy distribution shall pay
one-half of the excess to the other counties in accordance with
the home county auditor's certification. On or before June 25
and November 25 of each year, each county treasurer in the area
shall pay the county and each municipality its wind energy
distribution amount.
Sec. 19. Minnesota Statutes 1994, section 279.01,
subdivision 1, is amended to read:
Subdivision 1. Except as provided in subdivision 3 or 4,
on May 16 or 21 days after the postmark date on the envelope
containing the property tax statement, whichever is later, a
penalty shall accrue and thereafter be charged upon all unpaid
taxes on real estate on the current lists in the hands of the
county treasurer. The penalty shall be at a rate of two percent
on homestead property until May 31 and four percent on June 1.
The penalty on nonhomestead property shall be at a rate of four
percent until May 31 and eight percent on June 1. This penalty
shall not accrue until June 1 of each year, or 21 days after the
postmark date on the envelope containing the property tax
statements, whichever is later, on commercial use real property
used for seasonal residential recreational purposes and
classified as class 1c or 4c, and on other commercial use real
property classified as class 3a, provided that over 60 percent
of the gross income earned by the enterprise on the class 3a
property is earned during the months of May, June, July, and
August. Any property owner of such class 3a property who pays
the first half of the tax due on the property after May 15 and
before June 1, or 21 days after the postmark date on the
envelope containing the property tax statement, whichever is
later, shall attach an affidavit to the payment attesting to
compliance with the income provision of this subdivision.
Thereafter, for both homestead and nonhomestead property, on the
first day of each month beginning July 1, up to and including
October 1 following, an additional penalty of one percent for
each month shall accrue and be charged on all such unpaid taxes
provided that if the due date was extended beyond May 15 as the
result of any delay in mailing property tax statements no
additional penalty shall accrue if the tax is paid by the
extended due date. If the tax is not paid by the extended due
date, then all penalties that would have accrued if the due date
had been May 15 shall be charged. When the taxes against any
tract or lot exceed $50, one-half thereof may be paid prior to
May 16 or 21 days after the postmark date on the envelope
containing the property tax statement, whichever is later; and,
if so paid, no penalty shall attach; the remaining one-half
shall be paid at any time prior to October 16 following, without
penalty; but, if not so paid, then a penalty of two percent
shall accrue thereon for homestead property and a penalty of
four percent on nonhomestead property. Thereafter, for
homestead property, on the first day of November an additional
penalty of four percent shall accrue and on the first day of
December following, an additional penalty of two percent shall
accrue and be charged on all such unpaid taxes. Thereafter, for
nonhomestead property, on the first day of November and December
following, an additional penalty of four percent for each month
shall accrue and be charged on all such unpaid taxes. If
one-half of such taxes shall not be paid prior to May 16 or 21
days after the postmark date on the envelope containing the
property tax statement, whichever is later, the same may be paid
at any time prior to October 16, with accrued penalties to the
date of payment added, and thereupon no penalty shall attach to
the remaining one-half until October 16 following.
This section applies to payment of personal property taxes
assessed against improvements to leased property, except as
provided by section 277.01, subdivision 3.
A county may provide by resolution that in the case of a
property owner that has multiple tracts or parcels with
aggregate taxes exceeding $50, payments may be made in
installments as provided in this subdivision.
The county treasurer may accept payments of more or less
than the exact amount of a tax installment due. If the accepted
payment is less than the amount due, payments must be applied
first to the penalty accrued for the year the payment is made.
Acceptance of partial payment of tax does not constitute a
waiver of the minimum payment required as a condition for filing
an appeal under section 278.03 or any other law, nor does it
affect the order of payment of delinquent taxes under section
280.39.
Sec. 20. Minnesota Statutes 1994, section 279.01, is
amended by adding a subdivision to read:
Subd. 4. [SEASONAL RESIDENTIAL RECREATIONAL PROPERTY.] In
the case of class 4c seasonal residential recreational property
not used for commercial purposes, penalties shall accrue and be
charged on unpaid taxes at the times and at the rates provided
in subdivision 1 for homestead property.
Sec. 21. [282.135] [DELEGATION BY COUNTY BOARD.]
Except as provided in section 282.13 and notwithstanding
any other law to the contrary, the county board may delegate to
the county auditor any authority, power, or responsibility
relating generally to the administration of tax-forfeited land
assigned to the county board this chapter. This delegation
includes, but is not limited to, the authority, power, and
responsibility to classify tax-forfeited land as conservation or
nonconservation property; set the appraisal values and terms of
sale and sell at public auction; initiate legal proceedings to
cancel purchase and repurchase contracts in default status;
authorize reinstatement of canceled tax-forfeited contracts; and
authorize former owners and other eligible parties to repurchase
tax-forfeited land. If delegation is granted under this
section, the county board shall prescribe the conditions for
delegation and may revoke the delegation without good cause or
prior notice. If the county auditor holds elective office, no
delegation shall be made under this section unless the county
auditor concurs in the delegation.
Sec. 22. Minnesota Statutes 1994, section 290A.03,
subdivision 6, is amended to read:
Subd. 6. [HOMESTEAD.] "Homestead" means the dwelling
occupied as the claimant's principal residence and so much of
the land surrounding it, not exceeding ten acres, as is
reasonably necessary for use of the dwelling as a home and any
other property used for purposes of a homestead as defined in
section 273.13, subdivision 22, except for agricultural land
assessed as part of a homestead pursuant to section 273.13,
subdivision 23, "homestead" is limited to 320 acres or, where
the farm homestead is rented, one acre. The homestead may be
owned or rented and may be a part of a multidwelling or
multipurpose building and the land on which it is built. A
manufactured home, as defined in section 273.125, subdivision 8,
or a park trailer taxed as a manufactured home under section
168.012, subdivision 9, assessed as personal property may be a
dwelling for purposes of this subdivision.
Sec. 23. Minnesota Statutes 1994, section 290A.03,
subdivision 13, is amended to read:
Subd. 13. [PROPERTY TAXES PAYABLE.] "Property taxes
payable" means the property tax exclusive of special
assessments, penalties, and interest payable on a claimant's
homestead before reductions made under section 273.13 but after
deductions made under sections 273.135, 273.1391, 273.42,
subdivision 2, and any other state paid property tax credits in
any calendar year. In the case of a claimant who makes ground
lease payments, "property taxes payable" includes the amount of
the payments directly attributable to the property taxes
assessed against the parcel on which the house is located. No
apportionment or reduction of the "property taxes payable" shall
be required for the use of a portion of the claimant's homestead
for a business purpose if the claimant does not deduct any
business depreciation expenses for the use of a portion of the
homestead in the determination of federal adjusted gross
income. For homesteads which are manufactured homes as defined
in section 274.19, subdivision 8, and for homesteads which are
park trailers taxed as manufactured homes under section 168.012,
subdivision 9, "property taxes payable" shall also include the
amount of the gross rent paid in the preceding year for the site
on which the homestead is located, which is attributable to the
net tax paid on the site. The amount attributable to property
taxes shall be determined by multiplying the net tax on the
parcel by a fraction, the numerator of which is the gross rent
paid for the calendar year for the site and the denominator of
which is the gross rent paid for the calendar year for the
parcel. When a homestead is owned by two or more persons as
joint tenants or tenants in common, such tenants shall determine
between them which tenant may claim the property taxes payable
on the homestead. If they are unable to agree, the matter shall
be referred to the commissioner of revenue whose decision shall
be final. Property taxes are considered payable in the year
prescribed by law for payment of the taxes.
In the case of a claim relating to "property taxes
payable," the claimant must have owned and occupied the
homestead on January 2 of the year in which the tax is payable
and (i) the property must have been classified as homestead
property pursuant to section 273.13, subdivision 22 or 23, on or
before December 15 of the assessment year to which the "property
taxes payable" relate; or (ii) the claimant must provide
documentation from the local assessor that application for
homestead classification has been made on or before December 15
of the year in which the "property taxes payable" were payable
and that the assessor has approved the application.
Sec. 24. Minnesota Statutes 1994, section 290A.04,
subdivision 3, is amended to read:
Subd. 3. The commissioner of revenue shall construct and
make available to taxpayers a comprehensive table showing the
property taxes to be paid and refund allowed at various levels
of income and assessment. The table shall follow the schedule
of income percentages, maximums and other provisions specified
in subdivision 2, except that the commissioner may graduate the
transition between income brackets. All refunds shall be
computed in accordance with tables prepared and issued by the
commissioner of revenue.
The commissioner shall include on the form an appropriate
space or method for the claimant to identify if the property
taxes paid are for a manufactured home, as defined in section
273.125, subdivision 8, paragraph (c), or a park trailer taxed
as a manufactured home under section 168.012, subdivision 9.
Sec. 25. Minnesota Statutes 1994, section 290A.07,
subdivision 2a, is amended to read:
Subd. 2a. A claimant who is a renter or a homeowner who
occupies a manufactured home, as defined in section 273.125,
subdivision 8, paragraph (c), or a park trailer taxed as a
manufactured home under section 168.012, subdivision 9, shall
receive full payment after August 1 and before August 15 or 60
days after receipt of the application, whichever is later.
Sec. 26. Minnesota Statutes 1994, section 375.192, is
amended by adding a subdivision to read:
Subd. 4. [DELEGATION BY COUNTY BOARD.] Notwithstanding any
law to the contrary, the county board may delegate to the county
auditor any authority, power, or responsibility assigned to the
county board in this section. If delegation is granted under
this subdivision, the county board shall prescribe the
conditions for the delegation and may revoke delegation without
good cause or prior notice. If the county auditor holds
elective office, no delegation shall be made under this
subdivision unless the county auditor concurs in the delegation.
Sec. 27. [473.3915] [TRANSIT ZONES.]
Subdivision 1. [DEFINITIONS.] For the purposes of this
section, the terms defined in subdivisions 2 and 3 have the
meanings given them.
Subd. 2. [REGULAR ROUTE TRANSIT SERVICE.] "Regular route
transit service" means services as defined in section 473.385,
subdivision 1, paragraph (b), with at least two scheduled runs
per hour between 7:00 a.m. and 6:30 p.m., Monday to Friday, and
regularly scheduled service on Saturday, Sunday, and holidays,
and weekdays after 6:30 p.m.
Subd. 3. [TRANSIT ZONE.] "Transit zone" means the area
within one-quarter of a mile of a route along which regular
route transit service is provided that is also within the
metropolitan urban service area, as determined by the council.
"Transit zone" includes any light rail transit route for which
funds for construction have been committed.
Subd. 4. [TRANSIT ZONES; MAP AND PLAN.] For the purposes
of section 273.13, subdivision 24, the council shall designate
transit zones and identify them on a detailed map and in a
plan. The council shall review the map and plan once a year and
revise them as necessary to indicate the current transit zones.
The council shall provide each county and city assessor in the
metropolitan area a copy of the current map and plan.
Subd. 5. [TRANSIT ZONE MAP; DATE FIRST PRODUCED.] The
metropolitan council shall produce an initial version of the
transit zone map required under subdivision 4 by January 1, 1996.
Subd. 6. [APPLICATION.] This section applies in the
counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and
Washington.
Sec. 28. Laws 1985, chapter 302, section 2, subdivision 1,
as amended by Laws 1993, chapter 375, article 5, section 36,
subdivision 1, is amended to read:
Subdivision 1. [ORDINANCE.] The governing body of the city
may adopt ordinances:
(a) establishing a special service district in the part of
Minneapolis which is south of 28th Street, west of Dupont Avenue
South, north of 31st Street, and east of East Calhoun Parkway
and East Lake of the Isles Parkway; and
(b) establishing a special service district south of Sixth
Street southeast, west of Sixteenth Avenue Southeast, north of a
line parallel to and 200 feet south of University Avenue and
east of Twelfth Avenue Southeast;
(c) establishing a special service district that includes
that part of Minneapolis lying within the following described
line: commencing at the intersection of Grant Street with
LaSalle Avenue, South on LaSalle Avenue to Franklin Avenue south
on Blaisdell Avenue to 29th Street, east on 29th Street to 1st
Avenue South, north on 1st Avenue South to a point on a line
parallel to and 200 feet south of 26th Street, east on that line
to 3rd Avenue South, north on 3rd Avenue South to a point on a
line parallel to and 200 feet north of 26th Street, west on that
line to 1st Avenue South, north on 1st Avenue South to Grant
Street, west on Grant Street to the point of origin;
(d) establishing a special service district south of Saint
Anthony Parkway, west of a line parallel to and 300 feet east of
Central Avenue, north of Broadway Street, and east of a line
parallel to and 300 feet west of Central Avenue; and
(e) establishing a special service district that includes
that portion of Minneapolis lying within the following described
line: commencing at the intersection of the Mississippi River
and Interstate Highway 94, northwesterly along the Mississippi
River to its intersection with Interstate Highway 35W,
southwesterly on Interstate Highway 35W to its intersection with
Hiawatha Avenue extended (Trunk Highway 55), southeasterly on
Hiawatha Avenue to its intersection with Franklin Avenue,
easterly on Franklin Avenue to its intersection with 20th Avenue
South extended, northerly on 20th Avenue South to its
intersection with Interstate Highway 94, and easterly on
Interstate Highway 94 to the point of origin.
Only property which is zoned for commercial, business, or
industrial use under a municipal zoning ordinance may be
included in a special service district. The ordinance shall
describe with particularity the areas to be included in the
district and the special services to be furnished. The
ordinance may not be adopted until after a public hearing on the
question. Notice of the hearing shall include:
(1) the time and place of the hearing;
(2) a map showing the boundaries of the proposed district;
and
(3) a statement that all persons owning property in the
proposed district will be given an opportunity to be heard at
the hearing.
Subd. 2. [LOCAL APPROVAL.] This section is effective the
day after the governing body of the city of Minneapolis complies
with Minnesota Statutes, section 645.021, subdivision 3.
Sec. 29. Laws 1992, chapter 511, article 2, section 45,
subdivision 1, is amended to read:
Subdivision 1. [EXEMPTION.] As provided in this section,
qualified student housing at the Duluth technical college is
exempt from ad valorem property taxation and in lieu payments
under Minnesota Statutes, section 469.040, subdivision 3. In
order to qualify for the exemption, the requirements in
subdivisions 2 to 6 must be met.
Sec. 30. Laws 1992, chapter 511, article 2, section 45, is
amended by adding a subdivision to read:
Subd. 6a. [HOUSING REDEVELOPMENT AUTHORITY; EXCEPTIONS.]
The requirements of subdivisions 2, 3, 4, and 5 do not apply in
order to qualify for the exemption if the student housing is
owned by the local housing and redevelopment authority, the
reduced cost of development due to the exemption is reflected in
lower rents, and a reasonable system is used to provide priority
to students in renting the dwelling units.
Sec. 31. Laws 1992, chapter 511, article 2, section 45,
subdivision 7, is amended to read:
Subd. 7. [EXPIRATION.] This section applies to student
housing approved by the state board before January 1, 1997. The
property tax exemption for a student housing development is
limited to 20 years from the date of first occupancy. This
section expires January 1, 2018.
Sec. 32. Laws 1992, chapter 511, article 2, section 46,
subdivision 1, is amended to read:
Subdivision 1. [EXEMPTION.] As provided in this section,
qualified student housing at the Thief River Falls technical
college is exempt from ad valorem property taxation and in lieu
payments under Minnesota Statutes, section 469.040, subdivision
3. In order to qualify for the exemption, the requirements in
subdivisions 2 to 6 must be met.
Sec. 33. Laws 1992, chapter 511, article 2, section 46, is
amended by adding a subdivision to read:
Subd. 6a. [HOUSING REDEVELOPMENT AUTHORITY; EXCEPTIONS.]
The requirements of subdivisions 2, 3, 4, and 5 do not apply in
order to qualify for the exemption if the student housing is
owned by the local housing and redevelopment authority or by a
multicounty housing and redevelopment authority on land leased
from a city or school district, the reduced cost of development
due to the exemption is reflected in lower rents, and a
reasonable system is used to provide priority to students in
renting the dwelling units.
Sec. 34. Laws 1992, chapter 511, article 2, section 46,
subdivision 7, is amended to read:
Subd. 7. [EXPIRATION.] This section applies to student
housing approved by the state board before January 1, 1997. The
property tax exemption for a student housing development is
limited to 20 years from the date of first occupancy. This
section expires January 1, 2018.
Sec. 35. Laws 1993, chapter 375, article 5, section 40,
subdivision 3, is amended to read:
Subd. 3. [ESTABLISHMENT OF SPECIAL SERVICE DISTRICT;
AREA.] The governing body of the city may establish a special
service district in the city. The district shall be bounded on
the northwest by Interstate Highway 35, on the northeast by the
centerline of Sixth Avenue West and as the same is extended to
the United States Harbor Line in St. Louis Bay, on the southeast
by said Harbor Line and on the southwest by the centerline
of Ninth Tenth Avenue West and as the same is extended to said
Harbor Line.
Sec. 36. Laws 1993, chapter 375, article 5, section 44, is
amended to read:
Sec. 44. [EFFECTIVE DATE.]
Section 1 is effective April 1, 1994.
Sections 2, 3, clause (26), and 43, paragraph (b), are
effective for taxes levied in 1993, payable in 1994, and
thereafter.
Section 3, clause (25), is effective for taxes levied in
1991, payable in 1992, and thereafter. Upon application to and
approval by the county auditor, the county treasurer shall
refund to the taxpayer any taxes paid for 1992 that are exempt
under section 3, clause (25). The refund shall be paid without
interest. Each taxing jurisdiction must reimburse the county
for the refund in the same proportion as the taxing
jurisdiction's levy bears to the total levies of all
jurisdictions for taxes payable in 1992. The amount of the
reimbursement may be deducted in the next distribution of tax
proceeds to the taxing jurisdiction.
Sections 4 to 7, 17, and 43, paragraph (a), are effective
the day following final enactment, except that section 17,
paragraphs (c) and (d) are effective for taxes payable in 1994
and thereafter.
Sections 8 to 10, 12, 19, 21 to 27, and 30 are effective
for 1993 assessments for taxes payable in 1994 and subsequent
years, except if provided otherwise.
Section 11, clauses (1) and (2), are effective for the 1992
assessment, taxes payable in 1993 and thereafter. Section 11,
clause (3), is effective for the 1993 assessment, taxes payable
in 1994 and thereafter.
Section 13 is effective for qualifying improvements made
after January 2, 1993; except that in the case of improvements
made under a city-sponsored interest rate incentive program,
section 13 is also effective for improvements made between
January 1, 1992, and January 1, 1993, provided that the market
value of those improvements shall initially be excluded from the
property's 1995 assessment and are subject to all other
limitations under Minnesota Statutes 1994, section 273.11,
subdivision 16.
Sections 14 and 15 are effective for the 1994 assessment,
payable in 1995, and thereafter. Notwithstanding Minnesota
Statutes, section 273.112, subdivision 6, in order to qualify
for valuation under Minnesota Statutes, section 273.112, for the
1994 assessment, the taxpayer of the property devoted to golf
and operated by private clubs, that does not meet the
requirement of Minnesota Statutes, section 273.112, subdivision
3, for the 1993 assessment year, must submit an affidavit or
other written verification to the assessor showing that the
bylaws in rules and regulations of the private club meet the
eligibility requirements of Minnesota Statutes, section 273.112,
by January 1, 1994.
Sections 16 and 18 are effective for assessment year 1994
and subsequent years.
Section 20 is effective for taxes payable in 1995 and
thereafter.
Section 28 is effective for taxes payable in 1994 and
thereafter.
Section 29 is effective for the 1991 assessment and
thereafter, for taxes payable in 1992 and thereafter. For taxes
payable in 1992 and 1993, any amounts paid by the property owner
in excess of the amounts required by section 29 shall be paid by
the county treasurer to the property owner under the abatement
procedures.
Section 31 is effective for applications for reductions or
abatements filed after the day of final enactment.
Section 33 is effective for assessments certified after
July 1, 1993.
Section 40 is effective the day after compliance with
Minnesota Statutes, section 645.021, subdivision 3, by the
governing body of the city of Duluth.
Section 43, clause (c) is repealed effective January 2,
1993, provided that any improvements made prior to January 2,
1993, shall continue to qualify for the delayed assessment
provisions under section 383C.78 for the duration of the period
provided in that section.
Sec. 37. Laws 1994, chapter 587, article 9, section 10,
subdivision 6, is amended to read:
Subd. 6. [EFFECTIVE DATE.] This section (a) Laws 1994,
chapter 587, article 9, section 10, is effective in any of the
following cities or towns the day after compliance by the
governing body of a city or town with Minnesota Statutes,
section 645.021, subdivision 3: 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. Laws 1994, chapter 587, article 9,
section 10, 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.
(b) Notwithstanding the time limitations for filing local
approval under Minnesota Statutes, section 645.021, subdivision
3, the certificate of approval of any of the cities, towns, or
counties named in this subdivision may be filed with the
secretary of state at any time after May 6, 1994, and the law
approved by the certificate is then effective as to the
certifying city, town, or unorganized territory.
Sec. 38. Laws 1994, chapter 587, article 5, section 27, is
amended as follows:
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 and 1996. 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. To receive the property tax credit under
subdivision 9, the evaluator must have determined that repairs
were necessary, and 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, for taxes
payable in 1995 and by September 1, 1995, for taxes payable in
1996.
(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, for appeals for taxes payable in 1995 and between November
1 and December 1, 1995, for appeals for taxes payable in 1996.
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 in 1996, and is limited to a total amount
of $1,000,000 for the two years. 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.
Any amount remaining of the $1,000,000 total appropriation,
after the reimbursement for taxes payable in 1995 have been
paid, is available for taxes payable in 1996 provided, however,
that the total amount available for both taxes payable in 1995
and 1996 shall not exceed the total $1,000,000 appropriation for
both years.
Subd. 9. [REPORT TO THE LEGISLATURE.] By January 15, 1995,
and by January 15, 1996, 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 and 1996 tax year, respectively.
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 and in 1996
on nonhomestead, single- and two-family rental properties
existing on the effective date.
Sec. 39. [CITY OF ROSEVILLE; ESTABLISHMENT OF SPECIAL
SERVICE DISTRICTS.]
Subdivision 1. [DEFINITIONS.] (a) For the purpose of this
section, the terms defined have the meanings given them.
(b) "City" means the city of Roseville.
(c) "Special services" means:
(1) all services rendered or contracted for by the city,
including the repair, maintenance, operation, and construction
of any improvement authorized by Minnesota Statutes, section
429.021;
(2) maintenance of landscape and streetscape improvements
installed by the city; and
(3) any other service provided to the public by the city as
authorized by law or charter.
Subd. 2. [ESTABLISHMENT OF DISTRICTS.] The governing body
of the city of Roseville 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. [EFFECTIVE DATE.] This section is effective the
day following final enactment, after the governing body of the
city of Roseville complies with Minnesota Statutes, section
645.021, subdivision 3.
Sec. 40. [TAX-EXEMPT PROPERTY; EXCEPTION TO TIME
REQUIREMENT.]
Subdivision 1. [EXCEPTION TO TIME REQUIREMENT.]
Notwithstanding the time requirements of Minnesota Statutes,
section 272.02, subdivision 4, paragraph (b), for taxes levied
in 1991, payable in 1992, the governing body of a county that
has a population exceeding 700,000 according to the most recent
federal decennial census may grant a property tax exemption for
property that (1) meets the requirements of exempt property
under Minnesota Statutes, section 272.02, subdivision 4,
paragraph (b), except for the July 1 date; (2) was an athletic
facility classified as class 3 commercial and industrial
property on January 2, 1991; and (3) was acquired during 1991 by
a church.
Subd. 2. [EFFECTIVE DATE.] Subdivision 1 is effective the
day following final enactment, and applies to property taxes
levied in 1991, payable in 1992, only.
Sec. 41. [CITY OF ST. LOUIS PARK; ESTABLISHMENT OF SPECIAL
SERVICE DISTRICTS.]
Subdivision 1. [DEFINITIONS.] (a) For the purposes of this
section, the terms defined have the meanings given them.
(b) "City" means the city of St. Louis Park.
(c) "Special services" means:
(1) all services rendered or contracted for by the city,
including the repair, maintenance, operation, and construction
of any improvement authorized by Minnesota Statutes, section
429.021;
(2) maintenance of landscape and streetscape improvements
installed by the city; and
(3) any other service provided to the public by the city as
authorized by law or charter.
Subd. 2. [ESTABLISHMENT OF DISTRICTS.] The governing body
of the city of St. Louis Park 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 following final enactment, after the governing body of the
city of St. Louis Park complies with Minnesota Statutes, section
645.021, subdivision 3.
Sec. 42. [CITY OF RICHFIELD; FORMATION OF NONPROFIT
HOUSING CORPORATIONS.]
Subdivision 1. [FORMATION OF NONPROFIT HOUSING
CORPORATIONS.] The housing and redevelopment authority of the
city of Richfield may form or consent to the formation of one or
more corporations under Minnesota Statutes, chapter 317A, for
the purpose of owning and operating housing developments
financed with mortgages insured by the Federal Housing
Administration of the United States Department of Housing and
Urban Development to be occupied by low- and moderate-income
persons and families.
Subd. 2. [CONTROL BY AUTHORITY.] The authority shall be a
member of each corporation, and the members of the board of
directors of each corporation shall be members or employees of
the authority. The authority may capitalize a corporation and
may acquire all or a part of the corporation's share or member
certificates. The authority shall approve a corporation's
articles of incorporation and bylaws, directors, projects, and
expenditures, the sale or conveyance of projects, the issuance
of obligations, and such other actions of a corporation as the
authority may determine. The authority shall take title to
property of a corporation upon its dissolution.
Subd. 3. [ISSUANCE OF BONDS.] A nonprofit corporation
authorized to be formed under subdivision 1 may issue bonds for
the purpose of financing the acquisition and operation of
multifamily housing developments, in furtherance of the public
purpose of provision of low- and moderate-income housing. The
bonds shall be payable solely from the revenues of the
developments and shall be issued upon such terms as the
corporation shall determine, with the consent of the authority.
Subd. 4. [PROPERTY TAX EXEMPTION.] Property owned by a
nonprofit corporation authorized to be formed under subdivision
1 shall be treated as public property exclusively used for a
public purpose under Minnesota Statutes, section 272.02,
subdivision 1.
Subd. 5. [EFFECTIVE DATE.] This section is effective the
day after compliance with Minnesota Statutes, section 645.021,
subdivision 3, by the city council of the city of Richfield.
Sec. 43. [RENTAL TAX EQUITY; BROOKLYN PARK PILOT PROJECT;
PAYABLE 1996 ONLY.]
Subdivision 1. [PILOT; TERM.] A pilot project for rental
tax equity in the city of Brooklyn Park is established. The
program is for property taxes payable in 1996 only. The program
is available to owners of residential rental property.
Subd. 2. [PRIMARY OBJECTIVE.] The pilot project's primary
objective is to give an incentive to landlords to improve their
tenant-occupied property and still offer affordable housing.
Subd. 3. [DEFINITION; RESIDENTIAL RENTAL PROPERTY.] For
the purposes of this section, "residential rental property"
means privately owned property classified under section 273.13,
subdivision 25, paragraph (a) or (b)(1), that is ten or more
years old.
Subd. 4. [PROPERTY TAX TREATMENT.] (a) Residential rental
property located in the city of Brooklyn Park that meets the
requirements of this section, is eligible for the property tax
credit under subdivision 9.
(b) The program is not a housing or building code
enforcement program.
(c) Participation in the program is voluntary.
Subd. 5. [NOTIFICATION TO OWNERS.] The city of Brooklyn
Park shall notify the owner of each residential rental property
located in the city that the property may be eligible to receive
a property tax credit as provided in this section.
Subd. 6. [PROGRAM STEPS.] (a) The Brooklyn Park city
council shall adopt by resolution guidelines for implementation
of the program under this section.
(b) A landlord who owns eligible property and who wishes to
participate must arrange for a certified evaluator who is
licensed by the city of Brooklyn Park to evaluate the property.
(c) The landlord must notify the tenant of the evaluation
so that the tenant may be present if the tenant wishes.
(d) The evaluator must evaluate the property using program
guidelines adopted by resolution of the Brooklyn Park city
council prior to implementation of the program under this
section.
(e) To receive the property tax credit under subdivision 9,
the evaluator must have determined that repairs were necessary,
and 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.
(f) The evaluator must reinspect the property to see if the
program guidelines have been followed.
(g) 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.
(h) 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 9 will not, in the city's estimate, exceed $350,000.
(i) A landlord who chooses to participate must complete an
application for certification by November 1, 1995 for credit
payable in 1996.
Subd. 7. [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,
1995.
Subd. 8. [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. 9. [CREDIT AND REIMBURSEMENT.] (a) [CREDIT
PROVIDED.] Property that meets the requirements of 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). For
the purposes of determining the tax that would be payable if the
property were classified under section 273.13, subdivision 22,
paragraph (a), the first $72,000 of market value shall be
applied to the parcel as a whole.
(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 Hennepin 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 Hennepin 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 1996, and is limited to $350,000. To the extent the
amount of credit originally certified exceeds $350,000,
reimbursements to the taxing districts shall be prorated
according to the proportions of their levies so as not to exceed
$350,000.
Subd. 10. [REPORT TO THE LEGISLATURE.] By January 15,
1997, the Brooklyn Park city council shall provide a report to
the legislature as provided in Minnesota Statutes, section
3.195. The council shall 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.
Subd. 11. [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
Brooklyn Park, and applies to property taxes payable in 1996 on
residential rental properties.
Sec. 44. [PROPERTY TAX REFUNDS; BROOKLYN PARK RENTAL
EQUITY PARTICIPANTS.]
Notwithstanding Minnesota Statutes, section 290A.03,
subdivision 11, for purposes of calculating a claimant's
property tax refund, in the case of a claimant who resides in a
unit certified for participation in the rental equity project
under section 43, the claimant's "rent constituting property
taxes paid" for property taxes payable in 1996 only shall be 20
percent of gross rent actually paid in cash or its equivalent.
An owner or managing agent of a unit certified for
participation in the rental equity project shall indicate that
the unit was certified for participation on the rent certificate
prescribed in Minnesota Statutes, section 290A.19, paragraph
(a). In the event that the owner or managing agent fails to
provide a rent certificate and the renter obtains a statement
from the county treasurer, as prescribed in Minnesota Statutes,
section 290A.19, paragraph (c), the county treasurer shall also
indicate on the statement if the building was certified for
participation in the rental equity project.
Sec. 45. [PROPERTY TAX REFUNDS; ST. PAUL RENTAL EQUITY
PARTICIPANTS.]
Notwithstanding Minnesota Statutes, section 290A.03,
subdivision 11, for purposes of calculating a claimant's
property tax refund, in the case of a claimant who resides in a
unit certified for participation in the St. Paul rental equity
program under section 38, the claimant's "rent constituting
property taxes paid" for property taxes payable in 1996 only
shall be 20 percent of gross rent actually paid in cash or its
equivalent.
An owner or managing agent of a unit certified for
participation in the rental equity project shall indicate that
the unit was certified for participation on the rent certificate
prescribed in Minnesota Statutes, section 290A.19, paragraph
(a). In the event that the owner or managing agent fails to
provide a rent certificate and the renter obtains a statement
from the county treasurer, as prescribed in Minnesota Statutes,
section 290A.19, paragraph (c), the county treasurer shall also
indicate on the statement if the building was certified for
participation in the rental equity project.
Sec. 46. [STUDY OF APARTMENT PROPERTY TAX RELIEF.]
The commissioner of revenue, with the assistance of the
executive director of the Minnesota housing finance agency,
shall conduct a study on alternative methods of providing
incentives to improve the stock of rental housing throughout the
state.
(a) The study must specifically consider the following
proposal as if it were in effect for property taxes payable in
1998: Provide a two percent class rate for five assessment
years on the market value of improvements made to class 4a
apartment property if (i) the assessor's estimated market value
of the improvements is at least 20 percent of the total
estimated market value of the property, and (ii) the building is
at least 25 years old. For purposes of this paragraph,
"improvements" shall exclude adding square footage or amenities
to the building.
(b) The study should also consider other policy
alternatives that could be considered by the legislature in
trying to encourage improvements to deteriorating apartment
properties throughout the state.
(c) The study must include an analysis of the
administrative feasibility, policy implications, and state and
local fiscal impacts of the specific proposal described in
paragraph (a), the St. Paul and Brooklyn Park rental equity
programs and any other options resulting from paragraph (b)
alternatives.
(d) On or before February 15, 1996, the commissioner shall
report the findings of the study to the chairs of the House and
the Senate Tax Committees, along with recommendations that would
facilitate administration and improve the effectiveness of the
proposal described in paragraph (a) and any other options
considered.
Sec. 47. [STEARNS COUNTY; REFUND OF PURCHASE PRICE.]
Subdivision 1. [REFUND OF PURCHASE PRICE.] The governing
body of Stearns county shall refund to the city of Melrose a
portion of the amount paid by the city for the purchase on
October 28, 1994, of property designated as PIN No. 66:
36648.000, located in the city of Melrose. The amount of the
refund must equal the taxes, penalties, and interest paid on
that property for taxes payable years 1990 and 1991.
Subd. 2. [EFFECTIVE DATE.] Subdivision 1 is effective the
day following final enactment, after the Stearns county board
complies with Minnesota Statutes, section 645.021, subdivision 3.
Sec. 48. [COMPUTATION OF TAX RATES.]
In computing the basic transportation tax rate under
Minnesota Statutes, section 124.226, subdivision 1, and the
general education tax rate under Minnesota Statutes, section
124A.23, subdivision 1, the commissioner shall, notwithstanding
Minnesota Statutes, section 124.2131, subdivision 1, use
adjusted net tax capacities that do not reflect the class rate
reductions for seasonal residential recreational property not
used for commercial purposes, in section 10. Notwithstanding
the dollar amounts specified in Minnesota Statutes, section
124.226, subdivision 1, and section 124A.23, subdivision 1, the
resulting rate shall be applied to the adjusted net tax
capacities as computed under Minnesota Statutes, section
124.2131, for purposes of determining the basic transportation
levy under Minnesota Statutes, section 124.226, subdivision 1,
and the general education levy under Minnesota Statutes, section
124A.23, subdivision 2. The equalizing factor under Minnesota
Statutes, section 124A.02, shall be computed using the tax rate
computed under this section.
Sec. 49. [WIND ENERGY; UPDATED OFFERS.]
The remaining companies after April 1, 1995, that are
seeking to fulfill the wind generation requirements of Minnesota
Statutes, section 116C.771, paragraph (b), through the
competitive bidding process under Minnesota Statutes, section
216B.2422, subdivision 5, shall be permitted to update their
offers to account for changes in the property tax treatment of
wind energy conversion system property contained in 1995 H. F.
No. 1864, if enacted. The public utility shall notify each of
the remaining companies in writing of this provision and shall
establish a schedule for updated offers. The public utilities
commission shall not approve a contract until the public utility
has demonstrated to the commission's satisfaction that it has
provided the opportunity to each of the remaining companies to
submit an updated bid.
Sec. 50. [APPROPRIATION.]
$350,000 is appropriated from the general fund to the
commissioner of revenue for the biennium ending June 30, 1997,
for purposes of the Brooklyn Park Rent Equity Program under
section 43.
Sec. 51. [REPEALER.]
(a) Minnesota Statutes 1994, section 168.013, subdivision
lj, is repealed.
(b) Minnesota Statutes 1994, section 245.48, is repealed.
Sec. 52. [EFFECTIVE DATE.]
Sections 1, 2, and 36 are effective for the 1995 levy and
thereafter, for taxes payable in 1996 and thereafter. Sections
3 and 13 are effective for taxes payable in 1997 and thereafter.
Sections 4, 7, 8, 12, 17, and 18 are effective for the 1995
assessment and thereafter, payable in 1996 and thereafter,
provided that the provisions of section 7 restricting homestead
classification for seasonal recreational residential property
apply to taxes payable in 1996 and thereafter regardless of the
date of occupancy of the property or the date of filing of an
application for homestead classification by the relative of the
owner. Section 5 is effective for the 1996 assessment and
thereafter. Sections 9 and 27 are effective for the 1997
assessment and thereafter, for taxes payable in 1998 and
thereafter. Sections 14 and 15 are effective for notices and
tax statements prepared in 1995 and thereafter, for taxes
payable in 1996 and thereafter. Sections 19 and 20 are
effective for taxes levied in 1995, payable in 1996, and
thereafter. Sections 21, 26, 38, and 46 are effective the day
following final enactment. Sections 22 to 25 are effective for
refunds based on property taxes paid in 1997 and thereafter, and
for rent paid in 1996 and thereafter. Sections 29 to 31 are
effective the day after the governing body of Duluth complies
with Minnesota Statutes, section 645.021, subdivision 3.
Sections 32 to 34 are effective the day after the governing body
of Thief River Falls complies with Minnesota Statutes, section
645.021, subdivision 3. Section 35 is effective the day after
the governing body of the city of Duluth complies with Minnesota
Statutes, section 645.021, subdivision 3. Section 48 is
effective for school aids payable in fiscal years 1998 and
thereafter. Section 51, paragraph (a), is effective beginning
January 1, 1997.
ARTICLE 4
PROPERTY TAX REFUND AS DEDUCTION ON TAX STATEMENT
Section 1. Minnesota Statutes 1994, section 270A.03,
subdivision 7, is amended to read:
Subd. 7. [REFUND.] "Refund" means an individual income tax
refund or political contribution refund, pursuant to chapter
290,; or a property tax credit or refund, pursuant to chapter
290A, other than a refund which has been certified to or
calculated by the county auditor under section 276.012.
For purposes of this chapter, lottery prizes, as set forth
in section 349A.08, subdivision 8, shall be treated as refunds.
In the case of a joint property tax refund payable to
spouses under chapter 290A, the refund shall be considered as
belonging to each spouse in the proportion of the total refund
that equals each spouse's proportion of the total income
determined under section 290A.03, subdivision 3. The
commissioner shall remit the entire refund to the claimant
agency, which shall, upon the request of the spouse who does not
owe the debt, determine the amount of the refund belonging to
that spouse and refund the amount to that spouse.
Sec. 2. Minnesota Statutes 1994, section 270B.12, is
amended by adding a subdivision to read:
Subd. 11. [PROPERTY TAX REFUNDS.] The commissioner may
disclose to a county auditor and treasurer, and to their
designated agents or employees, the property tax refund amounts
for each parcel of homestead property in the county as
determined by the commissioner under chapter 290A.
Sec. 3. Minnesota Statutes 1994, 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 deed of record, 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, or, for purposes of proceeding
under the revenue recapture act to recover personal property
taxes owing, to the county treasurer.
(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, and the property tax
refunds under chapter 290A deducted on the property tax
statement.
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. In the case of a manufactured home, the amount
shall be certified to the current year's tax list for collection.
(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 property tax
refunds reimbursed to the county by the state shall be paid to
the commissioner of revenue for deposit in the fund from which
it was paid. 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. 4. Minnesota Statutes 1994, 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, including separate deductions for
the property tax refunds under section 290A.04, subdivisions 2
and 2h, and the actual tax for taxes payable the current year,
including separate deductions for the property tax refunds under
section 290A.04, subdivisions 2 and 2h. For the purposes of
this subdivision, "school district excess referenda levy" means
school district taxes for operating purposes approved at
referendums, including those taxes based on net tax capacity as
well as those based on market value. "School district excess
referenda levy" does not include school district taxes for
capital expenditures approved at referendums or school district
taxes to pay for the debt service on bonds approved at
referenda. 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 and that these items
may increase the proposed tax shown on the notice:
(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) the contamination tax imposed on properties which
received market value reductions for contamination.
The notice must state that the deduction for a property tax
refund under section 290A.04, subdivision 2h, is contingent upon
continuity in ownership of the property.
(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, 473.446, 473.521, 473.547, or 473.834;
(2) metropolitan airports commission under section 473.667,
473.671, or 473.672; and
(3) 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. 5. [276.012] [COMPUTATION AND ADMINISTRATION OF
PROPERTY TAX REFUNDS.]
(a) On or before October 1 each year, the commissioner of
revenue shall certify to the county auditor the property tax
refund amount under section 290A.04, subdivision 2, for each
parcel of homestead property as defined in section 290A.03,
subdivision 6, other than a manufactured home assessed under
section 273.125, subdivision 8, paragraph (c), that qualifies
for a refund relating to taxes payable in the current year.
(b) The county auditor shall compute the refund for
purposes of the proposed property tax notice for each parcel of
homestead property as defined in section 290A.03, subdivision 6,
other than a manufactured home assessed under section 273.125,
subdivision 8, paragraph (c), that may qualify for a refund
under section 290A.04, subdivision 2h, for taxes payable in the
subsequent year.
(c) After certification of the levies by taxing districts
under section 275.07, the county auditor shall compute the
refund for each parcel of homestead property as defined in
section 290A.03, subdivision 6, other than a manufactured home
assessed under section 273.125, subdivision 8, paragraph (c),
that qualifies for a refund under section 290A.04, subdivision
2h, for taxes payable in the current year.
(d) The county auditor shall separately certify the amounts
in paragraphs (a) and (c) to the county treasurer who shall
reflect the amounts as property tax deductions on the property
tax statement under section 276.04 for taxes payable in the
current year, provided that to receive the refunds, the property
must be classified as homestead property under section 273.13
for taxes payable in the year the refund is payable.
(e) The county auditor shall annually separately certify
the costs of the property tax refunds under section 290A.04,
subdivisions 2 and 2h, to the department of revenue with the
abstract of tax lists under section 275.29.
Sec. 6. Minnesota Statutes 1994, 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 the
parcel identification number and a county identification number
as specified by the commissioner. The statement must contain
the qualifying tax amount to be used by the taxpayer in claiming
a property tax refund under section 290A.04, subdivision 2, in
the form and location determined by the commissioner of
revenue. 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. For the purposes of this
subdivision, "school district excess referenda levy" means
school district taxes for operating purposes approved at
referenda, including those taxes based on market value. "School
district excess referenda levy" does not include school district
taxes for capital expenditures approved at referendums or school
district taxes to pay for the debt service on bonds approved at
referenda. 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 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).;
(8) for eligible homestead properties, the property tax
refunds under section 290A.04, subdivisions 2 and 2h, if any,
shown separately as deductions on the statement; and
(9) the tax after deduction of the property tax refunds
under clause (8).
(d) 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. 7. Minnesota Statutes 1994, section 276.09, is
amended to read:
276.09 [SETTLEMENT BETWEEN AUDITOR AND TREASURER.]
On the later of May 20 of each year or 26 calendar days
after the postmark date on the envelopes containing real or
personal property tax statements, the county treasurer shall
make full settlement with the county auditor of all receipts
collected for all purposes, from the date of the last settlement
up to and including each day mentioned. The county auditor
shall, within 30 days after the settlement, send an abstract of
it to the state auditor in the form prescribed by the state
auditor. At the settlement the treasurer shall make complete
returns of the receipts on the current tax list, showing the
amount collected on account of the several funds included in the
list.
Settlement of receipts from the later of May 20 or the
actual settlement date to December 31 of each year must be made
as provided in section 276.111.
For purposes of this section, "receipts" includes all tax
payments received by the county treasurer on or before the
settlement date and all property tax refunds paid to the county
treasurer under section 290A.07.
Sec. 8. Minnesota Statutes 1994, section 276.111, is
amended to read:
276.111 [DISTRIBUTIONS AND FINAL YEAR-END SETTLEMENT.]
Within 14 business days after July 20, the county treasurer
shall pay to each taxing district 100 percent of the estimated
collections arising from taxes levied by and belonging to the
taxing district from the settlement day determined in section
276.09 to July 25.
Within seven business days after October 15, the county
treasurer shall pay to the school districts 50 percent of the
estimated collections arising from taxes levied by and belonging
to the school district from the settlement day determined in
section 276.09 July 25 to October 20. The remaining 50 percent
of the estimated tax collections must be paid to the school
district within the next seven business days. Within ten
business days after November 15, the county treasurer shall pay
to the school district 100 percent of the estimated collections
arising from taxes levied by and belonging to the school
districts from October 20 to November 20.
Within ten business days after November 15, the county
treasurer shall pay to each taxing district, except any school
district, 100 percent of the estimated collections arising from
taxes levied by and belonging to each taxing district from the
settlement day determined in section 276.09 July 25 to November
20.
On or before January 5, the county treasurer shall make
full settlement with the county auditor of all receipts
collected from the settlement day determined in section 276.09
to December 31. After subtracting any tax distributions that
have been made to the taxing districts in July, October, and
November, the treasurer shall pay to each of the taxing
districts on or before January 25, the balance of the tax
amounts collected on behalf of each taxing district. Interest
accrues at an annual rate of eight percent and must be paid to
the taxing district if this final settlement amount is not paid
by January 25. Interest must be paid upon appropriation from
the general revenue fund of the county. If not paid, it may be
recovered by the taxing district in a civil action.
Sec. 9. Minnesota Statutes 1994, section 289A.60,
subdivision 12, is amended to read:
Subd. 12. [PENALTIES RELATING TO PROPERTY TAX REFUNDS.]
(a) If the commissioner determines that a property tax refund
claim is or was excessive and was filed with fraudulent intent,
the claim must be disallowed in full. If the claim has been
paid, the amount disallowed may be recovered by assessment and
collection.
(b) If it is determined that a property tax refund claim is
excessive and was negligently prepared, ten percent of the
corrected claim must be disallowed. If the claim has been paid,
the amount disallowed must be recovered by assessment and
collection.
(c) An owner or managing agent who knowingly fails to give
a certificate of rent constituting property tax to a renter, as
required by section 290A.19, paragraph (a), is liable to the
commissioner for a penalty of $100 for each failure.
(d) If the owner or managing agent knowingly gives rent
certificates that report total rent constituting property taxes
in excess of the amount of actual rent constituting property
taxes paid on the rented part of a property, the owner or
managing agent is liable for a penalty equal to the greater of
(1) $100 or (2) 50 percent of the excess that is reported. An
overstatement of rent constituting property taxes is presumed to
be knowingly made if it exceeds by ten percent or more the
actual rent constituting property taxes.
(e) No property tax refund claim based on rent paid, or on
property taxes payable in the case of a manufactured home
assessed under section 273.125, subdivision 8, paragraph (c), is
allowed if the initial claim is filed more than one year after
the original due date for filing the claim.
(f) Except as provided in paragraph (e), no property tax
refund claim based on property taxes payable filed after the
original due date for filing the claim may be paid. No
extensions of time for filing may be granted.
Sec. 10. Minnesota Statutes 1994, section 290A.03,
subdivision 13, is amended to read:
Subd. 13. [PROPERTY TAXES PAYABLE.] "Property taxes
payable" means the property tax exclusive of special
assessments, penalties, and interest payable on a claimant's
homestead before reductions made under section 273.13 but after
deductions made under sections 273.135, 273.1391, 273.42,
subdivision 2, and any other state paid property tax credits in
any calendar year other than property tax refunds determined
under chapter 290A. In the case of a claimant who makes ground
lease payments, "property taxes payable" includes the amount of
the payments directly attributable to the property taxes
assessed against the parcel on which the house is located. No
apportionment or reduction of the "property taxes payable" shall
be required for the use of a portion of the claimant's homestead
for a business purpose if the claimant does not deduct any
business depreciation expenses for the use of a portion of the
homestead in the determination of federal adjusted gross
income. For homesteads which are manufactured homes as defined
in section 274.19, subdivision 8 assessed under section 273.125,
subdivision 8, paragraph (c), "property taxes payable" shall
also include the amount of the gross rent paid in the preceding
year for the site on which the homestead is located, which is
attributable to the net tax paid on the site. The amount
attributable to property taxes shall be determined by
multiplying the net tax on the parcel by a fraction, the
numerator of which is the gross rent paid for the calendar year
for the site and the denominator of which is the gross rent paid
for the calendar year for the parcel. When a homestead is owned
by two or more persons as joint tenants or tenants in common,
such tenants shall determine between them which tenant may claim
the property taxes payable on the homestead. If they are unable
to agree, the matter shall be referred to the commissioner of
revenue whose decision shall be final. Property taxes are
considered payable in the year prescribed by law for payment of
the taxes.
In the case of a claim relating to "property taxes
payable," the claimant must have owned and occupied the
homestead on January 2 of the year in which the tax is
payable to which the "property taxes payable" used in computing
the refund relate, and (i) the property must have been
classified as homestead property pursuant to section 273.13,
subdivision 22 or 23, on or before December 15 of the assessment
year to which the "property taxes payable" relate; or (ii) the
claimant must provide documentation from the local assessor that
application for homestead classification has been made on or
before December August 15 of the year in which the "property
taxes payable" were payable and that the assessor has approved
the application.
No refunds under section 290A.04, subdivision 2 or 2h, may
be deducted on the property tax statement unless the property is
classified as homestead property for taxes payable in the year
the property tax refund is paid.
Sec. 11. Minnesota Statutes 1994, section 290A.04,
subdivision 2h, is amended to read:
Subd. 2h. (a) If the gross property taxes payable on a
homestead increase more than 12 percent over the net property
taxes payable in the prior year on the same property that is
owned and occupied by the same owner on January 2 of both years,
and the amount of that increase is $100 or more for taxes
payable in 1995 and 1996, a claimant who is, a homeowner shall
be allowed an additional refund equal to 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 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 $1,000.
(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, 1995, the commissioner shall
estimate the cost of making the payments provided by this
subdivision for taxes payable in 1996. Notwithstanding the open
appropriation provision of section 290A.23, if the estimated
total refund claims for taxes payable in 1996 exceed $5,500,000,
the commissioner shall 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. 12. [290A.055] [PUBLIC DATA; NOTICE ON CLAIM FORM.]
The property tax refund claim form must contain a statement
notifying claimants that the property tax refund amount is
public data, and that it will appear on the property tax
statement and on other county records.
Sec. 13. Minnesota Statutes 1994, section 290A.07, is
amended to read:
290A.07 [TIME FOR AND MANNER OF PAYMENT.]
Subdivision 1. [GENERAL FUND.] Allowable claims filed
pursuant to the provisions of this chapter and the refund under
section 290A.04, subdivision 2h, shall be paid by the
commissioner from the general fund as provided in this section.
Subd. 2a. [PAYMENT TO CLAIMANT.] A claimant who is a
renter or a homeowner who occupies a manufactured home, as
defined in section 273.125, subdivision 8, paragraph (c), shall
receive full payment after August 1 and before August 15 or 60
days after receipt of the application, whichever is later.
Subd. 3. [PAYMENT TO COUNTY TREASURER AS DEDUCTION ON
PROPERTY TAX STATEMENT.] A claimant In the case of property not
included in subdivision 2a shall receive full payment after
September 15 and before September 30., payment of a refund under
section 290A.04, subdivision 2, is made as a deduction on the
property tax statement for the homestead for taxes payable the
following year, and payment of a refund under section 290A.04,
subdivision 2h, is made as a deduction on the property tax
statement for the homestead for taxes payable in the current
year.
Subd. 4. [PAYMENT TO COUNTY TREASURER.] Annually on or
before July 20, the commissioner shall pay the amount of the
property tax refunds under section 290A.04, subdivisions 2 and
2h, certified by the county auditor under section 276.012,
paragraph (e), to the county treasurer for settlement and
distribution under sections 276.09 to 276.111.
Sec. 14. Minnesota Statutes 1994, section 290A.15, is
amended to read:
290A.15 [CLAIM APPLIED AGAINST OUTSTANDING LIABILITY.]
The amount of any claim otherwise payable under this
chapter may be applied by the commissioner against any
delinquent tax liability of the claimant or spouse of the
claimant payable to the department of revenue. This section
does not apply to (1) refunds under section 290A.04, subdivision
2, that have been certified by the commissioner of revenue to
the county auditor under section 276.012, or (2) refunds under
section 290A.04, subdivision 2h, determined by the county
auditor under section 276.012.
Sec. 15. Minnesota Statutes 1994, section 290A.18, is
amended to read:
290A.18 [RIGHT TO FILE CLAIM; RIGHT TO RECEIVE CREDIT.]
Subdivision 1. [CLAIM BY SURVIVING SPOUSE OR DEPENDENT.]
Except as provided in subdivision 3, if a person entitled to
relief under this chapter dies prior to receiving relief, the
surviving spouse or dependent of the person shall be entitled to
file the claim and receive relief. If there is no surviving
spouse or dependent, the right to the credit shall lapse.
Subd. 2. [CLAIMANT CANNOT BE LOCATED.] Except as provided
in subdivision 3, if the commissioner cannot locate the claimant
within two years from the date that the original warrant was
issued, or if a claimant to whom a warrant has been issued does
not cash that warrant within two years from the date the warrant
was issued, the right to the credit shall lapse, and the warrant
shall be deposited in the general fund.
Subd. 3. [RIGHT TO RECEIVE REFUND NOT PERSONAL TO
CLAIMANT.] Property tax refunds under section 290A.04,
subdivisions 2 and 2h, are paid as a deduction on the property
tax statement of the property as provided in section 290A.07,
subdivision 3. The right to receive the deduction is not
personal to the claimant or to a surviving spouse or dependent
of the claimant.
Sec. 16. [290A.26] [APPROPRIATION; COUNTY COSTS.]
$2,650,000 is appropriated for fiscal year 1998, and
$2,370,000 is appropriated for fiscal year 1999, and each year
thereafter, to the commissioner of revenue to pay counties for
the costs of implementing and administering the property tax
refunds for homeowners. The commissioner shall make the
payments annually on July 20. The commissioner, after
consultation with the Minnesota Association of County Officers,
shall apportion the available appropriation among the counties.
Sec. 17. [1997 LEVY; TRUTH IN TAXATION NOTICE.]
For taxes payable in 1998 only, the notice of proposed
property taxes under Minnesota Statutes, section 275.065,
subdivision 3, shall state that beginning with property taxes
payable in 1998, the homestead property tax refund calculated
under Minnesota Statutes, section 290A.04, subdivision 2, and
the special refund for property tax increases under Minnesota
Statutes, section 290A.04, subdivision 2h, shall be paid as a
deduction from the net tax on the property for all qualifying
properties other than manufactured homes assessed under
Minnesota Statutes, section 273.125, subdivision 8, paragraph
(c). The notice shall clearly notify the taxpayer that these
deductions are shown on the notice of proposed taxes for taxes
payable in 1998, and that the actual tax for taxes payable in
1998 may be greater than the amount shown on the notice if the
ownership or classification of the property changes before the
refunds are paid. The commissioner of revenue shall prescribe
the form and wording of the statement required in this section.
The commissioner may prescribe that the statement be included
with the notice of proposed property taxes as a separate
addendum. At least five working days before distribution to the
counties, the notice prescribed by the commissioner of revenue
under this section must be submitted to the chairs of the senate
committee on taxes and tax laws and the house tax committee for
their advice and approval.
Sec. 18. [PROPERTY TAX REFUNDS FOR TAXES PAYABLE IN 1998;
TRANSITION PROVISION.]
Notwithstanding the provisions of Minnesota Statutes,
chapter 290A, or any other law to the contrary, the property tax
refund amounts under Minnesota Statutes, section 290A.04,
subdivisions 2 and 2h, relating to property taxes payable in
1997, as paid by the commissioner to the claimants under
Minnesota Statutes, section 290A.07, subdivision 3, shall be the
amounts certified on October 1, 1997, by the commissioner of
revenue to the county auditors. The refund amounts under
Minnesota Statutes, section 290A.04, subdivision 2, are the
amounts that the county auditor shall show as a deduction on the
property tax statement for taxes payable in 1998. The county
auditor shall calculate the amounts of the refund under
Minnesota Statutes, section 290A.04, subdivision 2h, for taxes
payable in 1998, and show that amount as a deduction on the 1998
property tax statement.
Sec. 19. [APPROPRIATION.]
$95,000 is appropriated for the fiscal year ending June 30,
1998, from the general fund in the state treasury to the
commissioner of revenue for purposes of implementing and
administering this article.
Sec. 20. [EFFECTIVE DATE.]
Sections 1 to 15 are effective for property tax refunds
payable as deductions on property tax statements in 1998 and
thereafter.
ARTICLE 5
ECONOMIC DEVELOPMENT
Section 1. Minnesota Statutes 1994, section 124.2131, is
amended by adding a subdivision to read:
Subd. 3a. [CAPTURED TAX CAPACITY ADJUSTMENT.] In
calculating adjusted net tax capacity, the commissioner of
revenue shall increase the adjusted net tax capacity of a school
district containing a tax increment financing district for which
an election is made under section 469.1782, subdivision 1,
clause (1). The amount of the increase equals the captured net
tax capacity of the tax increment financing district in the year
preceding the first taxes payable year in which the special law
permits collection beyond that permitted by the general law
duration limit that otherwise would apply. The addition applies
beginning for aid and levy for the first taxes payable year in
which the special law permits collection of increment beyond
that permitted by the general law duration limit that otherwise
would apply. The addition continues to apply for each taxes
payable year the district remains in effect.
Sec. 2. [270.0683] [REPORT ON THE EFFECT OF TAX INCENTIVES
UPON THE NUMBER OF JOBS.]
On a biennial basis, the commissioner of trade and economic
development shall analyze the effect of all business related tax
reductions or waivers on the aggregate number of jobs created
and wages paid in those new jobs. The commissioner of trade and
economic development shall present the results of the analysis
to the legislature.
Sec. 3. [270.0684] [GOALS FOR NEW TAX EXPENDITURES.]
Each newly enacted business related tax expenditure must
include measurable goals for jobs and wages and require a
biennial review conducted by the commissioner of trade and
economic development for continuation based upon meeting those
goals. The commissioner of trade and economic development shall
report the results of the review to the legislature.
Sec. 4. Minnesota Statutes 1994, section 273.1399,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] For purposes of this
section, the following terms have the meanings given.
(a) "Qualifying captured net tax capacity" means the
following amounts:
(1) The captured net tax capacity of a new or the expanded
part of an existing economic development or soils condition tax
increment financing district, other than a qualified
manufacturing district, for which certification was requested
after April 30, 1990;.
(2) the captured net tax capacity of a qualified
manufacturing district, multiplied by the following percentage
based on the number of years that have elapsed since the
assessment year of the original net tax capacity. In no case
may the final amounts be less than zero or greater than the
total captured net tax capacity of the district:
Number of Years Percentage
1 0
2 20
3 40
4 60
5 80
6 or more 100;
(3) The captured net tax capacity of a new or the expanded
part of an existing tax increment financing district, other than
a qualified housing district, qualified hazardous substance
subdistrict, or an economic development or soils condition
district, for which certification was requested after April 30,
1990, multiplied by the following percentage based on the number
of years that have elapsed since the assessment year of the
original net tax capacity. In no case may the final amounts be
less than zero or greater than the total captured net tax
capacity of the district.
Number of Renewal and All other
years Renovation Districts
Districts
0 to 5 0 0
6 12.5 6.25
7 25 12.5
8 37.5 18.75
9 50 25
10 62.5 31.25
11 75 37.5
12 87.5 43.75
13 100 50
14 100 56.25
15 100 62.5
16 100 68.75
17 100 75
18 100 81.25
19 100 87.5
20 100 93.75
21 or more 100 100
In the case of (3) The following rules apply to a hazardous
substance subdistrict,. The applicable percentage under clause
(2) must be determined under the "all other districts" category.
The number of years must be measured from the date of
certification of the subdistrict for purposes of the additional
captured net tax capacity resulting from the reduction in the
subdistrict's or site's original net tax capacity. After
termination of the overlying district, captured net tax capacity
includes the full amount that is captured by the subdistrict.
(4) Qualified captured tax capacity does not include the
captured tax capacity of exempt districts under subdivisions 6
and 7.
(b) The terms defined in section 469.174 have the meanings
given in that section.
(c) "Qualified manufacturing district" means an economic
development district that qualifies under section 469.176,
subdivision 4c, paragraph (a), without regard to clauses (2) and
(5), for which certification was requested after June 30, 1991,
located in a home rule charter or statutory city that has a
population under 10,000 according to the last federal census.
(d) "Qualified housing district" means a housing district
for a residential rental project or projects in which the only
properties receiving assistance from revenues derived from tax
increments from the district meet all of the requirements for a
low-income housing credit under section 42 of the Internal
Revenue Code of 1986, as amended through December 31, 1992,
regardless of whether the project actually receives a low-income
housing credit.
(e) "Qualified hazardous substance subdistrict" means a
hazardous substance subdistrict in which the municipality has
made an election to make an alternative local contribution as
provided under section 469.175, subdivision 7a.
Sec. 5. Minnesota Statutes 1994, section 273.1399,
subdivision 2, is amended to read:
Subd. 2. [REPORTING.] The county auditor shall calculate
the qualifying captured net tax capacity amount for each
municipal part of each school district in the county and report
the amounts to the commissioner of revenue at the time and in
the manner prescribed by the commissioner. (a) The commissioner
of revenue shall use the retained captured value, tax increment,
and other information reported in the abstract of tax lists
supplement in administering the provisions of this section.
(b) Each tax increment authority or municipality must by
March 15 of each year submit to the commissioner of revenue a
report on local contributions made to each tax increment
district in the preceding year. The commissioner shall
prescribe the form and content of the report, including the
sources and amounts of contributions and any other information
the commissioner requires. Submission of a local contribution
report is required for a tax increment district to be exempt
from the aid reduction provisions of this section.
Sec. 6. Minnesota Statutes 1994, section 273.1399,
subdivision 6, is amended to read:
Subd. 6. [EXEMPTION; ETHANOL PROJECTS EXEMPT DISTRICTS.]
(a) The provisions of this section do not apply to exempt tax
increment financing districts as specified by this subdivision.
(b) A tax increment financing district for an ethanol
production facility that satisfies all of the following
requirements is exempt:
(1) The district is an economic development district, that
qualifies under section 469.176, subdivision 4c, paragraph (a),
clause (1).
(2) The facility is certified by the commissioner of
revenue agriculture to qualify for state payments for ethanol
development under section 41A.09 to the extent funds are
available.
(3) Increments from the district are used only to finance
the qualifying ethanol development project located in the
district or to pay for administrative costs of the district.
(4) The district is located outside of the seven-county
metropolitan area, as defined in section 473.121.
(5) The tax increment financing plan was approved by a
resolution of the county board.
(6) The exemption provided by this paragraph applies until
the first year after the total amount of increment for the
district does not exceed $1,000,000 exceeds $1,500,000. The
county auditor shall notify the commissioner of revenue of the
expiration of the exemption by June 1 of the year in which the
auditor projects the revenues from increments will exceed
$1,500,000.
(c) A qualified housing district is exempt.
(d) A district is exempt if the municipality elects at the
time of approving the tax increment financing plan for the
district to make a qualifying local contribution. To qualify
for the exemption in each year, the authority or the
municipality must make a qualifying local contribution equal to
the listed percentages of increment from the district or
subdistrict:
(1) for an economic development district, a housing
district, or a renewal and renovation district, ten percent;
(2) for a redevelopment district, a mined underground space
district, a hazardous substance subdistrict, or a soils
condition district, 7.5 percent.
The maximum local contribution for all districts in the
municipality is limited to two percent of city net tax capacity
as defined in section 477A.011, subdivision 20.
The amount of the local contribution must be made out of
unrestricted money of the authority or municipality, such as the
general fund, a property tax levy, or a federal or a state
grant-in-aid which may be spent for general government
purposes. The local contribution may not be made, directly or
indirectly, with tax increments or developer payments as defined
under section 469.1766. The local contribution must be used to
pay project costs and cannot be used for general government
purposes or for improvements or costs that the authority or
municipality planned to incur absent the project. The authority
or municipality may request contributions from other local
government entities that will benefit from the district's
activities. These contributions reduce the local contribution
required of the municipality or authority by this paragraph.
Cities, counties, towns, and schools may contribute to paying
these costs, notwithstanding any other law to the contrary.
If the state contributes to the project costs through a
direct grant or similar incentive, the required local
contribution is reduced by one-half of the dollar amount of the
state grant or other similar incentive.
Sec. 7. Minnesota Statutes 1994, section 273.1399, is
amended by adding a subdivision to read:
Subd. 7. [EXEMPTION; AGRICULTURAL PROCESSING
FACILITIES.] The provisions of this section do not apply to a
tax increment financing district that satisfies all of the
following requirements:
(1) the district is established to construct or expand an
agricultural processing facility;
(2) the construction or expansion of the facility creates,
or upon completion will create, a minimum of five permanent
full-time jobs;
(3) the district is located outside of the seven-county
metropolitan area, as defined in section 473.121;
(4) the tax increment financing plan was approved by a
resolution of the county board;
(5) the municipality approving the tax increment financing
plan agrees to make at least a five percent local contribution
that meets the requirements of subdivision 6, paragraph (d),
including the limitation to two percent of city tax capacity;
and
(6) the commissioner of agriculture has certified to the
county auditor that the requirements of this subdivision have
been met.
The exemption provided by this subdivision applies until
the first year after the total amount of increment for the
district exceeds $1,500,000. The county auditor shall notify
the commissioner of revenue of the expiration of the exemption
by June 1 of the year in which the auditor projects the revenues
from increment will exceed $1,500,000.
For purposes of this section, "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, and
including livestock products, poultry products, and wood
products, but not the raising of livestock or poultry.
Sec. 8. Minnesota Statutes 1994, section 273.1399, is
amended by adding a subdivision to read:
Subd. 8. [APPLICATION TO EXTENSIONS BY SPECIAL LAW.] The
provisions of this section apply to a tax increment financing
district, notwithstanding the date on which the request for
certification was made, if (1) the duration limit of the
district under section 469.176 is extended by a special law and
(2) the municipality elects under section 469.1782, subdivision
1, clause (2), that this section applies to the extension. The
section applies beginning for the first taxes payable year after
the district would have terminated under general law and the aid
reduction is determined by using 100 percent of the captured tax
capacity as the qualified captured tax capacity of the
district. The exemption provided by subdivision 6, paragraph
(d), does not apply.
Sec. 9. Minnesota Statutes 1994, section 375.83, is
amended to read:
375.83 [ECONOMIC AND AGRICULTURAL DEVELOPMENT.]
A county board may appropriate not more than $50,000
annually money out of the general revenue fund of the county to
be paid to any incorporated development society or organization
of this state which, in the board's opinion, will use the money
for the best interests of the county in promoting, advertising,
improving, or developing the economic and agricultural resources
of the county. The limitation on appropriations in this section
does not prohibit accumulation of amounts in excess of $50,000
in a fund to be used for the purposes of this section. The
total amount accumulated in the fund must not exceed $300,000.
Sec. 10. Minnesota Statutes 1994, section 469.169,
subdivision 9, is amended to read:
Subd. 9. [ADDITIONAL BORDER CITY ALLOCATIONS.] In addition
to tax reductions authorized in subdivisions 7 and 8, the
commissioner may allocate $1,100,000 for tax reductions to
border city enterprise zones in cities located on the western
border of the state, and $300,000 to the border city enterprise
zone in the city of Duluth. The commissioner shall make
allocations to zones in cities on the western border by
evaluating which cities' applications for allocations relate to
business prospects that have the greatest positive economic
impact. Allocations made under this subdivision may be used for
tax reductions as provided in section 469.171, or other offsets
of taxes imposed on or remitted by businesses located in the
enterprise zone, but only if the municipality determines that
the granting of the tax reduction or offset is necessary in
order to retain a business within or attract a business to the
zone. Limitations on allocations under section 469.169,
subdivision 7, do not apply to this allocation. Enterprise
zones that receive allocations under this subdivision may
continue in effect for purposes of those allocations through
December 31, 1994 1995.
Sec. 11. Minnesota Statutes 1994, section 469.169, is
amended by adding a subdivision to read:
Subd. 10. [ADDITIONAL BORDER CITY ALLOCATIONS.] In
addition to tax reductions authorized in subdivisions 7, 8, and
9, the commissioner may allocate $1,500,000 for tax reductions
to border city enterprise zones in cities located on the western
border of the state. The commissioner shall make allocations to
zones in cities on the western border on a per capita basis.
Allocations made under this subdivision may be used for tax
reductions as provided in section 469.171, or other offsets of
taxes imposed on or remitted by businesses located in the
enterprise zone, but only if the municipality determines that
the granting of the tax reduction or offset is necessary in
order to retain a business within or attract a business to the
zone. Limitations on allocations under section 469.169,
subdivision 7, do not apply to this allocation. Enterprise
zones that receive allocations under this subdivision may
continue in effect for purposes of those allocations through
December 31, 1996.
Sec. 12. Minnesota Statutes 1994, section 469.174,
subdivision 4, is amended to read:
Subd. 4. [CAPTURED NET TAX CAPACITY.] "Captured net tax
capacity" means the amount by which the current net tax capacity
of a tax increment financing district or an extended subdistrict
exceeds the original net tax capacity, including the value of
property normally taxable as personal property by reason of its
location on or over property owned by a tax-exempt entity. In
the case of a hazardous substance subdistrict, except an
extended subdistrict, "captured net tax capacity" means the
amount by which the original net tax capacity of the portion of
the tax increment financing district overlying the subdistrict
exceeds the original net tax capacity of the subdistrict.
Sec. 13. Minnesota Statutes 1994, section 469.174,
subdivision 19, is amended to read:
Subd. 19. [SOILS CONDITION DISTRICT.] (a) "Soils condition
district" means a type of tax increment financing district
consisting of a project, or portions of a project, within which
the authority finds by resolution that the following conditions
exist:
(1) unusual terrain, the presence of hazardous substances,
pollution, or contaminants, or soil deficiencies for 80 percent
of the acreage in the district require substantial filling,
grading, requires removal or remedial action, or other physical
preparation for use;
(2) the estimated cost of the physical preparation under
clause (1), but excluding costs directly related to roads as
defined in section 160.01 and local improvements as described in
sections 429.021, subdivision 1, clauses (1) to (7), (11), and
(12), and 430.01, proposed removal and remedial action exceeds
the fair market value of the land before completion of the
preparation.
The requirements of clause (2) need not be satisfied, if
each parcel of property in the district either satisfies the
requirements of clause (2) or the estimated costs of the
proposed removal or remedial action exceeds $2 per square foot
for the area of the parcel.
(b) An area does not qualify as a soils condition district
if it contains a wetland, as defined in section 103G.005, unless
the development agreement prohibits draining, filling, or other
alteration of the wetland or other binding legal assurances for
preservation of the wetland are provided.
(c) If the district is located in the metropolitan area,
the proposed development of the district in the tax increment
financing plan must be consistent with the municipality's land
use plan adopted in accordance with sections 473.851 to 473.872
and reviewed by the metropolitan council under section 473.175.
If the district is located outside of the metropolitan area, the
proposed development of the district must be consistent with the
municipality's comprehensive municipal plan. The proposed
removal or remediation action must be specified in a development
action response plan to satisfy the requirements of paragraph
(a).
Sec. 14. Minnesota Statutes 1994, section 469.174,
subdivision 21, is amended to read:
Subd. 21. [CREDIT ENHANCED BONDS.] "Credit enhanced bonds"
means special obligation bonds that are:
(1) payable primarily from tax increments (i) derived from
a tax increment financing district within which the activity, as
defined in section 469.1763, subdivision 1, financed by at least
75 percent the applicable in-district percentage of the bond
proceeds is located and (ii) estimated on the date of issuance
to be sufficient to pay when due the debt service on the bonds,
and
(2) further secured by tax increments (i) derived from one
or more tax increment financing districts and (ii) determined by
the issuer to be necessary in order to make the marketing of the
bonds feasible.
For purposes of this subdivision, "applicable in-district
percentage" means the percentage under section 469.1763,
subdivision 2, for the district.
Sec. 15. Minnesota Statutes 1994, section 469.174, is
amended by adding a subdivision to read:
Subd. 23. [HAZARDOUS SUBSTANCE SUBDISTRICT.] "Hazardous
substance subdistrict" or "subdistrict" means a hazardous
substance subdistrict created under section 469.175, subdivision
7.
Sec. 16. Minnesota Statutes 1994, section 469.174, is
amended by adding a subdivision to read:
Subd. 24. [EXTENDED SUBDISTRICT.] "Extended subdistrict"
means a hazardous substance subdistrict, but only for any period
during which the subdistrict remains in effect after the
overlying tax increment district has terminated.
Sec. 17. Minnesota Statutes 1994, section 469.175,
subdivision 1, is amended to read:
Subdivision 1. [TAX INCREMENT FINANCING PLAN.] (a) A tax
increment financing plan shall contain:
(1) a statement of objectives of an authority for the
improvement of a project;
(2) a statement as to the development program for the
project, including the property within the project, if any, that
the authority intends to acquire;
(3) a list of any development activities that the plan
proposes to take place within the project, for which contracts
have been entered into at the time of the preparation of the
plan, including the names of the parties to the contract, the
activity governed by the contract, the cost stated in the
contract, and the expected date of completion of that activity;
(4) identification or description of the type of any other
specific development reasonably expected to take place within
the project, and the date when the development is likely to
occur;
(5) estimates of the following:
(i) cost of the project, including administration expenses;
(ii) amount of bonded indebtedness to be incurred;
(iii) sources of revenue to finance or otherwise pay public
costs;
(iv) the most recent net tax capacity of taxable real
property within the tax increment financing district;
(v) the estimated captured net tax capacity of the tax
increment financing district at completion; and
(vi) the duration of the tax increment financing district's
existence;
(6) statements of the authority's alternate estimates of
the impact of tax increment financing on the net tax capacities
of all taxing jurisdictions in which the tax increment financing
district is located in whole or in part. For purposes of one
statement, the authority shall assume that the estimated
captured net tax capacity would be available to the taxing
jurisdictions without creation of the district, and for purposes
of the second statement, the authority shall assume that none of
the estimated captured net tax capacity would be available to
the taxing jurisdictions without creation of the district;
(7) identification and description of studies and analyses
used to make the determination set forth in subdivision 3,
clause (2); and
(8) identification of all parcels to be included in the
district or any subdistrict.
(b) For a housing district, redevelopment district, or a
hazardous substance subdistrict, the authority may elect in the
tax increment financing plan to provide for the identification
of a minimum market value in the plan, development agreement, or
assessment agreement, and provide that increment is first
received by the authority when (1) the market value of the
improvements as determined by the assessor reaches or exceeds
the minimum market value, or (2) four years has elapsed from the
date of certification of the original net tax capacity of the
taxable real property in the district or subdistrict by the
county auditor, whichever is earlier.
Sec. 18. Minnesota Statutes 1994, section 469.175,
subdivision 3, is amended to read:
Subd. 3. [MUNICIPALITY APPROVAL.] A county auditor shall
not certify the original net tax capacity of a tax increment
financing district until the tax increment financing plan
proposed for that district has been approved by the municipality
in which the district is located. If an authority that proposes
to establish a tax increment financing district and the
municipality are not the same, the authority shall apply to the
municipality in which the district is proposed to be located and
shall obtain the approval of its tax increment financing plan by
the municipality before the authority may use tax increment
financing. The municipality shall approve the tax increment
financing plan only after a public hearing thereon after
published notice in a newspaper of general circulation in the
municipality at least once not less than ten days nor more than
30 days prior to the date of the hearing. The published notice
must include a map of the area of the district from which
increments may be collected and, if the project area includes
additional area, a map of the project area in which the
increments may be expended. The hearing may be held before or
after the approval or creation of the project or it may be held
in conjunction with a hearing to approve the project. Before or
at the time of approval of the tax increment financing plan, the
municipality shall make the following findings, and shall set
forth in writing the reasons and supporting facts for each
determination:
(1) that the proposed tax increment financing district is a
redevelopment district, a renewal or renovation district, a
mined underground space development district, a housing
district, a soils condition district, or an economic development
district; if the proposed district is a redevelopment district
or a renewal or renovation district, the reasons and supporting
facts for the determination that the district meets the criteria
of section 469.174, subdivision 10, paragraph (a), clauses (1)
and (2), or subdivision 10a, must be retained and made available
to the public by the authority until the district has been
terminated.
(2) that the proposed development or redevelopment, in the
opinion of the municipality, would not reasonably be expected to
occur solely through private investment within the reasonably
foreseeable future and therefore the use of tax increment
financing is deemed necessary that the increased market value of
the site that could reasonably be expected to occur without the
use of tax increment financing would be less than the increase
in the market value estimated to result from the proposed
development after subtracting the present value of the projected
tax increments for the maximum duration of the district
permitted by the plan. The requirements of this clause do not
apply if the district is a qualified housing district, as
defined in section 273.1399, subdivision 1.
(3) that the tax increment financing plan conforms to the
general plan for the development or redevelopment of the
municipality as a whole.
(4) that the tax increment financing plan will afford
maximum opportunity, consistent with the sound needs of the
municipality as a whole, for the development or redevelopment of
the project by private enterprise.
(5) that the municipality elects the method of tax
increment computation set forth in section 469.177, subdivision
3, clause (b), if applicable.
When the municipality and the authority are not the same,
the municipality shall approve or disapprove the tax increment
financing plan within 60 days of submission by the authority, or
the plan shall be deemed approved. When the municipality and
the authority are not the same, the municipality may not amend
or modify a tax increment financing plan except as proposed by
the authority pursuant to subdivision 4. Once approved, the
determination of the authority to undertake the project through
the use of tax increment financing and the resolution of the
governing body shall be conclusive of the findings therein and
of the public need for the financing.
Sec. 19. Minnesota Statutes 1994, section 469.175,
subdivision 5, is amended to read:
Subd. 5. [ANNUAL DISCLOSURE.] For all tax increment
financing districts, whether created prior or subsequent to
August 1, 1979, on or before July 1 of each year, the authority
shall submit to the county board, the county auditor, the school
board, the commissioner of revenue state auditor and, if the
authority is other than the municipality, the governing body of
the municipality, a report of the status of the district. The
report shall include the following information: the amount and
the source of revenue in the account, the amount and purpose of
expenditures from the account, the amount of any pledge of
revenues, including principal and interest on any outstanding
bonded indebtedness, the original net tax capacity of the
district, the captured net tax capacity retained by the
authority, the captured net tax capacity shared with other
taxing districts, the tax increment received, and any additional
information necessary to demonstrate compliance with any
applicable tax increment financing plan. An annual statement
showing the tax increment received and expended in that year,
the original net tax capacity, captured net tax capacity, amount
of outstanding bonded indebtedness, the amount of the district's
increments paid to other governmental bodies, the amount paid
for administrative costs, the sum of increments paid, directly
or indirectly, for activities and improvements located outside
of the district, and any additional information the authority
deems necessary shall be published in a newspaper of general
circulation in the municipality. If the fiscal disparities
contribution for the district is computed under section 469.177,
subdivision 3, paragraph (a), the annual statement must disclose
that fact and indicate the amount of increased property tax
imposed on other properties in the municipality as a result of
the fiscal disparities contribution. The commissioner of
revenue shall prescribe the form of this statement and the
method for calculating the increased property taxes.
Sec. 20. Minnesota Statutes 1994, section 469.175,
subdivision 6, is amended to read:
Subd. 6. [FINANCIAL REPORTING.] (a) The state auditor
shall develop a uniform system of accounting and financial
reporting for tax increment financing districts. The system of
accounting and financial reporting shall, as nearly as possible:
(1) provide for full disclosure of the sources and uses of
public funds in the district;
(2) permit comparison and reconciliation with the affected
local government's accounts and financial reports;
(3) permit auditing of the funds expended on behalf of a
district, including a single district that is part of a
multidistrict project or that is funded in part or whole through
the use of a development account funded with tax increments from
other districts or with other public money;
(4) be consistent with generally accepted accounting
principles.
(b) The authority must annually submit to the state
auditor, on or before July 1, a financial report in compliance
with paragraph (a). Copies of the report must also be provided
to the county and school district boards and to the governing
body of the municipality, if the authority is not the
municipality. To the extent necessary to permit compliance with
the requirement of financial reporting, the county and any other
appropriate local government unit or private entity must provide
the necessary records or information to the authority or the
state auditor as provided by the system of accounting and
financial reporting developed pursuant to paragraph (a).
(c) The annual financial report must also include the
following items:
(1) the original net tax capacity of the district;
(2) the captured net tax capacity of the district,
including the amount of any captured net tax capacity shared
with other taxing districts;
(3) the outstanding principal amount of bonds issued or
other loans incurred to finance project costs in the district;
(4) for the reporting period and for the duration of the
district, the amount budgeted under the tax increment financing
plan, and the actual amount expended for, at least, the
following categories:
(i) acquisition of land and buildings through condemnation
or purchase;
(ii) site improvements or preparation costs;
(iii) installation of public utilities, parking facilities,
streets, roads, sidewalks, or other similar public improvements;
(iv) administrative costs, including the allocated cost of
the authority;
(v) public park facilities, facilities for social,
recreational, or conference purposes, or other similar public
improvements; and
(5) (4) for properties sold to developers, the total cost
of the property to the authority and the price paid by the
developer;
(6) the amount of tax exempt obligations, other than those
reported under clause (3), that were issued on behalf of private
entities for facilities located in the district (5) the amount
of increments rebated or paid to developers or property owners
for privately financed improvements or other qualifying costs.
(d) The reporting requirements imposed by this subdivision
are in lieu of the annual disclosure required by subdivision 5
apply to districts certified before, on, and after August 1,
1979.
Sec. 21. Minnesota Statutes 1994, section 469.175,
subdivision 6a, is amended to read:
Subd. 6a. [REPORTING REQUIREMENTS.] (a) The municipality
must annually report to the commissioner of revenue state
auditor the following amounts for the entire municipality:
(1) the total principal amount of nondefeased tax increment
financing bonds that are outstanding at the end of the previous
calendar year; and
(2) the total annual amount of principal and interest
payments that are due for the current calendar year on (i)
general obligation tax increment financing bonds, and (ii) other
tax increment financing bonds.
(b) The municipality must annually report to the
commissioner of revenue state auditor the following amounts for
each tax increment financing district located in the
municipality:
(1) the type of district, whether economic development,
redevelopment, housing, soils condition, mined underground
space, or hazardous substance site;
(2) the date on which the district is required to be
decertified;
(3) the captured tax capacity of the district, by property
class as specified by the commissioner of revenue, for taxes
payable in the current calendar year amount of any payments and
the value of in-kind benefits, such as physical improvements and
the use of building space, that are financed with revenues
derived from increments and are provided to another governmental
unit (other than the municipality) during the preceding calendar
year;
(4) the tax increment revenues for taxes payable in the
current calendar year;
(5) whether the tax increment financing plan or other
governing document permits increment revenues to be expended (i)
to pay bonds, the proceeds of which were or may be expended on
activities located outside of the district, (ii) for deposit
into a common fund from which money may be expended on
activities located outside of the district, or (iii) to
otherwise finance activities located outside of the tax
increment financing district; and
(6) any additional information that the commissioner of
revenue state auditor may require.
(c) The report required by this subdivision must be filed
with the commissioner of revenue state auditor on or before
March July 1 of each year.
(d) The state auditor may provide for combining the reports
required by this subdivision and subdivisions 5 and 6 so that
only one report is made for each year to the auditor.
(e) This section applies to districts certified before, on,
and after August 1, 1979.
Sec. 22. Minnesota Statutes 1994, section 469.176, is
amended by adding a subdivision to read:
Subd. 1g. [EXTENSION TO RECOVER CLEANUP COSTS.] (a) The
authority, with the approval of the municipality, may extend the
duration of a district beyond the limit that otherwise applies
under this section, if the following circumstances apply:
(1) after the district is established, contamination,
hazardous substances, pollution, or other materials requiring
removal or remediation are found in the district;
(2) the authority elects not to create a hazardous
substance subdistrict; and
(3) the municipality pays for the cost of removal, cleanup,
or remediation out of its general fund or other money of the
municipality, except revenues from tax increments.
(b) The maximum duration extension permitted by this
subdivision is the lesser of (1) ten years after the district
otherwise would have terminated or (2) the number of additional
years necessary to collect increment equal to the cleanup costs
paid by the municipality out of funds other than tax
increments. Cleanup costs are limited to the actual costs of
removal and remediation, and do not include financing or
interest costs. Cleanup costs do include testing and
engineering costs. Cleanup costs must be reduced by any
reimbursements or amounts recovered from private parties or
other responsible parties.
Sec. 23. Minnesota Statutes 1994, section 469.176,
subdivision 4b, is amended to read:
Subd. 4b. [SOILS CONDITION DISTRICTS.] Revenue derived
from tax increment from a soils condition district under section
469.174, subdivision 19, may be used only to (1) acquire parcels
on which the improvements described in clause (2) will occur;
(2) pay for the cost of correcting the unusual terrain or soil
deficiencies and the additional cost of installing public
improvements directly caused by the deficiencies removal or
remedial action; and (3) pay for the administrative expenses of
the authority allocable to the district, including the cost of
preparation of the development action response plan. The sale
by the authority of a parcel acquired and improved as described
in clauses (1) and (2) must be for a price that is no less than
the cost of acquisition.
Sec. 24. Minnesota Statutes 1994, section 469.176,
subdivision 4c, is amended to read:
Subd. 4c. [ECONOMIC DEVELOPMENT DISTRICTS.] (a) Revenue
derived from tax increment from an economic development district
may not be used to provide improvements, loans, subsidies,
grants, interest rate subsidies, or assistance in any form to
developments consisting of buildings and ancillary facilities,
if more than 15 percent of the buildings and facilities
(determined on the basis of square footage) are used for a
purpose other than:
(1) the manufacturing or production of tangible personal
property, including processing resulting in the change in
condition of the property;
(2) warehousing, storage, and distribution of tangible
personal property, excluding retail sales;
(3) research and development related to the activities
listed in clause (1) or (2);
(4) telemarketing if that activity is the exclusive use of
the property;
(5) tourism facilities; or
(6) space necessary for and related to the activities
listed in clauses (1) to (5).
(b) Notwithstanding the provisions of this subdivision,
revenue derived from tax increment from an economic development
district may be used to provide improvements, loans, subsidies,
grants, interest rate subsidies, or assistance in any form for
up to 5,000 square feet of commercial and retail facilities
within the municipal jurisdiction of a home rule charter or
statutory city that has a population of 5,000 or less. The
5,000 square feet limitation is cumulative and applies to all
facilities in all the economic development districts within the
municipal jurisdiction pay for site preparation and public
improvements, if the following conditions are met:
(1) bedrock soils conditions are present in 80 percent or
more of the acreage of the district;
(2) the estimated cost of physical preparation of the site
exceeds the fair market value of the land before completion of
the preparation; and
(3) revenues from tax increments are expended only for the
additional costs of preparing the site because of unstable soils
and the bedrock soils condition, the additional cost of
installing public improvements because of unstable soils or the
bedrock soils condition, and reasonable administrative costs.
Sec. 25. Minnesota Statutes 1994, section 469.176,
subdivision 7, is amended to read:
Subd. 7. [SUBSEQUENT PARCELS NOT INCLUDABLE IN DISTRICTS.]
Except as provided in subdivision 6, for subsequent
recertification of parcels eliminated from a district because of
lack of development activity, no parcel that has been so
eliminated subsequent to two years from the date of the original
certification may be included in a tax increment district if, at
any time during the 20 years prior to the date when
certification of the district is requested pursuant to section
469.177, subdivision 1, that parcel had been included in an
economic development district. (a) The authority may not request
inclusion in a tax increment financing district and the county
auditor may not certify the original tax capacity of the
following:
(1) a parcel or a part of a parcel that qualified under the
provisions of section 273.111 or 273.112 or chapter 473H for
taxes payable in any of the five calendar years before the
filing of the request for certification, if the parcel is
located in the metropolitan area, as defined in section 473.121;
or
(2) a parcel or a part of a parcel, located outside of the
metropolitan area, as defined in section 473.121, that qualified
under the provisions of section 273.111 or 273.112 for taxes
payable in any of the five calendar years before the request for
certification, if the district is not a district in which 85
percent or more of the planned buildings and facilities
(determined on the basis of square footage) are for
manufacturing or production of tangible personal property,
including processing resulting in the change in condition of the
property.
Sec. 26. Minnesota Statutes 1994, section 469.1763,
subdivision 2, is amended to read:
Subd. 2. [EXPENDITURES OUTSIDE DISTRICT.] (a) For each tax
increment financing district, an amount equal to at least 75
percent of the revenue derived from tax increments paid by
properties in the district must be expended on activities in the
district or to pay bonds, to the extent that the proceeds of the
bonds were used to finance activities in the district or to pay,
or secure payment of, debt service on credit enhanced
bonds. For districts, other than redevelopment districts for
which the request for certification was made after June 30,
1995, the in-district percentage for purposes of the preceding
sentence is 80 percent. Not more than 25 percent of the revenue
derived from tax increments paid by properties in the district
may be expended, through a development fund or otherwise, on
activities outside of the district but within the defined
geographic area of the project except to pay, or secure payment
of, debt service on credit enhanced bonds. For districts, other
than redevelopment districts for which the request for
certification was made after June 30, 1995, the pooling
percentage for purposes of the preceding sentence is 20
percent. The revenue derived from tax increments for the
district that are expended on costs under section 469.176,
subdivision 4h, paragraph (b), may be deducted first before
calculating the percentages that must be expended within and
without the district.
(b) In the case of a housing district, a housing project,
as defined in section 469.174, subdivision 11, is an activity in
the district.
(c) All administrative expenses are for activities outside
of the district.
Sec. 27. Minnesota Statutes 1994, section 469.1763,
subdivision 4, is amended to read:
Subd. 4. [USE OF REVENUES FOR DECERTIFICATION.] (a)
Beginning with the sixth year following certification of the
district, 75 the applicable in-district percent of the revenues
derived from tax increments paid by properties in the district
that remain after the expenditures permitted under subdivision 3
must be used only to pay:
(1) outstanding bonds, as defined in subdivision 3,
paragraphs (a), clause (2), and (b);
(2) contracts, as defined in subdivision 3, paragraph (a),
clauses (3) and (4); or
(3) credit enhanced bonds to which the revenues derived
from tax increments are pledged, but only to the extent that
revenues of the district for which the credit enhanced bonds
were issued are insufficient to pay the bonds and to the extent
that the increments from the unrestricted 25 applicable pooling
percent share for the district are insufficient.
(b) When the outstanding bonds have been defeased and when
sufficient money has been set aside to pay contractual
obligations as defined in subdivision 3, paragraph (a), clauses
(3) and (4), the district must be decertified and the pledge of
tax increment discharged.
Sec. 28. Minnesota Statutes 1994, section 469.177,
subdivision 1, is amended to read:
Subdivision 1. [ORIGINAL NET TAX CAPACITY.] (a) Upon or
after adoption of a tax increment financing plan, the auditor of
any county in which the district is situated shall, upon request
of the authority, certify the original net tax capacity of the
tax increment financing district and that portion of the
district overlying any subdistrict as described in the tax
increment financing plan and shall certify in each year
thereafter the amount by which the original net tax capacity has
increased or decreased as a result of a change in tax exempt
status of property within the district and any subdistrict,
reduction or enlargement of the district or changes pursuant to
subdivision 4.
(b) In the case of a mined underground space development
district the county auditor shall certify the original net tax
capacity as zero, plus the net tax capacity, if any, previously
assigned to any subsurface area included in the mined
underground space development district pursuant to section
272.04.
(c) For districts approved under section 469.175,
subdivision 3, or parcels added to existing districts after May
1, 1988, if the classification under section 273.13 of property
located in a district changes to a classification that has a
different assessment ratio, the original net tax capacity of
that property must be redetermined at the time when its use is
changed as if the property had originally been classified in the
same class in which it is classified after its use is changed.
(d) The amount to be added to the original net tax capacity
of the district as a result of previously tax exempt real
property within the district becoming taxable equals the net tax
capacity of the real property as most recently assessed pursuant
to section 273.18 or, if that assessment was made more than one
year prior to the date of title transfer rendering the property
taxable, the net tax capacity assessed by the assessor at the
time of the transfer. If substantial taxable improvements were
made to a parcel after certification of the district and if the
property later becomes tax exempt, in whole or part, as a result
of the authority acquiring the property through foreclosure or
exercise of remedies under a lease or other revenue agreement or
as a result of tax forfeiture, the amount to be added to the
original net tax capacity of the district as a result of the
property again becoming taxable is the amount of the parcel's
value that was included in original net tax capacity when the
parcel was first certified. The amount to be added to the
original net tax capacity of the district as a result of
enlargements equals the net tax capacity of the added real
property as most recently certified by the commissioner of
revenue as of the date of modification of the tax increment
financing plan pursuant to section 469.175, subdivision 4.
(e) For districts approved under section 469.175,
subdivision 3, or parcels added to existing districts after May
1, 1988, if the net tax capacity of a property increases because
the property no longer qualifies under the Minnesota
agricultural property tax law, section 273.111; the Minnesota
open space property tax law, section 273.112; or the
metropolitan agricultural preserves act, chapter 473H, or
because platted, unimproved property is improved or three years
pass after approval of the plat under section 273.11,
subdivision 1, the increase in net tax capacity must be added to
the original net tax capacity.
(f) Each year the auditor shall also add to the original
net tax capacity of each economic development district an amount
equal to the original net tax capacity for the preceding year
multiplied by the average percentage increase in the market
value of all property included in the economic development
district during the five years prior to certification of the
district.
(g) The amount to be subtracted from the original net tax
capacity of the district as a result of previously taxable real
property within the district becoming tax exempt, or a reduction
in the geographic area of the district, shall be the amount of
original net tax capacity initially attributed to the property
becoming tax exempt or being removed from the district. If the
net tax capacity of property located within the tax increment
financing district is reduced by reason of a court-ordered
abatement, stipulation agreement, voluntary abatement made by
the assessor or auditor or by order of the commissioner of
revenue, the reduction shall be applied to the original net tax
capacity of the district when the property upon which the
abatement is made has not been improved since the date of
certification of the district and to the captured net tax
capacity of the district in each year thereafter when the
abatement relates to improvements made after the date of
certification. The county auditor may specify reasonable form
and content of the request for certification of the authority
and any modification thereof pursuant to section 469.175,
subdivision 4.
(h) If a parcel of property contained a substandard
building that was demolished or removed and if the authority
elects to treat the parcel as occupied by a substandard building
under section 469.174, subdivision 10, paragraph (b), the
auditor shall certify the original net tax capacity of the
parcel using the greater of (1) the current net tax capacity of
the parcel, or (2) the estimated market value of the parcel for
the year in which the building was demolished or removed, but
applying the class rates for the current year.
Sec. 29. Minnesota Statutes 1994, section 469.177,
subdivision 1a, is amended to read:
Subd. 1a. [ORIGINAL LOCAL TAX RATE.] At the time of the
initial certification of the original net tax capacity for a tax
increment financing district or a subdistrict, the county
auditor shall certify the original local tax rate that applies
to the district or subdistrict. The original local tax rate is
the sum of all the local tax rates that apply to a property in
the district or subdistrict. The local tax rate to be certified
is the rate in effect for the same taxes payable year applicable
to the tax capacity values certified as the district's or
subdistrict's original tax capacity. The resulting tax capacity
rate is the original local tax rate for the life of the district
or subdistrict.
Sec. 30. Minnesota Statutes 1994, section 469.177,
subdivision 2, is amended to read:
Subd. 2. [CAPTURED NET TAX CAPACITY.] The county auditor
shall certify the amount of the captured net tax capacity to the
authority each year, together with the proportion that the
captured net tax capacity bears to the total net tax capacity of
the real property within the tax increment financing
district and any subdistrict for that year.
(a) An authority may choose to retain any part or all of
the captured net tax capacity for purposes of tax increment
financing according to one of the following options:
(1) If the plan provides that all the captured net tax
capacity is necessary to finance or otherwise make permissible
expenditures under section 469.176, subdivision 4, the authority
may retain the full captured net tax capacity.
(2) If the plan provides that only a portion of the
captured net tax capacity is necessary to finance or otherwise
make permissible expenditures under section 469.176, subdivision
4, only that portion shall be set aside and the remainder shall
be distributed among the affected taxing districts by the county
auditor.
(b) The portion of captured net tax capacity that an
authority intends to use for purposes of tax increment financing
must be clearly stated in the tax increment financing plan.
Sec. 31. Minnesota Statutes 1994, section 469.177,
subdivision 6, is amended to read:
Subd. 6. [REQUEST FOR CERTIFICATION OF NEW TAX INCREMENT
FINANCING DISTRICT.] A request for certification of a new tax
increment financing district pursuant to subdivision 1 or of a
modification to an existing tax increment financing district
pursuant to section 469.175, subdivision 4, received by the
county auditor on or before July 1 June 30 of the calendar year
shall be recognized by the county auditor in determining local
tax rates for the current and subsequent levy years. Requests
received by the county auditor after July 1 June 30 of the
calendar year shall not be recognized by the county auditor in
determining local tax rates for the current levy year but shall
be recognized by the county auditor in determining local tax
rates for subsequent levy years.
Sec. 32. Minnesota Statutes 1994, section 469.177,
subdivision 9, is amended to read:
Subd. 9. [DISTRIBUTIONS OF EXCESS TAXES ON CAPTURED NET
TAX CAPACITY.] (a) If the amount of tax paid on captured net tax
capacity exceeds the amount of tax increment, the county auditor
shall distribute the excess to the municipality, county, and
school district as follows: each governmental unit's share of
the excess equals
(1) the total amount of the excess for the tax increment
financing district, multiplied by
(2) a fraction, the numerator of which is the current local
tax rate of the governmental unit less the governmental unit's
local tax rate for the year the original local tax rate for the
district was certified (in no case may this amount be less than
zero) and the denominator of which is the sum of the numerators
for the municipality, county, and school district.
If the entire increase in the local tax rate is attributable to
a taxing district, other than the municipality, county, or
school district, then the excess must be distributed to the
municipality, county, and school district in proportion to their
respective local tax rates.
The school district's tax rate must be divided into the
portion of the tax rate attributable (1) to state equalized
levies, and (2) unequalized levies. Equalized levies mean the
levies identified in section 273.1398, subdivision 1, and As
used in this subdivision, "equalized levies" means the sum of
the maximum amounts that may be levied for: (i) general
education under section 124A.23, subdivision 2; (ii)
supplemental revenue under section 124A.22, subdivision 8a;
(iii) capital expenditure facilities revenue under section
124.243, subdivision 3; (iv) capital expenditure equipment
revenue under section 124.244, subdivision 2; and (v) basic
transportation under section 124.226, subdivision 1.
Unequalized levies mean the rest of the school district's
levies. The calculations under clause (2) must determine the
amount of excess taxes attributable to each portion of the
school district's tax rate. If one of the portions of the
change in the school district tax rate is less than zero and the
combined change is greater than zero, the combined rate must be
used and all the school district's share of excess taxes
allocated to that portion of the tax rate.
(b) The amounts distributed shall be deducted in computing
the levy limits of the taxing district for the succeeding
taxable year. In the case of a school district, only the
proportion of the excess taxes attributable to unequalized
levies that are subject to a fixed dollar amount levy limit
shall be deducted from the levy limit.
(c) In the case of distributions to a school district that
are attributable to state equalized levies, the county auditor
shall report amounts distributed to the commissioner of
education in the same manner as provided for excess increments
under section 469.176, subdivision 2, and the distribution shall
be deducted from the school district's state aid payments.
Sec. 33. Minnesota Statutes 1994, section 469.177, is
amended by adding a subdivision to read:
Subd. 11. [DEDUCTION FOR ENFORCEMENT COSTS;
APPROPRIATION.] (a) The county treasurer shall deduct an amount
equal to 0.1 percent of any increment distributed to an
authority or municipality. The county treasurer shall pay the
amount deducted to the state treasurer for deposit in the state
general fund.
(b) The amounts deducted and paid under paragraph (a) are
appropriated to the state auditor for the cost of (1) the
financial reporting of tax increment financing information and
(2) the cost of examining and auditing of authorities' use of
tax increment financing as provided under section 469.1771,
subdivision 1. Notwithstanding section 16A.28 or any other law
to the contrary, this appropriation does not cancel and remains
available until spent.
Sec. 34. Minnesota Statutes 1994, section 469.1771,
subdivision 1, is amended to read:
Subdivision 1. [ENFORCEMENT.] (a) The commissioner of
revenue shall enforce the provisions of sections 469.174 to
469.179. In addition, the owner of taxable property located in
the city, town, school district, or county in which the tax
increment financing district is located may bring suit for
equitable relief or for damages, as provided in subdivisions 3
and 4, arising out of a failure of a municipality or authority
to comply with the provisions of sections 469.174 to 469.179, or
related provisions of this chapter. The prevailing party in a
suit filed under the preceding sentence is entitled to costs,
including reasonable attorney fees.
(b) The responsibility for financial and compliance
auditing of state auditor may examine and audit political
subdivisions' use of tax increment financing remains with the
state auditor. Without previous notice, the state auditor may
examine or audit accounts and records on a random basis as the
auditor deems to be in the public interest. If the state
auditor finds evidence that an authority or municipality has
violated a provision of the law for which a remedy is provided
under this section, the state auditor shall forward the relevant
information to the commissioner of revenue. The commissioner of
revenue may audit an authority's use of tax increment
financing county attorney. The county attorney may bring an
action to enforce the provisions of sections 469.174 to 469.179
or related provisions of this chapter, for matters referred by
the state auditor or on behalf of the county.
(c) If the state auditor finds an authority is not in
compliance with sections 469.174 to 469.179 or related
provisions of law, the auditor shall notify the governing body
of the municipality that approved the tax increment financing
district of its findings. The governing body of the
municipality must respond in writing to the state auditor within
60 days after receiving the notification. Its written response
must state whether the municipality accepts, in whole or part,
the auditor's findings. If the municipality does not accept the
findings, the statement must indicate the basis for its
disagreement. The state auditor shall annually summarize the
responses it receives under this section and send the summary
and copies of the responses to the chairs of the committees of
the legislature with jurisdiction over tax increment financing.
Sec. 35. [469.1782] [SPECIAL LAW PROVISIONS.]
Subdivision 1. [ELECTION.] If a special law allows an
extension of the duration limit of an existing tax increment
financing district under section 469.176 or allows establishment
of a new district with a longer duration limit than permitted by
general law, the municipality must elect, by resolution, that
the district is subject to either:
(1) the adjustment to adjusted net tax capacity for the
school district under section 1; or
(2) the reduction in state tax increment financing aid
under section 273.1399, subdivision 8.
This election is irrevocable and must be made before the
extension is submitted by the municipality to the school
district for approval under subdivision 2. If the municipality
fails to make an election before submitting the matter to the
school district, the municipality is deemed to have elected
clause (2).
Subd. 2. [LOCAL APPROVAL OF SPECIAL LAWS.] (a) If a
special law allows an extension of the duration limit of an
existing tax increment financing district under section 469.176
or allows establishment of a new district with a longer duration
limit than that permitted by general law, the "affected local
government units," for purposes of section 645.021 and article
XII, section 2, of the Minnesota Constitution, include the city
or town, the school district, and the county in which the tax
increment district is located. The town board may act to
approve the special law.
(b) The chief clerical officer of the municipality must, as
soon after the affected local units have approved the special
law allowing an extension, file with the secretary of state a
certificate stating the essential facts necessary to valid
approval, including a copy of each of the resolutions of
approval by the city or town, the school district, and the
county. The attorney general shall prescribe the form of the
certificate and the secretary of state shall furnish copies. If
the municipality fails to file a certificate of approval before
the first day of the next regular session of the legislature,
the extension of the duration is deemed to be disapproved,
unless the special law allows a longer period for approval. If
the law contains other provisions besides an extension of the
duration and the municipality otherwise complies with section
645.021, the rest of the law takes effect.
Sec. 36. [TAX INCREMENT FINANCING DISTRICT EXTENSION.]
Subdivision 1. [AUTHORIZATION.] Notwithstanding Minnesota
Statutes, section 469.176, subdivision 1c, the St. Louis Park
economic development authority may collect and expend tax
increments from the Excelsior Boulevard Redevelopment Project
and Oak Park Village tax increment financing districts (Hennepin
county project numbers 1300 and 1301, respectively) located
within the city of St. Louis Park, after April 1, 2001, for
eligible activities within the redevelopment area. The
authority under this section expires August 1, 2009.
Subd. 2. [LOCAL APPROVAL.] This section is effective upon
compliance with Minnesota Statutes, sections 469.1782,
subdivision 2, and 645.021, subdivision 3.
Sec. 37. [CITY OF HASTINGS; DISTRICT EXTENSION.]
Subdivision 1. [AUTHORIZATION.] Notwithstanding the
provisions of Minnesota Statutes, section 469.176, subdivision
1c, the housing and redevelopment authority may collect and
expend tax increments from the downtown redevelopment tax
increment financing district, located within the city of
Hastings, after April 1, 2001, for eligible activities within
the district. The authority under this section expires December
31, 2006.
Subd. 2. [EFFECTIVE DATE.] This section is effective upon
compliance with Minnesota Statutes, sections 469.1782,
subdivision 2, and 645.021, subdivision 3.
Sec. 38. [CITY OF HOPKINS; TAX INCREMENT DISTRICT.]
Subdivision 1. [DURATION.] Notwithstanding the provisions
of Minnesota Statutes, section 469.176, subdivision 1c, tax
increment collected by the housing and redevelopment authority
in and for the city of Hopkins from tax increment financing
district no. 1-1 may be expended by the authority or the city of
Hopkins to pay or defease (1) bonds or obligations issued within
two years after the effective date of this section, or (2) bonds
issued to refund the principal of the outstanding bonds and pay
associated issuance costs, provided the average maturity of the
refunding bonds does not exceed the bonds refunded. Tax
increment from district no. 1-1 will not be paid to the
authority after August 1, 2009.
Subd. 2. [EFFECTIVE DATE.] This section is effective upon
compliance with Minnesota Statutes, sections 469.1782,
subdivision 2, and 645.021, subdivision 3.
Sec. 39. [SWIFT COUNTY RURAL DEVELOPMENT FINANCE
AUTHORITY.]
Subdivision 1. [ESTABLISHMENT.] The Swift county board
may, by adopting a written enabling resolution, establish a
county rural development finance authority that, subject to
subdivision 2, has the following powers: powers of an economic
development authority under Minnesota Statutes, sections 469.090
to 469.107; and powers of a rural development financing
authority under sections 469.142 to 469.151.
Subd. 2. [ECONOMIC DEVELOPMENT AUTHORITY POWERS.] If the
county rural development finance authority exercises the powers
of an economic development authority, the county may exercise
all of the powers relating to an economic development authority
granted to a city under Minnesota Statutes, sections 469.090 to
469.108, except for the authority to issue general obligation
bonds under Minnesota Statutes, section 469.102. 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 county rural development finance
authority may create and define the boundaries of economic
development districts at any place or places within the county.
Minnesota Statutes, section 469.174, subdivision 10, and the
contiguity requirement specified under Minnesota Statutes,
section 469.101, subdivision 1, do not apply to limit the areas
that may be designated as county economic development districts.
Subd. 3. [LIMIT OF POWERS.] (a) The enabling resolution
may impose the following limits on the actions of the authority:
(1) that the authority may not exercise any of the powers
contained in subdivision 1 unless those powers are specifically
authorized in the enabling resolution; and
(2) any other limitation or control established by the
county board by the enabling resolution.
(b) The enabling resolution may be modified at any time,
but may not be applied in a manner that impairs contracts
executed before the modification is made. All modifications to
the enabling resolution must be by written resolution.
(c) Before the commencement of a project by the authority,
the governing body of the municipality in which the project is
to be located or the Swift county board, if the project is
outside municipal corporate limits, shall by majority vote
approve the project as recommended by the authority.
Subd. 4. [BOARD OF DIRECTORS.] (a) The authority consists
of a board of seven directors. The directors shall be appointed
by the Swift county board. Each director shall be appointed to
serve for three years or until a successor is appointed and
qualified. No director may serve more than two consecutive
terms. The initial appointment of directors must be made so
that no more than one-third of the directors' positions will
require appointment in any one year due to fulfillment of their
three-year appointment. The appointment of directors must be
made to reflect representation of the entire county by
population, appointing one director to represent each of the
five county commissioner districts. The other two directors
must be representatives of various county-based economic
development organizations or be directors at-large. No more
than two directors may reside in any one county commissioner
district.
(b) Two of the directors initially appointed shall serve
for terms of one year, two for two years, and three for three
years. Each vacancy must be filled for the unexpired term in
the manner in which the original appointment was made. A
vacancy occurs if a director no longer resides in the county.
No director shall be an officer, employee, director,
shareholder, or member of any corporation, firm, or association
with which the authority has entered into any operating lease,
or other agreement. The directors may be removed by the county
for the reasons and in the manner provided under Minnesota
Statutes, section 469.010, and shall receive no compensation
other than reimbursement for expenses incurred in the
performance of their duties. Directors shall have no personal
liability for obligations of the authority or the methods of
enforcement and collection of the obligations.
Subd. 5. [EFFECTIVE DATE.] This section is effective upon
compliance by the Swift county board with Minnesota Statutes,
section 645.021, subdivision 3.
Sec. 40. [CITY OF MORRIS; TAX INCREMENT FINANCING
DISTRICT.]
Subdivision 1. [AUTHORIZATION.] Notwithstanding the
provisions of Minnesota Statutes, section 469.175, subdivision
4, paragraph (b), the economic development authority of the city
of Morris may, within one year after the effective date of this
section, enlarge the geographic area of tax increment financing
district No. 5 to include a parcel identified as lot 2, block 2,
Morris industrial park. The district is established under and
subject to Minnesota Statutes, sections 469.174 to 469.178,
except:
(1) the duration limit for the district and enlarged area
is December 31, 2005; and
(2) the buildings to be constructed in the enlarged
geographic area of the district may, notwithstanding the
provisions of Minnesota Statutes, section 469.176, subdivision
4c, include space necessary for and related to the manufacturing
facility located on parcels contiguous to the district. The
maximum space for nonmanufacturing uses may not exceed 40
percent of the square footage of the buildings. This test may
be applied based on a two-year test period.
Subd. 2. [EFFECTIVE DATE.] This section is effective after
compliance with Minnesota Statutes, sections 469.1782,
subdivision 2, and 645.021, subdivision 3.
Sec. 41. [CITY OF OAKDALE; TAX INCREMENT DISTRICTS.]
Subdivision 1. [DURATION.] (a) Notwithstanding Minnesota
Statutes, section 469.176, subdivisions 1 and 1b, tax increments
from the city of Oakdale tax increment financing district number
1-2 may be collected and expended by the authority through
December 31, 2011.
(b) Notwithstanding Minnesota Statutes, section 469.176,
subdivisions 1 and 1b, tax increments from the city of Oakdale
tax increment financing district number 9 may be collected and
expended by the authority through December 31, 2004.
Subd. 2. [EFFECTIVE DATE.] This section is effective upon
compliance with Minnesota Statutes, sections 469.1782,
subdivision 2, and 645.021, subdivision 3.
Sec. 42. [CITY OF LAKE CITY; TAX INCREMENT DISTRICT.]
Subdivision 1. [DURATION EXTENSION.] Notwithstanding the
provisions of Minnesota Statutes, section 469.176, subdivision
1b, the duration of tax increment financing district number 3,
located within the city of Lake City, may be extended to January
1, 2002, by resolution of the governing body of Lake City.
Subd. 2. [EFFECTIVE DATE.] This section is effective the
day following final enactment.
Sec. 43. [CITY OF LAKEFIELD; TAX INCREMENT FINANCING
DISTRICTS.]
Subdivision 1. [REDEVELOPMENT DISTRICT.] (a) The governing
body of the city of Lakefield may establish a tax increment
financing district that is a redevelopment district as defined
in Minnesota Statutes, section 469.174, subdivision 10, for the
purpose of developing the property previously used as the
municipal hospital. The district is subject to Minnesota
Statutes, sections 469.174 to 469.179.
(b) Notwithstanding Minnesota Statutes, section 469.177,
subdivision 1, paragraph (d), for the district established under
this subdivision, the original tax capacity of the previously
tax exempt property comprising the municipal hospital equals the
value of the land only, as determined by the assessor at the
time of the transfer.
Subd. 2. [EFFECTIVE DATE.] This section is effective upon
compliance by the governing body of the city of Lakefield with
Minnesota Statutes, section 645.021, subdivision 3.
Sec. 44. [CITIES OF CRYSTAL, FRIDLEY, ST. PAUL, AND
MINNEAPOLIS; HOUSING REPLACEMENT DISTRICTS; DEFINITIONS.]
Subdivision 1. [CAPTURED NET TAX CAPACITY.] "Captured net
tax capacity" means the amount by which the current net tax
capacity in a housing replacement district exceeds the original
net tax capacity, including the value of property normally
taxable as personal property by reason of its location on or
over property owned by a tax-exempt entity.
Subd. 2. [ORIGINAL NET TAX CAPACITY.] "Original net tax
capacity" means the net tax capacity of all taxable real
property within a housing replacement district as certified by
the commissioner of revenue for the previous assessment year
less the net tax capacity attributable to existing improvements,
provided that the request by the authority for certification of
a new housing replacement district has been made to the county
auditor by June 30. The original net tax capacity of housing
replacement districts for which requests are filed after June 30
has an original net tax capacity based on the current assessment
year. In any case, the original net tax capacity must be
determined together with subsequent adjustments as set forth in
Minnesota Statutes, section 469.177, subdivision 1, paragraph
(c). In determining the original net tax capacity, the net tax
capacity of real property exempt from taxation at the time of
the request shall be zero, except for real property which is tax
exempt by reason of public ownership by the requesting authority
and which has been publicly owned for less than one year prior
to the date of the request for certification, in which event the
net tax capacity of the property shall be the net tax capacity
as most recently determined by the commissioner of revenue.
Subd. 3. [PARCEL.] "Parcel" means a tract or plat of land
established prior to the certification of the housing
replacement district as a single unit for purposes of assessment.
Subd. 4. [AUTHORITY.] For housing replacement projects in
the city of Crystal, "authority" means the Crystal economic
development authority. For housing replacement projects in the
city of Fridley, "authority" means the housing and redevelopment
authority in and for the city of Fridley or a successor in
interest. For housing replacement projects in the city of
Minneapolis, "authority" means the Minneapolis community
development agency. For housing replacement projects in the
city of St. Paul, "authority" means the St. Paul housing and
redevelopment authority.
Sec. 45. [ESTABLISHMENT OF HOUSING REPLACEMENT DISTRICTS.]
Subdivision 1. [CREATION OF PROJECTS.] (a) An authority
may create a housing replacement project under sections 44 to
47, as provided in this section.
(b) For the cities of Crystal and Fridley, the authority
may designate up to 50 parcels in the city to be included in a
housing replacement district. No more than ten parcels may be
included in year one of the district, with up to ten additional
parcels added to the district in each of the following nine
years. For the cities of Minneapolis and St. Paul, each
authority may designate up to 100 parcels in the city to be
included in a housing replacement district over the life of the
district. The only parcels that may be included in a district
are (1) vacant sites, (2) parcels containing vacant houses, or
(3) parcels containing houses that are structurally substandard,
as defined in Minnesota Statutes, section 469.174, subdivision
10.
(c) The city in which the authority is located must pay at
least 25 percent of the housing replacement project costs from
its general fund, a property tax levy, or other unrestricted
money, not including tax increments.
(d) The housing replacement district plan must have as it
sole object the acquisition of parcels for the purpose of
preparing the site to be sold for market rate housing. As used
in this section, "market rate housing" means housing that has a
market value that does not exceed 150 percent of the average
market value of single-family housing in that municipality.
Subd. 2. [HOUSING REPLACEMENT DISTRICT PLAN.] To establish
a housing replacement district under sections 44 to 47, an
authority shall adopt a housing replacement district plan which
contains:
(1) a statement of the objectives and a description of the
housing replacement projects proposed by the authority for the
housing replacement district;
(2) a statement of the housing replacement district plan,
demonstrating the coordination of that plan with the city's
comprehensive plan;
(3) estimates of the following:
(i) cost of the program, including administrative expenses;
(ii) sources of revenue to finance or otherwise pay public
costs;
(iii) the most recent net tax capacity of taxable real
property within the housing replacement district; and
(iv) the estimated captured net tax capacity of the housing
replacement district at completion;
(4) statements of the authority's alternate estimates of
the impact of the housing replacement district on the net tax
capacities of all taxing jurisdictions in which the housing
replacement district is located in whole or in part. For
purposes of one statement, the municipality shall assume that
the estimated captured net tax capacity would be available to
the taxing jurisdictions without creation of the housing
replacement district, and for purposes of the second statement,
the county shall assume that none of the estimated captured net
tax capacity would be available to the taxing jurisdictions
without creation of the housing replacement district; and
(5) identification of all parcels to be included in the
district, to the extent known at the time the original housing
replacement district plan is prepared. At a minimum, the
parcels that will be included in the housing replacement
district during its first year must be identified in the
original housing replacement district plan. If parcels for
subsequent years are not specifically identified, the original
housing replacement district plan must include the criteria that
will be used by the authority to select parcels to be included
in the later years.
Subd. 3. [PROCEDURE.] The provisions of Minnesota
Statutes, section 469.175, subdivisions 3, 4, 5, and 6, apply to
the establishment and operation of the housing replacement
districts created under sections 44 to 47, except as follows:
(1) the determination specified in Minnesota Statutes,
section 469.175, subdivision 3, clause (1), is not required; and
(2) addition of parcels not identified in the original
housing replacement district plan is not treated as a
modification of that plan requiring an approval process provided
that the parcels added are consistent with the criteria
described in subdivision 2, clause (5).
Sec. 46. [LIMITATIONS.]
Subdivision 1. [DURATION LIMITS.] No tax increment may be
paid to the authority on each parcel in a housing replacement
district after 15 years from date of receipt by the county of
the first tax increment from that parcel.
Subd. 2. [LIMITATION ON USE OF TAX INCREMENTS.] All
revenues derived from tax increments must be used in accordance
with the housing replacement district plan. The revenues must
be used solely to pay the costs of site acquisition, relocation,
demolition of existing structures, site preparation, and
pollution abatement on parcels identified in the housing
replacement district plan, as well as public improvements and
administrative costs directly related to those parcels.
Sec. 47. [APPLICATION OF OTHER LAWS.]
Subdivision 1. [COMPUTATION OF TAX INCREMENT.] The
provisions of Minnesota Statutes, section 469.177, subdivisions
1a, and 5 to 10, apply to the computation of tax increment for
the housing replacement districts created under sections 44 to
47. The original local tax rate is the rate for the year a
parcel is certified for inclusion in a housing replacement
district.
Subd. 2. [OTHER PROVISIONS.] References in Minnesota
Statutes to tax increment financing districts created and tax
increments generated under Minnesota Statutes, sections 469.174
to 469.179, other than references in Minnesota Statutes, section
273.1399, include housing replacement districts and tax
increments subject to sections 44 to 47, provided that Minnesota
Statutes, sections 469.174 to 469.179, apply only to the extent
specified in sections 44 to 47.
Subd. 3. [MINNEAPOLIS SPECIAL LAW.] Laws 1980, chapter
595, section 2, subdivision 2, does not apply to a district
created under sections 44 to 47.
Sec. 48. [REPEALER.]
Minnesota Statutes 1994, section 469.175, subdivision 7a,
is repealed.
Sec. 49. [EFFECTIVE DATE.]
Sections 1, 8, and 35, subdivision 1, are effective for
special laws, if the enactment occurs on or after the enactment
date of this act.
Sections 2 and 3 apply to state grants, state loans, and
tax increment financing authorized on or after August 1, 1995.
Sections 4 to 6, and 48 apply to tax increment financing
districts and additions of new areas to existing tax increment
financing districts for which the request for certification was
made after June 30, 1994, and to all hazardous substance
subdistricts, regardless of when the request for certification
was made. For districts for which the tax increment financing
plan was approved before July 1, 1995, the governing body of the
municipality must elect, by resolution, to be covered by the
section by no later than December 31, 1995.
Section 7 is effective for new tax increment financing
districts for which the request for certification is made after
the day following final enactment.
Sections 9, 12, 15 to 17, and 28 to 31, are effective the
day following final enactment.
Section 10 is effective January 1, 1995.
Sections 13, 14, 18, and 23 to 27, are effective June 30,
1995.
Sections 19 to 21, 33, and 34 are effective January 1,
1996, and apply to all tax increment financing districts
regardless of when the request for certification was made,
including requests made before August 1, 1979.
Section 22 is effective the day following final enactment
and applies to all tax increment financing districts for which
the request for certification was made after December 31, 1988.
Section 32 is effective beginning for taxes payable in 1994.
Section 35, subdivision 2, is effective for special laws
that become effective two or more days after the day following
final enactment.
Sections 44 to 47 are effective for the cities of Crystal
and Fridley on the day following final enactment, for the cities
of Minneapolis and St. Paul on June 1, 1996, and upon compliance
by the governing bodies of the local units with Minnesota
Statutes, section 645.021, subdivision 3.
ARTICLE 6
STATE FINANCE
Section 1. Minnesota Statutes 1994, section 16A.152,
subdivision 1, is amended to read:
Subdivision 1. [BUDGET RESERVE AND CASH FLOW ACCOUNT
ESTABLISHED.] (a) A budget reserve and cash flow account is
created in the general fund in the state treasury. The
commissioner of finance shall restrict part or all of the
balance before reserves in the general fund as may be necessary
to fund the budget reserve and cash flow account as provided by
law from time to time.
(b) The commissioner of finance shall transfer the amount
necessary to bring the total amount of the budget reserve and
cash flow account, including any existing balance in the account
on June 30, 1993, to $360,000,000 $350,000,000 on July 1, 1995.
The amounts restricted shall remain in the account until drawn
down under subdivision 1 or increased under subdivision 2 and
used to meet cash flow deficiencies resulting from uneven
distribution of revenue collections and required expenditures
during a fiscal year.
Sec. 2. [16A.67] [JUDGMENT BONDS.]
Subdivision 1. [AUTHORIZATION.] The commissioner of
finance, upon request of the governor, is authorized to sell and
issue state bonds to fund the judgment rendered against the
state by the Minnesota supreme court in Cambridge State Bank et.
al. v. James, 514 N.W. 2d 565, on April 1, 1994, and interest
accrued thereon to fund any bond reserve determined to be
necessary, and to pay costs of issuance of the bonds. The
proceeds of the bonds are appropriated for these purposes. The
principal amount of the bonds shall not exceed $400,000,000.
The bonds shall be sold and issued upon such terms and in such
manner as the commissioner shall determine to be in the best
interests of the state. The final maturity of the bonds shall
be not later than June 30, 2005.
Subd. 2. [SECURITY; BONDS NOT PUBLIC DEBT.] The bonds and
the interest thereon shall be payable solely from and secured by
the revenues appropriated and transferred to the debt service
fund established for this purpose in subdivision 4 and
investment income thereon, and any bond reserve established for
the bonds. The bonds are not public debt, and the full faith,
credit, and taxing powers of the state are not pledged for their
payment. The bonds and the interest thereon shall not be paid,
directly or indirectly, in whole or in part, from a tax of
statewide application on any class of property, income,
transaction, or privilege.
Subd. 3. [SPECIAL REVENUE FUND.] There is established in
the state treasury a separate and special revenue fund for
deposit of the revenues from net proceeds of the lottery in
accordance with section 349A.10, subdivision 5, money received
for payment or reimbursement of health care costs in accordance
with section 246.18, subdivision 7, state license and service
fees as defined in section 16A.6701, and investment income
thereon.
Subd. 4. [DEBT SERVICE FUND.] There is established in the
state treasury a separate and special debt service fund. Money
transferred or appropriated to the fund and investment income
thereon on hand or required to be transferred to the fund shall
be used and are irrevocably appropriated for the payment of the
principal of and interest on the bonds authorized in this
section when due.
Subd. 5. [COVENANTS; AGREEMENTS.] The commissioner may,
for and on behalf of the state, enter into such covenants and
agreements not inconsistent with subdivisions 1 to 4 and
sections 246.18, subdivisions 4 and 6; and 349A.10, subdivision
5, as may be necessary or desirable to facilitate the sale and
issuance of the bonds on terms favorable to the state,
including, but not limited to, covenants and agreements relating
to the payment of and security for the bonds, tax-exemption, and
disclosure of information required by federal and state
securities laws. Such covenants may not include covenants to
continue to operate the state lottery but may include covenants
to continue to seek payment by and reimbursement from nonstate
sources of health care costs so long as any bonds issued
pursuant to this section are outstanding. The provisions of
sections 16A.672 and 16A.675 are applicable to the bonds.
Sec. 3. [16A.6701] [DEPOSIT OF CERTAIN STATE LICENSE FEES,
SERVICE FEES, AND CHARGES.]
Subdivision 1. [STATE LICENSE AND SERVICE FEES.] For
purposes of section 16A.665, subdivision 3, and this section,
the term "state license and service fees" means, and refers to,
all license fees, service fees, and charges imposed by law and
collected by any state officer, agency, or employee, which are
listed below or which are defined as departmental earnings under
section 16A.1285, subdivision 1, and the use of which is not
otherwise restricted by law, and which are not required to be
credited or transferred to a fund other than the general fund:
Minnesota Statutes 1994, sections 3.9221; 5.12; 5.14; 5.16;
5A.04; 6.58; 13.03, subdivision 10; 16A.155; 16A.48; 16A.54;
16A.72; 16B.59; 16B.70; 17A.04; 18.51, subdivision 2; 18.53;
18.54; 18C.551; 19.58; 19.64; 27.041, subdivision 2, clauses (d)
and (e); 27.07, subdivision 5; 28A.08; 32.071; 32.075; 32.392;
35.71; 35.824; 35.95; 41C.12; 45.027, subdivisions 3 and 6;
46.041, subdivision 1; 46.131, subdivisions 2, 7, 8, 9, and 10;
47.101, subdivision 2; 47.54, subdivisions 1 and 4; 47.62,
subdivision 4; 47.65; 48.475, subdivision 1; 48.61, subdivision
7; 48.93; 49.36, subdivision 1; 52.01; 52.203; 53.03,
subdivisions 1, 5, and 6; 53.09, subdivision 1; 53A.03; 53A.05,
subdivision 1; 53A.081, subdivision 3; 54.294, subdivision 1;
55.04, subdivision 2; 55.095; 56.02; 56.04; 56.10; 59A.03,
subdivision 2; 59A.06, subdivision 3; 60A.14, subdivisions 1 and
2; 60A.23, subdivision 8; 60K.19, subdivision 5; 65B.48,
subdivision 3; 70A.14, subdivision 4; 72B.04, subdivision 10;
79.251, subdivision 5; 80A.28, subdivisions 1, 2, 3, 4, 5, 6, 7,
7a, 8, and 9; 80C.04, subdivision 1; 80C.07; 80C.08, subdivision
1; 80C.16, subdivisions 2 and 3; 80C.18, subdivision 2; 82.20,
subdivision 8 and 9; 82A.04, subdivision 1; 82A.08, subdivision
2; 82A.16, subdivisions 2 and 6; 82B.09, subdivision 1; 83.23,
subdivisions 2, 3, and 4; 83.25, subdivisions 1 and 2; 83.26,
subdivision 2; 83.30, subdivision 2; 83.31, subdivision 2;
83.38, subdivision 2; 85.052; 85.053; 85.055; 88.79, subdivision
2; 89.035; 89.21; 115.073; 115.77, subdivisions 1 and 2; 116.41,
subdivision 2; 116C.69; 116C.712; 116J.9673; 125.08; 136C.04,
subdivision 9; 155A.045; 155A.16; 168.27, subdivision 11;
168.33, subdivisions 3 and 7; 168.54; 168.67; 168.705; 168A.152;
168A.29; 169.345; 171.06, subdivision 2a; 171.29, subdivision 2;
176.102; 176.1351; 176.181, subdivision 2a; 177.30; 181A.12;
183.545; 183.57; 184.28; 184.29; 184A.09; 201.091, subdivision
5; 204B.11; 207A.02; 214.06; 216C.261; 221.0355; 239.101;
240.06; 240.07; 240.08; 240.09; 240.10; 246.51; 270.69,
subdivision 2; 270A.07; 272.484; 296.06; 296.12; 296.17; 297.04;
297.33; 299C.46; 299C.62; 299K.09; 299K.095; 299L.07; 299M.04;
300.49; 318.02; 323.44, subdivision 3; 325D.415; 326.22;
326.3331; 326.47; 326.50; 326.92, subdivisions 1 and 3; 327.33;
331A.02; 332.15, subdivisions 2 and 3; 332.17; 332.22,
subdivision 1; 332.33, subdivisions 3 and 4; 332.54, subdivision
7; 333.055; 333.20; 333.23; 336.9-413; 336A.04; 336A.05;
336A.09; 345.35; 345.43, subdivision 1; 345.44; 345.55,
subdivision 3; 347.33; 349.151; 349.161; 349.162; 349.163;
349.164; 349.165; 349.166; 349.167; 357.08; 359.01, subdivision
3; 360.018; 360.63; 386.68; and 414.01, subdivision 11;
Minnesota Statutes 1994, chapters 154; 216B; 237; 302A; 303;
308A; 317A; 322A; and 322B; Laws 1990, chapter 593; Laws 1993,
chapter 254, section 7; and Laws 1994, chapter 573, section 4;
Minnesota Rules, parts 1800.0500; 1950.1070; 2100.9300;
7515.0210; and 9545.2000 to 9545.2040.
Subd. 2. [FEES CREDITED TO SPECIAL REVENUE FUND.] All
state license and service fees must be credited to the special
revenue fund created in section 16A.67, subdivision 3. Money
credited to the special revenue fund must be transferred to the
debt service fund established in section 16A.67, subdivision 4,
at the times and in the amounts determined by the commissioner
of finance to be necessary to provide for the payment and
security of bonds issued pursuant to section 16A.67. On or
before the tenth day of each month, any money in the special
revenue fund not required to be transferred to the debt service
fund must be transferred to the general fund.
Subd. 3. [APPLICABILITY.] If any state license or service
fee described in subdivision 1 is determined by the attorney
general or a court of competent jurisdiction to be a tax, the
provisions of subdivisions 1 and 2 no longer apply to it.
Sec. 4. Minnesota Statutes 1994, section 246.18,
subdivision 4, as amended by Laws 1995, chapter 207, article 8,
section 28, is amended to read:
Subd. 4. [COLLECTIONS DEPOSITED IN THE GENERAL FUND.]
Except as provided in subdivisions 2, 5, and 6, and 7, all
receipts from collection efforts for the regional treatment
centers, state nursing homes, and other state facilities as
defined in section 246.50, subdivision 3, must be deposited in
the general fund. The commissioner shall ensure that the
departmental financial reporting systems and internal accounting
procedures comply with federal standards for reimbursement for
program and administrative expenditures and fulfill the purpose
of this paragraph.
Sec. 5. Minnesota Statutes 1994, section 246.18, is
amended by adding a subdivision to read:
Subd. 7. [USE OF CERTAIN REIMBURSEMENT FUNDS.] Except as
provided in subdivisions 2, 5, and 6, and unless otherwise
required by federal law, during any period in which bonds are
issued and outstanding under section 16A.67, all money received
from the federal government or other nonstate source for payment
or reimbursement of health care costs incurred at regional
treatment centers, state nursing homes, and other state
facilities as defined in section 246.50, subdivision 3, must be
credited to the special revenue fund created in section 16A.67,
subdivision 3. Money credited to the special revenue fund must
be transferred to the debt service fund established in section
16A.67, subdivision 4, at the times and in the amounts
determined by order of the commissioner of finance to be
necessary to provide for the payment and security of bonds
issued pursuant to section 16A.67. On or before the tenth day
of each month, any money in the special revenue fund not
required to be transferred to the debt service fund must be
transferred to the general fund.
Sec. 6. Minnesota Statutes 1994, section 349A.10,
subdivision 5, is amended to read:
Subd. 5. [DEPOSIT OF NET PROCEEDS.] Within 30 days after
the end of each month, the director shall deposit in the state
treasury the net proceeds of the lottery, which is the balance
in the lottery fund after transfers to the lottery prize fund
and credits to the lottery operations account. Of the net
proceeds, 40 percent must be credited to the Minnesota
environment and natural resources trust fund, and the remainder
must be credited to the general fund special revenue fund
created in section 16A.67, subdivision 3. Money created to the
special revenue fund must be transferred to the debt service
fund established in section 16A.67, subdivision 4, at the times
and in the amounts determined by the commissioner of finance to
be necessary to provide for the payment and security of bonds
issued pursuant to section 16A.67. On or before the tenth day
of each month, any money in the special revenue fund not
required to be transferred to the debt service fund must be
transferred to the general fund.
Sec. 7. [EFFECTIVE DATE.]
Sections 1 to 6 are effective July 1, 1995.
ARTICLE 7
TACONITE TAX
Section 1. Minnesota Statutes 1994, section 298.01,
subdivision 4, is amended to read:
Subd. 4. [OCCUPATION TAX; IRON ORE; TACONITE
CONCENTRATES.] A person engaged in the business of mining or
producing of iron ore or, taconite concentrates or direct
reduced ore in this state shall pay an occupation tax to the
state of Minnesota. The tax is determined in the same manner as
the tax imposed by section 290.02, except that sections 290.05,
subdivision 1, clause (a), and 290.17, subdivision 4, do not
apply. The tax is in addition to all other taxes.
Sec. 2. Minnesota Statutes 1994, 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 and direct reduced
ore 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 1994, section 298.24,
subdivision 1, is amended to read:
Subdivision 1. (a) For concentrate produced in 1992, 1993,
and 1994, and 1995 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 1995 1996 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) (1) Notwithstanding any other provision of this
subdivision, for concentrates produced in 1994 through 1999 the
first five years of a plant's production of direct reduced ore,
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.
(2) Production of direct reduced ore in this state is
subject to the tax imposed by this section, but if that
production is not produced by a producer of taconite or iron
sulfides, the production of taconite or iron sulfides consumed
in the production of direct reduced iron in this state is not
subject to the tax imposed by this section on taconite or iron
sulfides.
Sec. 4. Minnesota Statutes 1994, section 298.25, is
amended to read:
298.25 [TAXES ADDITIONAL TO OTHER TAXES.]
The taxes imposed under section 298.24 shall be in addition
to the occupation tax imposed upon the business of mining and
producing iron ore. Except as herein otherwise provided, such
taxes shall be in lieu of all other taxes upon such
taconite and, iron sulphides, and direct reduced ore or the
lands in which they are contained, or upon the mining or
quarrying thereof, or the production of concentrate or direct
reduced ore therefrom, or upon the concentrate or direct reduced
ore produced, or upon the machinery, equipment, tools, supplies
and buildings used in such mining, quarrying or production, or
upon the lands occupied by, or used in connection with, such
mining, quarrying or production facilities. If electric or
steam power for the mining, transportation or concentration of
such taconite or the, concentrates or direct reduced ore
produced therefrom is generated in plants principally devoted to
the generation of power for such purposes, the plants in which
such power is generated and all machinery, equipment, tools,
supplies, transmission and distribution lines used in the
generation and distribution of such power, shall be considered
to be machinery, equipment, tools, supplies and buildings used
in the mining, quarrying, or production of taconite and,
taconite concentrates or direct reduced ore within the meaning
of this section. If part of the power generated in such a plant
is used for purposes other than the mining or concentration of
taconite or direct reduced ore or the transportation or loading
of taconite or, the concentrates thereof or direct reduced ore,
a proportionate share of the value of such generating
facilities, equal to the proportion that the power used for such
other purpose bears to the generating capacity of the plant,
shall be subject to the general property tax in the same manner
as other property; provided, power generated in such a plant and
exchanged for an equivalent amount of power which is used for
the mining, transportation, or concentration of such
taconite or, concentrates or direct reduced ore produced
therefrom, shall be considered as used for such purposes within
the meaning of this section. Nothing herein shall prevent the
assessment and taxation of the surface of reserve land
containing taconite and not occupied by such facilities or used
in connection therewith at the value thereof without regard to
the taconite or iron sulphides therein, nor the assessment and
taxation of merchantable iron ore or other minerals, or
iron-bearing materials other than taconite or iron sulphides in
such lands in the manner provided by law, nor the assessment and
taxation of facilities used in producing sulphur or sulphur
products from iron sulphide concentrates, or in refining such
sulphur products, under the general property tax laws. Nothing
herein shall except from general taxation or from taxation as
provided by other laws any property used for residential or
townsite purposes, including utility services thereto.
Sec. 5. Minnesota Statutes 1994, 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, and 1997 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 5/16 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. 6. Minnesota Statutes 1994, section 298.296,
subdivision 4, is amended 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 1997.
Sec. 7. [EFFECTIVE DATE.]
This article is effective for production years beginning
after December 31, 1994.
ARTICLE 8
AIDS TO LOCAL GOVERNMENTS
Section 1. Minnesota Statutes 1994, section 465.795,
subdivision 7, is amended to read:
Subd. 7. [SCOPE.] As used in sections 465.795 to 465.799
and sections 465.801 to 465.87 465.88, the terms defined in this
section have the meanings given them.
Sec. 2. Minnesota Statutes 1994, 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 465.801,
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 465.87 465.88, and
determine whether to approve or disapprove the application; and
(6) make recommendations to the legislature for the
authorization of pilot projects for the implementation of
innovative service delivery activities that require statutory
authorization;
(7) make recommendations to the legislature regarding the
elimination of state mandates that inhibit local government
efficiency, innovation, and cooperation. by prescribing specific
processes for achieving a desired outcome;
(8) investigate and review the role of unfunded state
mandates in intergovernmental relations and assess their impact
on state and local government objectives and responsibilities;
(9) make recommendations to the governor and the
legislature regarding:
(i) allowing flexibility for local units of government in
complying with specific unfunded state mandates for which terms
of compliance are unnecessarily rigid or complex;
(ii) reconciling any two or more unfunded state mandates
that impose contradictory or inconsistent requirements;
(iii) terminating unfunded state mandates that are
duplicative, obsolete, or lacking in practical utility;
(iv) suspending, on a temporary basis, unfunded state
mandates that are not vital to public health and safety and that
compound the fiscal difficulties of local units of government,
including recommendations for initiating the suspensions;
(v) consolidating or simplifying unfunded state mandates or
the planning or reporting requirements of the mandates, in order
to reduce duplication and facilitate compliance by local units
of government with those mandates; and
(vi) establishing common state definitions or standards to
be used by local units of government in complying with unfunded
state mandates that use different definitions or standards for
the same terms or principles; and
(10) identify relevant unfunded state mandates.
The duties imposed under clauses (8) to (10) shall be
performed to the extent possible given existing resources. Each
recommendation under clause (9) shall, to the extent
practicable, identify the specific unfunded state mandates to
which the recommendation applies. The commissioners or
directors of state agencies responsible for the promulgation or
enforcement of the unfunded mandates addressed in clauses (7) to
(10) shall assign staff to assist the board in carrying out the
board's duties under this section.
The board may purchase services from the metropolitan council in
reviewing requests for waivers and grant applications.
Sec. 3. Minnesota Statutes 1994, section 465.797,
subdivision 5, is amended to read:
Subd. 5. [CONDITIONS OF AGREEMENTS.] (a) 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. The duration of a waiver from an
administrative rule may be for no less than two years and no
more than four years, subject to renewal if both parties agree.
An exemption from enforcement of a law terminates ten days after
adjournment of the regular legislative session held during the
calendar year following the year when the exemption is granted,
unless the legislature has acted to extend or make permanent the
exemption.
(b) If the board grants a waiver or exemption, it must
report the waiver or exemption to the legislature, including the
chairs of the governmental operations and appropriate policy
committees in the house and senate, and the governor within 30
days.
(c) 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. 4. Minnesota Statutes 1994, 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, a local unit of
government acting in conjunction with 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. The application to the board must state what other
sources of funding have been considered by the local units of
government to implement the project and explain why it is not
possible to complete the project without assistance from the
board. The board may not award a grant if it determines that
the local units of government could complete the project without
board assistance. 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 may not exceed $50,000.
Sec. 5. Minnesota Statutes 1994, 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 application to the board must state what other
sources of funding have been considered by the local units of
government to implement the project and explain why it is not
possible to complete the project without assistance from the
board. The board may not award a grant if it determines that
the local units of government could complete the project without
board assistance. 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 may not exceed $50,000.
Sec. 6. Minnesota Statutes 1994, section 465.801, is
amended to read:
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. The
application to the board must state what other sources of
funding have been considered by the local units of government to
implement the project and explain why it is not possible to
complete the project without assistance from the board. The
board may not award a grant if it determines that the local
units of government could complete the project without board
assistance. 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. 7. Minnesota Statutes 1994, section 465.81,
subdivision 1, is amended to read:
Subdivision 1. [SCOPE.] Sections 465.81 to 465.87
establish procedures to be used by counties, cities, or towns
that adopt by resolution an agreement providing a plan to
provide combined services during an initial two-year cooperation
period that may not exceed two years and then to merge into a
single unit of government over the succeeding two-year period.
Sec. 8. Minnesota Statutes 1994, section 465.82,
subdivision 2, is amended to read:
Subd. 2. [CONTENTS OF PLAN.] The plan shall must state:
(1) the specific cooperative activities the units will
engage in during the first two years of the venture;
(2) the steps to be taken to effect the merger of the
governmental units, beginning in the third year of the process,
with completion no later than four years after the process
begins;
(3) the steps by which a single governing body will be
created. Notwithstanding any other law to the contrary, all
current members of the governing bodies of the local government
units that propose to combine under sections 465.81 to 465.87
may serve on the initial governing body of the combined unit,
until a gradual reduction in membership is achieved by foregoing
election of new members when terms expire until the number
permitted by other law is reached;
(4) changes in services provided, facilities used,
administrative operations and staffing to effect the preliminary
cooperative activities and the final merger and a two-, five-,
and ten-year projection of expenditures for each unit if it
combined and if it remained separate;
(5) treatment of employees of the merging governmental
units, specifically including provisions for reassigning
employees, dealing with unions, and providing financial
incentives to encourage early retirements;
(6) financial arrangements for the merger, specifically
including responsibility for debt service on outstanding
obligations of the merging entities;
(7) two, five, and ten-year projections prepared by the
department of revenue at the request of the local government
unit, of revenues, expenditures, and property taxes for each
unit if it combined and if it remained separate one- and
two-year impact analysis, prepared by the granting state agency
at the request of the local government unit, of major state aid
revenues received for each unit if it combined and if it
remained separate. This would also include an impact analysis,
prepared by the department of revenue, of property tax revenue
implications, if any, associated with tax increment financing
districts and fiscal disparities resulting from the merger;
(8) procedures for a referendum to be held prior to the
year of before the proposed combination to approve combining the
local government units, specifically stating whether a majority
of those voting in each district proposed for combination or a
majority of those voting on the question in the entire area
proposed for combination would be needed to pass the referendum;
and
(9) a time schedule for implementation.
Notwithstanding clause (3) or any other law to the
contrary, all current members of the governing bodies of the
local governmental units that propose to combine under sections
465.81 to 465.88 may serve on the initial governing body of the
combined unit until a gradual reduction in membership is
achieved by foregoing election of new members when terms expire
until the number permitted by other law is reached.
Sec. 9. Minnesota Statutes 1994, section 465.84, is
amended to read:
465.84 [REFERENDUM.]
During the first or second year of cooperation, and after
approval of the plan by the department board under section
465.83, a referendum on the question of combination shall must
be conducted. The referendum shall must be on a date called by
the governing bodies of the units that propose to combine. The
referendum shall must be conducted according to the Minnesota
election law, as defined in section 200.01. If the referendum
fails, the same question or a modified question may be submitted
the following year. If the referendum fails again, the same
question may not be submitted. Referendums shall be conducted
on the same date in all local government units.
Sec. 10. Minnesota Statutes 1994, section 465.85, is
amended to read:
465.85 [COUNTY AUDITOR TO PREPARE PLAT.]
Upon the request of two or more local government units that
have adopted a resolution to cooperate and combine, the county
auditor shall prepare a plat. If the proposed combined local
government unit is located in more than one county, the request
shall must be submitted to the county auditor of the county that
has the greatest land area in the proposed district. The plat
must show:
(1) the boundaries of each of the present units;
(2) the boundaries of the proposed unit;
(3) the boundaries of proposed election districts, if
requested; and
(4) other information deemed pertinent by the governing
bodies or the county auditor.
Sec. 11. Minnesota Statutes 1994, section 465.87, is
amended to read:
465.87 [AIDS TO COOPERATING AND COMBINING UNITS.]
Subdivision 1. [ELIGIBILITY.] A local government unit is
eligible to apply for aid under this section if the board has
approved its plan to cooperate and combine under section 465.83.
Subd. 1a. [ADDITIONAL ELIGIBILITY.] A local government
unit is eligible to apply for aid under this section if it has
combined with another unit of government in accordance with any
process within chapter 414 that results in the elimination of at
least one local government unit and a copy of the municipal
board's order combining the two units of government is forwarded
to the board. If two units of government cooperate in the
orderly annexation of the entire area of a third unit of
government which has a population of at least 8,000 people, the
two units of government are each eligible for the amount of aid
specified in subdivision 2.
Subd. 1b. [APPLICATION PROCEDURES.] A local government
unit covered by subdivision 1 may submit an application to the
board along with the final plan for cooperation and combination
required by section 465.83. A local government unit covered by
subdivision 1a may submit an application to the board after the
issuance of the municipal board's order combining the two units
of government. The application must be on a form prescribed by
the board and must specify the total amount of aid requested up
to the maximum authorized by subdivision 2. The application
must also include a detailed explanation of the need for the aid
and provide a budget indicating how the requested aid would be
used.
Subd. 1c. [AID AWARD.] The board may grant or deny an
application for aid made by a local government unit under
subdivision 1b. The board may also grant aid to an applicant in
an amount that is less than the amount requested by the
applicant. The board shall base its decision on the following
criteria:
(1) whether the local government unit has adequately
demonstrated that the requested aid is essential to
accomplishing the proposed combination;
(2) whether the activities to be funded by the requested
aid are directly related to the combination;
(3) whether other sources of funding for the activities
identified in the application, including short-term cost
savings, are available to the applicant as a direct result of
the combination; and
(4) whether there are competing needs for the funding
available to the board that would provide a greater public
benefit than would be realized by the combination or activities
described in the application.
The board may award money to an applicant for a period not
to exceed four years. Any funding awarded for a period beyond
the biennium in which an award is made, however, is contingent
on future appropriations to the board.
Subd. 2. [AMOUNT OF AID.] The annual amount of aid to be
paid to each eligible local government unit is equal to may not
exceed the following per capita amounts, based on the combined
population of the units, not to exceed $100,000 per year for any
unit as estimated by the state demographer, or $100,000,
whichever is less.
Combined Population Aid
after Combination Per Capita
0 - 2,500 $25
2,500 - 5,000 20
5,000 - 20,000 15
over 20,000 10
Payments shall must be made on the dates provided for payments
of local government aid under section 477A.013, beginning in the
year during which substantial cooperative activities under the
plan initially occur, unless those activities begin after July
1, in which case the initial aid payment shall must be made in
the following calendar year. Payments to a local government
unit that qualifies for aid under subdivision 1a must be made on
the dates provided for payments of local government aids under
section 477A.013, beginning in the calendar year during which a
combination in any form is expected to be ordered by the
Minnesota municipal board as evidenced in a resolution adopted
by July 1 by the affected local government units declaring their
intent to combine. The resolutions must certify that the
combination agreement addressing all issues relative to the
combination is substantially complete. The total amount of aid
paid may not exceed the amount appropriated to the board for
purposes of this section.
Subd. 3. [TERMINATION OF AID; RECAPTURE.] If a second
referendum under section 465.84 fails, or if an initial
referendum fails and the governing body does not schedule a
second referendum within one year after the first has failed, or
if one or more of the local government units that proposed to
combine terminates its participation in the cooperation or
combination, no additional aid will may be paid under this
section. The amount previously paid under this section to a
unit must be repaid if the governing body of the unit acts to
terminate its current level of participation in the plan. The
amount previously paid to the unit must be repaid in annual
installments equal to the total amount paid to the unit for all
years under subdivision subdivisions 1c and 2, divided by the
number of years when payments were made.
Sec. 12. [465.88] [PLANNING AID FOR CONSOLIDATION
STUDIES.]
Two local units of government with a combined population of
2,500 or less based on the most recent decennial census may
apply to the board for aid to assist in the study of a possible
consolidation or combination. To be eligible for receipt of aid
under this section, the two local units of government must be
subject to a municipal board motion to form a consolidation
commission under section 414.041, subdivision 2, or the
governing bodies of the local units of government must have
approved a resolution expressing their intent to develop and
submit a combination plan for consideration by the board. The
application must be on a form prescribed by the board and must
provide a proposed budget detailing how the requested aid shall
be used. The governing bodies of the local units of government
must also approve resolutions certifying that the requested aid
is essential for paying a portion of the costs associated with
the consolidation or combination study. The board may grant up
to $10,000 in aid for each application received.
Sec. 13. Minnesota Statutes 1994, section 477A.011,
subdivision 36, is amended to read:
Subd. 36. [CITY AID BASE.] (a) Except as provided in
paragraphs (b) and (c), "city aid base" means, for each city,
the sum of the local government aid and equalization aid it was
originally certified to receive in calendar year 1993 under
Minnesota Statutes 1992, section 477A.013, subdivisions 3 and 5,
and the amount of disparity reduction aid it received in
calendar year 1993 under Minnesota Statutes 1992, section
273.1398, subdivision 3.
(b) For aids payable in 1996 and thereafter, a city that in
1992 or 1993 transferred an amount from governmental funds to
its sewer and water fund, which amount exceeded its net levy for
taxes payable in the year in which the transfer occurred, has a
"city aid base" equal to the sum of (i) its city aid base, as
calculated under paragraph (a), and (ii) one-half of the
difference between its city aid distribution under section
477A.013, subdivision 9, for aids payable in 1995 and its city
aid base for aids payable in 1995.
(c) The city aid base for any city with a population less
than 500 is increased by $40,000 for aids payable in calendar
year 1995 and thereafter, and the maximum amount of total aid it
may receive under section 477A.013, subdivision 9, paragraph
(c), is also increased by $40,000 for aids payable in calendar
year 1995 only, provided that:
(i) the average total tax capacity rate for taxes payable
in 1995 exceeds 200 percent;
(ii) the city portion of the tax capacity rate exceeds 100
percent; and
(iii) its city aid base is less than $60 per capita.
Sec. 14. Minnesota Statutes 1994, section 477A.0121,
subdivision 4, is amended to read:
Subd. 4. [PUBLIC DEFENDER COSTS.] Each calendar year, four
two percent of the total appropriation for this section shall be
retained by the commissioner of revenue to make reimbursements
to the commissioner of finance for payments made under section
611.27. The reimbursements shall be to defray the additional
costs associated with court-ordered counsel under section
611.27. Any retained amounts not used for reimbursement in a
year shall be included in the next distribution of county
criminal justice aid that is certified to the county auditors
for the purpose of property tax reduction for the next taxes
payable year.
Sec. 15. Minnesota Statutes 1994, section 477A.0132, is
amended to read:
477A.0132 [AID REDUCTIONS TO LOCAL GOVERNMENTS.]
Subdivision 1. [AFFECTED LOCAL GOVERNMENTS.] The following
permanent and nonpermanent reductions shall be made in aids paid
to the following local units of government:
(a) For aids payable in 1992 1996, there shall be a
permanent nonpermanent reduction in aids to counties,
cities, towns, and special taxing districts of $86,000,000. For
purposes of this reduction, hospital districts are not
considered special taxing districts $16,000,000, provided that
section 25, subdivision 1, is enacted; otherwise the reduction
is $14,000,000.
(b) Aid reductions required under section 16A.711,
subdivision 5, shall be nonpermanent reductions in aids to
counties, cities, towns, and special taxing districts equal to
the difference between the aid amounts certified to be paid and
the amount of the appropriation to pay the aids.
(c) For aids payable in 1996 there shall be a permanent
reduction in aids to counties of $10,000,000, provided that
section 16 is enacted.
Subd. 2. [CALCULATION OF AID REDUCTION.] The aid reduction
to each local government as provided under subdivision 1 will be
equal to the product of the reduction percentage and its
reduction base. The reduction base is defined as the following:
(a) For subdivision 1, clause (a), the reduction base is
equal to the adjusted revenue base for 1992 1996.
(b) For subdivision 1, clause (b), the reduction base is
equal to the adjusted revenue base for the year in which the aid
payment is to be made.
(c) For subdivision 1, clause (c), the reduction base is a
county's aid in calendar year 1996 under section 477A.0121.
Reductions under subdivisions 1, paragraph (a), and 2,
paragraph (a), to any individual county, city, or town are
limited to an amount equal to 0.45 percent of the unit's 1994
adjusted net tax capacity. For this subdivision, "adjusted net
tax capacity" means the political subdivision's net tax capacity
calculated using the method for calculating city net tax
capacity under section 477A.011, subdivision 20.
Subd. 3. [ORDER OF AID REDUCTIONS.] (a) The aid reduction
to a local government calculated under subdivisions 1,
paragraphs (a) and (c), and 2, paragraphs (a) and (c), is
applied to homestead and agricultural credit aid under section
273.1398 only.
(b) The aid reduction to a local government as calculated
under other paragraphs of subdivisions 1 and 2, is first applied
to its local government aid under sections 477A.012 and 477A.013
excluding aid under section 477A.013, subdivision 5; then, if
necessary, to its equalization aid under section 477A.013,
subdivision 5; then if necessary, to its homestead and
agricultural credit aid under section 273.1398, subdivision 2;
and then, if necessary, to its disparity reduction aid under
section 273.1398, subdivision 3. No aid payment may be less
than $0. Aid reductions under this section in any given year
shall be divided equally between the July and December aid
payments unless specified otherwise.
Sec. 16. Minnesota Statutes 1994, section 477A.03,
subdivision 2, is amended to read:
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.
Aid payments to counties under section 477A.0121 are limited to
$20,265,000 in 1996. For aid payable in 1997 and thereafter,
the total aids paid under section 477A.0121 are the amounts
certified to be paid in the previous year, adjusted for
inflation as provided under subdivision 3.
Sec. 17. Laws 1994, chapter 587, article 3, section 21, is
amended to read:
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, and 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. 18. [AID ADJUSTMENT.]
Homestead and agricultural credit aid under Minnesota
Statutes, section 273.1398, subdivisions 2 and 8, for any
statutory city incorporated after January 1, 1975, which is
located in a county containing a city of the first class which
is not a metropolitan county under Minnesota Statutes, section
473.121, subdivision 4, shall be permanently increased by
$200,000, beginning with aids payable in 1996.
Sec. 19. [HACA REDUCTION; HENNEPIN COUNTY COURT
EMPLOYEES.]
Subdivision 1. [HACA REDUCTION.] There shall be deducted
from the homestead and agricultural credit aid payments to
Hennepin county under Minnesota Statutes, section 273.1398, an
amount equal to $180,000, which represents the cost to the state
for the assumption of two Hennepin county staff attorneys whose
job functions are that of court referees and whose positions
should have been transferred to the state as part of the court
takeover in Laws 1989, First Special Session chapter 1, article
4. One-half of the total amount shall be deducted from each of
the aid payments made in 1995 to Hennepin county under Minnesota
Statutes, section 273.1398. The amount of reduction made under
this section shall be a permanent aid reduction.
Subd. 2. [EFFECTIVE DATE.] Subdivision 1 is effective for
aid payments made to Hennepin county in 1995 provided, however,
that the aid reduction made under subdivision 1 is contingent
upon enactment of a law in 1995 which (i) transfers the Hennepin
county positions, and (ii) provides from the general fund a
funding to the state supreme court for the positions.
Sec. 20. [HACA ADJUSTMENT; DAKOTA COUNTY.]
Subdivision 1. [HACA ADJUSTMENT.] The homestead and
agricultural credit aid offset for the 1996 public defender
costs for Dakota county shall be changed from the $644,000
amount as contained in Minnesota Statutes 1994, section
477A.012, subdivision 7, paragraph (b), to a corrected amount of
$492,000. The $152,000 adjustment results from an incorrect
estimate of Dakota county's public defender costs which were
transferred to the state under Laws 1994, chapter 636, article
11, section 1. The adjustment amount of $152,000 provided for
under this section is a permanent aid increase to Dakota county
made under Minnesota Statutes, section 273.1398, subdivision 2.
Subd. 2. [EFFECTIVE DATE.] Subdivision 1 is effective for
homestead and agricultural credit aid paid to Dakota county
beginning in calendar year 1996 and subsequent years.
Sec. 21. [HACA ADJUSTMENT; ANOKA COUNTY.]
Subdivision 1. [HACA ADJUSTMENT.] The homestead and
agricultural credit aid offset for the 1996 public defender
costs for Anoka county shall be changed from the $634,000 amount
as contained in Minnesota Statutes 1994, section 477A.012,
subdivision 7, paragraph (b), to a corrected amount of
$472,000. The $162,000 adjustment results from an incorrect
estimate of Anoka county's public defender costs which were
transferred to the state under Laws 1994, chapter 636, article
11, section 1. The adjustment amount of $162,000 provided for
under this section is a permanent aid increase to Anoka county
made under Minnesota Statutes, section 273.1398, subdivision 2.
Subd. 2. [EFFECTIVE DATE.] Subdivision 1 is effective for
homestead and agricultural credit aid paid to Anoka county
beginning in calendar year 1996 and subsequent years.
Sec. 22. [STUDY OF LOCAL GOVERNMENT AID DISTRIBUTION
PROGRAMS AND GOVERNMENT SERVICE DELIVERY.]
By July 1, 1995, the legislative commission on planning and
fiscal policy or its successor entity shall establish a
subcommittee to study: (1) alternative methods of distributing
general purpose aids to units of local governments; and (2)
approaches to maximizing the efficiency and effectiveness of
local government service delivery. For purposes of the study,
each home rule charter or statutory city and county shall
provide the subcommittee with information and analysis as
requested by the subcommittee. The subcommittee shall notify
each city and county that is required to submit information no
later than 60 days before the report is due. If a city or
county fails to submit when due a report that satisfies the
subcommittee, the subcommittee may recommend that the
legislature impose a financial penalty on the city or county.
By February 1, 1996, the subcommittee shall report the
findings of the study to the legislative commission on planning
and fiscal policy or its successor entity and to the chairs of
the house and senate tax committees, along with recommendations
for reforms in aid distribution and government service delivery
systems.
Sec. 23. [REPORT ON UNFUNDED STATE MANDATES.]
The board of government innovation and cooperation shall
prepare and distribute a report to the governor and legislature
by January 15, 1996, containing recommended legislation to
accomplish the goals of Minnesota Statutes, section 465.796,
subdivision 2, clauses (8) to (10).
Sec. 24. [STUDY ON CONSOLIDATING COUNTIES AND
RATIONALIZING OTHER INTERNAL BOUNDARIES.]
The board of government innovation and cooperation shall
study, to the extent possible given available resources, the
feasibility of consolidating counties in the state. As part of
the study, the board shall consider conforming county boundaries
to other existing physical or organizational boundaries
including, among others, state judicial districts, and shall
consider the economic implications that may result from the
consolidation.
The study shall also include a consideration of the
rationalization of other internal boundaries of the state such
as highway maintenance and regional economic districts.
The board shall report on the study to the appropriate
committees of the legislature by January 15, 1997.
Sec. 25. [APPROPRIATION.]
Subdivision 1. $2,000,000 is appropriated to the board of
government innovation and cooperation from the general fund,
with $1,000,000 to be available for fiscal year 1996 and
$1,000,000 to be available for fiscal year 1997. At least 50
percent of the amount appropriated must be used to provide aids
to cooperating and combining local government units under
Minnesota Statutes, section 465.87. Any amount of the
appropriation to the board of government innovation and
cooperation under Laws 1993, chapter 375, article 15, section
15, that is unexpended on June 30, 1995, shall remain available
for expenditure by the board until June 30, 1997.
Subd. 2. An amount sufficient to pay the additional aid
under section 13, paragraph (c), in calendar year 1995 is
appropriated from the local government trust fund to the
commissioner of revenue.
Sec. 26. [EFFECTIVE DATES.]
Section 13 is effective for aids payable in 1995 and
thereafter.
Sections 14 to 16, and 18 are effective for aids payable in
1996.
Section 17 is effective the day after final enactment.
Sections 22 and 25 are effective July 1, 1995.
ARTICLE 9
MISCELLANEOUS
Section 1. Minnesota Statutes 1994, section 14.61, is
amended to read:
14.61 [AGENCY DECISION IN CONTESTED CASE.]
In all contested cases the decision of the officials of the
agency who are to render the final decision shall not be made
until the report of the administrative law judge as required by
sections 14.48 to 14.56, has been made available to parties to
the proceeding for at least ten days and an opportunity has been
afforded to each party adversely affected to file exceptions and
present argument to a majority of the officials who are to
render the decision. This section does not apply to a contested
case under which the report or order of the administrative law
judge constitutes the final decision in the case.
Sec. 2. Minnesota Statutes 1994, section 14.62, is amended
by adding a subdivision to read:
Subd. 4. [APPLICABILITY.] This section does not apply to a
contested case under which the report or order of the
administrative law judge constitutes the final decision in the
case.
Sec. 3. Minnesota Statutes 1994, section 60A.15,
subdivision 1, is amended to read:
Subdivision 1. [DOMESTIC AND FOREIGN COMPANIES.] (a) On or
before April 1, June 1, and December 1 of each year, every
domestic and foreign company, including town and farmers' mutual
insurance companies, domestic mutual insurance companies, marine
insurance companies, health maintenance organizations,
integrated service networks, community integrated service
networks, and nonprofit health service plan corporations, shall
pay to the commissioner of revenue installments equal to
one-third of the insurer's total estimated tax for the current
year. Except as provided in paragraphs (b) (d) and (e),
installments must be based on a sum equal to two percent of the
premiums described in paragraph (c) (b).
(b) For town and farmers' mutual insurance companies and
mutual property and casualty insurance companies other than
those (i) writing life insurance, or (ii) whose total assets on
December 31, 1989, exceeded $1,600,000,000, the installments
must be based on an amount equal to the following percentages of
the premiums described in paragraph (c):
(1) for premiums paid after December 31, 1988, and before
January 1, 1992, one percent; and
(2) for premiums paid after December 31, 1991, one-half of
one percent.
(c) Installments under paragraph (a), (b) (d), or (e) are
percentages of gross premiums less return premiums on all direct
business received by the insurer in this state, or by its agents
for it, in cash or otherwise, during such year.
(d) (c) Failure of a company to make payments of at least
one-third of either (1) the total tax paid during the previous
calendar year or (2) 80 percent of the actual tax for the
current calendar year shall subject the company to the penalty
and interest provided in this section, unless the total tax for
the current tax year is $500 or less.
(e) (d) For health maintenance organizations, nonprofit
health services plan corporations, integrated service networks,
and community integrated service networks, the installments must
be based on an amount equal to one percent of premiums described
in paragraph (c) (b) that are paid after December 31, 1995.
(e) For purposes of computing installments for town and
farmers' mutual insurance companies and for mutual property
casualty companies with total assets on December 31, 1989, of
$1,600,000,000 or less, the following rates apply:
(1) for all life insurance, two percent;
(2) for town and farmers' mutual insurance companies and
for mutual property and casualty companies with total assets of
$5,000,000 or less, on all other coverages, one percent; and
(3) for mutual property and casualty companies with total
assets on December 31, 1989, of $1,600,000,000 or less, on all
other coverages, 1.26 percent.
(f) Premiums under medical assistance, the MinnesotaCare
program, and the Minnesota comprehensive health insurance plan
are not subject to tax under this section.
Sec. 4. Minnesota Statutes 1994, section 69.021,
subdivision 2, is amended to read:
Subd. 2. [REPORT OF PREMIUMS.] Each insurer, including
township and farmers mutual insurers where applicable, shall
return to the commissioner with its annual financial statement
the reports described in subdivision 1 certified by its
secretary and president or chief financial officer. The
Minnesota Firetown Premium Report shall contain a true and
accurate statement of the total premium for all gross direct
fire, lightning, sprinkler leakage, and extended coverage
insurance of all domestic mutual insurers and the total premiums
for all gross direct fire, lightning, sprinkler leakage and
extended coverage insurance of all other insurers, less return
premiums and dividends received by them on that business written
or done during the preceding calendar year upon property located
within the state or brought into the state for temporary use.
The fire and extended coverage portion of multiperil and
multiple peril package premiums and all other combination
premiums shall be determined by applying percentages determined
by the commissioner or by rating bureaus recognized by the
commissioner. The Minnesota Aid to Police Premium Report shall
contain a true and accurate statement of the total premiums,
less return premiums and dividends, on all direct business
received by such insurer in this state, or by its agents for it,
in cash or otherwise, during the preceding calendar year, with
reference to insurance written for perils described in section
69.011, subdivision 1, clause (f), except that domestic mutual
insurance companies must not file a report.
Sec. 5. Minnesota Statutes 1994, section 69.021,
subdivision 5, is amended to read:
Subd. 5. [CALCULATION OF STATE AID.] (a) The amount of
fire state aid available for apportionment shall be two equal to
107 percent of the amount of premium taxes paid to the state
upon the fire, lightning, sprinkler leakage, and extended
coverage premiums reported to the commissioner by insurers on
the Minnesota Firetown Premium Report. This amount shall be
reduced by the amount required to pay the state auditor's costs
and expenses of the audits or exams of the firefighters relief
associations.
(b) The total amount for apportionment in respect to peace
officer state aid is equal to 104 percent of the amount of
premium taxes paid to the state upon the premiums reported to
the commissioner by insurers on the Minnesota Aid to Police
Premium Report, plus the payment amounts received under section
60A.152 since the last aid apportionment, and reduced by the
amount required to pay the state auditor's costs and expenses of
the audits or exams of the police relief associations. The
total amount for apportionment in respect to firefighters state
aid shall not be greater or lesser less than the amount of
premium taxes paid to the state upon two percent of the premiums
reported to the commissioner by insurers on the Minnesota
Firetown Premium Report after subtracting (1) the amount
required to pay the state auditor's costs and expenses of the
audits or exams of the firefighters relief associations, and (2)
one percent of the premiums reported by town and farmers' mutual
insurance companies and mutual property and casualty companies
with total assets of $5,000,000 or less. The total amount for
apportionment in respect to the police state aid program shall
not be less than two percent of the amount of premiums reported
to the commissioner by insurers on the Minnesota Aid to Police
Premium Report after subtracting the amount required to pay the
state auditor's cost and expenses of the audits or exams of the
police relief associations. The commissioner shall calculate
the percentage of increase or decrease reflected in the
apportionment over or under the previous year's available state
aid using the same premiums as a basis for comparison.
Sec. 6. Minnesota Statutes 1994, section 270A.07,
subdivision 2, is amended to read:
Subd. 2. [SETOFF PROCEDURES.] (a) The commissioner, upon
receipt of notification, shall initiate procedures to detect any
refunds otherwise payable to the debtor. When the commissioner
determines that a refund is due to a debtor whose debt was
submitted by a claimant agency, the commissioner shall first
deduct the fee in subdivision 1 and then remit the refund or the
amount claimed, whichever is less, to the agency. In
transferring or remitting moneys to the claimant agency, the
commissioner shall provide information indicating the amount
applied against each debtor's obligation and the debtor's
address listed on the tax return.
(b) The commissioner shall remit to the debtor the amount
of any refund due in excess of the debt submitted for setoff by
the claimant agency. Notice of the amount setoff and address of
the claimant agency shall accompany any disbursement to the
debtor of the balance of a refund. The notice shall also advise
the debtor of the right to contest the validity of the claim,
other than a claim based upon child support under section
518.171, 518.54, 518.551, or chapter 518C at a hearing, subject
to the restrictions in this paragraph. The debtor must assert
this right by written request to the claimant agency, which
request the claimant agency must receive within 45 days of the
date of the notice. This right does not apply to (1) issues
relating to the validity of the claim that have been previously
raised at a hearing under this section or section 270A.09; (2)
issues relating to the validity of the claim that were not
timely raised by the debtor under section 270A.08, subdivision
2; or (3) issues relating to the validity of the claim for which
a hearing is discretionary under section 270A.09.
Sec. 7. Minnesota Statutes 1994, section 270A.09, is
amended by adding a subdivision to read:
Subd. 3. [CONTESTED CASE; FINAL DECISION.] The report of
the administrative law judge shall contain a decision and order,
which constitute the final decision in the contested case. A
copy of the decision and order shall be served by first class
mail upon each party, the commissioner of revenue, and the
attorney general. Fees and expenses may be awarded as provided
in sections 15.471 to 15.475. The provisions for judicial
review under sections 14.63 to 14.68 apply to decisions of the
administrative law judge under this subdivision.
Sec. 8. Minnesota Statutes 1994, section 270A.11, is
amended to read:
270A.11 [DATA PRIVACY.]
Private and confidential data on individuals may be
exchanged among the department, the taxpayer's rights advocate,
the attorney general, the claimant agency, and the debtor as
necessary to accomplish and effectuate the intent of sections
270A.01 to 270A.12, as provided by section 13.05, subdivision 4,
clause (b). The department may disclose to the claimant agency
only the debtor's name, address, social security number and the
amount of the refund, and in the case of a joint return, the
name of the debtor's spouse. Any person employed by, or
formerly employed by, a claimant agency who discloses any such
information for any other purpose, shall be subject to the civil
and criminal penalties of section 270B.18.
Sec. 9. Minnesota Statutes 1994, section 349.12,
subdivision 25, is amended to read:
Subd. 25. [LAWFUL PURPOSE.] (a) "Lawful purpose" means one
or more of the following:
(1) any expenditure by or contribution to a 501(c)(3)
organization, provided that the organization and expenditure or
contribution are in conformity with standards prescribed by the
board under section 349.154;
(2) a contribution to an individual or family suffering
from poverty, homelessness, or physical or mental disability,
which is used to relieve the effects of that poverty,
homelessness, or disability;
(3) a contribution to an individual for treatment for
delayed posttraumatic stress syndrome or a contribution to a
recognized program for the treatment of compulsive gambling on
behalf of an individual who is a compulsive gambler;
(4) a contribution to or expenditure on a public or private
nonprofit educational institution registered with or accredited
by this state or any other state;
(5) a contribution to a scholarship fund for defraying the
cost of education to individuals where the funds are awarded
through an open and fair selection process;
(6) activities by an organization or a government entity
which recognize humanitarian or military service to the United
States, the state of Minnesota, or a community, subject to rules
of the board, provided that the rules must not include mileage
reimbursements in the computation of the per occasion
reimbursement limit and must impose no aggregate annual limit on
the amount of reasonable and necessary expenditures made to
support:
(i) members of a military marching or colorguard unit for
activities conducted within the state; or
(ii) members of an organization solely for services
performed by the members at funeral services;
(7) recreational, community, and athletic facilities and
activities intended primarily for persons under age 21, provided
that such facilities and activities do not discriminate on the
basis of gender and the organization complies with section
349.154;
(8) payment of local taxes authorized under this chapter,
taxes imposed by the United States on receipts from lawful
gambling, the taxes imposed by section 297E.02, subdivisions 1,
4, 5, and 6, and the tax imposed on unrelated business income by
section 290.05, subdivision 3;
(9) payment of real estate taxes and assessments on
permitted gambling premises wholly owned by the licensed
organization paying the taxes, not to exceed:
(i) the amount which an organization may expend under board
rule on rent for premises used for bingo, the amount which an
organization may expend under board rules on rent for bingo; or
and
(ii) $15,000 $35,000 per year for premises used for other
forms of lawful gambling;:
(10) a contribution to the United States, this state or any
of its political subdivisions, or any agency or instrumentality
thereof other than a direct contribution to a law enforcement or
prosecutorial agency;
(11) a contribution to or expenditure by a nonprofit
organization which is a church or body of communicants gathered
in common membership for mutual support and edification in
piety, worship, or religious observances;
(12) payment of one-half of the reasonable costs of an
audit required in section 297E.06, subdivision 4;
(13) a contribution to or expenditure on a wildlife
management project that benefits the public at-large, provided
that the state agency with authority over that wildlife
management project approves the project before the contribution
or expenditure is made; or
(14) expenditures, approved by the commissioner of natural
resources, by an organization for grooming and maintaining
snowmobile trails that are (1) grant-in-aid trails established
under section 116J.406, or (2) other trails open to public use,
including purchase or lease of equipment for this purpose.
(b) Notwithstanding paragraph (a), "lawful purpose" does
not include:
(1) any expenditure made or incurred for the purpose of
influencing the nomination or election of a candidate for public
office or for the purpose of promoting or defeating a ballot
question;
(2) any activity intended to influence an election or a
governmental decision-making process;
(3) the erection, acquisition, improvement, expansion,
repair, or maintenance of real property or capital assets owned
or leased by an organization, unless the board has first
specifically authorized the expenditures after finding that (i)
the real property or capital assets will be used exclusively for
one or more of the purposes in paragraph (a); (ii) with respect
to expenditures for repair or maintenance only, that the
property is or will be used extensively as a meeting place or
event location by other nonprofit organizations or community or
service groups and that no rental fee is charged for the use;
(iii) with respect to expenditures, including a mortgage payment
or other debt service payment, for erection or acquisition only,
that the erection or acquisition is necessary to replace with a
comparable building, a building owned by the organization and
destroyed or made uninhabitable by fire or natural disaster,
provided that the expenditure may be only for that part of the
replacement cost not reimbursed by insurance; or (iv) with
respect to expenditures, including a mortgage payment or other
debt service payment, for erection or acquisition only, that the
erection or acquisition is necessary to replace with a
comparable building a building owned by the organization that
was acquired from the organization by eminent domain or sold by
the organization to a purchaser that the organization reasonably
believed would otherwise have acquired the building by eminent
domain, provided that the expenditure may be only for that part
of the replacement cost that exceeds the compensation received
by the organization for the building being replaced;
(4) an expenditure by an organization which is a
contribution to a parent organization, foundation, or affiliate
of the contributing organization, if the parent organization,
foundation, or affiliate has provided to the contributing
organization within one year of the contribution any money,
grants, property, or other thing of value;
(5) a contribution by a licensed organization to another
licensed organization unless the board has specifically
authorized the contribution. The board must authorize such a
contribution when requested to do so by the contributing
organization unless it makes an affirmative finding that the
contribution will not be used by the recipient organization for
one or more of the purposes in paragraph (a); or
(6) a contribution to a statutory or home rule charter
city, county, or town by a licensed organization with the
knowledge that the governmental unit intends to use the
contribution for a pension or retirement fund.
Sec. 10. [410.325] [TAX ANTICIPATION CERTIFICATES.]
Notwithstanding a contrary provision of other law or
charter, a home rule charter city may issue tax anticipation
certificates in the manner and subject to the limitations
applicable to statutory cities under section 412.261. The
certificates may also be issued in anticipation of federal and
state aids, but the total amount of certificates issued against
any fund for any year with interest on them must not exceed any
limits in the charter relating to the total of the anticipated
tax levy and the anticipated state aids for any fund not yet
collected or received.
Sec. 11. [PIPESTONE COUNTY; AUTHORIZATION.]
The county of Pipestone may issue its general obligation
bonds in a principal amount of not to exceed $598,000 to defray
the expense of repair and renovation of the county courthouse
and courthouse annex. The bonds shall be issued in accordance
with Minnesota Statutes, chapter 475. No further election
proceedings are required. Minnesota Statutes, section 275.61,
shall apply to taxes levied to pay the bonds as if the bonds
were required to be approved and were approved by the voters.
Sec. 12. [MORRISON COUNTY; FAIRGROUND IMPROVEMENT BONDS;
REFERENDUM.]
Morrison county may issue its general obligation bonds in a
principal amount of not to exceed $1,200,000 for county
fairground improvements, under Minnesota Statutes, sections
373.40 to 373.42 and chapter 475. However, the bonds may be
issued only after an election has been held on the question
under Minnesota Statutes, section 475.58, and the voters have
approved the bond issue.
Sec. 13. [STUDY OF REVENUE RECAPTURE.]
The commissioner of revenue, in consultation with the
attorney general, shall study the compliance of claimant
agencies with the requirements of the revenue recapture act.
The study shall consider the number and nature of complaints by
taxpayers with regard to claims of specific claimant agencies,
and evaluate the general issues raised in those complaints. On
or before January 15, 1996, the commissioner shall report the
results of the study to the chairs of the house of
representatives committee on taxes and the senate committee on
taxes and tax laws. The report shall include recommendations to
strengthen compliance by claimant agencies with the revenue
recapture act.
Sec. 14. [APPROPRIATION.]
$150,000 is appropriated from the general fund to the
commissioner of revenue to conduct the Minnesota-Wisconsin
individual income tax reciprocity rebenchmark study. $50,000 is
appropriated for the fiscal year ending June 30, 1996, and
$100,000 is appropriated for the fiscal year ending June 30,
1997.
Sec. 15. [EFFECTIVE DATES.]
Sections 3 and 4 are effective retroactively to January 1,
1995. Section 5 is effective January 1, 1996. Section 11 takes
effect the day after the Pipestone county board complies with
Minnesota Statutes, section 645.021, subdivision 3. Section 12
is effective the day after the county board of Morrison county
complies with Minnesota Statutes, section 645.021, subdivision 3.
ARTICLE 10
REVENUE POLICY INITIATIVES
INCOME AND BUSINESS TAXES
Section 1. Minnesota Statutes 1994, section 289A.18,
subdivision 2, is amended to read:
Subd. 2. [WITHHOLDING RETURNS, ENTERTAINER WITHHOLDING
RETURNS, RETURNS FOR WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE
CONTRACTORS, AND WITHHOLDING RETURNS FROM PARTNERSHIPS AND S
CORPORATIONS.] Withholding returns are due on or before the last
day of the month following the close of the quarterly period.
However, if the return shows timely deposits in full payment of
the taxes due for that period, the return returns for the first,
second, and third quarters may be filed on or before the tenth
day of the second calendar month following the period and the
return for the fourth quarter may be filed on or before the 28th
day of the second calendar month following the period. An
employer, in preparing a quarterly return, may take credit for
monthly deposits previously made for that quarter. Entertainer
withholding tax returns are due within 30 days after each
performance. Returns for withholding from payments to
out-of-state contractors are due within 30 days after the
payment to the contractor. Returns for withholding by
partnerships are due on or before the due date specified for
filing partnership returns. Returns for withholding by S
corporations are due on or before the due date specified for
filing corporate franchise tax returns.
Sec. 2. Minnesota Statutes 1994, section 289A.20,
subdivision 2, is amended to read:
Subd. 2. [WITHHOLDING FROM WAGES, ENTERTAINER WITHHOLDING,
WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, AND
WITHHOLDING BY PARTNERSHIPS AND SMALL BUSINESS CORPORATIONS.]
(a) A tax required to be deducted and withheld during the
quarterly period must be paid on or before the last day of the
month following the close of the quarterly period, unless an
earlier time for payment is provided. A tax required to be
deducted and withheld from compensation of an entertainer and
from a payment to an out-of-state contractor must be paid on or
before the date the return for such tax must be filed under
section 289A.18, subdivision 2. Taxes required to be deducted
and withheld by partnerships and S corporations must be paid on
or before the date the return must be filed under section
289A.18, subdivision 2.
(b) An employer who, during the previous quarter, withheld
more than $500 $1,500 of tax under section 290.92, subdivision
2a or 3, or 290.923, subdivision 2, must deposit tax withheld
under those sections with the commissioner within the time
allowed to deposit the employer's federal withheld employment
taxes under Treasury Regulation, section 31.6302-1, without
regard to the safe harbor or de minimus rules in subparagraph
(f) or the one-day rule in subsection (c), clause (3).
Taxpayers must submit a copy of their federal notice of deposit
status to the commissioner upon request by the commissioner.
(c) The commissioner may prescribe by rule other return
periods or deposit requirements. In prescribing the reporting
period, the commissioner may classify payors according to the
amount of their tax liability and may adopt an appropriate
reporting period for the class that the commissioner judges to
be consistent with efficient tax collection. In no event will
the duration of the reporting period be more than one year.
(d) If less than the correct amount of tax is paid to the
commissioner, proper adjustments with respect to both the tax
and the amount to be deducted must be made, without interest, in
the manner and at the times the commissioner prescribes. If the
underpayment cannot be adjusted, the amount of the underpayment
will be assessed and collected in the manner and at the times
the commissioner prescribes.
(e) If the aggregate amount of the tax withheld during a
fiscal year ending June 30 under section 290.92, subdivision 2a
or 3, is equal to or exceeds $120,000 $50,000, the employer must
remit each required deposit in the subsequent calendar year by
means of a funds transfer as defined in section 336.4A-104,
paragraph (a). The funds transfer payment date, as defined in
section 336.4A-401, must be on or before the date the deposit is
due. If the date the deposit is due is not a funds transfer
business day, as defined in section 336.4A-105, paragraph (a),
clause (4), the payment date must be on or before the funds
transfer business day next following the date the deposit is due.
(f) Providers of payroll services who remit withholding
deposits on behalf of 50 or more employers, or on behalf of any
employer with aggregate amounts over the threshold in paragraph
(e), must remit all deposits by means of a funds transfer as
provided in paragraph (e), regardless of the aggregate amount of
tax withheld during a fiscal year for all of the employers.
Sec. 3. Minnesota Statutes 1994, section 289A.38,
subdivision 7, is amended to read:
Subd. 7. [FEDERAL TAX CHANGES.] If the amount of income,
items of tax preference, deductions, or credits for any year of
a taxpayer as reported to the Internal Revenue Service is
changed or corrected by the commissioner of Internal Revenue or
other officer of the United States or other competent authority,
or where a renegotiation of a contract or subcontract with the
United States results in a change in income, items of tax
preference, deductions, or credits, or, in the case of estate
tax, where there are adjustments to the taxable estate resulting
in a change to the credit for state death taxes, the taxpayer
shall report the change or correction or renegotiation results
in writing to the commissioner, in the form required by the
commissioner. The report must be submitted within 90 180 days
after the final determination and must concede the accuracy of
the determination or state how it is wrong be in the form of
either an amended Minnesota return conceding the accuracy of the
federal determination or a letter detailing how the federal
determination is incorrect or does not change the Minnesota
tax. A taxpayer filing an amended federal tax return must also
file a copy of the amended return with the commissioner of
revenue within 90 180 days after filing the amended return.
Sec. 4. Minnesota Statutes 1994, section 289A.55,
subdivision 7, is amended to read:
Subd. 7. [INSTALLMENT PAYMENTS; ESTATE TAX.] Interest must
be paid on unpaid installment payments of the tax authorized
under section 289A.30, subdivision 2, beginning on the date the
tax was due without regard to extensions allowed or extensions
elected, at the rate of interest in effect under given in
section 270.75, nine months following the date of death.
Sec. 5. Minnesota Statutes 1994, section 289A.60, is
amended by adding a subdivision to read:
Subd. 24. [PENALTY FOR FAILURE TO NOTIFY OF FEDERAL
CHANGE.] If a person fails to report to the commissioner a
change or correction of the person's federal return in the
manner and time prescribed in section 289A.38, subdivision 7,
there must be added to the tax an amount equal to ten percent of
the amount of any underpayment of Minnesota tax attributable to
the federal change.
Sec. 6. Minnesota Statutes 1994, section 290.01,
subdivision 7b, is amended to read:
Subd. 7b. [RESIDENT TRUST.] Resident trust means a trust,
except a grantor type trust, which is administered in this state
either (1) was created by a will of a decedent who at his or her
death was domiciled in this state or (2) is an irrevocable
trust, the grantor of which was domiciled in this state at the
time the trust became irrevocable. For the purpose of this
subdivision, a trust is considered irrevocable to the extent the
grantor is not treated as the owner thereof under sections 671
to 678 of the Internal Revenue Code. The term "grantor type
trust" means a trust where the income or gains of the trust are
taxable to the grantor or others treated as substantial owners
under sections 671 to 678 of the Internal Revenue Code.
Sec. 7. Minnesota Statutes 1994, section 290.015,
subdivision 1, is amended to read:
Subdivision 1. [GENERAL RULE.] (a) Except as provided in
subdivision 3, a person that conducts a trade or business that
has a place of business in this state, regularly has employees
or independent contractors conducting business activities on its
behalf in this state, or owns or leases real property located in
this state or tangible personal property located in this state
as defined in section 290.191, subdivision 6, paragraph (e), is
subject to the taxes imposed by this chapter.
(b) Except as provided in subdivision 3, a person that
conducts a trade or business not described in paragraph (a) is
subject to the taxes imposed by this chapter if the trade or
business obtains or regularly solicits business from within this
state, without regard to physical presence in this state.
(c) For purposes of paragraph (b), business from within
this state includes, but is not limited to:
(1) sales of products or services of any kind or nature to
customers in this state who receive the product or service in
this state;
(2) sales of services which are performed from outside this
state but the benefits of which services are consumed received
in this state;
(3) transactions with customers in this state that involve
intangible property and result in income flowing to the person
from within this state as provided in section 290.191;
(4) leases of tangible personal property that is located in
this state as defined in section 290.191, subdivision 6,
paragraph (e);
(5) sales and leases of real property located in this
state; and
(6) if a financial institution, deposits received from
customers in this state.
(d) For purposes of paragraph (b), solicitation includes,
but is not limited to:
(1) the distribution, by mail or otherwise, without regard
to the state from which such distribution originated or in which
the materials were prepared, of catalogs, periodicals,
advertising flyers, or other written solicitations of business
to customers in this state;
(2) display of advertisements on billboards or other
outdoor advertising in this state;
(3) advertisements in newspapers published in this state;
(4) advertisements in trade journals or other periodicals,
the circulation of which is primarily within this state;
(5) advertisements in a Minnesota edition of a national or
regional publication or a limited regional edition of which this
state is included of a broader regional or national publication
which are not placed in other geographically defined editions of
the same issue of the same publication;
(6) advertisements in regional or national publications in
an edition which is not by its contents geographically targeted
to Minnesota, but which is sold over the counter in Minnesota or
by subscription to Minnesota residents;
(7) advertisements broadcast on a radio or television
station located in Minnesota; or
(8) any other solicitation by telegraph, telephone,
computer database, cable, optic, microwave, or other
communication system.
Sec. 8. Minnesota Statutes, 1994, section 290.067,
subdivision 1, as amended by Laws 1995, chapter 1, section 4, 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 do not apply.
(b) If a child who is six years of age or less has not
attained the age of six years 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 has not attained the age of
six years 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 who has not attained the age of one year 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. 9. Minnesota Statutes 1994, section 290.191,
subdivision 1, is amended to read:
Subdivision 1. [GENERAL RULE.] (a) Except as otherwise
provided in section 290.17, subdivision 5, the net income from a
trade or business carried on partly within and partly without
this state must be apportioned to this state as provided in this
section.
(b) For purposes of this section, "state" means a state of
the United States, the District of Columbia, the commonwealth of
Puerto Rico, or any territory or possession of the United States
or any foreign country.
Sec. 10. Minnesota Statutes 1994, section 290.191,
subdivision 5, is amended to read:
Subd. 5. [DETERMINATION OF SALES FACTOR.] For purposes of
this section, the following rules apply in determining the sales
factor.
(a) The sales factor includes all sales, gross earnings, or
receipts received in the ordinary course of the business, except
that the following types of income are not included in the sales
factor:
(1) interest;
(2) dividends;
(3) sales of capital assets as defined in section 1221 of
the Internal Revenue Code;
(4) sales of property used in the trade or business, except
sales of leased property of a type which is regularly sold as
well as leased;
(5) sales of debt instruments as defined in section
1275(a)(1) of the Internal Revenue Code or sales of stock; and
(6) royalties, fees, or other like income of a type which
qualify for a subtraction from federal taxable income under
section 290.01, subdivision 19(d)(11).
(b) Sales of tangible personal property are made within
this state if the property is received by a purchaser at a point
within this state, and the taxpayer is taxable in this state,
regardless of the f.o.b. point, other conditions of the sale, or
the ultimate destination of the property.
(c) Tangible personal property delivered to a common or
contract carrier or foreign vessel for delivery to a purchaser
in another state or nation is a sale in that state or nation,
regardless of f.o.b. point or other conditions of the sale.
(d) Notwithstanding paragraphs (b) and (c), when
intoxicating liquor, wine, fermented malt beverages, cigarettes,
or tobacco products are sold to a purchaser who is licensed by a
state or political subdivision to resell this property only
within the state of ultimate destination, the sale is made in
that state.
(e) Sales made by or through a corporation that is
qualified as a domestic international sales corporation under
section 992 of the Internal Revenue Code are not considered to
have been made within this state.
(f) Sales, rents, royalties, and other income in connection
with real property is attributed to the state in which the
property is located.
(g) Receipts from the lease or rental of tangible personal
property, including finance leases and true leases, must be
attributed to this state if the property is located in this
state and to other states if the property is not located in this
state. Moving property including, but not limited to, motor
vehicles, rolling stock, aircraft, vessels, or mobile equipment
is located in this state if:
(1) the operation of the property is entirely within this
state; or
(2) the operation of the property is in two or more states
and the principal base of operations from which the property is
sent out is in this state.
(h) Royalties and other income not described in paragraph
(a), clause (6), received for the use of or for the privilege of
using intangible property, including patents, know-how,
formulas, designs, processes, patterns, copyrights, trade names,
service names, franchises, licenses, contracts, customer lists,
or similar items, must be attributed to the state in which the
property is used by the purchaser. If the property is used in
more than one state, the royalties or other income must be
apportioned to this state pro rata according to the portion of
use in this state. If the portion of use in this state cannot
be determined, the royalties or other income must be excluded
from both the numerator and the denominator. Intangible
property is used in this state if the purchaser uses the
intangible property or the rights therein in the regular course
of its business operations in this state, regardless of the
location of the purchaser's customers.
(i) Sales of intangible property are made within the state
in which the property is used by the purchaser. If the property
is used in more than one state, the sales must be apportioned to
this state pro rata according to the portion of use in this
state. If the portion of use in this state cannot be
determined, the sale must be excluded from both the numerator
and the denominator of the sales factor. Intangible property is
used in this state if the purchaser used the intangible property
in the regular course of its business operations in this state.
(j) Receipts from the performance of services must be
attributed to the state in which the benefits of where the
services are consumed received. If the benefits are consumed in
more than one state, the receipts from those benefits must be
apportioned to this state pro rata according to the portion of
the benefits consumed in this state. If the extent to which the
benefits of services are consumed in this state is not readily
determinable, the benefits of the For the purposes of this
section, receipts from the performance of services provided to a
corporation, partnership, or trust may only be attributed to a
state where it has a fixed place of doing business. If the
state where the services are received is not readily
determinable or is a state where the corporation, partnership,
or trust receiving the service does not have a fixed place of
doing business, the services shall be deemed to be consumed
received at the location of the office of the customer from
which the services were ordered in the regular course of the
customer's trade or business. If the ordering office cannot be
determined, the benefits of the services shall be deemed to be
consumed received at the office of the customer to which the
services are billed.
Sec. 11. Minnesota Statutes 1994, section 290.191,
subdivision 6, is amended to read:
Subd. 6. [DETERMINATION OF RECEIPTS FACTOR FOR FINANCIAL
INSTITUTIONS.] (a) For purposes of this section, the rules in
this subdivision and subdivisions 7 and subdivision 8 apply in
determining the receipts factor for financial institutions.
(b) "Receipts" for this purpose means gross income,
including net taxable gain on disposition of assets, including
securities and money market instruments, when derived from
transactions and activities in the regular course of the
taxpayer's trade or business.
(c) "Money market instruments" means federal funds sold and
securities purchased under agreements to resell, commercial
paper, banker's acceptances, and purchased certificates of
deposit and similar instruments to the extent that the
instruments are reflected as assets under generally accepted
accounting principles.
(d) "Securities" means United States Treasury securities,
obligations of United States government agencies and
corporations, obligations of state and political subdivisions,
corporate stock, bonds, and other securities, participations in
securities backed by mortgages held by United States or state
government agencies, loan-backed securities and similar
investments to the extent the investments are reflected as
assets under generally accepted accounting principles.
(e) Receipts from the lease or rental of real or tangible
personal property, including both finance leases and true
leases, must be attributed to this state if the property is
located in this state. Tangible personal property that is
characteristically moving property, such as motor vehicles,
rolling stock, aircraft, vessels, mobile equipment, and the
like, is considered to be located in a state if:
(1) the operation of the property is entirely within the
state; or
(2) the operation of the property is in two or more states,
but the principal base of operations from which the property is
sent out is in the state.
(f) Interest income and other receipts from assets in the
nature of loans that are secured primarily by real estate or
tangible personal property must be attributed to this state if
the security property is located in this state under the
principles stated in paragraph (e).
(g) Interest income and other receipts from consumer loans
not secured by real or tangible personal property that are made
to residents of this state, whether at a place of business, by
traveling loan officer, by mail, by telephone or other
electronic means, must be attributed to this state.
(h) Interest income and other receipts from commercial
loans and installment obligations that are unsecured by real or
tangible personal property or secured by intangible property
must be attributed to this state if the proceeds of the loan are
to be applied in this state. If it cannot be determined where
the funds are to be applied, the income and receipts are
attributed to the state in which the office of the borrower from
which the application would be made in the regular course of
business is located. If this cannot be determined, the
transaction is disregarded in the apportionment formula.
(i) Interest income and other receipts from a participating
financial institution's portion of participation and syndication
loans must be attributed under paragraphs (e) to (h). A
participation loan is an arrangement in which a lender makes a
loan to a borrower and then sells, assigns, or otherwise
transfers all or a part of the loan to a purchasing financial
institution. A syndication loan is a loan transaction involving
multiple financial institutions in which all the lenders are
named as parties to the loan documentation, are known to the
borrower, and have privity of contract with the borrower.
(j) Interest income and other receipts including service
charges from financial institution credit card and travel and
entertainment credit card receivables and credit card holders'
fees must be attributed to the state to which the card charges
and fees are regularly billed.
(k) Merchant discount income derived from financial
institution credit card holder transactions with a merchant must
be attributed to the state in which the merchant is located. In
the case of merchants located within and outside the state, only
receipts from merchant discounts attributable to sales made from
locations within the state are attributed to this state. It is
presumed, subject to rebuttal, that the location of a merchant
is the address shown on the invoice submitted by the merchant to
the taxpayer.
(l) Receipts from the performance of fiduciary and other
services must be attributed to the state in which the benefits
of the services are consumed received. If the benefits are
consumed in more than one state, the receipts from those
benefits must be apportioned to this state pro rata according to
the portion of the benefits consumed in this state. For the
purposes of this section, services provided to a corporation,
partnership, or trust must be attributed to a state where it has
a fixed place of doing business. If the extent to which the
benefits of state where the services are consumed in this state
received is not readily determinable or is a state where the
corporation, partnership, or trust does not have a fixed place
of doing business, the benefits of the services shall be deemed
to be consumed received at the location of the office of the
customer from which the services were ordered in the regular
course of the customer's trade or business. If the ordering
office cannot be determined, the benefits of the services shall
be deemed to be consumed received at the office of the customer
to which the services are billed.
(m) Receipts from the issuance of travelers checks and
money orders must be attributed to the state in which the checks
and money orders are purchased.
(n) Receipts from investments of a financial institution in
securities and from money market instruments must be apportioned
to this state based on the ratio that total deposits from this
state, its residents, including any business with an office or
other place of business in this state, its political
subdivisions, agencies, and instrumentalities bear to the total
deposits from all states, their residents, their political
subdivisions, agencies, and instrumentalities. In the case of
an unregulated financial institution subject to this section,
these receipts are apportioned to this state based on the ratio
that its gross business income, excluding such receipts, earned
from sources within this state bears to gross business income,
excluding such receipts, earned from sources within all states.
For purposes of this subdivision, deposits made by this state,
its residents, its political subdivisions, agencies, and
instrumentalities must be attributed to this state, whether or
not the deposits are accepted or maintained by the taxpayer at
locations within this state.
(o) A financial institution's interest in property
described in section 290.015, subdivision 3, paragraph (b), is
included in the receipts factor in the same manner as assets in
the nature of securities or money market instruments are
included in paragraph (n).
Sec. 12. Minnesota Statutes 1994, section 290.92,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] (1) [WAGES.] For purposes
of this section, the term "wages" means the same as that term is
defined in section 3401(a) and (f) of the Internal Revenue Code,
except wages shall not include agricultural labor as defined in
section 3121(g) of the Internal Revenue Code.
(2) [PAYROLL PERIOD.] For purposes of this section the
term "payroll period" means a period for which a payment of
wages is ordinarily made to the employee by the employee's
employer, and the term "miscellaneous payroll period" means a
payroll period other than a daily, weekly, biweekly,
semimonthly, monthly, quarterly, semiannual, or annual payroll
period.
(3) [EMPLOYEE.] For purposes of this section the term
"employee" means any resident individual performing services for
an employer, either within or without, or both within and
without the state of Minnesota, and every nonresident individual
performing services within the state of Minnesota, the
performance of which services constitute, establish, and
determine the relationship between the parties as that of
employer and employee. As used in the preceding sentence, the
term "employee" includes an officer of a corporation, and an
officer, employee, or elected official of the United States, a
state, or any political subdivision thereof, or the District of
Columbia, or any agency or instrumentality of any one or more of
the foregoing.
(4) [EMPLOYER.] For purposes of this section the term
"employer" means any person, including individuals, fiduciaries,
estates, trusts, partnerships, limited liability companies, and
corporations transacting business in or deriving any income from
sources within the state of Minnesota for whom an individual
performs or performed any service, of whatever nature, as the
employee of such person, except that if the person for whom the
individual performs or performed the services does not have
legal control of the payment of the wages for such services, the
term "employer," except for purposes of paragraph (1), means the
person having legal control of the payment of such wages. As
used in the preceding sentence, the term "employer" includes any
corporation, individual, estate, trust, or organization which is
exempt from taxation under section 290.05 and further includes,
but is not limited to, officers of corporations who have legal
control, either individually or jointly with another or others,
of the payment of the wages.
(5) [NUMBER OF WITHHOLDING EXEMPTIONS CLAIMED.] For
purposes of this section, the term "number of withholding
exemptions claimed" means the number of withholding exemptions
claimed in a withholding exemption certificate in effect under
subdivision 5, except that if no such certificate is in effect,
the number of withholding exemptions claimed shall be considered
to be zero.
Sec. 13. Minnesota Statutes 1994, section 290.9201,
subdivision 3, is amended to read:
Subd. 3. [CREDIT AGAINST TAX.] Each calendar year an
entertainment entity may take a nonrefundable credit
of $100 $120 against the tax imposed by this section.
Sec. 14. [OMISSIONS FROM INHERITANCE OR ESTATE TAX
RETURN.]
Effective for decedents dying before August 1, 1990, the
provisions of Minnesota Statutes, section 289A.38, subdivision
6, apply to assets omitted from an inheritance tax return or
estate tax return rather than the provisions of Minnesota
Statutes 1988, section 291.11, subdivision 1, clause (2)(c).
Sec. 15. [EFFECTIVE DATE.]
Section 1 is effective for returns due after December 31,
1995. Section 2 as it relates to quarterly withholding deposits
is effective for withholding done after December 31, 1995, and
the remainder of section 2 is effective for payments due after
December 31, 1995. Sections 3 and 5 are effective for federal
determinations after December 31, 1995. Section 4 is effective
for estates of decedents dying after the date of final
enactment. Section 6 is effective for deaths after December 31,
1995, and trusts that become irrevocable after December 31,
1995. Sections 7 and 9 to 11 are effective for tax years
beginning after December 31, 1995. Section 12 is effective for
wages paid after December 31, 1995. Sections 8 and 13 are
effective for tax years beginning after December 31, 1994.
ARTICLE 11
REVENUE POLICY INITIATIVES
PROPERTY TAX AND PROPERTY TAX REFUNDS
Section 1. Minnesota Statutes 1994, 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.
Notwithstanding any other law to the contrary, the department of
revenue may, upon request from an assessor, verify whether an
individual who is requesting or receiving homestead
classification has filed a Minnesota income tax return as a
resident for the most recent taxable year for which the
information is available.
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, 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, 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 must not 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.
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 qualifying 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. 2. Minnesota Statutes 1994, section 273.124,
subdivision 3, is amended to read:
Subd. 3. [COOPERATIVES AND CHARITABLE CORPORATIONS.] When
one or more dwellings, or one or more buildings which each
contain several dwelling units, are owned by a corporation or
association organized under chapter 308A, and each person who
owns a share or shares in the corporation or association is
entitled to occupy a dwelling, or dwelling unit in the building,
the corporation or association may claim homestead treatment for
each dwelling, or for each unit in case of a building containing
several dwelling units, for the dwelling or for the part of the
value of the building occupied by a shareholder. Each dwelling
or unit must be designated by legal description or number, and
the net tax capacity of each dwelling that qualifies for
assessment under this subdivision must include not more than
one-half acre of land, if platted, nor more than 80 acres if
unplatted. The net tax capacity of the building or buildings
containing several dwelling units is the sum of the net tax
capacities of each of the respective units comprising the
building. To qualify for the treatment provided by this
subdivision, the corporation or association must be wholly owned
by persons having a right to occupy a dwelling or dwelling unit
owned by the corporation or association. A charitable
corporation organized under the laws of Minnesota and not
otherwise exempt thereunder with no outstanding stock qualifies
for homestead treatment with respect to member residents of the
dwelling units who have purchased and hold residential
participation warrants entitling them to occupy the units.
When dwelling units no longer qualify under this
subdivision, the current owner must notify the assessor within
60 days. Failure to notify the assessor within 60 days shall
result in the loss of benefits under this subdivision for taxes
payable in the year that the failure is discovered. For these
purposes, "benefits under this subdivision" means the difference
in the net tax capacity of the units which no longer qualify as
computed under this subdivision and as computed under the
otherwise applicable law, times the local tax rate applicable to
the building for that taxes payable year. Upon discovery of a
failure to notify, the assessor shall inform the auditor of the
difference in net tax capacity for the building or buildings in
which units no longer qualify, and the auditor shall calculate
the benefits under this subdivision. Such amount, plus a
penalty equal to 100 percent of that amount, shall then be
demanded of the building's owner. The property owner may appeal
the county's determination by serving copies of a petition for
review with county officials as provided in section 278.01 and
filing a proof of service as provided in section 278.01 with the
Minnesota tax court within 60 days of the date of the notice
from the county. The appeal shall be governed by the tax court
procedures provided in chapter 271, for cases relating to the
tax laws as defined in section 271.01, subdivision 5;
disregarding sections 273.125, subdivision 5, and 278.03, but
including section 278.05, subdivision 2. If the amount of the
benefits under this subdivision and penalty are not paid within
60 days, and if no appeal has been filed, the county auditor
shall certify the amount of the benefit and penalty to the
succeeding year's tax list to be collected as part of the
property taxes on the affected buildings.
Sec. 3. Minnesota Statutes 1994, section 273.124,
subdivision 6, is amended to read:
Subd. 6. [LEASEHOLD COOPERATIVES.] When one or more
dwellings or one or more buildings which each contain several
dwelling units is owned by a nonprofit corporation subject to
the provisions of chapter 317A and qualifying under section
501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as
amended through December 31, 1990, or a limited partnership
which corporation or partnership operates the property in
conjunction with a cooperative association, and has received
public financing, homestead treatment may be claimed by the
cooperative association on behalf of the members of the
cooperative for each dwelling unit occupied by a member of the
cooperative. The cooperative association must provide the
assessor with the social security numbers of those members. To
qualify for the treatment provided by this subdivision, the
following conditions must be met:
(a) the cooperative association must be organized under
chapter 308A and all voting members of the board of directors
must be resident tenants of the cooperative and must be elected
by the resident tenants of the cooperative;
(b) the cooperative association must have a lease for
occupancy of the property for a term of at least 20 years, which
permits the cooperative association, while not in default on the
lease, to participate materially in the management of the
property, including material participation in establishing
budgets, setting rent levels, and hiring and supervising a
management agent;
(c) to the extent permitted under state or federal law, the
cooperative association must have a right under a written
agreement with the owner to purchase the property if the owner
proposes to sell it; if the cooperative association does not
purchase the property it is offered for sale, the owner may not
subsequently sell the property to another purchaser at a price
lower than the price at which it was offered for sale to the
cooperative association unless the cooperative association
approves the sale;
(d) a minimum of 40 percent of the cooperative
association's members must have incomes at or less than 60
percent of area median gross income as determined by the United
States Secretary of Housing and Urban Development under section
142(d)(2)(B) of the Internal Revenue Code of 1986, as amended
through December 31, 1991. For purposes of this clause, "member
income" means the income of a member existing at the time the
member acquires cooperative membership;
(e) if a limited partnership owns the property, it must
include as the managing general partner a nonprofit organization
operating under the provisions of chapter 317A and qualifying
under section 501(c)(3) or 501(c)(4) of the Internal Revenue
Code of 1986, as amended through December 31, 1990, and the
limited partnership agreement must provide that the managing
general partner have sufficient powers so that it materially
participates in the management and control of the limited
partnership;
(f) prior to becoming a member of a leasehold cooperative
described in this subdivision, a person must have received
notice that (1) describes leasehold cooperative property in
plain language, including but not limited to the effects of
classification under this subdivision on rents, property taxes
and tax credits or refunds, and operating expenses, and (2)
states that copies of the articles of incorporation and bylaws
of the cooperative association, the lease between the owner and
the cooperative association, a sample sublease between the
cooperative association and a tenant, and, if the owner is a
partnership, a copy of the limited partnership agreement, can be
obtained upon written request at no charge from the owner, and
the owner must send or deliver the materials within seven days
after receiving any request;
(g) if a dwelling unit of a building was occupied on the
60th day prior to the date on which the unit became leasehold
cooperative property described in this subdivision, the notice
described in paragraph (f) must have been sent by first class
mail to the occupant of the unit at least 60 days prior to the
date on which the unit became leasehold cooperative property.
For purposes of the notice under this paragraph, the copies of
the documents referred to in paragraph (f) may be in proposed
version, provided that any subsequent material alteration of
those documents made after the occupant has requested a copy
shall be disclosed to any occupant who has requested a copy of
the document. Copies of the articles of incorporation and
certificate of limited partnership shall be filed with the
secretary of state after the expiration of the 60-day period
unless the change to leasehold cooperative status does not
proceed;
(h) the county attorney of the county in which the property
is located must certify to the assessor that the property meets
the requirements of this subdivision;
(i) the public financing received must be from at least one
of the following sources:
(1) tax increment financing proceeds used for the
acquisition or rehabilitation of the building or interest rate
write-downs relating to the acquisition of the building;
(2) government issued bonds exempt from taxes under section
103 of the Internal Revenue Code of 1986, as amended through
December 31, 1991, the proceeds of which are used for the
acquisition or rehabilitation of the building;
(3) programs under section 221(d)(3), 202, or 236, of Title
II of the National Housing Act;
(4) rental housing program funds under Section 8 of the
United States Housing Act of 1937 or the market rate family
graduated payment mortgage program funds administered by the
Minnesota housing finance agency that are used for the
acquisition or rehabilitation of the building;
(5) low-income housing credit under section 42 of the
Internal Revenue Code of 1986, as amended through December 31,
1991;
(6) public financing provided by a local government used
for the acquisition or rehabilitation of the building, including
grants or loans from (i) federal community development block
grants; (ii) HOME block grants; or (iii) residential rental
bonds issued under chapter 474A; or
(7) other rental housing program funds provided by the
Minnesota housing finance agency for the acquisition or
rehabilitation of the building;
(j) at the time of the initial request for homestead
classification or of any transfer of ownership of the property,
the governing body of the municipality in which the property is
located must hold a public hearing and make the following
findings:
(1) that the granting of the homestead treatment of the
apartment's units will facilitate safe, clean, affordable
housing for the cooperative members that would otherwise not be
available absent the homestead designation;
(2) that the owner has presented information satisfactory
to the governing body showing that the savings garnered from the
homestead designation of the units will be used to reduce
tenant's rents or provide a level of furnishing or maintenance
not possible absent the designation; and
(3) that the requirements of paragraphs (b), (d), and (i)
have been met.
Homestead treatment must be afforded to units occupied by
members of the cooperative association and the units must be
assessed as provided in subdivision 3, provided that any unit
not so occupied shall be classified and assessed pursuant to the
appropriate class. No more than three acres of land may, for
assessment purposes, be included with each dwelling unit that
qualifies for homestead treatment under this subdivision.
When dwelling units no longer qualify under this
subdivision, the current owner must notify the assessor within
60 days. Failure to notify the assessor within 60 days shall
result in the loss of benefits under this subdivision for taxes
payable in the year that the failure is discovered. For these
purposes, "benefits under this subdivision" means the difference
in the net tax capacity of the units which no longer qualify as
computed under this subdivision and as computed under the
otherwise applicable law, times the local tax rate applicable to
the building for that taxes payable year. Upon discovery of a
failure to notify, the assessor shall inform the auditor of the
difference in net tax capacity for the building or buildings in
which units no longer qualify, and the auditor shall calculate
the benefits under this subdivision. Such amount, plus a
penalty equal to 100 percent of that amount, shall then be
demanded of the building's owner. The property owner may appeal
the county's determination by serving copies of a petition for
review with county officials as provided in section 278.01 and
filing a proof of service as provided in section 278.01 with the
Minnesota tax court within 60 days of the date of the notice
from the county. The appeal shall be governed by the tax court
procedures provided in chapter 271, for cases relating to the
tax laws as defined in section 271.01, subdivision 5;
disregarding sections 273.125, subdivision 5, and 278.03, but
including section 278.05, subdivision 2. If the amount of the
benefits under this subdivision and penalty are not paid within
60 days, and if no appeal has been filed, the county auditor
shall certify the amount of the benefit and penalty to the
succeeding year's tax list to be collected as part of the
property taxes on the affected buildings.
Sec. 4. Minnesota Statutes 1994, section 273.124,
subdivision 11, is amended to read:
Subd. 11. [LIMITATION ON HOMESTEAD CLASSIFICATION.] If the
assessor has classified a property as both homestead and
nonhomestead, the greater of the value attributable to the
portion of the property classified as class 1 or class 2a or the
value of the first tier of net class rates provided under
section 273.13, subdivision 22, or 23, paragraph (a), is
entitled to assessment as a homestead under section 273.13,
subdivision 22 or 23. The limitation in this subdivision does
not apply to buildings containing fewer than four residential
units or to a single rented or leased dwelling unit located
within or attached to a private garage or similar structure
owned by the owner of a homestead and located on the premises of
that homestead.
If the assessor has classified a property as both homestead
and nonhomestead, the homestead credit provided in section
273.13, subdivisions 22 and 23, and the reductions in tax
provided under sections 273.135 and 273.1391 apply to the value
of both the homestead and the nonhomestead portions of the
property.
Sec. 5. Minnesota Statutes 1994, section 274.14, is
amended to read:
274.14 [LENGTH OF SESSION; RECORD.]
The county board of equalization or the special board of
equalization appointed by it shall meet during the last two
weeks in June that contain the last ten meeting days, in June.
For this purpose, "meeting days" are defined as any day of the
week excluding Saturday and Sunday. The board may meet on any
ten consecutive meeting days in June, after the second Friday in
June, if the actual meeting dates are contained on the valuation
notices mailed to each property owner in the county under
section 273.121. No action taken by the county board of review
after June 30 is valid, except for corrections permitted in
sections 273.01 and 274.01. The county auditor shall keep an
accurate record of the proceedings and orders of the board. The
record must be published like other proceedings of county
commissioners. A copy of the published record must be sent to
the commissioner of revenue, with the abstract of assessment
required by section 274.16.
Sec. 6. Minnesota Statutes 1994, section 275.07,
subdivision 1, is amended to read:
Subdivision 1. The taxes voted by cities, counties, school
districts, and special districts shall be certified by the
proper authorities to the county auditor on or before five
working days after December 20 in each year. A town must
certify the levy adopted by the town board to the county auditor
by September 15 each year. If the town board modifies the levy
at a special town meeting after September 15, the town board
must recertify its levy to the county auditor on or before five
working days after December 20. The taxes certified shall not
be reduced by the county auditor by the aid received under
sections section 273.1398, subdivisions 2 and 3 subdivision 2,
but shall be reduced by the county auditor by the aid received
under section 273.1398, subdivision 3. If a city, town, county,
school district, or special district fails to certify its levy
by that date, its levy shall be the amount levied by it for the
preceding year.
Sec. 7. Minnesota Statutes 1994, section 275.08,
subdivision 1b, is amended to read:
Subd. 1b. The amounts certified under section 275.07 after
adjustment under section 275.07, subdivision 3, by an individual
local government unit, except for any amounts certified under
sections 124A.03, subdivision 2a, and 275.61, shall be divided
by the total net tax capacity of all taxable properties within
the local government unit's taxing jurisdiction. The resulting
ratio, the local government's local tax rate, multiplied by each
property's net tax capacity shall be each property's tax for
that local government unit before reduction by any credits.
Any amount certified to the county auditor under section
124A.03, subdivision 2a, or 275.61, after the dates given in
those sections, shall be divided by the total estimated market
value of all taxable properties within the taxing district. The
resulting ratio, the taxing district's new referendum tax rate,
multiplied by each property's estimated market value shall be
each property's new referendum tax before reduction by any
credits.
Sec. 8. Minnesota Statutes 1994, section 289A.60,
subdivision 12, is amended to read:
Subd. 12. [PENALTIES RELATING TO PROPERTY TAX REFUNDS.]
(a) If the commissioner determines that a property tax refund
claim is or was excessive and was filed with fraudulent intent,
the claim must be disallowed in full. If the claim has been
paid, the amount disallowed may be recovered by assessment and
collection.
(b) If it is determined that a property tax refund claim is
excessive and was negligently prepared, ten percent of the
corrected claim must be disallowed. If the claim has been paid,
the amount disallowed must be recovered by assessment and
collection.
(c) An owner or managing agent who knowingly without
reasonable cause fails to give a certificate of rent
constituting property tax to a renter, as required by section
290A.19, paragraph (a), is liable to the commissioner for a
penalty of $100 for each failure.
(d) If the owner or managing agent knowingly gives rent
certificates that report total rent constituting property taxes
in excess of the amount of actual rent constituting property
taxes paid on the rented part of a property, the owner or
managing agent is liable for a penalty equal to the greater of
(1) $100 or (2) 50 percent of the excess that is reported. An
overstatement of rent constituting property taxes is presumed to
be knowingly made if it exceeds by ten percent or more the
actual rent constituting property taxes.
(e) No claim is allowed if the initial claim is filed more
than one year after the original due date for filing the claim.
Sec. 9. [EFFECTIVE DATE.]
Section 5 is effective for taxes payable in 1997 and
thereafter. Sections 2 to 4 are effective January 1, 1996, and
thereafter. Section 8 is effective for certificates of rent
paid required after the date of final enactment.
ARTICLE 12
REVENUE POLICY INITIATIVES
SALES AND SPECIAL TAXES
Section 1. Minnesota Statutes 1994, section 297.08,
subdivision 1, is amended to read:
Subdivision 1. [CONTRABAND DEFINED.] The following are
declared to be contraband:
(1) All packages which do not have stamps affixed to them
as provided in sections 297.01 to 297.13, including but not
limited to (i) packages with illegible stamps and packages with
stamps that are not complete or whole even if the stamps are
legible, and (ii) all devices for the vending of cigarettes in
which such unstamped packages as defined in item (i) are found,
including all contents contained within the devices.
(2) Any device for the vending of cigarettes and all
packages of cigarettes contained therein, where the device does
not afford at least partial visibility of contents. Where any
package exposed to view does not carry the stamp required by
sections 297.01 to 297.13, it shall be presumed that all
packages contained in the device are unstamped and contraband.
(3) Any device for the vending of cigarettes to which the
commissioner or authorized agents have been denied access for
the inspection of contents. In lieu of seizure, the
commissioner or an agent may seal the device to prevent its use
until inspection of contents is permitted.
(4) Any device for the vending of cigarettes which does not
carry the name and address of the owner, plainly marked and
visible from the front of the machine.
(5) Any device including, but not limited to, motor
vehicles, trailers, snowmobiles, airplanes, and boats used with
the knowledge of the owner or of a person operating with the
consent of the owner for the storage or transportation of more
than 5,000 cigarettes which are contraband under this
subdivision. When cigarettes are being transported in the
course of interstate commerce, or are in movement from either a
public warehouse to a distributor upon orders from a
manufacturer or distributor, or from one distributor to another,
the cigarettes are not contraband, notwithstanding the
provisions of clause (1).
(6) All packages obtained in violation of section 297.11,
subdivision 6.
(7) All packages offered for sale or held as inventory in
violation of section 297.11, subdivision 7.
Sec. 2. Minnesota Statutes 1994, section 297.08,
subdivision 3, is amended to read:
Subd. 3. [INVENTORY; JUDICIAL DETERMINATION; APPEAL;
DISPOSITION OF SEIZED PROPERTY.] Within two days after the
seizure of any alleged contraband, the person making the seizure
shall deliver an inventory of the property seized to the person
from whom the seizure was made, if known, and file a copy with
the commissioner. Within ten days after the date of service of
the inventory, the person from whom the property was seized or
any person claiming an ownership or security interest in the
property may file with the commissioner a demand for a judicial
determination of the question as to whether the property was
lawfully subject to seizure and forfeiture. The commissioner,
within 30 days, shall institute an action in the district court
of the county where the seizure was made to determine the issue
of forfeiture. The only issue to be decided by the court is
whether the alleged contraband is contraband, as defined in
subdivision 1. The action shall be brought in the name of the
state and shall be prosecuted by the county attorney or by the
attorney general. The court shall hear the action without a
jury and shall try and determine the issues of fact and law
involved. Whenever a judgment of forfeiture is entered, the
commissioner may, unless the judgment is stayed pending an
appeal, either (1) deliver the forfeited property to the
commissioner of human services for use by patients in state
institutions; (2) cause it to be destroyed; or (3) cause it to
be sold at public auction as provided by law. If a demand for
judicial determination is made and no action is commenced as
provided in this subdivision, the property shall be released by
the commissioner and redelivered to the person entitled to it.
If no demand is made, the property seized shall be deemed
forfeited to the state by operation of law and may be disposed
of by the commissioner as provided where there has been a
judgment of forfeiture. Whenever the commissioner is satisfied
that any person from whom property is seized under sections
297.01 to 297.13 was acting in good faith and without intent to
evade the tax imposed by sections 297.01 to 297.13, the
commissioner shall release the property seized, without further
legal proceedings.
Sec. 3. Minnesota Statutes 1994, section 297C.02,
subdivision 2, is amended to read:
Subd. 2. [FERMENTED MALT BEVERAGES.] There is imposed
on the direct or indirect sale of fermented malt beverages all
fermented malt beverages that are imported, directly or
indirectly sold, or possessed in this state the following excise
tax:
(1) on fermented malt beverages containing not more than
3.2 percent alcohol by weight, $2.40 per barrel of 31 gallons;
(2) on fermented malt beverages containing more than 3.2
percent alcohol by weight, $4.60 per barrel of 31 gallons.
The tax is at a proportional rate for fractions of a barrel
of 31 gallons.
Sec. 4. Minnesota Statutes 1994, section 297C.07, is
amended to read:
297C.07 [EXCEPTIONS.]
The following are not subject to the excise tax:
(1) Sales by a manufacturer, brewer, or wholesaler for
shipment outside the state in interstate commerce.
(2) Sales of wine for sacramental purposes under section
340A.316.
(3) Fruit juices naturally fermented or beer naturally
brewed in the home for family use.
(4) Malt beverages served by a brewery for on-premise
consumption at no charge, or distributed to brewery employees
for on-premise consumption under a labor contract.
(5) Alcoholic beverages sold to authorized manufacturers of
food products or pharmaceutical firms. The alcoholic beverage
must be used exclusively in the manufacture of food products or
medicines. For purposes of this part, "manufacturer" means a
manufacturer of food products intended for sale to wholesalers
or retailers for ultimate sale to the consumer.
(6) Sales to common carriers engaged in interstate
transportation of passengers and qualified approved military
clubs, except as provided in section 297C.17.
(7) Alcoholic beverages sold or transferred between
Minnesota wholesalers.
(8) Sales to a federal agency, that the state of Minnesota
is prohibited from taxing under the constitution or laws of the
United States or under the constitution of Minnesota.
(9) Shipments of wine to Minnesota residents under section
340A.417.
(10) One liter of intoxicating liquor or 288 ounces of malt
liquor per calendar month imported or possessed by a person
entering Minnesota from another state, provided the alcoholic
beverages accompany the person into this state and will not be
offered for sale or used for any commercial purpose.
(11) Four liters of intoxicating liquor or ten quarts (320
ounces) of malt liquor per calendar month imported or possessed
by a person entering Minnesota from a foreign country, provided
the alcoholic beverages accompany the person into this state and
will not be offered for sale or used for any commercial purpose.
(12) The alcoholic beverage contained in 12 or fewer
commemorative bottles per calendar month imported into this
state.
Sec. 5. [REPEALER.]
Minnesota Statutes 1994, section 297A.212, is repealed.
Sec. 6. [EFFECTIVE DATE.]
Sections 1 to 5, are effective the day following final
enactment.
ARTICLE 13
REVENUE POLICY INITIATIVES
COLLECTIONS AND COMPLIANCE
Section 1. Minnesota Statutes 1994, section 60A.15,
subdivision 12, is amended to read:
Subd. 12. [OVERPAYMENTS, CLAIMS FOR REFUND.] (1)
[PROCEDURE, TIME LIMIT, APPROPRIATION.] A company who has paid,
voluntarily or otherwise, or from whom there has been collected
an amount of tax for any year in excess of the amount legally
due for that year, may file with the commissioner of revenue a
claim for a refund of the excess. Except as provided in
subdivision 11, no claim or refund shall be allowed or made
after 3-1/2 years from the date prescribed for filing the return
(plus any extension of time granted for filing the return but
only if filed within the extended time) or after two years from
the date of overpayment, whichever period is longer, unless
before the expiration of the period a claim is filed by the
company the period prescribed in section 289A.40, subdivision 1.
For this purpose, a return or amended return claiming an
overpayment constitutes a claim for refund.
Upon the filing of a claim, the commissioner shall examine
it, shall make and file written findings denying or allowing the
claim in whole or in part, and shall mail a notice thereof to
the company at the address stated upon the return. If the claim
is allowed in whole or in part, the commissioner shall issue a
certificate for the refundment of the excess paid by the
company, with interest at the rate specified in section 270.76
computed from the date of the payment of the tax until the date
the refund is paid or the credit is made to the company. The
commissioner of finance shall pay the refund out of the proceeds
of the taxes imposed by this section, as other state moneys are
expended. As much of the proceeds of the taxes as necessary are
appropriated for that purpose.
(2) [DENIAL OF CLAIM, COURT PROCEEDINGS.] If the claim is
denied in whole or in part, the commissioner shall mail an order
of denial to the company in the manner prescribed in subdivision
8. An appeal from this order may be taken to the Minnesota tax
court in the manner prescribed in section 271.06, or the company
may commence an action against the commissioner to recover the
denied overpayment. The action may be brought in the district
court of the district in the county of its principal place of
business, or in the district court for Ramsey county. The
action in the district court must be commenced within 18 months
following the mailing of the order of denial to the company. If
a claim for refund is filed by a company and no order of denial
is issued within six months of the filing, the company may
commence an action in the district court as in the case of a
denial, but the action must be commenced within two years of the
date that the claim for refund was filed.
(3) [CONSENT TO EXTEND TIME.] If the commissioner and the
company have, within the periods prescribed in clause (1),
consented in writing to any extension of time for the assessment
of the tax, the period within which a claim for refund may be
filed, or a refund may be made or allowed, if no claim is filed,
shall be the period within which the commissioner and the
company have consented to an extension for the assessment of the
tax and six months thereafter. The period within which a claim
for refund may be filed shall not expire prior to two years
after the tax was paid.
(4) [OVERPAYMENTS; REFUNDS.] If the amount determined to be
an overpayment exceeds the taxes imposed by this section, the
amount of excess shall be considered an overpayment. An amount
paid as tax constitutes an overpayment even if in fact there was
no tax liability with respect to which the amount was paid.
Notwithstanding any other provision of law to the contrary,
in the case of any overpayment, the commissioner, within the
applicable period of limitations, shall refund any balance of
more than one dollar to the company if the company requests the
refund.
Sec. 2. Minnesota Statutes 1994, section 60A.199,
subdivision 8, is amended to read:
Subd. 8. [REFUND PROCEDURE; TIME LIMIT; APPROPRIATION.] A
licensee which has paid, voluntarily or otherwise, or from which
there was collected an amount of tax for any year in excess of
the amount legally due for that year, may file with the
commissioner of revenue a claim for a refund of the excess.
Except as provided in subdivision 3, no claim or refund shall be
allowed or made after 3-1/2 years from the date prescribed for
filing the return (plus any extension of time granted for filing
the return but only if filed within the extended time) or after
two years from the date of overpayment, whichever period is
longer, unless before the expiration of the period a claim is
filed by the licensee the period prescribed in section 289A.40,
subdivision 1. For this purpose, a return or amended return
claiming an overpayment constitutes a claim for refund.
Upon the filing of a claim the commissioner shall examine
it, shall make written findings thereon denying or allowing the
claim in whole or in part, and shall mail a notice thereof to
the licensee at the address stated upon the return. If the
claim is allowed in whole or in part, the commissioner shall
issue a certificate for a refund of the excess paid by the
licensee, with interest at the rate specified in section 270.76
computed from the date of the payment of the tax until the date
the refund is paid or credit is made to the licensee. The
commissioner of finance shall cause the refund to be paid as
other state moneys are expended. So much of the proceeds of the
taxes as is necessary are appropriated for that purpose.
Sec. 3. Minnesota Statutes 1994, section 60A.199,
subdivision 10, is amended to read:
Subd. 10. [CONSENT TO EXTEND TIME.] If the commissioner
and the licensee have, within the periods prescribed by this
section, consented in writing to any extension of time for the
assessment of the tax, the period within which a claim for
refund may be filed, or a refund may be made or allowed, if no
claim is filed, is the period within which the commissioner and
the licensee have consented to an extension for the assessment
of the tax and six months thereafter, the period within which a
claim for refund may be filed shall not expire prior to two
years after the tax was paid.
Sec. 4. [270.7002] [PERSONAL LIABILITY FOR FAILURE TO
HONOR A LEVY.]
Subdivision 1. [SURRENDER OF PROPERTY SUBJECT TO LEVY.] A
person who fails or refuses to surrender property or rights to
property subject to a levy served on the person under section
270.70, 270.7001, or 290.92, subdivision 23, is liable in an
amount equal to the value of the property or rights not
surrendered, or the amount of taxes, penalties, and interest for
the collection of which the levy was made, whichever is less. A
financial institution need not surrender funds on deposit until
ten days after service of the levy.
Subd. 2. [PENALTY.] In addition to the personal liability
imposed by subdivision 1, if a person required to surrender
property or rights to property fails to do so without reasonable
cause, the person is liable for a penalty equal to 25 percent of
the amount under subdivision 1.
Subd. 3. [PERSON DEFINED.] The term "person" as used in
this section includes an officer or employee of a corporation or
a member or employee of a partnership, who as such officer,
employee, or member is under a duty to surrender the property or
rights to property or to respond to the levy.
Subd. 4. [ORDER ASSESSING LIABILITY.] The liability
imposed by this section may, after demand to honor a levy has
been made, be assessed by the commissioner within 60 days after
service of the demand. The assessment may be based on
information available to the commissioner. The assessment is
presumed to be valid, and the burden is on the person assessed
to show it is incorrect or invalid. An order assessing
liability for failure to honor a levy is reviewable
administratively under section 289A.65, and is appealable to tax
court under chapter 271. The amount assessed, plus interest at
the rate specified in section 270.75, may be collected by any
remedy available to the commissioner for the collection of
taxes. The proceeds collected are applied first to the
liability of the original taxpayer to the extent of the
liability under subdivision 1 plus interest, and then to the
penalty under subdivision 2.
Sec. 5. Minnesota Statutes 1994, section 270.72,
subdivision 1, is amended to read:
Subdivision 1. [TAX CLEARANCE REQUIRED.] The state or a
political subdivision of the state may not issue, transfer, or
renew, and must revoke, a license for the conduct of a
profession, occupation, trade, or business, if the commissioner
notifies the licensing authority that the applicant owes the
state delinquent taxes, penalties, or interest. The
commissioner may not notify the licensing authority unless the
applicant taxpayer owes $500 or more in delinquent taxes or has
not filed returns. If the applicant taxpayer does not owe
delinquent taxes but has not filed returns, the commissioner may
not notify the licensing authority unless the taxpayer has been
given 90 days' written notice to file the returns or show that
the returns are not required to be filed. A licensing authority
that has received a notice from the commissioner may issue,
transfer, or renew, or not revoke the applicant's license only
if (a) the commissioner issues a tax clearance certificate and
(b) the commissioner or the applicant forwards a copy of the
clearance to the authority. The commissioner may issue a
clearance certificate only if the applicant does not owe the
state any uncontested delinquent taxes, penalties, or interest
and has filed all required returns.
Sec. 6. Minnesota Statutes 1994, section 270.72,
subdivision 2, is amended to read:
Subd. 2. [DEFINITIONS.] For purposes of this section, the
following terms have the meanings given.
(a) "Taxes" are all taxes payable to the commissioner
including penalties and interest due on the taxes.
(b) "Delinquent taxes" do not include a tax liability if
(i) an administrative or court action which contests the amount
or validity of the liability has been filed or served, (ii) the
appeal period to contest the tax liability has not expired, or
(iii) the applicant has entered into a payment agreement and is
current with the payments.
(c) "Applicant" means an individual if the license is
issued to or in the name of an individual or the corporation or
partnership if the license is issued to or in the name of a
corporation or partnership. "Applicant" also means an officer
of a corporation, a member of a partnership, or an individual
who is liable for delinquent taxes, either for the entity for
which the license is at issue or for another entity for which
the liability was incurred, or personally as a licensee. In the
case of a license transfer, "applicant" also means both the
transferor and the transferee of the license. "Applicant" also
means any holder of a license.
(d) "License" includes a contract for space rental at the
Minnesota state fair.
(e) "Licensing authority" includes the Minnesota state fair
board.
Sec. 7. Minnesota Statutes 1994, section 270.72,
subdivision 3, is amended to read:
Subd. 3. [NOTICE AND HEARING.] (a) The commissioner, on
notifying a licensing authority pursuant to subdivision 1 not to
issue, transfer, or renew a license, must send a copy of the
notice to the applicant. If the applicant requests, in writing,
within 30 days of the date of the notice a hearing, a contested
case hearing must be held. The hearing must be held within 45
days of the date the commissioner refers the case to the office
of administrative hearings. Notwithstanding any law to the
contrary, the applicant must be served with 20 days' notice in
writing specifying the time and place of the hearing and the
allegations against the applicant. The notice may be served
personally or by mail.
(b) Prior to notifying a licensing authority pursuant to
subdivision 1 to revoke a license, the commissioner must send a
notice to the applicant of the commissioner's intent to require
revocation of the license and of the applicant's right to a
hearing under paragraph (a). A license is subject to revocation
when 30 days have passed following the date of the notice in
this paragraph without the applicant requesting a hearing, or,
if a hearing is timely requested, upon final determination of
the hearing under section 14.62, subdivision 1. A license shall
be revoked by the licensing authority within 30 days after
receiving notice from the commissioner to revoke.
(c) A hearing under this subdivision is in lieu of any
other hearing or proceeding provided by law arising from any
action taken under subdivision 1.
Sec. 8. [270.721] [REVOCATION OF CORPORATE CERTIFICATES OF
AUTHORITY TO DO BUSINESS IN THIS STATE.]
When a foreign corporation authorized to do business in
this state under chapter 303 fails to comply with any tax laws
administered by the commissioner of revenue, the commissioner
may serve the secretary of state with a certified copy of an
order finding such failure to comply. The secretary of state,
upon receipt of the order, shall revoke the certificate of
authority of the corporation to do business in this state, and
shall reinstate the certificate under section 303.19 only when
the corporation has obtained from the commissioner an order
finding that the corporation is in compliance with state tax
law. An order requiring revocation of a certificate shall not
be issued unless the commissioner gives the corporation 30 days'
written notice of the proposed order, specifying the violations
of state tax law, and affording the corporation an opportunity
to request a contested case hearing under chapter 14.
Sec. 9. Minnesota Statutes 1994, section 270.79,
subdivision 4, is amended to read:
Subd. 4. [REFUND PROCEDURES.] (a) If the commissioner
determines that the cumulative refunds due all affected
taxpayers will exceed $50,000,000, the refund procedures in this
subdivision apply.
(b) The refunds due shall be paid in five installments
beginning after July 1 of. The first installment will be paid
during the calendar year following the later of the filing of
the refund claim or the final judicial determination and ending
in the fifth calendar year or at the time that the return for
that calendar year is filed subsequent installments will be paid
at any time during each of the four succeeding calendar years.
(c) The refunds shall be paid in the form of refundable
credits claimed on the tax return for the tax type giving rise
to the refund.
(d) In the case of annual returns the credit allowable must
be claimed on the annual return. When returns are filed on
other than an annual basis, the allowable credit must be claimed
on the first return due after July 1 of a calendar year The
commissioner shall compute the annual refund installment due
under this subdivision, and notify the taxpayer of the total
amount of the claim for refund which has been allowed.
(e) (d) The credit allowed for installment paid each year
equals 20 percent of the claimed refund allowed unless the
commissioner determines that the cumulative refunds due for a
particular year under this section will exceed $150,000,000. If
the refunds payable will exceed that amount, the claimed refunds
they will be reduced pro rata with any balance remaining due
payable with the final refund installment.
(f) (e) Unless contrary to the provisions in this section,
the provisions for refunds in the various tax types, including
provisions related to the payment of interest, apply to the
refunds subject to these provisions.
(g) (f) The commissioner may establish a de minimis
individual refund amount below which the installment provisions
do not apply. The amount established under this paragraph is
not subject to the provisions of chapter 14.
(g) If the commissioner of finance determines that it is in
the best interest of the state, refunds payable under this
section may be paid in fewer than five installments.
Sec. 10. Minnesota Statutes 1994, section 289A.26,
subdivision 2a, is amended to read:
Subd. 2a. [ELECTRONIC FUNDS TRANSFER PAYMENTS.] If the
aggregate amount of estimated tax payments made during a
calendar year is equal to or exceeds $80,000 $20,000, all
estimated tax payments in the subsequent calendar year must be
paid by means of a funds transfer as defined in section
336.4A-104, paragraph (a). The funds transfer payment date, as
defined in section 336.4A-401, must be on or before the date the
estimated tax payment is due. If the date the estimated tax
payment is due is not a funds transfer business day, as defined
in section 336.4A-105, paragraph (a), clause (4), the payment
date must be on or before the funds transfer business day next
following the date the estimated tax payment is due.
Sec. 11. Minnesota Statutes 1994, section 289A.40,
subdivision 1, is amended to read:
Subdivision 1. [TIME LIMIT; GENERALLY.] Unless otherwise
provided in this chapter, a claim for a refund of an overpayment
of state tax must be filed within 3-1/2 years from the date
prescribed for filing the return, plus any extension of time
granted for filing the return, but only if filed within the
extended time, or two years one year from the time date of an
order assessing tax under section 289A.37, subdivision 1, upon
payment in full of the tax is paid in full, penalties, and
interest shown on the order, whichever period expires
later. Claims for refund filed after the 3-1/2 year period but
within the one-year period are limited to the amount of the tax,
penalties, and interest on the order and to issues determined by
the order.
Sec. 12. Minnesota Statutes 1994, section 289A.60,
subdivision 2, is amended to read:
Subd. 2. [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If
a taxpayer fails to make and file a return other than an income
tax return of an individual, a withholding return, or sales or
use tax return, within the time prescribed or an extension, a
penalty is added to the tax. The penalty is three percent of
the amount of tax not paid on or before the date prescribed for
payment of the tax including any extensions if the failure is
for not more than 30 days, with an additional five percent of
the amount of tax remaining unpaid during each additional 30
days or fraction of 30 days, during which the failure continues,
not exceeding 23 percent in the aggregate.
If a taxpayer fails to file a return, other than an income
tax return of an individual, within 60 days of the date
prescribed for filing of the return (determined with regard to
any extension of time for filing), the addition to tax under
this subdivision must not be less than the lesser of: (1) $200;
or (2) the greater of (a) 25 percent of the amount required to
be shown as tax on the return without reduction for any payments
made or refundable credits allowable against the tax, or (b) $50.
If a taxpayer fails to file an individual income tax return
within six months after the date prescribed for filing of the
return, a penalty of ten percent of the amount of tax not paid
by the end of that six-month period is added to the tax.
If a taxpayer fails to file a withholding or sales or use
tax return within the time prescribed, including an extension, a
penalty of five percent of the amount of tax not timely paid is
added to the tax.
Sec. 13. Minnesota Statutes 1994, section 290.92,
subdivision 23, is amended to read:
Subd. 23. [WITHHOLDING BY EMPLOYER OF DELINQUENT TAXES.]
(1) The commissioner may, within five years after the date of
assessment of the tax, or if a lien has been filed under section
270.69, within the statutory period for enforcement of the lien,
give notice to any employer deriving income which has a taxable
situs in this state regardless of whether the income is exempt
from taxation, that an employee of that employer is delinquent
in a certain amount with respect to any state taxes, including
penalties, interest, and costs. The commissioner can proceed
under this subdivision only if the tax is uncontested or if the
time for appeal of the tax has expired. The commissioner shall
not proceed under this subdivision until the expiration of 30
days after mailing to the taxpayer, at the taxpayer's last known
address, a written notice of (a) the amount of taxes, interest,
and penalties due from the taxpayer and demand for their
payment, and (b) the commissioner's intention to require
additional withholding by the taxpayer's employer pursuant to
this subdivision. The effect of the notice shall expire 180
days after it has been mailed to the taxpayer provided that the
notice may be renewed by mailing a new notice which is in
accordance with this subdivision. The renewed notice shall have
the effect of reinstating the priority of the original claim.
The notice to the taxpayer shall be in substantially the same
form as that provided in section 571.72. The notice shall
further inform the taxpayer of the wage exemptions contained in
section 550.37, subdivision 14. If no statement of exemption is
received by the commissioner within 30 days from the mailing of
the notice, the commissioner may proceed under this
subdivision. The notice to the taxpayer's employer may be
served by mail or by delivery by an employee of the department
of revenue and shall be in substantially the same form as
provided in section 571.75. Upon receipt of notice, the
employer shall withhold from compensation due or to become due
to the employee, the total amount shown by the notice, subject
to the provisions of section 571.922. The employer shall
continue to withhold each pay period until the notice is
released by the commissioner under section 270.709. Upon
receipt of notice by the employer, the claim of the state of
Minnesota shall have priority over any subsequent garnishments
or wage assignments. The commissioner may arrange between the
employer and the employee for withholding a portion of the total
amount due the employee each pay period, until the total amount
shown by the notice plus accrued interest has been withheld.
The "compensation due" any employee is defined in
accordance with the provisions of section 571.921. The maximum
withholding allowed under this subdivision for any one pay
period shall be decreased by any amounts payable pursuant to a
garnishment action with respect to which the employer was served
prior to being served with the notice of delinquency and any
amounts covered by any irrevocable and previously effective
assignment of wages; the employer shall give notice to the
department of the amounts and the facts relating to such
assignments within ten days after the service of the notice of
delinquency on the form provided by the department of revenue as
noted in this subdivision.
(2) If the employee ceases to be employed by the employer
before the full amount set forth in a notice of delinquency plus
accrued interest has been withheld, the employer shall
immediately notify the commissioner in writing of the
termination date of the employee and the total amount withheld.
No employer may discharge any employee by reason of the fact
that the commissioner has proceeded under this subdivision. If
an employer discharges an employee in violation of this
provision, the employee shall have the same remedy as provided
in section 571.927, subdivision 2.
(3) Within ten days after the expiration of such pay
period, the employer shall remit to the commissioner, on a form
and in the manner prescribed by the commissioner, the amount
withheld during each pay period under this subdivision. Should
any employer, after notice, willfully fail to withhold in
accordance with the notice and this subdivision, or willfully
fail to remit any amount withheld as required by this
subdivision, the employer shall be liable for the total amount
set forth in the notice together with accrued interest which may
be collected by any means provided by law relating to taxation.
Any amount collected from the employer for failure to withhold
or for failure to remit under this subdivision shall be credited
to the employee's account in the following manner: penalties,
interest, tax, and costs.
(4) Clauses (1), (2), and (3), except provisions imposing a
liability on the employer for failure to withhold or remit,
shall apply to cases in which the employer is the United States
or any instrumentality thereof or this state or any municipality
or other subordinate unit thereof.
(5) The commissioner shall refund to the employee excess
amounts withheld from the employee under this subdivision. If
any excess results from payments by the employer because of
willful failure to withhold or remit as prescribed in clause
(3), the excess attributable to the employer's payment shall be
refunded to the employer.
(6) Employers required to withhold delinquent taxes,
penalties, interest, and costs under this subdivision shall not
be required to compute any additional interest, costs or other
charges to be withheld.
(7) The collection remedy provided to the commissioner by
this subdivision shall have the same legal effect as if it were
a levy made pursuant to section 270.70.
Sec. 14. Minnesota Statutes 1994, section 294.09,
subdivision 1, is amended to read:
Subdivision 1. [PROCEDURES; TIME LIMIT.] A company, joint
stock association, copartnership, corporation, or individual who
has paid, voluntarily or otherwise, or from whom there has been
collected (other than by proceedings instituted by the attorney
general under sections 294.06 and 294.08, subdivision 3) an
amount of gross earnings tax for any year in excess of the
amount legally due for that year, may file with the commissioner
of revenue a claim for a refund of such excess. Except as
provided in subdivision 4, no such claim shall be entertained
unless filed within two years after such tax was paid or
collected, or within 3-1/2 years from the filing of the return,
whichever period is the longer the period prescribed in section
289A.40, subdivision 1. Upon the filing of a claim the
commissioner shall examine the same and shall make and file
written findings thereon denying or allowing the claim in whole
or in part and shall mail a notice thereof to such company,
joint stock association, copartnership, corporation, or
individual at the address stated upon the return. If such claim
is allowed in whole or in part, the commissioner shall credit
the amount of the allowance against any tax due the state from
the claimant and for the balance of said allowance, if any, the
commissioner shall issue a certificate for the refundment of the
excess paid. The commissioner of finance shall cause such
refund to be paid out of the proceeds of the gross earnings
taxes imposed by Minnesota Statutes 1967, chapters 294 and 295
as other state moneys are expended. So much of the proceeds as
may be necessary are hereby appropriated for that purpose. Any
allowance so made by the commissioner shall include interest at
the rate specified in section 270.76 computed from the date of
payment or collection of the tax until the date the refund is
paid to the claimant.
Sec. 15. Minnesota Statutes 1994, section 294.09,
subdivision 4, is amended to read:
Subd. 4. [CONSENT TO EXTEND TIME.] If the commissioner and
the taxpayer have within the periods prescribed in subdivision 1
consented in writing to any extension of time for the assessment
of the tax under the provisions of section 294.08, subdivision
4, the period within which a claim for refund may be filed, or a
refund may be made or allowed, if no claim is filed, shall be
the period within which the commissioner and the taxpayer have
consented to an extension for the assessment of the tax and six
months thereafter, provided, however, that the period within
which a claim for refund may be filed shall not expire prior to
two years after the tax was paid.
Sec. 16. Minnesota Statutes 1994, section 297.35,
subdivision 1, is amended to read:
Subdivision 1. On or before the 18th day of each calendar
month every distributor with a place of business in this state
shall file a return with the commissioner showing the quantity
and wholesale sales price of each tobacco product (1) brought,
or caused to be brought, into this state for sale; and (2) made,
manufactured, or fabricated in this state for sale in this
state, during the preceding calendar month. Every licensed
distributor outside this state shall in like manner file a
return showing the quantity and wholesale sales price of each
tobacco product shipped or transported to retailers in this
state to be sold by those retailers, during the preceding
calendar month. Returns shall be made upon forms furnished and
prescribed by the commissioner and shall contain such other
information as the commissioner may require. Each return shall
be accompanied by a remittance for the full tax liability shown
therein, less 1.5 percent of such liability as compensation to
reimburse the distributor for expenses incurred in the
administration of sections 297.31 to 297.39. The return for the
May liability and 75 percent of the estimated June liability is
due on the date payment of the tax is due.
A distributor having a liability of $120,000 or more during
a calendar fiscal year ending June 30 must remit all liabilities
in the subsequent fiscal calendar year ending June 30 by means
of a funds transfer as defined in section 336.4A-104, paragraph
(a). The funds transfer payment date, as defined in section
336.4A-401, must be on or before the date the tax is due. If
the date the tax is due is not a funds transfer business day, as
defined in section 336.4A-105, paragraph (a), clause (4), the
payment date must be on or before the funds transfer business
day next following the date the tax is due.
Sec. 17. Minnesota Statutes 1994, section 297.43,
subdivision 2, is amended to read:
Subd. 2. [PENALTY FOR FAILURE TO FILE.] If a person fails
to make and file a return within the time required under
sections 297.07, 297.23, and 297.35, there shall be added to the
tax five percent of the amount of tax not paid on or before the
date prescribed for payment of the tax. The amount so added to
any tax under this subdivision and subdivision 1 shall be
collected at the same time and in the same manner and as a part
of the tax and shall bear interest at the rate specified in
section 270.75 from the time the tax should have been paid,
unless the tax has been paid before the discovery of the
negligence, in which case the amount so added shall be collected
in the same manner as the tax.
In the case of a failure to file a return within 60 days of
the date prescribed for filing of the return (determined with
regard to any extension of time for filing), the addition to tax
under this subdivision shall not be less than the lesser of (i)
$200; or (ii) the greater of (a) 25 percent of the amount
required to be shown as tax on the return without reduction for
any payments made or refundable credits allowable against the
tax; or (b) $50.
Sec. 18. Minnesota Statutes 1994, section 297C.14,
subdivision 2, is amended to read:
Subd. 2. [PENALTY FOR FAILURE TO FILE.] If a person fails
to make and file a return within the time required by this
chapter or an extension of time, there shall be added to the tax
five percent of the amount of tax not paid on or before the date
prescribed for payment of the tax. The amount so added to any
tax under subdivisions 1 and 2 shall be collected at the same
time and in the same manner and as a part of the tax and shall
bear interest at the rate specified in section 270.75 from the
time the tax should have been paid, unless the tax has been paid
before the discovery of the negligence, in which case the amount
so added shall be collected in the same manner as the tax.
In the case of a failure to file a return within 60 days of
the date prescribed for filing of the return (determined with
regard to any extension of time for filing), the addition to tax
under this subdivision shall not be less than the lesser of (i)
$200; or (ii) the greater of (a) 25 percent of the amount
required to be shown as tax on the return without reduction for
any payments made or refundable credits allowable against the
tax; or (b) $50.
Sec. 19. Minnesota Statutes 1994, section 297E.11,
subdivision 4, is amended to read:
Subd. 4. [TIME LIMIT FOR REFUNDS.] Unless otherwise
provided in this chapter, a claim for a refund of an overpayment
of tax must be filed within 3-1/2 years from the date prescribed
for filing the return, plus any extension of time granted for
filing the return, but only if filed within the extended time,
or two years from the time the tax is paid, whichever period
expires later the period prescribed in section 289A.40,
subdivision 1. Interest on refunds must be computed at the rate
specified in section 270.76 from the date of payment to the date
the refund is paid or credited. For purposes of this
subdivision, the date of payment is the later of the date the
tax was finally due or was paid.
Sec. 20. Minnesota Statutes 1994, section 297E.12,
subdivision 2, is amended to read:
Subd. 2. [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If
a taxpayer fails to make and file a return within the time
prescribed or an extension, a penalty is added to the tax. The
penalty is five percent of the amount of tax not paid on or
before the date prescribed for payment of the tax.
If a taxpayer fails to file a return within 60 days of the
date prescribed for filing of the return (determined with regard
to any extension of time for filing), the addition to tax under
this subdivision must be at least the lesser of: (1) $200; or
(2) the greater of (i) 25 percent of the amount required to be
shown as tax on the return without reduction for any payments
made or refundable credits allowable against the tax, or (ii)
$50.
Sec. 21. Minnesota Statutes 1994, section 299F.26,
subdivision 1, is amended to read:
Subdivision 1. [PROCEDURE, TIME LIMIT, APPROPRIATION.] A
company which has paid, voluntarily or otherwise, or from which
there was collected an amount of tax for any year in excess of
the amount legally due for that year, may file with the
commissioner of revenue a claim for a refund of the excess.
Except as provided in subdivision 4, no claim or refund shall be
allowed or made after 3-1/2 years from the date prescribed for
filing the return (plus any extension of time granted for filing
the return but only if filed within the extended time) or after
two years from the date of overpayment, whichever period is
longer, unless before the expiration of the period a claim is
filed by the company the period prescribed in section 289A.40,
subdivision 1. For this purpose a return or amended return
claiming an overpayment constitutes a claim for refund.
Upon the filing of a claim the commissioner shall examine
the same and shall make and file written findings thereon
denying or allowing the claim in whole or in part and shall mail
a notice thereof to the company at the address stated upon the
return. If such claim is allowed in whole or in part, the
commissioner shall issue a certificate for the refundment of the
excess paid by the company, with interest at the rate specified
in section 270.76 computed from the date of the payment of the
tax until the date the refund is paid or the credit is made to
the company, and the commissioner of finance shall cause the
refund to be paid as other state moneys are expended. So much
of the proceeds of the taxes as is necessary are appropriated
for that purpose.
Sec. 22. Minnesota Statutes 1994, section 299F.26,
subdivision 4, is amended to read:
Subd. 4. [CONSENT TO EXTEND TIME.] If the commissioner and
the company have within the periods prescribed in subdivision 1,
consented in writing to any extension of time for the assessment
of the tax, the period within a claim for refund may be filed,
or a refund may be made or allowed, if no claim is filed, shall
be the period within which the commissioner and the company have
consented to an extension for the assessment of the tax and six
months thereafter, provided, however, that the period within
which a claim for refund may be filed shall not expire prior to
two years after the tax was paid.
Sec. 23. [REPEALER.]
Minnesota Statutes 1994, sections 270.70, subdivisions 8,
9, and 10; and 297A.38, are repealed.
Sec. 24. [EFFECTIVE DATE.]
Sections 1, 2, 11, 14, 19, and 21 are effective for claims
for refund which have not been filed as of the day following
final enactment and in which the time period for filing the
claim has not expired under the provisions in effect prior to
the day following final enactment. The time period for filing
such claims is the time period prescribed in the enacted
sections, or one year after the day following final enactment,
whichever is greater.
Sections 3, 15, and 22, and the provisions in section 1
pertaining to consents to extend time, are effective for
consents to extend time for filing claims for refund entered
into on or after the day following final enactment.
Sections 4, 8, 12, 13, 16 to 18, 20, and 23 are effective
the day following final enactment.
Sections 5 to 7 are effective July 1, 1995.
Section 9 is effective for payments of refunds resulting
from final determinations made on or after April 26, 1994,
including refunds resulting from appeals filed before that date
but finally determined after that date.
Section 10 is effective for payments due for tax years
beginning after December 31, 1995.
ARTICLE 14
REVENUE POLICY INITIATIVES
MISCELLANEOUS
Section 1. Minnesota Statutes 1994, section 289A.43, is
amended to read:
289A.43 [PROHIBITION OF SUITS TO RESTRAIN ASSESSMENT OR
COLLECTION.]
Except for the express procedures in this chapter, chapters
270 and 271, and any other tax statutes for contesting the
assessment or collection of taxes, penalties, or interest
administered by the commissioner of revenue, and except for an
action challenging the constitutionality of a tax statute on its
face, if it is demonstrated to the court by clear and convincing
evidence that under no circumstances would the commissioner
ultimately prevail and that the taxpayer will suffer irreparable
harm if the relief sought is not granted, no suit to restrain
assessment or collection, including a declaratory judgment
action, can be maintained in any court by any person.
Sec. 2. Minnesota Statutes 1994, section 295.53,
subdivision 2, is amended to read:
Subd. 2. [DEDUCTIONS FOR STAFF MODEL HEALTH PLAN COMPANY.]
In addition to the exemptions allowed under subdivision 1, a
staff model health plan company may deduct from its gross
revenues for the year:
(1) amounts paid to hospitals, surgical centers, and health
care providers that are not employees of the staff model health
plan company for services on which liability for the tax is
imposed under section 295.52;
(2) net amounts added to reserves, if to the extent that
the amounts added do not cause total reserves do not to exceed
200 percent of the statutory net worth requirement, the
calculation of which may be determined on a consolidated basis,
taking into account the amounts held in reserve by affiliated
staff model health plan companies;
(3) assessments for the comprehensive health insurance plan
under section 62E.11; and
(4) amounts spent for administration as reported as total
administration to the department of health in the statement of
revenues, expenses, and net worth pursuant to section 62D.08,
subdivision 3, clause (a).
Sec. 3. [296.041] [ELECTRONICALLY FILED RETURNS OR
REPORTS; SIGNATURES.]
For purposes of this chapter, the name of the taxpayer, the
name of the taxpayer's authorized agent, or the taxpayer's
identification number constitutes a signature when transmitted
as part of the information on returns or reports filed by
electronic means by the taxpayer or at the taxpayer's
direction. "Electronic means" includes, but is not limited to,
the use of a touch-tone telephone to transmit return or report
information in a manner prescribed by the commissioner.
Sec. 4. Minnesota Statutes 1994, section 296.12,
subdivision 3, is amended to read:
Subd. 3. [TAX COLLECTION, REPORTING AND PAYMENT.] (a) For
clear diesel fuel, the tax is imposed on the distributor who
receives the fuel.
(b) For all other special fuels, the tax is imposed on the
distributor, bulk purchaser, or special fuel dealer. The tax
may be paid upon receipt or sale as follows:
(1) Distributors and special fuel dealers may, subject to
the approval of the commissioner, elect to pay to the
commissioner the special fuel excise tax on all special fuel
delivered or sold into the supply tank of an aircraft or a
licensed motor vehicle. Under this option an invoice must be
issued at the time of each delivery showing the name and address
of the purchaser, date of sale, number of gallons, price per
gallon and total amount of sale. A separate sales ticket book
shall be maintained for special fuel sales; and
(2) Bulk purchasers shall report and pay the excise tax on
all special fuel purchased by them for storage, to the
commissioner in the form and manner prescribed by the
commissioner.
(c) Any person delivering special fuel on which the excise
tax has not previously been paid, into the supply tank of an
aircraft or a licensed motor vehicle shall report such delivery
and pay the excise tax on the special fuel so delivered, to the
commissioner.
Sec. 5. Minnesota Statutes 1994, section 296.12,
subdivision 4, is amended to read:
Subd. 4. [MONTHLY REPORTS; SHRINKAGE ALLOWANCE.] On or
before the 23rd day of each month, the persons subject to the
provisions of this section shall file in the office of the
commissioner at St. Paul, Minnesota, a report in the following
manner form and manner prescribed by the commissioner. Reports
shall contain information as follows:
(1) Distributors of clear diesel fuel must file a monthly
tax return with the department listing all purchases or receipts
of clear diesel fuel. Distributors may be allowed to take a
credit or credits under section 296.14, subdivision 2.
(2) Distributors and dealers of special fuel other than
clear diesel fuel shall report the total number of gallons
delivered to them during the preceding calendar month and shall
pay the special fuel excise tax due thereon to the commissioner.
The invoice must show the true and correct name and address of
the purchaser, and the purchaser's signature. The report shall
contain such other information as the commissioner may require.
(3) Distributors and dealers of special fuel other than
clear diesel fuel who have elected to pay the special fuel
excise tax on all special fuel delivered into the supply tank of
an aircraft or licensed motor vehicle as provided in subdivision
3, shall report the total number of gallons delivered into the
supply tank of an aircraft or licensed motor vehicle during the
preceding calendar month and shall pay the special fuel excise
tax due thereon to the commissioner.
(4) Bulk purchasers shall report and pay the special fuel
excise tax on all special fuel except clear diesel fuel
purchased by them for storage, during the preceding calendar
month. In such cases as the commissioner may permit, credit for
the excise tax due or previously paid on special fuel not used
in aircraft or licensed motor vehicles, may be allowed in
computing tax liability. The report shall contain such other
information as the commissioner may require.
(5) In computing the special fuel excise tax due, a
deduction of one percent of the quantity of special fuel on
which tax is due shall be made for evaporation and loss.
(6) Each report shall contain a confession of judgment for
the amount of the tax shown due thereon to the extent not timely
paid.
Sec. 6. Minnesota Statutes 1994, section 296.12,
subdivision 11, is amended to read:
Subd. 11. [QUALIFIED BULK PURCHASERS.] Notwithstanding any
other provision of law to the contrary, the commissioner of
revenue may allow any bulk purchaser who receives special fuel
other than clear diesel fuel in bulk storage for subsequent
delivery into the supply tank of licensed motor vehicles or
aircraft operated by the bulk purchaser to purchase bulk special
fuel on a tax paid basis from any consenting supplier licensed
as a distributor or special fuel dealer under this section or
section 296.06. Bulk purchasers qualifying under this provision
must become registered in a manner approved by the commissioner
but shall be exempt from the bulk purchaser license
requirements. Every licensed distributor or special fuel dealer
who sells or delivers special fuel other than clear diesel fuel
on a tax paid basis to persons registered under this provision
must report on or before the 23rd day of each month sales made
during the preceding calendar month and shall pay the special
fuel excise tax due thereon to the commissioner. The report
shall be in the form and manner prescribed by the commissioner,
and shall contain information as the commissioner may require.
Sec. 7. Minnesota Statutes 1994, section 296.141,
subdivision 1, is amended to read:
Subdivision 1. [PAYMENT OF GASOLINE TAX AND PETROLEUM TANK
RELEASE CLEANUP FEE; SHRINKAGE ALLOWANCE.] On or before the 23rd
day of each month, every person who is required to pay a
gasoline tax shall file in the office of with the commissioner
at St. Paul, Minnesota, a report, in a the form and manner
approved by the commissioner, showing the number of gallons of
petroleum products received by the reporter during the preceding
calendar month, and other information the commissioner may
require. The number of gallons of gasoline must be reported in
United States standard liquid gallons (231 cubic inches), except
that the commissioner may upon written application and for cause
shown permit the distributor to report the number of gallons of
gasoline as corrected to a 60 degree Fahrenheit temperature. If
the application is granted, all gasoline covered in the
application and allowed by the commissioner must continue to be
reported by the distributor on the adjusted basis for a period
of one year from the date of the granting of the application.
The number of gallons of petroleum products other than gasoline
must be reported as originally invoiced.
Each report must show separately the number of gallons of
aviation gasoline received by the reporter during such calendar
month.
Each report must include the amount of gasoline tax on
gasoline received by the reporter during the preceding month;
provided that in computing the tax a deduction of three percent
of the quantity of gasoline received by a distributor shall be
made for evaporation and loss; provided further that at the time
of reporting, the distributor shall submit satisfactory evidence
that one-third of the three percent deduction has been credited
or paid to dealers on quantities sold to them. The A written
report is deemed to have been filed as required in this
subdivision if postmarked on or before the 23rd day of the month
in which payable.
Sec. 8. Minnesota Statutes 1994, section 296.141,
subdivision 2, is amended to read:
Subd. 2. [INSPECTION FEES.] Persons required to pay an
inspection fee under section 239.101 must file a report. Each
report must include the amount of inspection fees due on
petroleum products. The Reports must be filed with the
commissioner in the form and manner the commissioner
prescribes. A written report is considered filed as required if
postmarked on or before the 23rd day of the month in which
payable.
Sec. 9. Minnesota Statutes 1994, section 296.141,
subdivision 6, is amended to read:
Subd. 6. [ON-FARM BULK STORAGE OF GASOLINE OR SPECIAL
FUEL; ETHYL ALCOHOL FOR PERSONAL USE.] Notwithstanding the
provisions of this section, the producer of ethyl alcohol which
is produced for personal use and not for sale in the usual
course of business and a farmer who uses gasoline or any special
fuel on which a tax has not been paid shall report and pay the
tax on all ethyl alcohol, gasoline, or special fuel delivered
into the supply tank of a licensed motor vehicle during the
preceding calendar year. The tax must be reported in the form
and manner prescribed by the commissioner and paid together with
any refund claim filed by the taxpayer under section 296.18. If
no refund claim is filed, the tax must be reported and paid
annually by March 15 or more frequently, as the commissioner may
prescribe. Any producer qualifying under this subdivision is
exempt from the licensing requirements contained in section
296.06, subdivision 1.
Sec. 10. Minnesota Statutes 1994, section 296.17,
subdivision 1, is amended to read:
Subdivision 1. [UNREPORTED FUEL.] It shall be the duty of
every distributor, dealer, and person who sells or uses gasoline
manufactured, produced, received, or stored by the distributor,
dealer, or person, and of every person using gasoline in motor
vehicles or special fuel in licensed motor vehicles, if the same
has not been reported or if the tax on account thereof has not
been paid to the commissioner, to report to the commissioner in
the form and manner prescribed by the commissioner, the quantity
of such gasoline so sold or used or such special fuel used, and
such person shall become liable for the payment of the tax. All
provisions of sections 296.01 to 296.421 relating to the
calculation, collection and payment of the tax shall be
applicable to any such person, dealer or distributor.
Sec. 11. Minnesota Statutes 1994, section 296.17,
subdivision 3, is amended to read:
Subd. 3. [REFUNDS ON FUEL USED IN OTHER STATES.] Every
person regularly or habitually operating motor vehicles upon the
public highways of any other state or states and using in said
motor vehicles gasoline or special fuel purchased or obtained in
this state, shall be allowed a credit or refund equal to the tax
on said gasoline or special fuel paid to this state on the
gasoline or special fuel actually used in the other state or
states. No credit or refund shall be allowed under this
subdivision for taxes paid to any state which imposes a tax upon
gasoline or special fuel purchased or obtained in this state and
used on the highways of such other state, and which does not
allow a similar credit or refund for the tax paid to this state
on gasoline or special fuel purchased or acquired in such other
state and used on the highways of this state. Every person
claiming a credit or refund under this subdivision shall file a,
claim on a in the form and manner prescribed by the commissioner
or take the credit on a subsequent tax return within one year of
the last day of the month following the end of the quarter when
the overpayment occurred.
Sec. 12. Minnesota Statutes 1994, section 296.17,
subdivision 5, is amended to read:
Subd. 5. [UNREPORTED AVIATION GASOLINE.] The provisions of
subdivision 1 do not apply to aviation gasoline. It shall be
the duty of every distributor, dealer, and person who receives,
sells, stores, or withdraws from storage in this state aviation
gasoline manufactured, produced, received, or stored by the
distributor, dealer, or person, if the same has not been
reported or if a tax provided for in section 296.02 on account
thereof, has not been paid to the commissioner, to report to the
commissioner, in the form and manner prescribed by the
commissioner, the quantity of such gasoline so received, sold,
stored, or withdrawn from storage, and such person shall become
liable for the payment of the tax.
All provisions of sections 296.01 to 296.421 relating to
the calculation, collections, and payment of the tax shall be
applicable to any such person, dealer, or distributor.
Sec. 13. Minnesota Statutes 1994, section 296.17,
subdivision 11, is amended to read:
Subd. 11. [MOTOR CARRIER REPORTS.] Every motor carrier
subject to the road tax shall, on or before the last day of
April, July, October, and January, file with the commissioner
such in the form and manner prescribed by the commissioner,
reports of operations during the previous three months as the
commissioner may require, and such other reports from time to
time as the commissioner may deem necessary. The commissioner
by rule may exempt from the quarterly reporting requirements of
this section those motor carriers whose mileage is all or
substantially all and those motor carriers whose mileage is
minimal within this state, or states with which Minnesota has
reciprocity and require in such instances an annual report
reflecting the operations of the carrier during the previous
year along with payment of any taxes due.
Each report shall contain a confession of judgment for the
amount of the tax shown due thereon to the extent not timely
paid.
Sec. 14. Minnesota Statutes 1994, section 296.18,
subdivision 1, is amended to read:
Subdivision 1. [CLAIM; FUEL USED IN OTHER VEHICLES.] Any
person who shall buy and use gasoline for a qualifying purpose
other than use in motor vehicles, snowmobiles except as provided
in clause (2), or motorboats, or special fuel for a qualifying
purpose other than use in licensed motor vehicles, and who shall
have paid the Minnesota excise tax directly or indirectly
through the amount of the tax being included in the price of the
gasoline or special fuel, or otherwise, shall be reimbursed and
repaid the amount of the tax paid upon filing with the
commissioner a signed claim in writing in the form and manner
prescribed by the commissioner, and containing the information
the commissioner shall require and accompanied by the original
invoice thereof. By signing any such claim which is false or
fraudulent, the applicant shall be subject to the penalties
provided in this section for knowingly making a false claim.
The claim shall set forth the total amount of the gasoline so
purchased and used by the applicant other than in motor
vehicles, or special fuel so purchased and used by the applicant
other than in licensed motor vehicles, and shall state when and
for what purpose it was used. When a claim contains an error in
computation or preparation, the commissioner is authorized to
adjust the claim in accordance with the evidence shown on the
claim or other information available to the commissioner. The
commissioner, on being satisfied that the claimant is entitled
to the payments, shall approve the claim and transmit it to the
commissioner of finance. No repayment shall be made unless the
claim and invoice shall be filed with the commissioner within
one year from the date of the purchase. The postmark on the
envelope in which the a written claim is mailed shall determine
the its date of filing. The words "gasoline" or "special fuel"
as used in this subdivision do not include aviation gasoline or
special fuel for aircraft. Gasoline or special fuel bought and
used for a "qualifying purpose" means:
(1) Gasoline or special fuel used in carrying on a trade or
business, used on a farm situated in Minnesota, and used for a
farming purpose. "Farm" and "farming purpose" have the meanings
given them in section 6420(c)(2), (3), and (4) of the Internal
Revenue Code of 1986, as amended through December 31, 1988.
(2) Gasoline or special fuel used for off-highway business
use. "Off-highway business use" means any use by a person in
that person's trade, business, or activity for the production of
income. "Off-highway business use" includes use of a passenger
snowmobile off the public highways as part of the operations of
a resort as defined in section 157.01, subdivision 1.
"Off-highway business use" does not include use as a fuel in a
motor vehicle which, at the time of use, is registered or is
required to be registered for highway use under the laws of any
state or foreign country.
(3) Gasoline or special fuel placed in the fuel tanks of
new motor vehicles, manufactured in Minnesota, and shipped by
interstate carrier to destinations in other states or foreign
countries.
Sec. 15. Minnesota Statutes 1994, section 296.18,
subdivision 2, is amended to read:
Subd. 2. [FAILURE TO USE OR SELL FOR INTENDED PURPOSE;
REPORTS REQUIRED.] (1) Any person who shall buy aviation
gasoline or special fuel for aircraft use and who shall have
paid the excise taxes due thereon directly or indirectly through
the amount of the tax being included in the price thereof, or
otherwise, and shall use said gasoline or special fuel in motor
vehicles or shall knowingly sell it to any person for use in
motor vehicles shall, on or before the twenty-third day of the
month following that in which such gasoline or special fuel was
so used or sold, report the fact of such use or sale to the
commissioner in such form and manner as the commissioner may
prescribe.
(2) Any person who shall buy gasoline other than aviation
gasoline and who shall have paid the motor vehicle gasoline
excise tax directly or indirectly through the amount of the tax
being included in the price of the gasoline, or otherwise, who
shall knowingly sell such gasoline to any person to be used for
the purpose of producing or generating power for propelling
aircraft, or who shall receive, store, or withdraw from storage
such gasoline to be used for that purpose, shall, on or before
the 23rd day of the month following that in which such gasoline
was so sold, stored, or withdrawn from storage, report the fact
of such sale, storage, or withdrawal from storage to the
commissioner in such form and manner as the commissioner may
prescribe.
(3) Any person who shall buy aviation gasoline or special
fuel for aircraft use and who shall have paid the excise taxes
directly or indirectly through the amount of the tax being
included in the price thereof, or otherwise, who shall not use
it in motor vehicles or receive, sell, store, or withdraw it
from storage for the purpose of producing or generating power
for propelling aircraft, shall be reimbursed and repaid the
amount of the tax paid upon filing with the commissioner a
signed claim in writing in such form and containing such
information as the commissioner shall require and accompanied by
the original invoice thereof manner as the commissioner may
prescribe. By signing any such filing a claim which is false or
fraudulent, the applicant shall be subject to the penalties
provided in section 296.25 for knowingly or willfully making a
false claim. The claim shall set forth the total amount of the
aviation gasoline or special fuel for aircraft use so purchased
and used by the applicant, and shall state when and for what
purpose it was used. When a claim contains an error in
computation or preparation, the commissioner is authorized to
adjust the claim in accordance with the evidence shown on the
claim or other information available to the commissioner. The
commissioner, on being satisfied that the claimant is entitled
to payment, shall approve the claim and transmit it to the
commissioner of finance. No repayment shall be made unless the
claim and invoice shall be filed with the commissioner within
one year from the date of the purchase. The postmark on the
envelope in which the a written claim is mailed shall determine
the its date of filing.
Sec. 16. Minnesota Statutes 1994, section 296.18,
subdivision 5, is amended to read:
Subd. 5. [GRADUATED REDUCTION-BASIS REFUND CLAIM,
REQUIREMENTS.] Any distributor or other person claiming to be
entitled to any refund provided for in subdivision 4 shall
receive such refund upon filing with the commissioner a verified
claim in such form and manner, and, containing such information,
and accompanied by such invoices or other proof as the
commissioner shall require. The claim shall set forth, among
other things, the total number of gallons of aviation gasoline
or special fuel for aircraft use upon which the claimant has
directly or indirectly paid the excise tax provided for in
sections 296.02, subdivision 2, or 296.025, subdivision 2,
during the calendar year, which has been received, stored, or
withdrawn from storage by the claimant in this state and not
sold or otherwise disposed of to others. The commissioner, on
being satisfied that the claimant is entitled to the refund,
shall approve the claim and transmit it to the commissioner of
finance, and it shall be paid as provided for in section
296.421, subdivision 2. All claims for refunds under this
subdivision shall be made on or before April 15 following the
end of the calendar year for which the refund is claimed.
Claims for aviation gasoline and special fuel tax refund filed
within 15 days beyond the due date prescribed by this
subdivision shall be honored by the commissioner less a penalty
of 25 percent of the amount of the approved claim.
Sec. 17. [340A.7035] [CONSUMER IMPORTATION; ILLEGAL ACTS.]
A person who enters Minnesota from another state and who
imports or possesses alcoholic beverages in excess of the
tax-exempt quantities provided for in section 297C.07,
paragraphs (10), (11), and (12), is guilty of a misdemeanor. A
person who enters Minnesota from a foreign country who imports
or possesses alcoholic beverages on which the excise tax imposed
by sections 297C.02 and 297C.09 has not been paid, other than
the tax-exempt quantities provided for in section 297C.07,
paragraphs (10), (11), and (12), is guilty of a misdemeanor. A
peace officer, the commissioner of public safety, and employees
designated by the commissioner of public safety may seize
alcoholic beverages imported or possessed in violation of this
section. This section does not apply to the consignments of
alcoholic beverages shipped into this state by holders of
Minnesota import licenses or Minnesota manufacturers and
wholesalers when licensed by the commissioner of public safety
or to common carriers with licenses to sell alcoholic beverages
in more than one state when licensed by the commissioner of
public safety to sell alcoholic beverages in this state.
Sec. 18. [EFFECTIVE DATE.]
Section 1 is effective for lawsuits initiated on or after
the day following final enactment.
Sections 2 to 17 are effective the day following final
enactment.
ARTICLE 15
REVENUE TECHNICAL INITIATIVES
INCOME TAX AND PROPERTY TAX REFUND
Section 1. Minnesota Statutes 1994, section 290.032,
subdivision 1, is amended to read:
Subdivision 1. There is hereby imposed as an addition to
the annual income tax for a taxable year of a taxpayer in the
classes described in section 290.03 a tax with respect to any
distribution received by such taxpayer that is treated as a lump
sum distribution under section 402(e) 402(d) of the Internal
Revenue Code and that is subject to tax for such taxable year
under section 402(e) 402(d) of the Internal Revenue Code.
Sec. 2. Minnesota Statutes 1994, section 290.032,
subdivision 2, is amended to read:
Subd. 2. The amount of tax imposed by subdivision 1 shall
be computed in the same way as the tax imposed under section
402(e) 402(d) of the Internal Revenue Code, except that the
initial separate tax shall be an amount equal to five times the
tax which would be imposed by section 290.06, subdivision 2c, if
the recipient was an unmarried individual, and the taxable net
income was an amount equal to one-fifth of the excess of
(i) the total taxable amount of the lump sum distribution
for the year, over
(ii) the minimum distribution allowance, and except that
references in section 402(e) 402(d) of the Internal Revenue Code
to paragraph (1)(A) thereof shall instead be references to
subdivision 1, and the excess, if any, of the subtraction base
amount over federal taxable income for a qualified individual as
provided under section 290.0802, subdivision 2.
Sec. 3. Minnesota Statutes 1994, section 290A.04,
subdivision 2h, is amended to read:
Subd. 2h. (a) If the gross property taxes payable on a
homestead increase more than 12 percent over the net property
taxes payable in the prior year on the same property that is
owned and occupied by the same owner on January 2 of both years,
and the amount of that increase is $100 or more for taxes
payable in 1995 and 1996, a claimant who is a homeowner shall be
allowed an additional refund equal to 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
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. This subdivision shall not apply to any increase
in the gross property taxes payable attributable to the
termination of valuation exclusions under section 273.11,
subdivision 16.
The maximum refund allowed under this subdivision is $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, 1995, the commissioner shall
estimate the cost of making the payments provided by this
subdivision for taxes payable in 1996. Notwithstanding the open
appropriation provision of section 290A.23, if the estimated
total refund claims for taxes payable in 1996 exceed $5,500,000,
the commissioner shall 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 1994, section 290A.04,
subdivision 6, is amended to read:
Subd. 6. [INFLATION ADJUSTMENT.] Beginning for property
tax refunds payable in calendar year 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 1994, 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. Laws 1994, chapter 587, article 1, section 27, is
amended to read:
Sec. 27. [EFFECTIVE DATE.]
Sections 1, 7, 10, 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).
Sec. 6. [REPEALER.]
Minnesota Statutes 1994, section 290A.04, subdivision 2i,
and Laws 1989, First Special Session chapter 1, article 7,
section 9, are repealed.
Sec. 7. [EFFECTIVE DATE.]
Sections 1 and 2 are effective for tax years beginning
after December 31, 1994. Section 5 is effective for tax years
beginning after December 31, 1993. Section 6 is effective for
property taxes payable in 1995 and thereafter. Sections 3 and 4
are effective for refunds based on property taxes payable in
1996 and rent paid in 1995 and thereafter.
ARTICLE 16
REVENUE TECHNICAL INITIATIVES
PROPERTY TAX
Section 1. Minnesota Statutes 1994, section 270.47, is
amended to read:
270.47 [RULES.]
The board shall establish the rules necessary to accomplish
the purpose of section 270.41, and shall establish criteria
required of assessing officials in the state. Separate criteria
may be established depending upon the responsibilities of the
assessor. The board shall prepare and give examinations from
time to time to determine whether assessing officials possess
the necessary qualifications for performing the functions of the
office. Such tests shall be given immediately upon completion
of courses required by the board, or to persons who already
possess the requisite qualifications under the rules of the
board. Rules adopted by the board before July 1, 1981 to
accomplish the purposes of sections 270.41 to 270.53, including
those relating to licensure, are valid without compliance with
the administrative procedure act.
Sec. 2. Minnesota Statutes 1994, section 270.48, is
amended to read:
270.48 [LICENSURE OF QUALIFIED PERSONS.]
The board shall license persons as possessing the necessary
qualifications of an assessing official. Different levels of
licensure may be established as to classes of property which
assessors may be certified to assess at the discretion of the
board. Every person, except a local or county assessor,
regularly employed by the assessor to assist in making decisions
regarding valuing and classifying property for assessment
purposes shall be required to become licensed within three years
of the date of employment or June 1, 1975, whichever is later.
Licensure shall be required for local and county assessors as
otherwise provided in sections 270.41 to 270.53.
Sec. 3. Minnesota Statutes 1994, section 270.485, is
amended to read:
270.485 [SENIOR ACCREDITATION.]
The legislature finds that the property tax system would be
enhanced by requiring that every senior appraiser in the
department of revenue's local government services property tax
division obtain senior accreditation from the state board of
assessors. Every senior appraiser, including the department's
regional representatives, by January 1, 1990, and every county
assessor within two years of the first appointment under section
273.061, or by January 1, 1992, whichever is later, must obtain
senior accreditation from the state board of assessors. The
board shall provide the necessary courses or training. If a
department senior appraiser or regional representative fails to
obtain or maintain senior accreditation by January 1, 1990, the
failure shall be grounds for dismissal, disciplinary action, or
corrective action. Except as provided in section 273.061,
subdivision 2, paragraph (c), after December 30, 1991, the
commissioner must not approve the appointment of a county
assessor who is not senior accredited by the state board of
assessors. No employee hired by the commissioner as a senior
appraiser or regional representative after June 30, 1987, shall
attain permanent status until the employee obtains senior
accreditation.
Sec. 4. Minnesota Statutes 1994, section 270.494, is
amended to read:
270.494 [CERTAIN TOWNSHIPS AND CITIES OPTION TO ELECT TO
REINSTATE THE OFFICE OF ASSESSOR.]
Notwithstanding the provisions of sections 270.49, 270.493,
and section 273.05, subdivision 1, a city or township in which
the office of assessor has been eliminated because of failure of
the city or township to certify by resolution to the
commissioner of revenue its intention to employ or continue to
employ a certified assessor on or before April 1, 1972, pursuant
to section 270.49, or failure to hire a certified assessor prior
to June 15, 1975, pursuant to sections 270.493 and 270.50, or
failure to fill a vacancy in the office within 90 days pursuant
to section 273.05, subdivision 1, may elect, with the approval
of the commissioner, to have the office of assessor reinstated
by hiring a certified or accredited assessor. This section
shall not apply to Ramsey county or to cities and townships
located in counties which have elected a county assessment
system in accordance with section 273.055.
Sec. 5. Minnesota Statutes 1994, section 270.50, is
amended to read:
270.50 [EMPLOYMENT OF LICENSED ASSESSORS.]
Commencing June 15, 1975, No assessor shall be employed who
has not been licensed as qualified by the board, provided the
time to comply may be extended after application to the board
upon a showing that licensed assessors are not available for
employment. The board may license that a county or local
assessor who has not received the training, but possesses the
necessary qualifications for performing the functions of the
office by the passage of an approved examination or may waive
the examination if such person has demonstrated competence in
performing the functions of the office for a period of time the
board deems reasonable. The county or local assessing district
shall assume the cost of training of its assessors in courses
approved by the board for the purpose of obtaining the
assessor's license to the extent of course fees, mileage, meals
and lodging, and recognized travel expenses not paid by the
state. If the governing body of any township or city fails to
employ an assessor as required by sections 270.41 to 270.53, the
assessment shall be made by the county assessor.
A town shall pay its assessor $20 for each day the assessor
is attending approved courses or taking the examination. In
addition, the town shall pay its assessor $10 for each approved
course successfully completed and $20 upon licensure. The
maximum payable to an assessor for successful completion of
courses and licensure shall not exceed $50.
In the case of cities incorporated or townships organized
after April 11, 1974 except cities or towns located in Ramsey
county or which have elected a county assessor system in
accordance with section 273.055, the board shall allow the city
or town 90 days from the latter of June 3, 1977 or the date of
incorporation or organization to employ a licensed assessor.
Sec. 6. Minnesota Statutes 1994, section 270.52, is
amended to read:
270.52 [COSTS OF MAKING ASSESSMENTS.]
The cost of making any assessment provided in sections
270.41 to 270.53 shall be charged to the assessment district
involved. The county auditor shall certify the costs incurred
to the appropriate governing body not later than September
August 1 of each year, and if unpaid as of October 10 September
1, the county auditor shall levy a tax upon the taxable property
of such taxing district sufficient to pay such costs. The
amount so collected shall be credited to the general revenue
fund of the county.
Sec. 7. Minnesota Statutes 1994, section 270.53, is
amended to read:
270.53 [EXISTING CONTRACTS FOR ASSESSMENT OF PROPERTY.]
Sections 270.41 to 270.53 shall not supersede existing
contracts executed pursuant to section 273.072 or 471.59 except
to the extent that such contracts may conflict with section
270.49 or 270.50 nor preclude contracts between a taxing
district and the county for the assessment of property by the
county assessor.
Sec. 8. Minnesota Statutes 1994, section 272.121,
subdivision 2, is amended to read:
Subd. 2. [EXCEPTIONS.] No certification of current tax
paid is required when the land is being conveyed to the federal
government, the state, or a home rule charter or statutory city
or any other political subdivision, or. No certification of
current tax paid is required under subdivision 1 for any
sheriff's or referee's certificate of sale or other instrument
if a certification of delinquent tax for the instrument is not
required under section 272.12.
Sec. 9. Minnesota Statutes 1994, 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 owner-occupied housing units 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 prior to commencement of the improvement. 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 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 property
owner of the possibility of valuation exclusion under this
subdivision. The assessor shall require an application,
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 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. 10. Minnesota Statutes 1994, section 273.1398, is
amended by adding a subdivision to read:
Subd. 2d. [AIDS DETERMINED AS OF JUNE 30.] For aid amounts
authorized under subdivisions 2 and 3, and section 273.166: (i)
if the effective date for a municipal incorporation,
consolidation, annexation, detachment, dissolution, or township
organization is on or before June 30 of the year preceding the
aid distribution year, the change in boundaries or form of
government shall be recognized for aid determinations for the
aid distribution year; (ii) if the effective date for a
municipal incorporation, consolidation, annexation, detachment,
dissolution, or township organization is after June 30 of the
year preceding the aid distribution year, the change in
boundaries or form of government shall not be recognized for aid
determinations until the following year.
Sec. 11. Minnesota Statutes 1994, section 273.17,
subdivision 2, is amended to read:
Subd. 2. In counties where the county auditor has elected
to discontinue the preparation of assessment books as provided
by section 273.03, subdivision 2, such changes as provided for
in subdivision 1 of this section, shall be recorded in a
separate record prepared under the direction of the county
assessor and shall identify, by description or property
identification number, or both, the real estate affected, the
previous year's net tax capacities and the new market values and
net tax capacities, provided that if only property
identification numbers are used they shall be such that shall
permit positive identification of the real estate to which they
apply. Such record shall further indicate the total amount of
increase or decrease in net tax capacity contained therein. The
county assessor shall make return of such record to the county
auditor who shall be the official custodian thereof.
Such record shall be known as "County assessor's changes in
real estate valuations for the year 19.........". Such records
on file in the county auditor's office may be destroyed when
they are more than 20 ten years old pursuant to the conditions
for destruction of government records contained in Minnesota
Statutes 1961, section 384.14 sections 138.161 to 138.25.
Sec. 12. Minnesota Statutes 1994, section 275.065,
subdivision 6, is amended to read:
Subd. 6. [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.]
Between November 29 and December 20, the governing bodies of the
city, county, metropolitan special taxing districts as defined
in subdivision 3, paragraph (i), and regional library districts
shall each hold a public hearing to discuss and seek public
comment on its final budget and property tax levy for taxes
payable in the following year, and the governing body of the
school district shall hold a public hearing to review its
current budget and proposed property tax levy for taxes payable
in the following year. The metropolitan special taxing
districts shall be required to hold only a single joint public
hearing, the location of which will be determined by the
affected metropolitan agencies.
At a subsequent hearing, each county, school district,
city, and metropolitan special taxing district may amend its
proposed property tax levy and must adopt a final property tax
levy. Each county, city, and metropolitan special taxing
district may also amend its proposed budget and must adopt a
final budget at the subsequent hearing. A school district is
not required to adopt its final budget at the subsequent
hearing. The subsequent hearing of a taxing authority must be
held on a date subsequent to the date of the taxing authority's
initial public hearing, or subsequent to the date of its
continuation hearing if a continuation hearing is held. The
subsequent hearing may be held at a regularly scheduled board or
council meeting or at a special meeting scheduled for the
purposes of the subsequent hearing. The subsequent hearing of a
taxing authority does not have to be coordinated by the county
auditor to prevent a conflict with an initial hearing, a
continuation hearing, or a subsequent hearing of any other
taxing authority. All subsequent hearings must be held prior to
five working days after December 20 of the levy year.
The time and place of the subsequent hearing must be
announced at the initial public hearing or at the continuation
hearing.
The property tax levy certified under section 275.07 by a
city, county, metropolitan special taxing district, regional
library district, or school district must not exceed the
proposed levy determined under subdivision 1, except by an
amount up to the sum of the following amounts:
(1) the amount of a school district levy whose voters
approved a referendum to increase taxes under section 124.82,
subdivision 3, 124A.03, subdivision 2, 124B.03, subdivision 2,
or 136C.411, after the proposed levy was certified;
(2) the amount of a city or county levy approved by the
voters after the proposed levy was certified;
(3) the amount of a levy to pay principal and interest on
bonds issued or approved by the voters under section 475.58
after the proposed levy was certified;
(4) the amount of a levy to pay costs due to a natural
disaster occurring after the proposed levy was certified, if
that amount is approved by the commissioner of revenue under
subdivision 6a;
(5) the amount of a levy to pay tort judgments against a
taxing authority that become final after the proposed levy was
certified, if the amount is approved by the commissioner of
revenue under subdivision 6a;
(6) the amount of an increase in levy limits certified to
the taxing authority by the commissioner of education after the
proposed levy was certified; and
(7) the amount required under section 124.755.
At the hearing under this subdivision, the percentage
increase in property taxes proposed by the taxing authority, if
any, and the specific purposes for which property tax revenues
are being increased must be discussed. At the hearing held in
1993 only, specific information for previous year, current year,
and proposed budget year must be presented on:
(i) percent of total proposed budget representing total
compensation cost;
(ii) numbers of employees by general classification, and
whether full or part time;
(iii) number and budgeted expenditures for independent
contractors; and
(iv) the effect of budget increases or decreases on the
proposed property tax levy.
During the discussion, the governing body shall hear
comments regarding a proposed increase and explain the reasons
for the proposed increase. The public shall be allowed to speak
and to ask questions. At the subsequent hearing held as
provided in this subdivision, the governing body, other than the
governing body of a school district, shall adopt its final
property tax levy prior to adopting its final budget.
If the hearing is not completed on its scheduled date, the
taxing authority must announce, prior to adjournment of the
hearing, the date, time, and place for the continuation of the
hearing. The continued hearing must be held at least five
business days but no more than 14 business days after the
original hearing.
The hearing must be held after 5:00 p.m. if scheduled on a
day other than Saturday. No hearing may be held on a Sunday.
The governing body of a county shall hold a hearing on the
second Tuesday in December each year, and may hold additional
hearings on other dates before December 20 if necessary for the
convenience of county residents. If the county needs a
continuation of its hearing, the continued hearing shall be held
on the third Tuesday in December. If the third Tuesday in
December falls on December 21, the county's continuation hearing
shall be held on Monday, December 20. The county auditor shall
provide for the coordination of hearing dates for all cities and
school districts within the county.
The metropolitan special taxing districts shall hold a
joint public hearing on the first Monday of December. A
continuation hearing, if necessary, shall be held on the second
Monday of December.
By August 10, each school board and the board of the
regional library district shall certify to the county auditors
of the counties in which the school district or regional library
district is located the dates on which it elects to hold its
hearings and any continuations. If a school board or regional
library district does not certify the dates by August 10, the
auditor will assign the hearing date. The dates elected or
assigned must not conflict with the hearing dates of the county
hearing dates or the metropolitan special taxing districts. The
Ramsey county auditor shall coordinate with the metropolitan
special taxing districts as defined in subdivision 3, paragraph
(i), a date on which the metropolitan special taxing districts
will hold their joint public hearing and any continuation. The
metropolitan special taxing districts shall decide on mutually
agreeable dates for their joint public hearing and for any
continuation of that hearing and certify these dates to the
Ramsey county auditor on or before July 25. By August 20, the
county auditor shall notify the clerks of the cities within the
county of the dates on which school districts, metropolitan
special taxing districts, and regional library districts have
elected to hold their hearings. At the time a city certifies
its proposed levy under subdivision 1 it shall certify the dates
on which it elects to hold its hearings and any continuations.
The city must not select dates that conflict with the county
hearing dates, metropolitan special taxing district dates, or
with those elected by or assigned to the school districts or
regional library district in which the city is located.
The county hearing dates and the city, metropolitan special
taxing district, regional library district, and school district
hearing dates must be designated on the notices required under
subdivision 3. The continuation dates need not be stated on the
notices.
This subdivision does not apply to towns and special taxing
districts other than regional library districts and metropolitan
special taxing districts.
Notwithstanding the requirements of this section, the
employer is required to meet and negotiate over employee
compensation as provided for in chapter 179A.
Sec. 13. Minnesota Statutes 1994, 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.
For the purposes of this subdivision, "school district excess
referenda levy" means school district taxes for operating
purposes approved at referenda, including those taxes based
on net tax capacity as well as those based on market value.
"School district excess referenda levy" does not include school
district taxes for capital expenditures approved at referendums
or school district taxes to pay for the debt service on bonds
approved at referenda. 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 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 1994, section 284.28,
subdivision 2, is amended to read:
Subd. 2. Except as provided in subdivision 5, no cause of
action or defense shall be asserted or maintained upon any claim
adverse to the state, or its successors in interest, including
but not limited to any claim based upon any failure, omission,
error, or defect described in subdivision 1, respecting any
lands claimed to have been forfeited to the state for taxes,
unless such cause of action or defense is asserted in an action
commenced within one year after the filing of the county
auditor's certificate of forfeiture, as provided by section
281.23, subdivision 8 9, and acts supplementary thereto, or by
any other law hereafter enacted providing for the filing and
recording of such certificates.
Sec. 15. Minnesota Statutes 1994, section 298.75,
subdivision 2, is amended to read:
Subd. 2. A county shall impose upon every importer and
operator a production tax equal to ten cents per cubic yard or
seven cents per ton of aggregate material removed except that
the county board may decide not to impose this tax if it
determines that in the previous year operators removed less than
20,000 tons or 14,000 cubic yards of aggregate material from
that county. The tax shall be imposed on aggregate material
produced in the county when the aggregate material is
transported from the extraction site or sold, when in the case
of storage the. When aggregate material is stored in a
stockpile is within the state of Minnesota and the highways are
a public highway, road or street is not used for transporting
the aggregate material, the tax shall be imposed either when the
aggregate material is sold, or when it is transported from the
stockpile site, or when it is used from the stockpile, whichever
occurs first. The tax shall be imposed on an importer when the
aggregate material is imported into the county that imposes the
tax.
If the aggregate material is transported directly from the
extraction site to a waterway, railway, or another mode of
transportation other than a highway, road or street, the tax
imposed by this section shall be apportioned equally between the
county where the aggregate material is extracted and the county
to which the aggregate material is originally transported. If
that destination is not located in Minnesota, then the county
where the aggregate material was extracted shall receive all of
the proceeds of the tax.
Sec. 16. Minnesota Statutes 1994, section 428A.01,
subdivision 5, is amended to read:
Subd. 5. [NET TAX CAPACITY.] Except as provided in section
428A.05, "net tax capacity" means the net tax capacity most
recently certified by the county auditor under section 428A.03,
subdivision 1a, before the effective date of the ordinance or
resolution adopted under section 428A.02 or 428A.03.
Sec. 17. Minnesota Statutes 1994, section 428A.03, is
amended by adding a subdivision to read:
Subd. 1a. [CERTIFICATION OF NET TAX CAPACITY.] Upon a
request of the city, the county auditor must certify the most
recent net tax capacity of the taxable property subject to
service charges within the special service district.
Sec. 18. Minnesota Statutes 1994, section 428A.05, is
amended to read:
428A.05 [COLLECTION OF SERVICE CHARGES.]
Service charges may be imposed on the basis of the net tax
capacity of the property on which the service charge is imposed
but must be spread only upon the net tax capacity of the taxable
property located in the geographic area described in the
ordinance. Service charges based on net tax capacity may be
payable and collected at the same time and in the same manner as
provided for payment and collection of ad valorem taxes. When
made payable in the same manner as ad valorem taxes, service
charges not paid on or before the applicable due date shall be
subject to the same penalty and interest as in the case of ad
valorem tax amounts not paid by the respective due date. The
due date for a service charge payable in the same manner as ad
valorem taxes is the due date given in law for the real or
personal property tax for the property on which the service
charge is imposed. Services charges imposed on net tax capacity
which are to become payable in the following year must be
certified to the county auditor by the date provided in section
429.061, subdivision 3, for the annual certification of special
assessment installments. Other service charges imposed must be
collected as provided by ordinance. Service charges based on
net tax capacity collected under sections 428A.01 to 428A.10 are
not included in computations under section 469.177, chapter
473F, or any other law that applies to general ad valorem
levies. For the purpose of this section, "net tax capacity"
means the net tax capacity most recently determined at the time
that tax rates are determined under section 275.08.
Sec. 19. Minnesota Statutes 1994, section 473.446,
subdivision 1, is amended to read:
Subdivision 1. [TAXATION WITHIN TRANSIT TAXING DISTRICT.]
For the purposes of sections 473.404 to 473.449 and the
metropolitan transit system, except as otherwise provided in
this subdivision, the council shall levy each year upon all
taxable property within the metropolitan transit taxing
district, defined in subdivision 2, a transit tax consisting of:
(a) an amount which shall be used for payment of the
expenses of operating transit and paratransit service and to
provide for payment of obligations issued by the council under
section 473.436, subdivision 6;
(b) an additional amount, if any, the council determines to
be necessary to provide for the full and timely payment of its
certificates of indebtedness and other obligations outstanding
on July 1, 1985, to which property taxes under this section have
been pledged; and
(c) an additional amount necessary to provide full and
timely payment of certificates of indebtedness, bonds, including
refunding bonds or other obligations issued or to be issued
under section 473.39 by the council for purposes of acquisition
and betterment of property and other improvements of a capital
nature and to which the council has specifically pledged tax
levies under this clause.
The property tax levied by the council for general purposes
under clause (a) must not exceed the following amount for the
years specified:
(1) for taxes payable in 1995, the council's property tax
levy limitation for general transit purposes is equal to the
former regional transit board's property tax levy limitation for
general transit purposes under this subdivision, for taxes
payable in 1994, multiplied by an index for market valuation
changes equal to the total market valuation of all taxable
property located within the metropolitan transit taxing district
for the current assessment taxes payable year divided by the
total market valuation of all taxable property located within
the metropolitan transit taxing district for the previous
assessment taxes payable year; and
(2) for taxes payable in 1996 and subsequent years, the
product of (i) the council's property tax levy limitation for
general transit purposes for the previous year determined under
this subdivision multiplied by (ii) an index for market
valuation changes equal to the total market valuation of all
taxable property located within the metropolitan transit taxing
district for the current taxes payable year divided by the total
market valuation of all taxable property located within the
metropolitan transit taxing district for the previous taxes
payable year.
For the taxes payable year 1995, the index for market
valuation changes shall be multiplied by an amount equal to the
sum of the regional transit board's property tax levy limitation
for the taxes payable year 1994 and $160,665. The $160,665
increase shall be a permanent adjustment to the levy limit base
used in determining the regional transit board's property tax
levy limitation for general purposes for subsequent taxes
payable years.
For the purpose of determining the council's property tax
levy limitation for general transit purposes under this
subdivision, "total market valuation" means the total market
valuation of all taxable property within the metropolitan
transit taxing district without valuation adjustments for fiscal
disparities (chapter 473F), tax increment financing (sections
469.174 to 469.179), and high voltage transmission lines
(section 273.425).
The county auditor shall reduce the tax levied pursuant to
this subdivision on all property within statutory and home rule
charter cities and towns that receive full-peak service and
limited off-peak service by an amount equal to the tax levy that
would be produced by applying a rate of 0.510 percent of net tax
capacity on the property. The county auditor shall reduce the
tax levied pursuant to this subdivision on all property within
statutory and home rule charter cities and towns that receive
limited peak service by an amount equal to the tax levy that
would be produced by applying a rate of 0.765 percent of net tax
capacity on the property. The amounts so computed by the county
auditor shall be submitted to the commissioner of revenue as
part of the abstracts of tax lists required to be filed with the
commissioner under section 275.29. Any prior year adjustments
shall also be certified in the abstracts of tax lists. The
commissioner shall review the certifications to determine their
accuracy and may make changes in the certification as necessary
or return a certification to the county auditor for
corrections. The commissioner shall pay to the council the
amounts certified by the county auditors on the dates provided
in section 273.1398. There is annually appropriated from the
general fund in the state treasury to the department of revenue
the amounts necessary to make these payments.
For the purposes of this subdivision, "full-peak and
limited off-peak service" means peak period regular route
service, plus weekday midday regular route service at intervals
longer than 60 minutes on the route with the greatest frequency;
and "limited peak period service" means peak period regular
route service only.
For the purposes of property taxes payable in the following
year, the council shall annually determine which cities and
towns qualify for the 0.510 percent or 0.765 percent tax
capacity rate reduction and shall certify this list to the
county auditor of the county wherein such cities and towns are
located on or before September 15. No changes may be made to
the annual list after September 15.
Sec. 20. Minnesota Statutes 1994, section 473.711,
subdivision 2, is amended to read:
Subd. 2. [BUDGET; TAX LEVY.] The metropolitan mosquito
control commission shall prepare an annual budget. The budget
may provide for expenditures in an amount not exceeding the
property tax levy limitation determined in this subdivision.
The commission may levy a tax on all taxable property in the
district as defined in section 473.702 to provide funds for the
purposes of sections 473.701 to 473.716. The tax shall not
exceed the property tax levy limitation determined in this
subdivision. A participating county may agree to levy an
additional tax to be used by the commission for the purposes of
sections 473.701 to 473.716 but the sum of the county's and
commission's taxes may not exceed the county's proportionate
share of the property tax levy limitation determined under this
subdivision based on the ratio of its total net tax capacity to
the total net tax capacity of the entire district as adjusted by
section 270.12, subdivision 3. The auditor of each county in
the district shall add the amount of the levy made by the
district to other taxes of the county for collection by the
county treasurer with other taxes. When collected, the county
treasurer shall make settlement of the tax with the district in
the same manner as other taxes are distributed to political
subdivisions. No county shall levy any tax for mosquito,
disease vectoring tick, and black gnat (Simuliidae) control
except under sections 473.701 to 473.716. The levy shall be in
addition to other taxes authorized by law.
The property tax levied by the metropolitan mosquito
control commission shall not exceed the product of (1) the
commission's property tax levy limitation for the previous year
determined under this subdivision multiplied by (2) an index for
market valuation changes equal to the total market valuation of
all taxable property located within the district for the current
assessment taxes payable year divided by the total market
valuation of all taxable property located within the district
for the previous assessment taxes payable year.
For the purpose of determining the commission's property
tax levy limitation under this subdivision, "total market
valuation" means the total market valuation of all taxable
property within the district without valuation adjustments for
fiscal disparities (chapter 473F), tax increment financing
(sections 469.174 to 469.179), and high voltage transmission
lines (section 273.425).
Sec. 21. [REPEALER.]
Minnesota Statutes 1994, sections 270.49; and 270.493; and
Laws 1988, chapter 698, section 5, are repealed.
Sec. 22. [EFFECTIVE DATE.]
Sections 1 to 5, 7 to 9, 11 to 18, and 21 are effective the
day following final enactment. Section 6 is effective for taxes
payable in 1997 and thereafter. Section 10 is effective for
aids payable in 1995 and thereafter. Sections 19 and 20 are
effective for taxes payable in 1995 and thereafter.
ARTICLE 17
REVENUE TECHNICAL INITIATIVES
SALES AND SPECIAL TAXES
Section 1. Minnesota Statutes 1994, section 289A.18,
subdivision 4, is amended to read:
Subd. 4. [SALES AND USE TAX RETURNS.] (a) Sales and use
tax returns must be filed on or before the 20th day of the month
following the close of the preceding reporting period, except
that annual use tax returns provided for under section 289A.11,
subdivision 1, must be filed by April 15 following the close of
the calendar year, in the case of individuals. Annual use tax
returns of businesses, including sole proprietorships, and
annual sales tax returns must be filed by February 5 following
the close of the calendar year.
(b) Except for the return for the June reporting period,
which is due on the following August 25, returns filed by
retailers required to remit liabilities by means of funds
transfer under section 289A.20, subdivision 4, paragraph (d),
are due on or before the 25th day of the month following the
close of the preceding reporting period. The return for the May
liability and 75 percent of the estimated June liability is due
on the date payment of the estimated June liability is due, and
on or before August 25 of a year, the retailer must file a
return showing the actual June liability.
(c) If a retailer has an average sales and use tax
liability, including local sales and use taxes administered by
the commissioner, equal to or less than $500 per month in any
quarter of a calendar year, and has substantially complied with
the tax laws during the preceding four calendar quarters, the
retailer may request authorization to file and pay the taxes
quarterly in subsequent calendar quarters. The authorization
remains in effect during the period in which the retailer's
quarterly returns reflect sales and use tax liabilities of less
than $1,500 and there is continued compliance with state tax
laws.
(d) If a retailer has an average sales and use tax
liability, including local sales and use taxes administered by
the commissioner, equal to or less than $100 per month during a
calendar year, and has substantially complied with the tax laws
during that period, the retailer may request authorization to
file and pay the taxes annually in subsequent years. The
authorization remains in effect during the period in which the
retailer's annual returns reflect sales and use tax liabilities
of less than $1,200 and there is continued compliance with state
tax laws.
(e) The commissioner may also grant quarterly or annual
filing and payment authorizations to retailers if the
commissioner concludes that the retailers' future tax
liabilities will be less than the monthly totals identified in
paragraphs (c) and (d). An authorization granted under this
paragraph is subject to the same conditions as an authorization
granted under paragraphs (c) and (d).
Sec. 2. Minnesota Statutes 1994, section 297A.01,
subdivision 3, is amended to read:
Subd. 3. A "sale" and a "purchase" includes, but is not
limited to, each of the following transactions:
(a) Any transfer of title or possession, or both, of
tangible personal property, whether absolutely or conditionally,
and the leasing of or the granting of a license to use or
consume tangible personal property other than manufactured homes
used for residential purposes for a continuous period of 30 days
or more, for a consideration in money or by exchange or barter;
(b) The production, fabrication, printing, or processing of
tangible personal property for a consideration for consumers who
furnish either directly or indirectly the materials used in the
production, fabrication, printing, or processing;
(c) The furnishing, preparing, or serving for a
consideration of food, meals, or drinks. "Sale" does not
include:
(1) meals or drinks served to patients, inmates, or persons
residing at hospitals, sanitariums, nursing homes, senior
citizens homes, and correctional, detention, and detoxification
facilities;
(2) meals or drinks purchased for and served exclusively to
individuals who are 60 years of age or over and their spouses or
to the handicapped and their spouses by governmental agencies,
nonprofit organizations, agencies, or churches or pursuant to
any program funded in whole or part through 42 USCA sections
3001 through 3045, wherever delivered, prepared or served; or
(3) meals and lunches served at public and private schools,
universities, or colleges. Notwithstanding section 297A.25,
subdivision 2, taxable food or meals include, but are not
limited to, the following:
(i) heated food or drinks;
(ii) sandwiches prepared by the retailer;
(iii) single sales of prepackaged ice cream or ice milk
novelties prepared by the retailer;
(iv) hand-prepared or dispensed ice cream or ice milk
products including cones, sundaes, and snow cones;
(v) soft drinks and other beverages prepared or served by
the retailer;
(vi) gum;
(vii) ice;
(viii) all food sold in vending machines;
(ix) party trays prepared by the retailers; and
(x) all meals and single servings of packaged snack food,
single cans or bottles of pop, sold in restaurants and bars;
(d) The granting of the privilege of admission to places of
amusement, recreational areas, or athletic events, except a
world championship football game sponsored by the national
football league, and the privilege of having access to and the
use of amusement devices, tanning facilities, reducing salons,
steam baths, turkish baths, health clubs, and spas or athletic
facilities;
(e) The furnishing for a consideration of lodging and
related services by a hotel, rooming house, tourist court, motel
or trailer camp and of the granting of any similar license to
use real property other than the renting or leasing thereof for
a continuous period of 30 days or more;
(f) The furnishing for a consideration of electricity, gas,
water, or steam for use or consumption within this state, or
local exchange telephone service, intrastate toll service, and
interstate toll service, if that service originates from and is
charged to a telephone located in this state. Telephone service
includes paging services and private communication service, as
defined in United States Code, title 26, section 4252(d), except
for private communication service purchased by an agent acting
on behalf of the state lottery. The furnishing for a
consideration of access to telephone services by a hotel to its
guests is a sale under this clause. Sales by municipal
corporations in a proprietary capacity are included in the
provisions of this clause. The furnishing of water and sewer
services for residential use shall not be considered a sale.
The sale of natural gas to be used as a fuel in vehicles
propelled by natural gas shall not be considered a sale for the
purposes of this section;
(g) The furnishing for a consideration of cable television
services, including charges for basic service, charges for
premium service, and any other charges for any other
pay-per-view, monthly, or similar television services;
(h) Notwithstanding section 297A.25, subdivisions 9 and 12,
the sales of racehorses including claiming sales and fees paid
for breeding racehorses or horses previously used for racing
shall be considered a "sale" and a "purchase." "Racehorse"
means a horse that is or is intended to be used for racing and
whose birth has been recorded by the Jockey Club or the United
States Trotting Association or the American Quarter Horse
Association. "Sale" does not include fees paid for breeding
horses that are not racehorses;
(i) The furnishing for a consideration of parking services,
whether on a contractual, hourly, or other periodic basis,
except for parking at a meter;
(j) The furnishing for a consideration of services listed
in this paragraph:
(i) laundry and dry cleaning services including cleaning,
pressing, repairing, altering, and storing clothes, linen
services and supply, cleaning and blocking hats, and carpet,
drapery, upholstery, and industrial cleaning. Laundry and dry
cleaning services do not include services provided by coin
operated facilities operated by the customer;
(ii) motor vehicle washing, waxing, and cleaning services,
including services provided by coin-operated facilities operated
by the customer, and rustproofing, undercoating, and towing of
motor vehicles;
(iii) building and residential cleaning, maintenance, and
disinfecting and exterminating services;
(iv) services provided by detective agencies services,
security services, burglar, fire alarm, and armored car services
not including services performed within the jurisdiction they
serve by off-duty licensed peace officers as defined in section
626.84, subdivision 1;
(v) pet grooming services;
(vi) lawn care, fertilizing, mowing, spraying and sprigging
services; garden planting and maintenance; tree, bush, and shrub
pruning, bracing, spraying, and surgery; tree, bush, shrub and
stump removal; and tree trimming for public utility lines.
Services performed under a construction contract for the
installation of shrubbery, plants, sod, trees, bushes, and
similar items are not taxable;
(vii) solid waste collection and disposal services as
described in section 297A.45;
(viii) massages, except when provided by a licensed health
care facility or professional or upon written referral from a
licensed health care facility or professional for treatment of
illness, injury, or disease; and
(ix) the furnishing for consideration of lodging, board and
care services for animals in kennels and other similar
arrangements, but excluding veterinary and horse boarding
services.
The services listed in this paragraph are taxable under section
297A.02 if the service is performed wholly within Minnesota or
if the service is performed partly within and partly without
Minnesota and the greater proportion of the service is performed
in Minnesota, based on the cost of performance. In applying the
provisions of this chapter, the terms "tangible personal
property" and "sales at retail" include taxable services and the
provision of taxable services, unless specifically provided
otherwise. Services performed by an employee for an employer
are not taxable under this paragraph. Services performed by a
partnership or association for another partnership or
association are not taxable under this paragraph if one of the
entities owns or controls more than 80 percent of the voting
power of the equity interest in the other entity. Services
performed between members of an affiliated group of corporations
are not taxable. For purposes of this section, "affiliated
group of corporations" includes those entities that would be
classified as a member of an affiliated group under United
States Code, title 26, section 1504, and who are eligible to
file a consolidated tax return for federal income tax purposes;
(k) A "sale" and a "purchase" includes the transfer of
computer software, meaning information and directions that
dictate the function performed by data processing equipment. A
"sale" and a "purchase" does not include the design,
development, writing, translation, fabrication, lease, or
transfer for a consideration of title or possession of a custom
computer program; and
(l) The granting of membership in a club, association, or
other organization if:
(1) the club, association, or other organization makes
available for the use of its members sports and athletic
facilities (without regard to whether a separate charge is
assessed for use of the facilities); and
(2) use of the sports and athletic facilities is not made
available to the general public on the same basis as it is made
available to members.
Granting of membership includes both one-time initiation fees
and periodic membership dues. Sports and athletic facilities
include golf courses, tennis, racquetball, handball and squash
courts, basketball and volleyball facilities, running tracks,
exercise equipment, swimming pools, and other similar athletic
or sports facilities. The provisions of this paragraph do not
apply to camps or other recreation facilities owned and operated
by an exempt organization under section 501(c)(3) of the
Internal Revenue Code of 1986, as amended through December 31,
1992, for educational and social activities for young people
primarily age 18 and under.
Sec. 3. Minnesota Statutes 1994, section 297E.02,
subdivision 1, is amended to read:
Subdivision 1. [IMPOSITION.] A tax is imposed on all
lawful gambling other than (1) pull-tabs purchased and placed
into inventory after January 1, 1987, and (2) tipboards
purchased and placed into inventory after June 30, 1988, at the
rate of ten percent on the gross receipts as defined in section
349.12 297E.01, subdivision 21 8, less prizes actually paid.
The tax imposed by this subdivision is in lieu of the tax
imposed by section 297A.02 and all local taxes and license fees
except a fee authorized under section 349.16, subdivision 8, or
a tax authorized under subdivision 5.
The tax imposed under this subdivision is payable by the
organization or party conducting, directly or indirectly, the
gambling.
Sec. 4. Minnesota Statutes 1994, section 297E.02,
subdivision 6, is amended to read:
Subd. 6. [COMBINED RECEIPTS TAX.] In addition to the taxes
imposed under subdivisions 1 and 4, a tax is imposed on the
combined receipts of the organization. As used in this section,
"combined receipts" is the sum of the organization's gross
receipts from lawful gambling less gross receipts directly
derived from the conduct of bingo, raffles, and paddlewheels, as
defined in section 349.12 297E.01, subdivision 21 8, for the
fiscal year. The combined receipts of an organization are
subject to a tax computed according to the following schedule:
If the combined receipts for the The tax is:
fiscal year are:
Not over $500,000 zero
Over $500,000, but not over
$700,000 two percent of the amount
over $500,000, but not
over $700,000
Over $700,000, but not over
$900,000 $4,000 plus four percent
of the amount over
$700,000, but not over
$900,000
Over $900,000 $12,000 plus six percent
of the amount over
$900,000
Sec. 5. Minnesota Statutes 1994, section 297E.02,
subdivision 11, is amended to read:
Subd. 11. [UNPLAYED OR DEFECTIVE PULL-TABS OR TIPBOARDS.]
If a deal of pull-tabs or tipboards registered with the board or
bar coded in accordance with chapter chapters 297E and 349 and
upon which the tax imposed by subdivision 4 has been paid is
returned unplayed to the distributor, the commissioner shall
allow a refund of the tax paid.
If a defective deal registered with the board or bar coded
in accordance with chapter chapters 297E and 349 and upon which
the taxes have been paid is returned to the manufacturer, the
distributor shall submit to the commissioner of revenue
certification from the manufacturer that the deal was returned
and in what respect it was defective. The certification must be
on a form prescribed by the commissioner and must contain
additional information the commissioner requires.
The commissioner may require that no refund under this
subdivision be made unless the returned pull-tabs or tipboards
have been set aside for inspection by the commissioner's
employee.
Reductions in previously paid taxes authorized by this
subdivision must be made when and in the manner prescribed by
the commissioner.
Sec. 6. Minnesota Statutes 1994, section 297E.031,
subdivision 1, is amended to read:
Subdivision 1. [APPLICATION AND ISSUANCE.] A distributor
who sells gambling products under this chapter must file an
application with the commissioner an application, on a form
prescribed by the commissioner, for a gambling tax permit and
identification number. The commissioner, when satisfied that
the applicant has a valid license from the board meets all
applicable requirements under chapters 297E and 349, shall issue
the applicant a permit and number. A permit is not assignable
and is valid only for the distributor in whose name it is issued.
Sec. 7. Minnesota Statutes 1994, section 297E.13,
subdivision 5, is amended to read:
Subd. 5. [UNTAXED GAMBLING EQUIPMENT.] It is a gross
misdemeanor for a person to possess gambling equipment for
resale in this state that has not been stamped or bar-coded in
accordance with chapter chapters 297E and 349 and upon which the
taxes imposed by chapter 297A or section 297E.02, subdivision 4,
have not been paid. The director of gambling enforcement or the
commissioner or the designated inspectors and employees of the
director or commissioner may seize in the name of the state of
Minnesota any unregistered or untaxed gambling equipment.
Sec. 8. Minnesota Statutes 1994, section 325D.33,
subdivision 4, is amended to read:
Subd. 4. [WHOLESALER TO PRESERVE COPIES OF INVOICES.]
Every person who sells cigarettes to persons other than the
ultimate consumer shall prepare for each sale itemized invoices
showing the seller's name and address, the purchaser's name and
address, the date of sale, and all prices and discounts and
shall keep legible copies of them for one year from the date of
sale.
Sec. 9. Minnesota Statutes 1994, section 349.163,
subdivision 5, is amended to read:
Subd. 5. [PULL-TAB AND TIPBOARD FLARES.] (a) A
manufacturer may not ship or cause to be shipped into this state
or sell for use or resale in this state any deal of pull-tabs or
tipboards that does not have its own individual flare as
required for that deal by this subdivision and rule of the
board. A person other than a manufacturer may not manufacture,
alter, modify, or otherwise change a flare for a deal of
pull-tabs or tipboards except as allowed by this chapter or
board rules.
(b) A manufacturer must comply with either paragraphs (c)
to (g) or (f) to (j) with respect to pull-tabs and tipboards
sold by the manufacturer before January 1, 1995, for use or
resale in Minnesota or shipped into or caused to be shipped into
Minnesota by the manufacturer before January 1, 1995. A
manufacturer must comply with paragraphs (f) to (j) with respect
to pull-tabs and tipboards sold by the manufacturer on and after
January 1, 1995, for use or resale in Minnesota or shipped into
or caused to be shipped into Minnesota by the manufacturer on
and after January 1, 1995. Paragraphs (c) to (e) expire January
1, 1995.
(c) The flare of each deal of pull-tabs and tipboards sold
by a manufacturer for use or resale in Minnesota must have the
Minnesota gambling stamp affixed. The flare, with the stamp
affixed, must be placed inside the wrapping of the deal which
the flare describes.
(d) Each pull-tab and tipboard flare must bear the
following statement printed in letters large enough to be
clearly legible:
"Pull-tab (or tipboard) purchasers -- This pull-tab (or
tipboard) game is not legal in Minnesota unless:
-- a Minnesota gambling stamp is affixed to this sheet, and
-- the serial number handwritten on the gambling stamp is
the same as the serial number printed on this sheet and on the
pull-tab (or tipboard) ticket you have purchased."
(e) The flare of each pull-tab and tipboard game must bear
the serial number of the game, printed in numbers at least
one-half inch high and must be imprinted with the following:
(1) the name of the game;
(2) the name of the manufacturer;
(3) the number of tickets in the deal; and
(4) other information the board by rule requires.
(f) The flare of each pull-tab and tipboard game must have
affixed to or imprinted at the bottom a bar code that provides
all information required by the commissioner of revenue under
section 297E.04, subdivision 2.
The serial number included in the bar code must be the same as
the serial number of the tickets included in the deal. A
manufacturer who manufactures a deal of pull-tabs must affix to
the outside of the box containing that game the same bar code
that is affixed to or imprinted at the bottom of a flare for
that deal.
(g) No person may alter the bar code that appears on the
outside of a box containing a deal of pull-tabs and tipboards.
Possession of a box containing a deal of pull-tabs and tipboards
that has a bar code different from the bar code of the deal
inside the box is prima facie evidence that the possessor has
altered the bar code on the box.
(h) The flare of each deal of pull-tabs and tipboards sold
by a manufacturer for use or resale in Minnesota must have
imprinted on it a symbol that is at least one inch high and one
inch wide consisting of an outline of the geographic boundaries
of Minnesota with the letters "MN" inside the outline. The
flare must be placed inside the wrapping of the deal which the
flare describes.
(i) Each pull-tab and tipboard flare must bear the
following statement printed in letters large enough to be
clearly legible:
"Pull-tab (or tipboard) purchasers -- This pull-tab (or
tipboard) game is not legal in Minnesota unless:
-- an outline of Minnesota with letters "MN" inside it is
imprinted on this sheet, and
-- the serial number imprinted on the bar code at the
bottom of this sheet is the same as the serial number on the
pull-tab (or tipboard) ticket you have purchased."
(j) The flare of each pull-tab and tipboard game must have
the serial number of the game imprinted on the bar code at the
bottom of the flare in numerals at least one-half inch high.
Sec. 10. [REPEALER.]
Minnesota Statutes 1994, section 60A.15, subdivision 7, is
repealed.
Sec. 11. [INSTRUCTIONS TO REVISOR.]
In the next edition of Minnesota Statutes, the revisor of
statutes shall renumber section 297E.02, subdivision 5, as
section 349.213, subdivision 3, and shall change all references
to that section in Minnesota Statutes or Minnesota Rules
accordingly.
Sec. 12. [EFFECTIVE DATE.]
Section 1 is effective for returns due in 1996 and
thereafter. Sections 2 to 11 are effective the day following
final enactment.
ARTICLE 18
REVENUE TECHNICAL INITIATIVES
MINNESOTACARE
Section 1. Minnesota Statutes 1994, section 295.50,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] For purposes of sections
295.50 to 295.58 295.59, the following terms have the meanings
given.
Sec. 2. Minnesota Statutes 1994, section 295.50,
subdivision 4, is amended to read:
Subd. 4. [HEALTH CARE PROVIDER.] (a) "Health care
provider" means:
(1) a person furnishing any or all of the following goods
or services directly to a patient or consumer: medical,
surgical, optical, visual, dental, hearing, nursing services,
drugs, medical supplies, medical appliances, laboratory,
diagnostic or therapeutic services, or any goods and services
not listed above that qualifies qualify for reimbursement under
the medical assistance program provided under chapter 256B;
(2) a staff model health plan company; or
(3) a licensed an ambulance service required to be licensed.
(b) Health care provider does not include hospitals,
nursing homes licensed under chapter 144A or licensed in any
other jurisdiction, pharmacies, and surgical centers, bus and
taxicab transportation, or any other providers of transportation
services other than ambulance services required to be licensed,
supervised living facilities for persons with mental retardation
or related conditions, licensed under Minnesota Rules, parts
4665.0100 to 4665.9900, residential care homes licensed under
chapter 144B, board and lodging establishments providing only
custodial services that are licensed under chapter 157 and
registered under section 157.031 to provide supportive services
or health supervision services, adult foster homes as defined in
Minnesota Rules, part 9555.5050 and boarding care homes, as
defined in Minnesota Rules, part 4655.0100.
Sec. 3. Minnesota Statutes 1994, section 295.53,
subdivision 1, is amended to read:
Subdivision 1. [EXEMPTIONS.] The following payments are
excluded from the gross revenues subject to the hospital,
surgical center, or health care provider taxes under sections
295.50 to 295.57:
(1) payments received for services provided under the
Medicare program, including payments received from the
government, and organizations governed by sections 1833 and 1876
of title XVIII of the federal Social Security Act, United States
Code, title 42, section 1395, and enrollee deductibles,
coinsurance, and copayments, whether paid by the individual or
by insurer or other third party. Payments for services not
covered by Medicare are taxable;
(2) medical assistance payments including payments received
directly from the government or from a prepaid plan;
(3) payments received for home health care services;
(4) payments received from hospitals or surgical centers
for goods and services on which liability for tax is imposed
under section 295.52 or the source of funds for the payment is
exempt under clause (1), (2), (7), (8), or (10);
(5) payments received from health care providers for goods
and services on which liability for tax is imposed under
sections 295.52 to 295.57 this chapter or the source of funds
for the payment is exempt under clause (1), (2), (7), (8), or
(10);
(6) amounts paid for legend drugs, other than nutritional
products, to a wholesale drug distributor reduced by
reimbursements received for legend drugs under clauses (1), (2),
(7), and (8);
(7) payments received under the general assistance medical
care program including payments received directly from the
government or from a prepaid plan;
(8) payments received for providing services under the
MinnesotaCare program including payments received directly from
the government or from a prepaid plan and enrollee deductibles,
coinsurance, and copayments;
(9) payments received by a resident health care provider or
the wholly owned subsidiary of a resident health care provider
for care provided outside Minnesota to a patient who is not
domiciled in Minnesota;
(10) payments received from the chemical dependency fund
under chapter 254B;
(11) payments received in the nature of charitable
donations that are not designated for providing patient services
to a specific individual or group;
(12) payments received for providing patient services if
the services are incidental to conducting medical research;
(13) payments received from any governmental agency for
services benefiting the public, not including payments made by
the government in its capacity as an employer or insurer;
(14) payments received for services provided by community
residential mental health facilities licensed under Minnesota
Rules, parts 9520.0500 to 9520.0690, community support programs
and family community support programs approved under Minnesota
Rules, parts 9535.1700 to 9535.1760, and community mental health
centers as defined in section 245.62, subdivision 2;
(15) government payments received by a regional treatment
center;
(16) payments received for hospice care services;
(17) payments received by a resident health care provider
or the wholly owned subsidiary of a resident health care
provider for medical supplies, appliances and equipment
delivered outside of Minnesota;
(18) payments received for services provided by community
supervised living facilities for persons with mental retardation
or related conditions licensed under Minnesota Rules, parts
4665.0100 to 4665.9900;
(19) payments received by a post-secondary educational
institution from student tuition, student activity fees, health
care service fees, government appropriations, donations, or
grants. Fee for service payments and payments for extended
coverage are taxable; and
(20) (19) payments received for services provided by:
residential care homes licensed under chapter 144B; board and
lodging establishments providing only custodial services, that
are licensed under chapter 157 and registered under section
157.031 to provide supportive services or health supervision
services; and assisted living programs, and congregate housing
programs, and other senior housing options.
Sec. 4. Minnesota Statutes 1994, section 295.53,
subdivision 5, is amended to read:
Subd. 5. [DEDUCTIONS EXEMPTIONS FOR PHARMACIES.] (a)
Pharmacies may deduct exclude from their gross revenues subject
to tax payments for medical supplies, appliances, and devices
that are exempt under subdivision 1, except payments under
subdivision 1, clauses (3), (6), (9), (11), and (14) (1), (2),
(4), (5), (7), (8), and (13).
(b) Resident pharmacies may deduct exclude from their gross
revenues subject to tax payments received for medical supplies,
appliances, and equipment delivered outside of Minnesota.
Sec. 5. Minnesota Statutes 1994, section 295.55, is
amended by adding a subdivision to read:
Subd. 7. [EXTENSIONS FOR FILING RETURNS.] If good cause
exists, the commissioner may extend the time for filing
MinnesotaCare tax returns for not more than 60 days.
Sec. 6. Minnesota Statutes 1994, section 295.57, is
amended to read:
295.57 [COLLECTION AND ENFORCEMENT; REFUNDS; RULEMAKING;
APPLICATION OF OTHER CHAPTERS; INTEREST ON OVERPAYMENTS.]
Subdivision 1. [APPLICATION OF OTHER CHAPTERS.] Unless
specifically provided otherwise by sections 295.50 to 295.58
295.59, the enforcement, interest, and penalty provisions under
chapter 294, appeal provisions in sections 289A.43 and 289A.65,
criminal penalties in section 289A.63, and refunds provisions in
section 289A.50, and collection and rulemaking provisions under
chapter 270, apply to a liability for the taxes imposed under
sections 295.50 to 295.58 295.59.
Subd. 2. [INTEREST ON OVERPAYMENTS.] Interest must be paid
on an overpayment refunded or credited to the taxpayer from the
date of payment of the tax until the date the refund is paid or
credited. For purposes of this subdivision, the date of payment
is the due date of the return or the date of actual payment of
the tax, whichever is later.
Sec. 7. [EFFECTIVE DATES.]
Sections 1 and 4 are effective the day following final
enactment.
Sections 2 and 3 are effective for tax periods beginning on
or after January 1, 1996.
Section 5 is effective for returns due on or after January
1, 1996.
Section 6 is retroactively effective from January 1, 1994.
ARTICLE 19
REVENUE TECHNICAL INITIATIVES
MISCELLANEOUS
Section 1. Minnesota Statutes 1994, section 270.69,
subdivision 10, is amended to read:
Subd. 10. [LIMITATION FOR HOMESTEAD PROPERTY.] A lien
imposed under this section upon property defined as homestead
property in chapter 510 sections 510.01 and 510.02 may not be
enforced against homestead property by levy under section
270.70, or by judgment lien foreclosure under chapter 550, but
notwithstanding section 510.07, is enforceable against the
proceeds from the sale, conveyance, or transfer of the homestead.
Sec. 2. Minnesota Statutes 1994, section 270B.03,
subdivision 1, is amended to read:
Subdivision 1. [WHO MAY INSPECT.] Returns and return
information must, on written request, be made open to inspection
by or disclosure to the data subject. For purposes of this
chapter, the following are the data subject:
(1) in the case of an individual return, that individual;
(2) in the case of an income tax return filed jointly,
either of the individuals with respect to whom the return is
filed;
(3) in the case of a partnership return, any person who was
a member of the partnership during any part of the period
covered by the return;
(4) in the case of the return of a corporation or its
subsidiary:
(i) any person designated by resolution of the board of
directors or other similar governing body;
(ii) any officer or employee of the corporation upon
written request signed by any officer and attested to by the
secretary or another officer;
(iii) any bona fide shareholder of record owning one
percent or more of the outstanding stock of the corporation;
(iv) if the corporation is a corporation that has made an
election under section 1362 of the Internal Revenue Code of
1986, as amended through December 31, 1988, any person who was a
shareholder during any part of the period covered by the return
during which an election was in effect; or
(v) if the corporation has been dissolved, any person
authorized by state law to act for the corporation or any person
who would have been authorized if the corporation had not been
dissolved;
(5) in the case of an estate return:
(i) the personal representative or trustee of the estate;
and
(ii) any heir at law, next of kin, or beneficiary of the
estate, but only if the commissioner finds that the heir at law,
next of kin, or beneficiary has a material interest that will be
affected by information contained in the return;
(6) in the case of a trust return:
(i) the trustee or trustees, jointly or separately; and
(ii) any beneficiary of the trust, but only if the
commissioner finds that the beneficiary has a material interest
that will be affected by information contained in the return;
(7) if liability has been assessed to a transferee under
section 289A.31, subdivision 3, the transferee is the data
subject with regard to the returns and return information
relating to the assessed liability; and
(8) in the case of an Indian tribal government or an Indian
tribal government-owned entity,
(i) the chair of the tribal government, or
(ii) any person authorized by the tribal government; and
(9) in the case of a successor as defined in section
270.102, subdivision 1, paragraph (b), the successor is the data
subject and information may be disclosed as provided by section
270.102, subdivision 4.
Sec. 3. Minnesota Statutes 1994, section 270B.12,
subdivision 2, is amended to read:
Subd. 2. [MUNICIPALITIES LOCAL UNITS OF GOVERNMENT.] Sales
and or use tax returns and return information are open to
inspection by or disclosure to the taxing officials of
any municipality local unit of government of the state of
Minnesota that has a local sales or use tax, for the purpose of
and to the extent necessary for the administration of the local
sales and or use tax.
Sec. 4. Minnesota Statutes 1994, section 270B.14,
subdivision 11, is amended to read:
Subd. 11. [DISCLOSURE TO COMMISSIONER OF HEALTH.] (a) On
the request of the commissioner of health, the commissioner may
disclose return information to the extent provided in paragraph
(b) and for the purposes provided in paragraph (c).
(b) Data that may be disclosed are limited to the
taxpayer's identity, as defined in section 270B.01, subdivision
5.
(c) The commissioner of health may request data only for
the purposes of carrying out epidemiologic investigations, which
includes conducting occupational health and safety surveillance,
and locating and notifying individuals exposed to health hazards
as a result of employment. Requests for data by the
commissioner of health must be in writing and state the purpose
of the request. Data received may be used only for the purposes
of section 144.0525.
(d) The commissioner may disclose health care service
revenue data to the commissioner of health as provided by
section 62J.41, subdivision 2.
Sec. 5. Minnesota Statutes 1994, section 289A.50,
subdivision 1, is amended to read:
Subdivision 1. [GENERAL RIGHT TO REFUND.] (a) Subject to
the requirements of this section and section 289A.40, a taxpayer
who has paid a tax in excess of the taxes lawfully due and who
files a written claim for refund will be refunded or credited
the overpayment of the tax determined by the commissioner to be
erroneously paid.
(b) The claim must specify the name of the taxpayer, the
date when and the period for which the tax was paid, the kind of
tax paid, the amount of the tax that the taxpayer claims was
erroneously paid, the grounds on which a refund is claimed, and
other information relative to the payment and in the form
required by the commissioner. An income tax, estate tax, or
corporate franchise tax return, or amended return claiming an
overpayment constitutes a claim for refund.
(c) When, in the course of an examination, and within the
time for requesting a refund, the commissioner determines that
there has been an overpayment of tax, the commissioner shall
refund or credit the overpayment to the taxpayer and no demand
is necessary. If the overpayment exceeds $1, the amount of the
overpayment must be refunded to the taxpayer. If the amount of
the overpayment is less than $1, the commissioner is not
required to refund. In these situations, the commissioner does
not have to make written findings or serve notice by mail to the
taxpayer.
(d) If the amount allowable as a credit for withholding,
estimated taxes, or dependent care exceeds the tax against which
the credit is allowable, the amount of the excess is considered
an overpayment. The refund allowed by section 290.06,
subdivision 23, is also considered an overpayment. The
requirements of section 270.10, subdivision 1, do not apply to
the refunding of such an overpayment shown on the original
return filed by a taxpayer.
(e) If the entertainment tax withheld at the source exceeds
by $1 or more the taxes, penalties, and interest reported in the
return of the entertainment entity or imposed by section
290.9201, the excess must be refunded to the entertainment
entity. If the excess is less than $1, the commissioner need
not refund that amount.
(f) If the surety deposit required for a construction
contract exceeds the liability of the out-of-state contractor,
the commissioner shall refund the difference to the contractor.
(g) An action of the commissioner in refunding the amount
of the overpayment does not constitute a determination of the
correctness of the return of the taxpayer.
(h) There is appropriated from the general fund to the
commissioner of revenue the amount necessary to pay refunds
allowed under this section.
Sec. 6. Minnesota Statutes 1994, section 296.01,
subdivision 34, is amended to read:
Subd. 34. [SPECIAL FUEL.] "Special fuel" means (1) all
combustible gases and liquid petroleum products or substitutes
therefor including clear undyed diesel fuel, except gasoline,
which are delivered into the supply tank of a licensed motor
vehicle or into storage tanks maintained by an owner or operator
of a licensed motor vehicle as a source of supply for such
vehicle; (2) all combustible gases and liquid petroleum products
or substitutes therefor, except gasoline, when delivered to a
licensed special fuel dealer or to the retail service station
storage of a distributor who has elected to pay the special fuel
excise tax as provided in section 296.12, subdivision 3; (3) all
combustible gases and liquid petroleum products or substitutes
therefor, except gasoline, which are used as aviation fuel; or
(4) dyed fuel that is being used illegally in a licensed motor
vehicle.
Sec. 7. Minnesota Statutes 1994, section 296.025,
subdivision 1, is amended to read:
Subdivision 1. [TAX IMPOSED.] There is hereby imposed an
excise tax of the same rate per gallon as the gasoline excise
tax on all special fuel. For clear undyed diesel fuel, the tax
is imposed on the first distributor who received the product in
Minnesota. For dyed fuel being used illegally in a licensed
motor vehicle, the tax is imposed on the owner or operator of
the motor vehicle, or in some instances, on the dealer who
supplied the fuel. For dyed fuel used in a motor vehicle but
subject to a federal exemption, although no federal tax may be
imposed, the fuel is subject to the state tax. For other fuels,
including jet fuel, propane, and compressed natural gas, the tax
is imposed on the distributor, special fuel dealer, or bulk
purchaser. This tax is payable at the time and in the manner
specified in this chapter. For purposes of this section, "owner
or operator" means the operation of licensed motor vehicles,
whether loaded or empty, whether for compensation or not for
compensation, and whether owned by or leased to the motor
carrier who operates them or causes them to be operated.
Sec. 8. Minnesota Statutes 1994, section 296.12,
subdivision 3, is amended to read:
Subd. 3. [TAX COLLECTION, REPORTING AND PAYMENT.] (a)
For clear undyed diesel fuel, the tax is imposed on the
distributor who receives the fuel.
(b) For all other special fuels, the tax is imposed on the
distributor, bulk purchaser, or special fuel dealer. The tax
may be paid upon receipt or sale as follows:
(1) Distributors and special fuel dealers may, subject to
the approval of the commissioner, elect to pay to the
commissioner the special fuel excise tax on all special fuel
delivered or sold into the supply tank of an aircraft or a
licensed motor vehicle. Under this option an invoice must be
issued at the time of each delivery showing the name and address
of the purchaser, date of sale, number of gallons, price per
gallon and total amount of sale. A separate sales ticket book
shall be maintained for special fuel sales; and
(2) Bulk purchasers shall report and pay the excise tax on
all special fuel purchased by them for storage, to the
commissioner.
(c) Any person delivering special fuel on which the excise
tax has not previously been paid, into the supply tank of an
aircraft or a licensed motor vehicle shall report such delivery
and pay the excise tax on the special fuel so delivered, to the
commissioner.
Sec. 9. Minnesota Statutes 1994, section 296.12,
subdivision 4, is amended to read:
Subd. 4. [MONTHLY REPORTS; SHRINKAGE ALLOWANCE.] On or
before the 23rd day of each month, the persons subject to the
provisions of this section shall file in the office of the
commissioner at St. Paul, Minnesota, a report in the following
manner:
(1) Distributors of clear undyed diesel fuel must file a
monthly tax return with the department listing all purchases or
receipts of clear undyed diesel fuel. Distributors may be
allowed to take a credit or credits under section 296.14,
subdivision 2.
(2) Distributors and dealers of special fuel other than
clear undyed diesel fuel shall report the total number of
gallons delivered to them during the preceding calendar month
and shall pay the special fuel excise tax due thereon to the
commissioner. The invoice must show the true and correct name
and address of the purchaser, and the purchaser's signature.
The report shall contain such other information as the
commissioner may require.
(3) Distributors and dealers of special fuel other than
clear undyed diesel fuel who have elected to pay the special
fuel excise tax on all special fuel delivered into the supply
tank of an aircraft or licensed motor vehicle as provided in
subdivision 3, shall report the total number of gallons
delivered into the supply tank of an aircraft or licensed motor
vehicle during the preceding calendar month and shall pay the
special fuel excise tax due thereon to the commissioner.
(4) Bulk purchasers shall report and pay the special fuel
excise tax on all special fuel except clear undyed diesel fuel
purchased by them for storage, during the preceding calendar
month. In such cases as the commissioner may permit, credit for
the excise tax due or previously paid on special fuel not used
in aircraft or licensed motor vehicles, may be allowed in
computing tax liability. The report shall contain such other
information as the commissioner may require.
(5) In computing the special fuel excise tax due, a
deduction of one percent of the quantity of special fuel on
which tax is due shall be made for evaporation and loss.
(6) Each report shall contain a confession of judgment for
the amount of the tax shown due thereon to the extent not timely
paid.
Sec. 10. [EFFECTIVE DATE.]
Section 1 is effective for sales, conveyances, or transfers
on or after the day following final enactment.
Sections 2 to 9 are effective the day following final
enactment.
Presented to the governor May 30, 1995
Signed by the governor June 1, 1995, 11:18 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes