Office of the Revisor of Statutes
Minnesota Session Laws - 1997, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 231-H.F.No. 2163
An act relating to the financing and operation of
state and local government; providing property tax
class rate reform; dedicating future state revenues to
property tax reform; providing a property tax rebate;
providing for calculation of rent constituting
property taxes; changing truth-in-taxation
requirements; imposing levy limits on cities and
counties for taxes levied in 1997 and 1998;
authorizing deferral of property taxes by senior
citizens; changing fiscal note requirements for state
mandates; requiring periodic review of administrative
rules; making miscellaneous property, income, and
sales tax changes; changing and modifying the
application of tax increment financing provisions;
authorizing certain local governments to exercise
certain powers; authorizing local tax levies,
abatements, and assessments; modifying certain local
aids; conforming certain income tax laws with changes
in federal law; modifying certain income tax
definitions and formulas; providing income tax
credits; modifying the application of sales and excise
taxes; exempting certain purchases from the sales tax;
modifying waste management tax and minerals tax
provisions; increasing the budget reserve; revising
the law governing regional development commissions;
modifying certain provisions relating to insurance
companies; requiring studies; requiring reports;
appropriating money; repealing an appropriation;
amending Minnesota Statutes 1996, sections 6.76;
16A.152, subdivision 2; 60A.075, subdivisions 1, 8,
and 9; 60A.077, subdivisions 1, 2, 3, 5, 6, 7, 8, 9,
10, 11, and by adding a subdivision; 69.021,
subdivision 7; 93.41; 103D.905, subdivisions 4, 5, and
by adding a subdivision; 115A.554; 117.155; 121.15, by
adding a subdivision; 124.195, subdivisions 7 and 10;
124.239, subdivision 5, and by adding subdivisions;
161.45, by adding a subdivision; 216B.16, by adding a
subdivision; 270.60, by adding a subdivision; 270B.01,
subdivision 8; 270B.02, by adding a subdivision;
270B.12, by adding a subdivision; 271.01, subdivision
5; 271.19; 272.02, subdivision 1, and by adding a
subdivision; 272.115; 273.11, subdivisions 1, 1a, and
16; 273.111, subdivisions 3 and 6; 273.112,
subdivisions 2, 3, and 4; 273.12; 273.121; 273.124,
subdivision 1, and by adding a subdivision; 273.13,
subdivisions 22, 23, 24, 25, 31, 32, and by adding a
subdivision; 273.1393; 273.1398, subdivision 8;
273.18; 274.01; 274.13, by adding subdivisions;
275.065, subdivisions 1, 3, 5a, 6, 8, and by adding
subdivisions; 275.07, subdivision 4; 275.16; 275.62,
subdivision 1; 276.04, subdivision 2; 278.07; 281.13;
281.23, subdivision 6, and by adding a subdivision;
281.273; 281.276; 282.01, subdivision 8; 282.04,
subdivision 1; 287.22; 289A.02, subdivision 7;
289A.56, subdivision 4; 290.01, subdivisions 19, 19a,
19b, 19c, 19d, 19f, 19g, 31, and by adding a
subdivision; 290.014, subdivisions 2 and 3; 290.015,
subdivisions 3 and 5; 290.06, subdivision 22, and by
adding a subdivision; 290.067, subdivision 1; 290.068,
subdivision 1; 290.0922, subdivision 1; 290.17,
subdivisions 1 and 4; 290.191, subdivision 4; 290.371,
subdivision 2; 290.92, by adding a subdivision;
290.9725; 290.9727, subdivision 1; 290.9728,
subdivision 1; 290A.03, subdivisions 7, 11, and 13;
290A.04, by adding a subdivision; 290A.19; 291.005,
subdivision 1; 296.141, subdivision 4; 296.18,
subdivision 1; 297A.01, subdivisions 3, 4, 7, 11, and
16; 297A.09; 297A.15, subdivision 7; 297A.211,
subdivision 1; 297A.25, subdivisions 2, 3, 5, 7, 11,
16, 56, 59, and by adding subdivisions; 297A.44,
subdivision 1; 297B.01, subdivisions 7 and 8; 298.24,
subdivision 1; 298.28, subdivision 9a, and by adding a
subdivision; 298.296, subdivision 4; 298.2961,
subdivision 1; 298.75, subdivisions 1, 4, and by
adding a subdivision; 308A.705, subdivision 1;
325D.33, subdivision 3; 349.154, subdivision 2;
349.19, subdivision 2a; 349.191, subdivision 1b;
373.40, subdivision 7; 375.192, subdivision 2;
383A.75, subdivision 3; 398A.04, subdivision 1;
462.381; 462.383; 462.384, subdivision 5; 462.385,
subdivisions 1 and 3; 462.386, subdivision 1; 462.387;
462.388; 462.389, subdivisions 1, 3, and 4; 462.39,
subdivisions 2 and 3; 462.391, subdivision 5, and by
adding subdivisions; 462.393; 462.394; 462.396,
subdivisions 1, 3, and 4; 462.398; 465.71; 465.81,
subdivisions 1 and 3; 465.82, subdivisions 1, 2, and
by adding a subdivision; 465.87, subdivisions 1a and
2; 465.88; 469.012, subdivision 1; 469.033,
subdivision 6; 469.040, subdivision 3; 469.169, by
adding a subdivision; 469.174, subdivision 10, and by
adding subdivisions; 469.175, subdivision 3; 469.176,
subdivisions 1b, 4c, 4j, and 5; 469.177, subdivisions
1 and 3; 473.39, by adding a subdivision; 477A.011,
subdivision 36; 477A.05; Laws 1992, chapter 511,
article 2, section 52; Laws 1993, chapter 375,
articles 7, section 29, and 9, sections 45,
subdivisions 2, 3, 4, and by adding a subdivision, and
46, subdivision 2; Laws 1995, chapters 255, article 3,
section 2, subdivision 1, as amended, and 264, article
5, sections 44, subdivision 4, as amended, and 45,
subdivision 1, as amended; and Laws 1997, chapters 34,
section 2, and 75, section 2; proposing coding for new
law in Minnesota Statutes, chapters 3; 14; 16A; 273;
275; 287; 290; 297A; 383A; 383B; 458D; 462A; 465; and
469; proposing coding for new law as Minnesota
Statutes, chapters 290B; and 297H; repealing Minnesota
Statutes 1996, sections 3.982; 116.07, subdivision 10;
121.904, subdivision 4d; 124.2134; 270B.12,
subdivision 11; 273.1317; 273.1318; 276.012; 276.20;
276.21; 290A.03, subdivisions 12a and 14; 290A.055;
290A.26; 297A.01, subdivisions 20 and 21; 297A.02,
subdivision 5; 297A.45, as amended; 462.384,
subdivision 7; 462.385, subdivision 2; 462.389,
subdivision 5; 462.391, subdivisions 1, 2, 3, 4, 6, 7,
8, and 9; 462.392; 469.181; Laws 1995, chapter 264,
article 4, as amended; and H.F. 2158, article 1,
section 25, if enacted.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
PROPERTY TAX REFORM
Section 1. Minnesota Statutes 1996, section 124.239, is
amended by adding a subdivision to read:
Subd. 3a. [DEBT SERVICE COSTS QUALIFYING FOR AID.] Annual
debt service costs up to an amount equal to the 1997 debt
service costs for bonds outstanding on the effective date of
this act qualify for alternative facilities aid under
subdivision 5.
Sec. 2. Minnesota Statutes 1996, section 124.239,
subdivision 5, is amended to read:
Subd. 5. [LEVY AUTHORIZED.] A district, after local board
approval, may levy for costs related to an approved facility
plan as follows:
(a) if the district has indicated to the commissioner that
bonds will be issued, the district may levy for the principal
and interest payments on outstanding bonds issued according to
subdivision 3 after reduction for any alternative facilities aid
received under subdivision 5; or
(b) if the district has indicated to the commissioner that
the plan will be funded through levy, the district may levy
according to the schedule approved in the plan.
Sec. 3. Minnesota Statutes 1996, section 124.239, is
amended by adding a subdivision to read:
Subd. 5a. [ALTERNATIVE FACILITIES AID.] A district's
alternative facilities aid is the amount equal to the district's
annual debt service costs qualifying for aid under subdivision
3a.
Sec. 4. [273.126] [QUALIFYING LOW-INCOME RENTAL HOUSING.]
Subdivision 1. [QUALIFYING RULES.] The market value of a
rental housing unit qualifies for assessment under class 4d if:
(1) it is occupied by individuals meeting the income limits
under subdivision 2;
(2) a rent restriction agreement under subdivision 3
applies;
(3) the unit meets the minimum housing quality standards
under subdivision 4; and
(4) the Minnesota housing finance agency certifies to the
local assessor that the unit qualifies.
Subd. 2. [INCOME LIMITS.] (a) In order to qualify under
class 4d, a unit must be occupied by an individual or
individuals whose income is at or below 60 percent of the median
area gross income. If the resident's income met the requirement
when the resident first occupied the unit, the income of the
resident continues to qualify. If an individual first occupied
a unit before January 1, 1998, the individual's income for
purposes of the preceding sentence is the income for calendar
year 1996.
(b) For purposes of this section, "median area gross income"
means the greater of (1) the median gross income for the area
determined under section 42 of the Internal Revenue Code of
1986, as amended through December 31, 1996, or (2) the median
gross income for the state.
(c) The median gross income must be adjusted for family
size.
(d) Vacant units qualify as meeting the requirements of
this subdivision in the same proportion that total units in the
building are subject to rent restriction agreements under
subdivision 3 and meet minimum housing standards under
subdivision 4. This paragraph applies only to the extent that
units subject to a rent restriction agreement and meeting the
minimum housing quality standards are vacant.
(e) The owner or manager of the property may comply with
this subdivision by obtaining written statements from the
residents that their incomes are at or below the limit.
Subd. 3. [RENT RESTRICTIONS.] (a) In order to qualify
under class 4d, a unit must be subject to a rent restriction
agreement with the housing finance agency for a period of at
least five years. The agreement must be in effect and apply to
the rents to be charged for the year in which the property taxes
are payable. The agreement must provide that the restrictions
apply to each year of the period, regardless of whether the unit
is occupied by an individual with qualifying income or whether
class 4d applies. The rent restriction agreement must provide
for rents for the unit to be no higher than 30 percent of 60
percent of the median gross income. The definition of median
gross income specified in this section applies. "Rent" means
"gross rent" as defined in section 42(g)(2)(B) of the Internal
Revenue Code of 1986, as amended through December 31, 1996.
(b) Notwithstanding the maximum rent levels permitted, 20
percent of the units in the metropolitan area and ten percent of
the units in greater Minnesota qualifying under class 4d must be
made available to a family with a section 8 certificate.
(c) The rent restriction agreement runs with the land and
binds any successor to title to the property, without regard to
whether the successor had actual notice or knowledge of the
agreement. The owner must promptly record the agreement in the
office of the county recorder or must file it in the office of
the registrar of titles, in the county where the property is
located. If the agreement is not recorded, class 4d does not
apply to the property.
Subd. 4. [MINIMUM HOUSING STANDARDS.] In order to qualify
under class 4d, a unit must be certified by the housing finance
agency to meet the minimum housing standards established under
section 462A.071.
Subd. 5. [MONITORING RENT LEVELS.] The housing finance
agency is directed to monitor changes in rent levels and the use
of section 8 certificates in units qualifying under class 4d.
Subd. 6. [PENALTIES.] Notwithstanding the provisions of
section 273.01, 274.01, or any other law, if the Minnesota
housing finance agency notifies the assessor that the provisions
of this section have not been met for any period during which a
unit was classified under class 4d, a penalty is imposed as
provided in section 462A.071, subdivision 8.
Sec. 5. [273.127] [TRANSITION CLASS RATES; LOW-INCOME
HOUSING.]
Subdivision 1. [TAXES PAYABLE IN 1998.] For taxes payable
in 1998, low-income housing property classified as class 4c
shall have a class rate of two percent, and property classified
as class 4d shall have a class rate of 1.9 percent.
Subd. 2. [APPLICATION.] (a) The class rates under
subdivisions 3 and 4 apply to the market value of properties:
(1)(i) which were classified as class 4c or class 4d for
taxes payable in 1998; or
(ii) which are constructed or substantially rehabilitated
during calendar year 1997 and would have qualified as class 4c
or class 4d for taxes payable in 1999 absent the amendments to
those classes in section 8; and
(2) which do not qualify as class 4d property as a result
of the eligibility criteria specified in section 273.126.
(b) To qualify for the class rates under this section, the
building's owner must annually certify to the assessor in
writing that the property, building, or unit continues to
qualify under the laws in effect and applicable to its
classification for taxes payable in 1998.
(c) A property no longer qualifies under this section:
(1) if it is transferred or sold; or
(2) if loans, that have a principal amount equal to more
than 25 percent of the property's market value and that are
secured by the property, are refinanced.
Subd. 3. [CLASS 4C PROPERTIES.] For the market value of
properties that meet the criteria of subdivision 2, paragraph
(a), and which no longer qualify as a result of the eligibility
criteria specified in section 273.126, a class rate of 2.4
percent applies for taxes payable in 1999 and a class rate of
2.6 percent applies for taxes payable in 2000.
Subd. 4. [CLASS 4D PROPERTIES.] For the market value of
properties that meet the criteria of subdivision 2, paragraph
(a), and which no longer qualify as a result of the eligibility
criteria specified in section 273.126, a class rate of 2.2
percent applies for taxes payable in 1999 and a class rate of
2.5 applies for taxes payable in 2000.
Sec. 6. Minnesota Statutes 1996, section 273.13,
subdivision 22, is amended to read:
Subd. 22. [CLASS 1.] (a) Except as provided in subdivision
23, real estate which is residential and used for homestead
purposes is class 1. The market value of class 1a property must
be determined based upon the value of the house, garage, and
land.
For taxes payable in 1998 and thereafter, the first
$72,000 $75,000 of market value of class 1a property has a net
class rate of one percent of its market value and a gross class
rate of 2.17 percent of its market value. For taxes payable in
1992,; and the market value of class 1a property that
exceeds $72,000 but does not exceed $115,000 $75,000 has a class
rate of two 1.85 percent of its market value; and the market
value of class 1a property that exceeds $115,000 has a class
rate of 2.5 percent of its market value. For taxes payable in
1993 and thereafter, the market value of class 1a property that
exceeds $72,000 has a class rate of two percent.
(b) Class 1b property includes homestead real estate or
homestead manufactured homes used for the purposes of a
homestead by
(1) any blind person, or the blind person and the blind
person's spouse; or
(2) any person, hereinafter referred to as "veteran," who:
(i) served in the active military or naval service of the
United States; and
(ii) is entitled to compensation under the laws and
regulations of the United States for permanent and total
service-connected disability due to the loss, or loss of use, by
reason of amputation, ankylosis, progressive muscular
dystrophies, or paralysis, of both lower extremities, such as to
preclude motion without the aid of braces, crutches, canes, or a
wheelchair; and
(iii) has acquired a special housing unit with special
fixtures or movable facilities made necessary by the nature of
the veteran's disability, or the surviving spouse of the
deceased veteran for as long as the surviving spouse retains the
special housing unit as a homestead; or
(3) any person who:
(i) is permanently and totally disabled and
(ii) receives 90 percent or more of total income from
(A) aid from any state as a result of that disability; or
(B) supplemental security income for the disabled; or
(C) workers' compensation based on a finding of total and
permanent disability; or
(D) social security disability, including the amount of a
disability insurance benefit which is converted to an old age
insurance benefit and any subsequent cost of living increases;
or
(E) aid under the federal Railroad Retirement Act of 1937,
United States Code Annotated, title 45, section 228b(a)5; or
(F) a pension from any local government retirement fund
located in the state of Minnesota as a result of that
disability; or
(G) pension, annuity, or other income paid as a result of
that disability from a private pension or disability plan,
including employer, employee, union, and insurance plans and
(iii) has household income as defined in section 290A.03,
subdivision 5, of $50,000 or less; or
(4) any person who is permanently and totally disabled and
whose household income as defined in section 290A.03,
subdivision 5, is 150 275 percent or less of the federal poverty
level.
Property is classified and assessed under clause (4) only
if the government agency or income-providing source certifies,
upon the request of the homestead occupant, that the homestead
occupant satisfies the disability requirements of this paragraph.
Property is classified and assessed pursuant to clause (1)
only if the commissioner of economic security certifies to the
assessor that the homestead occupant satisfies the requirements
of this paragraph.
Permanently and totally disabled for the purpose of this
subdivision means a condition which is permanent in nature and
totally incapacitates the person from working at an occupation
which brings the person an income. The first $32,000 market
value of class 1b property has a net class rate of .45 percent
of its market value and a gross class rate of .87 percent of its
market value. The remaining market value of class 1b property
has a gross or net class rate using the rates for class 1 or
class 2a property, whichever is appropriate, of similar market
value.
(c) Class 1c property is commercial use real property that
abuts a lakeshore line and is devoted to temporary and seasonal
residential occupancy for recreational purposes but not devoted
to commercial purposes for more than 250 days in the year
preceding the year of assessment, and that includes a portion
used as a homestead by the owner, which includes a dwelling
occupied as a homestead by a shareholder of a corporation that
owns the resort or a partner in a partnership that owns the
resort, even if the title to the homestead is held by the
corporation or partnership. For purposes of this clause,
property is devoted to a commercial purpose on a specific day if
any portion of the property, excluding the portion used
exclusively as a homestead, is used for residential occupancy
and a fee is charged for residential occupancy. In order for a
property to be classified as class 1c, at least 40 percent of
the annual gross lodging receipts related to the property must
be from business conducted between Memorial Day weekend and
Labor Day weekend, and at least 60 percent of all bookings by
lodging guests during the year must be for periods of at least
two consecutive nights. Class 1c property has a class rate of
one percent of total market value for taxes payable in 1993 and
thereafter with the following limitation: the area of the
property must not exceed 100 feet of lakeshore footage for each
cabin or campsite located on the property up to a total of 800
feet and 500 feet in depth, measured away from the lakeshore.
(d) Class 1d property includes structures that meet all of
the following criteria:
(1) the structure is located on property that is classified
as agricultural property under section 273.13, subdivision 23;
(2) the structure is occupied exclusively by seasonal farm
workers during the time when they work on that farm, and the
occupants are not charged rent for the privilege of occupying
the property, provided that use of the structure for storage of
farm equipment and produce does not disqualify the property from
classification under this paragraph;
(3) the structure meets all applicable health and safety
requirements for the appropriate season; and
(4) the structure is not saleable as residential property
because it does not comply with local ordinances relating to
location in relation to streets or roads.
The market value of class 1d property has the same class
rates as class 1a property under paragraph (a).
Sec. 7. Minnesota Statutes 1996, 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 Each parcel has a class rate of three 2.7 percent of the
first $100,000 tier of market value for taxes payable in 1993
and thereafter, and 5.06 4.0 percent of the remaining market
value over $100,000, except that in the case of contiguous
parcels of commercial and industrial property owned by the same
person or entity, only the value equal to the first-tier value
of the contiguous parcels qualifies for the reduced class rate.
For the purposes of this subdivision, the first tier means the
first $150,000 of market value. 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 tier 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).
For purposes of this paragraph, parcels are considered to
be contiguous even if they are separated from each other by a
road, street, vacant lot, waterway, or other similar intervening
type of property.
(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 tier 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 equal to 85 percent of the class rate
of the second tier of the commercial property rate under
paragraph (a) on that any 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 first tier 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. 8. Minnesota Statutes 1996, 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 2.3 percent of market value for
taxes payable in 1996 and thereafter. All other class 4a
property has a class rate of 3.4 2.9 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
that does not qualify as class 4bb, 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) containing two or three units;
(4) unimproved property that is classified residential as
determined under section 273.13, subdivision 33.
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 2.1 percent of market value for
taxes payable in 1994 and thereafter.
(c) Class 4bb includes:
(1) nonhomestead residential real estate containing one
unit, other than seasonal residential, and recreational; and
(2) a single family dwelling, garage, and surrounding one
acre of property on a nonhomestead farm classified under
subdivision 23, paragraph (b).
Class 4bb has a class rate of 1.9 percent on the first
$75,000 of market value and a class rate of 2.1 percent of its
market value that exceeds $75,000.
Property that has been classified as seasonal recreational
residential property at any time during which it has been owned
by the current owner or spouse of the current owner does not
qualify for class 4bb.
(c) (d) 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. In order for a property to be
classified as class 4c, seasonal recreational residential for
commercial purposes, at least 40 percent of the annual gross
lodging receipts related to the property must be from business
conducted between Memorial Day weekend and Labor Day weekend and
at least 60 percent of all bookings by lodging guests during the
year must be for periods of at least two consecutive nights.
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;
(2) qualified property used as a golf course if:
(i) any portion of the property is located within a county
that has a population of less than 50,000, or within a county
containing a golf course owned by a municipality or the county;
(ii) it is open to the public on a daily fee basis. It may
charge membership fees or dues, but a membership fee may not be
required in order to use the property for golfing, and its green
fees for golfing must be comparable to green fees typically
charged by municipal courses; and
(iii) it meets the requirements of section 273.112,
subdivision 3, paragraph (d).
A structure used as a clubhouse, restaurant, or place of
refreshment in conjunction with the golf course is classified as
class 3a property.
(6) (3) 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) (4) 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) (5) manufactured home parks as defined in section
327.14, subdivision 3.
Class 4c property has a class rate of 2.3 2.1 percent of
market value, except that (i) for each parcel of seasonal
residential recreational property not used for commercial
purposes under clause (5) the first $72,000 $75,000 of market
value on each parcel has a class rate of 1.75 percent for taxes
payable in 1997 and 1.5 1.4 percent for taxes payable in 1998
and thereafter, and the market value of each parcel that exceeds
$72,000 $75,000 has a class rate of 2.5 percent, and (ii)
manufactured home parks assessed under clause (8) (5) have a
class rate of two percent for taxes payable in 1996, and
thereafter.
(d) (e) 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 is qualifying low-income rental
housing certified to the assessor by the housing finance agency
under sections 273.126 and 462A.071. Class 4d includes land in
proportion to the total market value of the building that is
qualifying low-income rental housing. For all properties
qualifying as class 4d, the market value determined by the
assessor must be based on the normal approach to value using
normal unrestricted rents.
Class 4d property has a class rate of two one 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.
(f) Class 4e property consists of the residential portion
of any structure located within a city that was converted from
nonresidential use to residential use, provided that:
(1) the structure had formerly been used as a warehouse;
(2) the structure was originally constructed prior to 1940;
(3) the conversion was done after December 31, 1995, but
before January 1, 2003; and
(4) the conversion involved an investment of at least
$25,000 per residential unit.
Class 4e property has a class rate of 2.3 percent, provided
that a structure is eligible for class 4e classification only in
the 12 assessment years immediately following the conversion.
Sec. 9. Minnesota Statutes 1996, section 273.13,
subdivision 31, is amended to read:
Subd. 31. [CLASS 5.] Class 5 property includes:
(1) tools, implements, and machinery of an electric
generating, transmission, or distribution system or a pipeline
system transporting or distributing water, gas, crude oil, or
petroleum products or mains and pipes used in the distribution
of steam or hot or chilled water for heating or cooling
buildings, which are fixtures;
(2) unmined iron ore and low-grade iron-bearing formations
as defined in section 273.14; and
(3) all other property not otherwise classified.
Class 5 property has a class rate of 5.06 4.0 percent of
market value for taxes payable in 1998 and thereafter.
Sec. 10. Minnesota Statutes 1996, section 273.13,
subdivision 32, is amended to read:
Subd. 32. [TARGET CLASS RATE RATES.] (a) All classes of
property with a class rate of 5.06 4 percent have a target class
rate of four 3.5 percent. Class 4a shall have a target class
rate of 2.5 percent. Class 4bb has a target class rate of 1.25
percent of the first $75,000 of market value and a target class
rate of 1.85 percent of the market value in excess of $75,000.
(b) By the fourth Tuesday in January of 1998 and at the
time of submission of the biennial budget under section
16A.11 in each biennium thereafter, the governor shall must
recommend the effective class rate schedule for all properties
for taxes payable in 1999 for the schedule submitted in 1998 and
for the following two calendar years by designating a "phase-in
percentage," equal to the proportion of the effective class rate
that will be based on the target class rate of four percent,
with the remaining proportion based on the class rate of 5.06
percent in each biennium thereafter. The class rate schedule
must include reductions in the class rates of the classes
designated in paragraph (a) until such time as the target class
rates are reached unless the governor recommends no change in
the class rate schedule for all properties. As part of the
recommendation, the governor shall identify recommend
appropriation of monies from the property tax reform account
under section 16A.1521 and include within the budget additional
funding for the increased expenditures for the education
homestead and agricultural credit aid over the amount of
expenditures for homestead and agricultural credit aid provided
in Laws 1989, First Special Session chapter 1, that are
estimated to result from the recommendation. At that time, the
property tax refund under chapter 290A and education aids under
chapters 124 and 124A to the extent those aids will be used to
reduce property tax levies. The governor may propose
alternative programs other than homestead and agricultural
credit aid to prevent other taxpayers' the taxes of classes
other than those designated in paragraph (a) from increasing as
a result of the governor's recommended increase in the phase-in
percentage. The effective net class rate is the sum of the
products of:
(1) the phase-in percentage adopted by the legislature
multiplied by four percent; and
(2) 100 percent minus the phase-in percentage multiplied by
5.06 percent.
The phase-in percentage in any year cannot be less than it
was in the prior year. The phase-in percentage is ten percent
for taxes payable in 1991, 29.2 percent for taxes payable in
1992, 34.0 percent for taxes payable in 1993, and 43.4 percent
for taxes payable in 1994 and thereafter.
Beginning in 1991, the commissioner of revenue shall
annually set the effective class rate to use for taxes payable
in the following year as provided in this subdivision and
announce it by June 1. For purposes of any aid, levy
limitation, debt limit, or salary limitation, and property tax
administration, net tax capacity must be computed with reference
to the effective class rate for the properties affected by this
subdivision class rate schedule.
Sec. 11. [273.1319] [SINGLE FAMILY HOUSING; NONCOMPLIANCE;
MINNEAPOLIS AND ST. PAUL.]
(a) If the city determines that a residential rental
property classified as class 4bb under section 273.13,
subdivision 25, is not in compliance with the city's applicable
rental licensing requirements and housing codes, the city shall
notify the property owner of the specific items that are not in
compliance. The owner has 60 days to correct the noncompliance
items identified by the city. If they have not been corrected
within the 60-day time period to the satisfaction of the city,
the city shall notify the assessor that the property is out of
compliance and is no longer eligible for the class 4bb property
classification. Notwithstanding any other provision of law, the
assessor shall reclassify the property for the current
assessment year, for taxes payable in the following year as
class 4b property. The assessor shall notify the property owner
of the action.
(b) This section applies only to property located in the
cities of Minneapolis and St. Paul.
(c) This section is effective for each of the cities of
Minneapolis and St. Paul upon compliance with Minnesota
Statutes, section 645.021, subdivision 3, by the governing body
of the city.
Sec. 12. [273.1382] [EDUCATION HOMESTEAD CREDIT.]
Subdivision 1. [EDUCATION HOMESTEAD CREDIT.] Each year,
beginning with property taxes payable in 1998, the respective
county auditors shall determine the local tax rate for each
school district for the general education levy certified under
section 124A.23, subdivision 2 or 3. That rate shall be the
general education homestead credit local tax rate for the
district. The auditor shall then determine a general education
homestead credit for each homestead within the county equal to
32 percent of the general education homestead credit local tax
rate times the net tax capacity of the homestead for the taxes
payable year. The amount of general education homestead credit
for a homestead may not exceed $225. In the case of an
agricultural homestead, only the net tax capacity of the house,
garage, and surrounding one acre of land shall be used in
determining the property's education homestead credit.
Subd. 2. [CREDIT REIMBURSEMENTS.] (a) The commissioner of
revenue shall determine the tax reductions allowed under this
section for each taxes payable year, and for each school
district based upon a review of the abstracts of tax lists
submitted by the county auditors under section 275.29, and from
any other information which the commissioner deems relevant.
The commissioner of revenue shall generally compute the tax
reductions at the unique taxing jurisdiction level, however the
commissioner may compute the tax reductions at a higher
geographic level if that would have a negligible impact, or if
changes in the composition of unique taxing jurisdictions do not
permit computation at the unique taxing jurisdiction level. The
commissioner's determinations under this paragraph are not rules.
(b) The commissioner of revenue shall certify the total of
the tax reductions granted under this section for each taxes
payable year within each school district to the commissioner of
children, families, and learning after July 1 and on or before
August 1 of the taxes payable year. The commissioner of
children, families, and learning shall reimburse each affected
school district for the amount of the property tax reductions
allowed under this section as provided in section 273.1392. The
commissioner of children, families, and learning shall treat the
reimbursement payments as entitlements for the same state fiscal
year as certified, including with each district's initial
payment all amounts that would have been paid up to that date,
computed as if 90 percent of the annual reimbursement amount for
the district were being paid one-twelfth in each month of the
fiscal year.
Subd. 3. [APPROPRIATION.] An amount sufficient to make the
payments required by this section is annually appropriated from
the general fund to the commissioner of children, families, and
learning.
Sec. 13. Minnesota Statutes 1996, section 273.1393, is
amended to read:
273.1393 [COMPUTATION OF NET PROPERTY TAXES.]
Notwithstanding any other provisions to the contrary, "net"
property taxes are determined by subtracting the credits in the
order listed from the gross tax:
(1) disaster credit as provided in section 273.123;
(2) powerline credit as provided in section 273.42;
(3) agricultural preserves credit as provided in section
473H.10;
(4) enterprise zone credit as provided in section 469.171;
(5) disparity reduction credit;
(6) conservation tax credit as provided in section 273.119;
(7) education homestead credit as provided in section
273.1382;
(8) taconite homestead credit as provided in section
273.135; and
(8) (9) supplemental homestead credit as provided in
section 273.1391.
The combination of all property tax credits must not exceed
the gross tax amount.
Sec. 14. Minnesota Statutes 1996, 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, 273.1382,
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 273.125, 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. 15. [462A.071] [CERTIFICATION OF HOUSING QUALIFYING
FOR REDUCED PROPERTY TAX RATE.]
Subdivision 1. [CERTIFICATION.] By June 30 of each year,
the agency must certify to local assessors the units of
low-income rental properties that qualify for class 4d under
sections 273.126 and 273.13. In making these certifications,
the agency may rely on the application and supporting
information supplied by the property owner as to compliance with
the income limits under section 273.126, subdivision 2, and
satisfaction of the minimum housing quality standards under
subdivision 4.
Subd. 2. [APPLICATION.] (a) In order to qualify for
certification under subdivision 1, the owner or manager of the
property must annually apply to the agency. The application
must be in the form prescribed by the agency, contain the
information required by the agency, and be submitted by the date
and time specified by the agency.
(b) Each application must include:
(1) the property tax identification number;
(2) the number, type, and size of units the applicant seeks
to qualify as low-income housing under class 4d;
(3) the number, type, and size of units in the property for
which the applicant is not seeking qualification, if any;
(4) a certification that the property has been inspected by
a qualified inspector within the past three years and meets the
minimum housing quality standards or is exempt from the
inspection requirement under subdivision 4;
(5) a statement indicating the building is in compliance
with the income limits;
(6) an executed agreement to restrict rents meeting the
requirements specified by the agency or executed leases for the
units for which qualification as low-income housing as class 4d
under section 273.13 is sought and the rent schedule; and
(7) any additional information the agency deems appropriate
to require.
(c) The applicant must pay a per-unit application fee to be
set by the agency. The application fee charged by the agency
must approximately equal the costs of processing and reviewing
the applications. The fee must be deposited in the general fund.
Subd. 3. [AGREEMENT TO RESTRICT RENTS.] The agency may
prescribe one or more standard form agreements to restrict rents
that meet the requirements of section 273.126, subdivision 3.
The agreements must be in recordable form. The agency may
require applicants to execute a rent restriction agreement in
this form as a condition of entering an agreement to restrict
rents.
Subd. 4. [MINIMUM HOUSING QUALITY STANDARDS.] (a) To
qualify for taxation under class 4d under section 273.13, a unit
must meet both the housing maintenance code of the local unit of
government in which the unit is located, if such a code has been
adopted, and the housing quality standards adopted by the United
States Department of Housing and Urban Development.
(b) In order to meet the minimum housing quality standards,
a building must be inspected by an independent designated
inspector at least once every three years. The inspector must
certify that the building complies with the minimum standards.
The property owner must pay the cost of the inspection.
(c) The agency may exempt from the inspection requirement
housing units that are financed by a governmental entity and
subject to regular inspection or other compliance checks with
regard to minimum housing quality. Written certification must
be supplied to show that these exempt units have been inspected
within the last three years and comply with the requirements
under the public financing or local requirements.
Subd. 5. [HOUSING INSPECTORS.] (a) Housing inspections
required by this section may be conducted only by persons
designated by the agency. The agency may designate one or more
persons to conduct inspections for all or part of the state. A
designated inspector may charge a fee for an inspection up to a
maximum amount approved by the agency. The inspector must be
independent of the owner or manager of the inspected property.
(b) The agency must maintain a list of persons eligible to
conduct housing inspections under this section.
Subd. 6. [SECTION 8 AND TAX CREDIT UNITS.] (a) The agency
may deem units as meeting the requirements of section 273.126
and this section, if the units either:
(1) are subject to a housing assistance payments contract
under section 8 of the United States Housing Act of 1937, as
amended; or
(2) are rent and income restricted units of a qualified
low-income housing project receiving tax credits under section
42(g) of the Internal Revenue Code of 1986, as amended.
(b) The agency may certify these deemed units under
subdivision 1 based on a simplified application procedure that
verifies the unit's qualifications under paragraph (a).
Subd. 7. [MONITORING COMPLIANCE.] (a) The agency must
monitor compliance by building owners with the requirements of
section 273.126 and this section. The agency must annually
conduct on-site examinations of a sample of the buildings
receiving class 4d taxation to monitor compliance. The agency
may contract with third parties to monitor compliance.
(b) An inspector, designated by the agency under
subdivision 5, shall notify the agency if, in conducting an
inspection under subdivision 4, the inspector finds that:
(1) a unit is receiving class 4d taxation;
(2) the unit is not in compliance with the requirements of
subdivision 4; and
(3) the owner or manager fails or refuses to cure the
violations within a reasonable time after receiving notification
of the violation.
Subd. 8. [PENALTIES.] (a) The penalties provided by this
subdivision apply to each unit that received class 4d taxation
for a year and failed to meet the requirements of section
273.126 and this section.
(b) If the owner or manager does not comply with the rent
restriction agreement, or does not comply with the income
restrictions or minimum housing quality standards, a penalty
applies equal to the increased taxes that would have been
imposed if the property had not been classified under class 4d
for the year in which restrictions were violated.
(c) If the agency finds that the violations were
inadvertent and insubstantial, a penalty of $50 per unit per
year applies in lieu of the penalty specified under paragraph
(b). In order to qualify under this paragraph, violations of
the minimum housing quality standards must be corrected within a
reasonable period of time and rent charged in excess of the
agreement must be rebated to the tenants.
(d) The agency may abate the penalties under this
subdivision for reasonable cause.
(e) Penalties assessed under paragraph (c) are payable to
the agency and must be deposited in the general fund. If an
owner or manager fails to timely pay a penalty imposed under
paragraph (c), the agency may choose to:
(1) impose the penalty under paragraph (b); or
(2) certify the penalty under paragraph (c) to the auditor
for collection as additional taxes.
The agency shall certify to the county auditor penalties
assessed under paragraph (b) and clause (2). The auditor shall
impose and collect the certified penalties as additional taxes
which will be distributed to taxing districts in the same manner
as property taxes on the property.
Subd. 9. [TAX COURT REVIEW.] (a) An owner may appeal to
tax court as provided in section 271.06:
(1) a denial of a request for certification of a property
as qualifying for class 4d taxation;
(2) imposition of a penalty under this section; or
(3) denial of a request to abate a penalty.
(b) The county attorney shall represent the public in
opposing the appeal.
Subd. 10. [INTERAGENCY CONTRACTING AUTHORITY.] The agency
may contract with the department of revenue or any other state
agency or a private entity to carry out administrative functions
under this section.
Subd. 11. [RULEMAKING.] (a) The agency may adopt
administrative rules under chapter 14 to carry out the
provisions of this section, including establishing standards for
abating penalties, violations that are inadvertent and
insubstantial, selection of inspectors, selection of persons to
monitor compliance, and establishing rent restriction agreement
terms.
(b) Pending final rulemaking, and in order to implement
this section by January 1, 1998, the agency shall be allowed to
make determinations regarding selection of inspectors, rent
restriction agreement terms, fees, application information,
application deadlines, required documentation, exemptions from
inspection requirements, and deeming of eligibility. Any
determinations adopted under this authority expire on January 1,
1999.
Sec. 16. [PROPERTY TAX REBATE.]
(a) A credit is allowed against the tax imposed on an
individual under Minnesota Statutes, chapter 290 equal to 20
percent of the qualified property tax paid in calendar year 1997
for taxes assessed in 1996.
(b) For property owned and occupied by the taxpayer,
qualified tax means property taxes payable as defined in
Minnesota Statutes, section 290A.03, subdivision 13, assessed in
1996 and payable in 1997.
(c) For a renter, the qualified property tax means the
amount of rent constituting property taxes under Minnesota
Statutes, section 290A.03, subdivision 11, based on rent paid in
1997. If two or more renters could be claimants under Minnesota
Statutes, chapter 290A with regard to the rent constituting
property taxes, the rules under Minnesota Statutes, section
290A.03, subdivision 8, paragraph (f), applies to determine the
amount of the credit for the individual.
(d) For an individual who both owned and rented principal
residences in calendar year 1997, qualified taxes are the sum of
the amounts under paragraphs (a) and (b).
(e) If the amount of the credit under this subdivision
exceeds the taxpayer's tax liability under this chapter, the
commissioner shall refund the excess.
(f) To claim a credit under this subdivision, the taxpayer
must attach a copy of the property tax statement and certificate
of rent paid, as applicable, and provide any additional
information the commissioner requires.
(g) An amount sufficient to pay refunds under this
subdivision is appropriated to the commissioner from the general
fund.
(h) This credit applies to taxable years beginning after
December 31, 1996, and before January 1, 1998.
Sec. 17. [GENERAL EDUCATION LEVY REDUCTION.]
Notwithstanding the provisions of Minnesota Statutes,
section 124A.23, subdivision 1, the general education levy shall
be reduced by $93,000,000 for taxes payable in 1998 and
subsequent years. The amount necessary to offset the costs of
the levy reductions contained in this section is annually
appropriated from the general fund to the commissioner of
children, families, and learning.
Sec. 18. [TEMPORARY EXEMPTIONS FROM INSPECTION
REQUIREMENTS.]
(a) The Minnesota housing finance agency may provide a
temporary exemption to the inspection requirement under
Minnesota Statutes, sections 273.126, subdivision 4, and
462A.071, if the agency finds that:
(1) the property owner made a good faith effort to obtain
an inspection; and
(2) the owner was unable to obtain an inspection in time to
apply because the designated inspectors were unable to conduct
all the requested inspections.
(b) If a unit that is exempted under this section does not
ultimately obtain a certification from a designated inspector
that it is in compliance with the minimum housing quality
standards, the additional taxes under Minnesota Statutes,
section 273.126, subdivision 5, apply.
(c) Procedures or rules for granting exemptions under this
section are not subject to the administrative rulemaking under
Minnesota Statutes, chapter 14.
(d) The authority under this section expires December 31,
2000.
Sec. 19. [TIF GRANTS; APPROPRIATIONS.]
Subdivision 1. [TIF GRANTS.] (a) The commissioner of
revenue shall pay grants to municipalities for deficits in tax
increment financing districts caused by the changes in class
rates under this act. Municipalities must submit applications
for the grants in a form prescribed by the commissioner by no
later than March 1 for grants payable during the calendar year.
The maximum grant equals the lesser of:
(1) for taxes payable in the year before the grant is paid,
the reduction in the tax increment financing district's revenues
derived from increment resulting from the class rate changes in
this article; or
(2) the municipality's total tax increments, including
unspent increments from previous years, less the amount due
during the calendar year to pay (i) bonds issued and sold before
the day following final enactment of this act and (ii) binding
contracts entered into before the day following final enactment
of this act.
(b) The commissioner of revenue may require applicants for
grants or pooling authority under this section to provide any
information the commissioner deems appropriate. The
commissioner shall calculate the amount under paragraph (a),
clause (2), based on the reports for the tax increment financing
district or districts filed with the state auditor on or before
July 1 of the year before the year in which the grant is to be
paid.
(c) This subdivision applies only to deficits in tax
increment financing districts for which:
(1) the request for certification was made before the
enactment date of this act; and
(2) all timely reports have been filed with the state
auditor, as required by Minnesota Statutes, section 469.175.
(d) The commissioner shall pay the grants under this
subdivision by December 26 of the year.
(e) $2,000,000 is appropriated to the commissioner of
revenue to make grants under this section. This appropriation
is available until expended or this section expires under
subdivision 3, whichever is earlier. If the amount of grant
entitlements for a year exceed the appropriation, the
commissioner shall reduce each grant proportionately so the
total equals the amount available.
Subd. 2. [ADDITIONAL POOLING AUTHORITY.] Notwithstanding
the provisions of Minnesota Statutes, section 469.1763,
subdivision 2, and the provisions of the tax increment financing
act in effect for districts for which the request for
certification was made before June 30, 1982, revenues derived
from increments may be spent on activities located outside of
the district to pay binding obligations entered into before the
day following final enactment. The amount qualifying under this
subdivision to be spent outside the district is limited to an
amount necessary to meet a binding obligation of the other
district that cannot be paid by the other district because of
the reduction in class rates under this section. Use of
increments under this authority must be approved, in writing, by
the commissioner of revenue.
Subd. 3. [EXPIRATION.] This section expires on January 1,
2001.
Sec. 20. [APPROPRIATION.]
(a) $450,000 is appropriated for fiscal year 1998 from the
general fund to the housing finance agency for purposes of
administering the certification of qualifying low-income
residential properties for property taxation under class 4d.
The cost ceiling for the Minnesota housing finance agency,
as otherwise provided by legislation enacted in 1997 without
regard to whether the legislation is enacted before or after
this act, is increased by $142,000 for fiscal year 1998 and by
$118,000 for fiscal year 1999.
(b) $15,300,000 is appropriated from the general fund to
the commissioner of children, families, and learning for fiscal
year 1999 for alternative facilities aid under section 3.
Sec. 21. [REPEALER.]
(a) Minnesota Statutes, section 124.2134, is repealed.
(b) Minnesota Statutes, sections 273.1317; and 273.1318,
are repealed.
Sec. 22. [EFFECTIVE DATES.]
Sections 1, 2, 5, 6, 7, 8, 9, 11, 12, 13, 14, 17, and 21,
paragraph (a), are effective for taxes levied in 1997, payable
in 1998 and subsequent years, except that the low-income housing
provisions in class 4c and 4d are effective for taxes payable in
1999 and thereafter and the provisions in sections 6 and 8
relating to class 1c and 4c seasonal residential property that
specify percentages of lodging receipts and bookings of at least
two consecutive nights are effective for taxes payable in 1999
and thereafter.
Sections 4, 15, and 21, paragraph (b), are effective for
taxes payable in 1999 and subsequent years.
Sections 3 and 20 are effective July 1, 1997.
Section 19 is effective for taxes payable in 1998, 1999,
and 2000.
ARTICLE 2
PROPERTY TAX
Section 1. Minnesota Statutes 1996, section 69.021,
subdivision 7, is amended to read:
Subd. 7. [APPORTIONMENT OF FIRE STATE AID TO
MUNICIPALITIES AND RELIEF ASSOCIATIONS.] (a) The commissioner
shall apportion the fire state aid relative to the premiums
reported on the Minnesota Firetown Premium Reports filed under
this chapter to each municipality and/or firefighters' relief
association.
(b) The commissioner shall calculate an initial fire state
aid allocation amount for each municipality or fire department
under paragraph (c) and a minimum fire state aid allocation
amount for each municipality or fire department under paragraph
(d). The municipality or fire department must receive the
larger fire state aid amount.
(c) The initial fire state aid allocation amount is the
amount available for apportionment as fire state aid under
subdivision 5, without inclusion of any additional funding
amount to support a minimum fire state aid amount under section
423A.02, subdivision 3, allocated one-half in proportion to the
population as shown in the last official statewide federal
census for each fire town and one-half in proportion to the
market value of each fire town, including (1) the market value
of tax exempt property and (2) the market value of natural
resources lands receiving in lieu payments under sections
477A.11 to 477A.14, but excluding the market value of minerals.
In the case of incorporated or municipal fire departments
furnishing fire protection to other cities, towns, or townships
as evidenced by valid fire service contracts filed with the
commissioner, the distribution must be adjusted proportionately
to take into consideration the crossover fire protection
service. Necessary adjustments shall be made to subsequent
apportionments. In the case of municipalities or independent
fire departments qualifying for the aid, the commissioner shall
calculate the state aid for the municipality or relief
association on the basis of the population and the market value
of the area furnished fire protection service by the fire
department as evidenced by duly executed and valid fire service
agreements filed with the commissioner. If one or more fire
departments are furnishing contracted fire service to a city,
town, or township, only the population and market value of the
area served by each fire department may be considered in
calculating the state aid and the fire departments furnishing
service shall enter into an agreement apportioning among
themselves the percent of the population and the market value of
each service area. The agreement must be in writing and must be
filed with the commissioner.
(d) The minimum fire state aid allocation amount is the
amount in addition to the initial fire state allocation amount
that is derived from any additional funding amount to support a
minimum fire state aid amount under section 423A.02, subdivision
3, and allocated to municipalities with volunteer firefighter
relief associations based on the number of active volunteer
firefighters who are members of the relief association as
reported in the annual financial reporting for the calendar year
1993 to the office of the state auditor, but not to exceed 30
active volunteer firefighters, so that all municipalities or
fire departments with volunteer firefighter relief associations
receive in total at least a minimum fire state aid amount per
1993 active volunteer firefighter to a maximum of 30
firefighters.
(e) The fire state aid must be paid to the treasurer of the
municipality where the fire department is located and the
treasurer of the municipality shall, within 30 days of receipt
of the fire state aid, transmit the aid to the relief
association if the relief association has filed a financial
report with the treasurer of the municipality and has met all
other statutory provisions pertaining to the aid apportionment.
(f) The commissioner may make rules to permit the
administration of the provisions of this section. Any
adjustments needed to correct prior misallocations must be made
to subsequent apportionments.
Sec. 2. Minnesota Statutes 1996, section 103D.905,
subdivision 4, is amended to read:
Subd. 4. [BOND FUND.] A bond fund consists of the proceeds
of special assessments, storm water charges, loan repayments,
and ad valorem tax levies pledged by the watershed district for
the payment of bonds or notes issued by the watershed district
secured by the property of the watershed district that is
producing or is likely to produce a regular income. The bond
fund is to be used for the payment of the purchase price of the
property or the value of the property as determined by the court
in proper proceedings and for the improvement and development of
the property principal of, premium or administrative surcharge,
if any, and interest on the bonds and notes issued by the
watershed district and for payments required to be made to the
federal government under section 148(f) of the Internal Revenue
Code of 1986, as amended through December 31, 1996.
Sec. 3. Minnesota Statutes 1996, section 103D.905,
subdivision 5, is amended to read:
Subd. 5. [CONSTRUCTION OR IMPLEMENTATION FUND.] (a) A
construction or implementation fund consists of:
(1) the proceeds of watershed district bonds or notes or of
the sale of county bonds;
(2) construction or implementation loans from the pollution
control agency under sections 103F.701 to 103F.761, or from any
agency of the federal government; and
(3) special assessments, storm water charges, loan
repayments, and ad valorem tax levies levied or to be levied to
supply funds for the construction or implementation of the
projects of the watershed district, including reservoirs,
ditches, dikes, canals, channels, storm water facilities, sewage
treatment facilities, wells, and other works, and the expenses
incident to and connected with the construction or
implementation.
(b) Construction or implementation loans from the pollution
control agency under sections 103F.701 to 103F.761, or from an
agency of the federal government may be repaid from money
collected by the proceeds of watershed district bonds or notes
or from the collections of storm water charges, loan repayments,
ad valorem tax levies, or special assessments on properties
benefited by the project.
Sec. 4. Minnesota Statutes 1996, section 103D.905, is
amended by adding a subdivision to read:
Subd. 9. [PROJECT TAX LEVY.] In addition to other tax
levies provided in this section or in any other law, a watershed
district may levy a tax:
(1) to pay the costs of projects undertaken by the
watershed district which are to be funded, in whole or in part,
with the proceeds of grants or construction or implementation
loans under sections 103F.701 to 103F.761;
(2) to pay the principal of, or premium or administrative
surcharge, if any, and interest on, the bonds and notes issued
by the watershed district pursuant to section 103F.725; or
(3) to repay the construction or implementation loans under
sections 103F.701 to 103F.761.
Taxes levied with respect to payment of bonds and notes
shall comply with section 475.61.
Sec. 5. Minnesota Statutes 1996, section 216B.16, is
amended by adding a subdivision to read:
Subd. 6d. [WIND ENERGY; PROPERTY TAX.] An owner of a wind
energy conversion facility which is required to pay property
taxes under section 272.02, subdivision 1, paragraph (21), or a
public utility regulated by the public utilities commission
which purchases the wind generated electricity may petition the
commission to include in any power purchase agreement between
the owner of the facility and the public utility the amount of
property taxes paid by the owner of the facility. The public
utilities commission shall require the public utility to amend
the power purchase agreement to include the property taxes paid
by the owner of the facility in the price paid by the utility
for wind generated electricity if the commission finds:
(a) the owner of the facility has paid the property taxes
required by this subdivision;
(b) the power purchase agreement between the public utility
and the owner does not already require the utility to pay the
amount of property taxes the owner has paid under this
subdivision; and
(c) the commission has approved a rate schedule containing
provisions for the automatic adjustment of charges for utility
service in direct relation to the charges ordered by the
commission under section 272.02, subdivision 1, paragraph (21).
Sec. 6. Minnesota Statutes 1996, section 271.01,
subdivision 5, is amended to read:
Subd. 5. [JURISDICTION.] The tax court shall have
statewide jurisdiction. Except for an appeal to the supreme
court or any other appeal allowed under this subdivision, the
tax court shall be the sole, exclusive, and final authority for
the hearing and determination of all questions of law and fact
arising under the tax laws of the state, as defined in this
subdivision, in those cases that have been appealed to the tax
court and in any case that has been transferred by the district
court to the tax court. The tax court shall have no
jurisdiction in any case that does not arise under the tax laws
of the state or in any criminal case or in any case determining
or granting title to real property or in any case that is under
the probate jurisdiction of the district court. The small
claims division of the tax court shall have no jurisdiction in
any case dealing with property valuation or assessment for
property tax purposes until the taxpayer has appealed the
valuation or assessment to the county board of equalization, and
in those towns and cities which have not transferred their
duties to the county, the town or city board of equalization and
to the county board of equalization, except for those taxpayers
whose original assessments are determined by the commissioner of
revenue. The tax court shall have no jurisdiction in any case
involving an order of the state board of equalization unless a
taxpayer contests the valuation of property. Laws governing
taxes, aids, and related matters administered by the
commissioner of revenue, laws dealing with property valuation,
assessment or taxation of property for property tax purposes,
and any other laws that contain provisions authorizing review of
taxes, aids, and related matters by the tax court shall be
considered tax laws of this state subject to the jurisdiction of
the tax court. This subdivision shall not be construed to
prevent an appeal, as provided by law, to an administrative
agency, board of equalization, review under section 274.13,
subdivision 1c, or to the commissioner of revenue. Wherever
used in this chapter, the term commissioner shall mean the
commissioner of revenue, unless otherwise specified.
Sec. 7. Minnesota Statutes 1996, 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 15a; (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) Small scale 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) "Small scale wind energy conversion systems" are 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) (b) Medium scale wind energy conversion systems, as
defined in section 216C.06, subdivision 12, installed after
January 1, 1995 1991, 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. "Medium scale wind energy conversion systems" are wind
energy conversion systems as defined in section 216C.06,
subdivision 12, 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 more
than two but equal to or less than 12 megawatts of energy as
measured by nameplate ratings.
(c) Large scale wind energy conversion systems installed
after January 1, 1991, are treated as follows: 25 percent of
the market value of all property is taxable, including (i) the
foundation and support pad; (ii) the associated supporting and
protective structures; and (iii) the turbines, blades,
transformers, and its related equipment. "Large scale wind
energy conversion systems" are wind energy conversion systems as
defined in section 216C.06, subdivision 12, including the
foundation or support pad, which are: (i) used as an electric
power source; and (ii) produce more than 12 megawatts of energy
as measured by nameplate ratings.
(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. 8. Minnesota Statutes 1996, section 272.02, is
amended by adding a subdivision to read:
Subd. 9. [PERSONAL PROPERTY; BIOMASS FACILITY.] (a)
Notwithstanding clause (8), item (a), of subdivision 1, attached
machinery and other personal property, excluding transmission
and distribution lines, that is part of a system that generates
biomass electric energy that satisfies the mandate, in whole or
in part, established in section 216B.2424, or a system that
generates electric energy using waste wood, is exempt if it
meets the requirements of this subdivision.
(b) The governing bodies of the county, city or town, and
school district must each approve, by resolution, the exemption
of the personal property under this subdivision. Each of the
governing bodies shall file a copy of the resolution with the
county auditor. The county auditor shall publish the
resolutions in newspapers of general circulation within the
county. The voters of the county may request a referendum on
the proposed exemption by filing a petition within 30 days after
the resolutions are published. The petition must be signed by
voters who reside in the county. The number of signatures must
equal at least ten percent of the number of persons voting in
the county in the last general election. If such a petition is
timely filed, the resolutions are not effective until they have
been submitted to the voters residing in the county at a general
or special election and a majority of votes cast on the question
of approving the resolution are in the affirmative. The
commissioner of revenue shall prepare a suggested form of
question to be presented at the referendum.
(c) The exemption under this subdivision is limited to a
maximum of five years, beginning with the assessment year
immediately following the year during which the personal
property is put in operation.
Sec. 9. Minnesota Statutes 1996, section 272.115, is
amended to read:
272.115 [CERTIFICATE OF VALUE; FILING.]
Subdivision 1. [REQUIREMENT.] Except as otherwise provided
in subdivision 5, 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.
Subd. 2. [FORM; INFORMATION REQUIRED.] The certificate of
value shall require such facts and information as may be
determined by the commissioner to be reasonably necessary in the
administration of the state education aid formulas. The form of
the certificate of value shall be prescribed by the department
of revenue which shall provide an adequate supply of forms to
each county auditor.
Subd. 3. [COPIES TRANSMITTED; HOMESTEAD STATUS.] The
county auditor shall transmit two true copies of the certificate
of value to the assessor who shall insert the most recent market
value and when available, the year of original construction of
each parcel of property on both copies and shall transmit one
copy to the department of revenue. Upon the request of a city
council located within the county, a copy of each certificate of
value for property located in that city shall be made available
to the governing body of the city. The assessor shall remove
the homestead classification for the following assessment year
from a property which is sold or transferred, unless the grantee
or the person to whom the property is transferred completes a
homestead application under section 273.124, subdivision 13, and
qualifies for homestead status.
Subd. 4. [ELIGIBILITY FOR HOMESTEAD STATUS.] No real
estate sold or transferred on or after January 1, 1993, under
subdivision 1 shall be classified as a homestead, unless (1) a
certificate of value has been filed with the county auditor in
accordance with this section, or (2) the real estate was
conveyed by the federal government, the state, a political
subdivision of the state, or combination of them to a person
otherwise eligible to receive homestead classification of the
property.
This subdivision shall apply to any real estate taxes that
are payable the year or years following the sale or transfer of
the property.
Subd. 5. [EXEMPTION FOR GOVERNMENT BODIES.] A certificate
of real estate value is not required when the real estate is
being conveyed to or by a public authority or agency of the
federal government, the state of Minnesota, a political
subdivision of the state, or any combination of them, provided
that the authority, agency, or governmental unit has agreed to
file a list of the real estate conveyed by or to the authority,
agency, or governmental unit with the commissioner of revenue by
June 1 of the year following the year of the conveyance.
Sec. 10. Minnesota Statutes 1996, section 273.11,
subdivision 1a, is amended to read:
Subd. 1a. [LIMITED MARKET VALUE.] In the case of all
property classified as agricultural homestead or nonhomestead,
residential homestead or nonhomestead, or noncommercial seasonal
recreational residential, the assessor shall compare the value
with that determined in the preceding assessment. The amount of
the increase entered in the current assessment shall not exceed
the greater of (1) ten percent of the value in the preceding
assessment, or (2) one-third one-fourth of the difference
between the current assessment and the preceding assessment.
This limitation shall not apply to increases in value due to
improvements. For purposes of this subdivision, the term
"assessment" means the value prior to any exclusion under
subdivision 16.
The provisions of this subdivision shall be in effect only
for assessment years 1993 through 1997 2001.
For purposes of the assessment/sales ratio study conducted
under section 124.2131, and the computation of state aids paid
under chapters 124, 124A, and 477A, market values and net tax
capacities determined under this subdivision and subdivision 16,
shall be used.
Sec. 11. Minnesota Statutes 1996, 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 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, or
(c) if the estimated market value of the house is $300,000
or more on January 2 of the current year, the property qualifies
if
(i) it is located in a city or town in which 45 percent or
more of the homes were constructed before 1940 based upon the
1990 federal census, and
(ii) it is located in a city or town in which 45 percent or
more of the housing units were rental based upon the 1990
federal census, and
(iii) the city or town's median value of owner-occupied
housing units based upon the 1990 federal census is less than
the statewide median value of owner-occupied housing units based
upon the 1990 federal census.
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 since the original
year of its construction. In the case of a residence that is
relocated, the relocation must be from a location within the
state and the only improvements eligible for exclusion under
this subdivision are (1) those for which building permits were
issued to the homeowner after the residence was relocated to its
present site, and (2) those undertaken during or after the year
the residence is initially occupied by the homeowner, excluding
any market value increase relating to basic improvements that
are necessary to install the residence on its foundation and
connect it to utilities 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 must be filed within three years of the date the
building permit was issued for the improvement. If the property
lies in a jurisdiction which is not subject to a building permit
process, the application must be filed within three years of the
date the improvement was made. The assessor may require proof
from the taxpayer of the date the improvement was made.
Applications must be received prior to July 1 of any year in
order to be effective for taxes payable in the following year.
No exclusion may be granted for an improvement by a local
board of review or county board of equalization and no abatement
of the taxes for qualifying improvements may be granted by the
county board 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.
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. If an application is filed after the first assessment
date at which an improvement could have been subject to the
valuation exclusion under this subdivision, the ten-year period
during which the value is subject to exclusion is reduced by the
number of years that have elapsed since the property would have
qualified initially. 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. 12. Minnesota Statutes 1996, section 273.111,
subdivision 3, is amended to read:
Subd. 3. (a) Real estate consisting of ten acres or more
or a nursery or greenhouse, and qualifying for classification as
class 1b, 2a, or 2b under section 273.13, subdivision 23,
paragraph (d), shall be entitled to valuation and tax deferment
under this section only if it is actively and exclusively
primarily devoted to agricultural use as defined, and meets the
qualifications in subdivision 6, and either:
(1) is the homestead of the owner, or of a surviving
spouse, child, or sibling of the owner or is real estate which
is farmed with the real estate which contains the homestead
property; or
(2) has been in possession of the applicant, the
applicant's spouse, parent, or sibling, or any combination
thereof, for a period of at least seven years prior to
application for benefits under the provisions of this section,
or is real estate which is farmed with the real estate which
qualifies under this clause and is within two townships or
cities or combination thereof from the qualifying real estate;
or
(3) is the homestead of a shareholder in a family farm
corporation as defined in section 500.24, notwithstanding the
fact that legal title to the real estate may be held in the name
of the family farm corporation; or
(4) is in the possession of a nursery or greenhouse or an
entity owned by a proprietor, partnership, or corporation which
also owns the nursery or greenhouse operations on the parcel or
parcels.
(b) Valuation of real estate under this section is limited
to parcels the ownership of which is in noncorporate entities
except for:
(1) family farm corporations organized pursuant to section
500.24; and
(2) corporations that derive 80 percent or more of their
gross receipts from the wholesale or retail sale of
horticultural or nursery stock.
Corporate entities who previously qualified for tax
deferment pursuant to this section and who continue to otherwise
qualify under subdivisions 3 and 6 for a period of at least
three years following the effective date of Laws 1983, chapter
222, section 8, will not be required to make payment of the
previously deferred taxes, notwithstanding the provisions of
subdivision 9. Special assessments are payable at the end of
the three-year period or at time of sale, whichever comes first.
(c) Land that previously qualified for tax deferment
pursuant to under this section and no longer qualifies because
it is not classified as primarily used for agricultural land
purposes but would otherwise qualify under subdivisions 3 and 6
for a period of at least three years will not be required to
make payment of the previously deferred taxes, notwithstanding
the provisions of subdivision 9. Sale of the land prior to the
expiration of the three-year period requires payment of deferred
taxes as follows: sale in the year the land no longer qualifies
requires payment of the current year's deferred taxes plus
payment of deferred taxes for the two prior years; sale during
the second year the land no longer qualifies requires payment of
the current year's deferred taxes plus payment of the deferred
taxes for the prior year; and sale during the third year the
land no longer qualifies requires payment of the current year's
deferred taxes. Deferred taxes shall be paid even if the land
qualifies pursuant to subdivision 11a. When such property is
sold or no longer qualifies under this paragraph, or at the end
of the three-year period, whichever comes first, all deferred
special assessments plus interest are payable in equal
installments spread over the time remaining until the last
maturity date of the bonds issued to finance the improvement for
which the assessments were levied. If the bonds have matured,
the deferred special assessments plus interest are payable
within 90 days. The provisions of section 429.061, subdivision
2, apply to the collection of these installments. Penalties are
not imposed on any such special assessments if timely paid.
Sec. 13. Minnesota Statutes 1996, section 273.111,
subdivision 6, is amended to read:
Subd. 6. Real property qualifying under subdivision 3
shall be considered to be in agricultural use provided that
annually:
(1) at least 33-1/3 percent of the total family income of
the owner is derived therefrom, or the total production income
including rental from the property is $300 plus $10 per tillable
acre; and
(2) it is devoted to the production for sale of
agricultural products as defined in section 273.13, subdivision
23, paragraph (e).
Slough, wasteland, and woodland contiguous to or surrounded
by land that is entitled to valuation and tax deferment under
this section is considered to be in agricultural use if under
the same ownership and management.
Sec. 14. Minnesota Statutes 1996, section 273.112,
subdivision 2, is amended to read:
Subd. 2. The present general system of ad valorem property
taxation in the state of Minnesota does not provide an equitable
basis for the taxation of certain private outdoor recreational,
social, open space and park land property and has resulted in
excessive taxes on some of these lands. Therefore, it is hereby
declared that the public policy of this state would be best
served by equalizing tax burdens upon private outdoor,
recreational, social, open space and park land within this state
through appropriate taxing measures to encourage private
development of these lands which would otherwise not occur or
have to be provided by governmental authority.
Sec. 15. Minnesota Statutes 1996, section 273.112,
subdivision 3, is amended to read:
Subd. 3. Real estate shall be entitled to valuation and
tax deferment under this section only if it is:
(a) actively and exclusively devoted to golf, skiing, lawn
bowling, croquet, or archery or firearms range recreational use
or uses and other recreational or social uses carried on at the
establishment;
(b) five acres in size or more, except in the case of a
lawn bowling or croquet green or an archery or firearms range or
an establishment actively and exclusively devoted to indoor
fitness, health, social, recreational, and related uses in which
the establishment is owned and operated by a not-for-profit
corporation;
(c)(1) operated by private individuals or, in the case of a
lawn bowling or croquet green, by private individuals or
corporations, and open to the public; or
(2) operated by firms or corporations for the benefit of
employees or guests; or
(3) operated by private clubs having a membership of 50 or
more or open to the public, provided that the club does not
discriminate in membership requirements or selection on the
basis of sex or marital status; and
(d) made available, in the case of real estate devoted to
golf, for use without discrimination on the basis of sex during
the time when the facility is open to use by the public or by
members, except that use for golf may be restricted on the basis
of sex no more frequently than one, or part of one, weekend each
calendar month for each sex and no more than two, or part of
two, weekdays each week for each sex.
If a golf club membership allows use of golf course
facilities by more than one adult per membership, the use must
be equally available to all adults entitled to use of the golf
course under the membership, except that use may be restricted
on the basis of sex as permitted in this section. Memberships
that permit play during restricted times may be allowed only if
the restricted times apply to all adults using the membership.
A golf club may not offer a membership or golfing privileges to
a spouse of a member that provides greater or less access to the
golf course than is provided to that person's spouse under the
same or a separate membership in that club, except that the
terms of a membership may provide that one spouse may have no
right to use the golf course at any time while the other spouse
may have either limited or unlimited access to the golf course.
A golf club may have or create an individual membership
category which entitles a member for a reduced rate to play
during restricted hours as established by the club. The club
must have on record a written request by the member for such
membership.
A golf club that has food or beverage facilities or
services must allow equal access to those facilities and
services for both men and women members in all membership
categories at all times. Nothing in this paragraph shall be
construed to require service or access to facilities to persons
under the age of 21 years or require any act that would violate
law or ordinance regarding sale, consumption, or regulation of
alcoholic beverages.
For purposes of this subdivision and subdivision 7a,
discrimination means a pattern or course of conduct and not
linked to an isolated incident.
Sec. 16. Minnesota Statutes 1996, section 273.112,
subdivision 4, is amended to read:
Subd. 4. The value of any real estate described in
subdivision 3 shall upon timely application by the owner, in the
manner provided in subdivision 6, be determined solely with
reference to its appropriate private outdoor,
recreational, social, open space and park land classification
and value notwithstanding sections 272.03, subdivision 8, and
273.11. In determining such value for ad valorem tax purposes
the assessor shall not consider the value such real estate would
have if it were converted to commercial, industrial, residential
or seasonal residential use.
Sec. 17. Minnesota Statutes 1996, section 273.121, is
amended to read:
273.121 [VALUATION OF REAL PROPERTY, NOTICE.]
Any county assessor or city assessor having the powers of a
county assessor, valuing or classifying taxable real property
shall in each year notify those persons whose property is to be
assessed or reclassified that year if the person's address is
known to the assessor, otherwise the occupant of the property.
The notice shall be in writing and shall be sent by ordinary
mail at least ten days before the meeting of the local board of
review or equalization under section 274.01 or the review
process established under section 274.13, subdivision 1c. It
shall contain: (1) the market value, (2) the limited market
value under section 273.11, subdivision 1a, (3) the qualifying
amount of any improvements under section 273.11, subdivision 16,
(4) the market value subject to taxation after subtracting the
amount of any qualifying improvements, (5) the new
classification, (6) a note that if the property is homestead and
at least 35 years old, improvements made to the property may be
eligible for a valuation exclusion under section 273.11,
subdivision 16, (7) the assessor's office address, and (8) the
dates, places, and times set for the meetings of the local board
of review or equalization, the review process established under
section 274.13, subdivision 1c, and the county board of
equalization. If the assessment roll is not complete, the
notice shall be sent by ordinary mail at least ten days prior to
the date on which the board of review has adjourned. The
assessor shall attach to the assessment roll a statement that
the notices required by this section have been mailed. Any
assessor who is not provided sufficient funds from the
assessor's governing body to provide such notices, may make
application to the commissioner of revenue to finance such
notices. The commissioner of revenue shall conduct an
investigation and, if satisfied that the assessor does not have
the necessary funds, issue a certification to the commissioner
of finance of the amount necessary to provide such notices. The
commissioner of finance shall issue a warrant for such amount
and shall deduct such amount from any state payment to such
county or municipality. The necessary funds to make such
payments are hereby appropriated. Failure to receive the notice
shall in no way affect the validity of the assessment, the
resulting tax, the procedures of any board of review or
equalization, or the enforcement of delinquent taxes by
statutory means.
Sec. 18. Minnesota Statutes 1996, 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 and paragraph (f) (g), "relative"
means a parent, stepparent, child, stepchild, grandparent,
grandchild, brother, sister, uncle, or aunt. This relationship
may be by blood or marriage. Property that has been classified
as seasonal recreational residential property at any time during
which it has been owned by the current owner or spouse of the
current owner will not be reclassified as a homestead unless it
is occupied as a homestead by the owner; this 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, 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 owner's spouse who previously occupied the
residence with the owner if the absence of the owner is due to
one of the exceptions provided in this paragraph.
(f) The assessor must not deny homestead treatment in whole
or in part if:
(1) in the case of a property owner who is not married, the
owner is absent due to residence in a nursing home or boarding
care facility and the property is not otherwise occupied; or
(2) in the case of a property owner who is married, the
owner or the owner's spouse or both are absent due to residence
in a nursing home or boarding care facility and the property is
not occupied or is occupied only by the owner's spouse.
(g) 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. 19. Minnesota Statutes 1996, section 273.124, is
amended by adding a subdivision to read:
Subd. 19. [LEASE-PURCHASE PROGRAM.] Qualifying buildings
and appurtenances, together with the land on which they are
located, are classified as homesteads, if the following
qualifications are met:
(1) the property is leased for up to a five-year period by
the occupant under a lease-purchase program administered by the
Minnesota housing finance agency or a housing and redevelopment
authority under sections 469.001 to 469.047;
(2) the occupant's income is no greater than 80 percent of
the county or area median income, adjusted for family size;
(3) the building consists of one or two dwelling units;
(4) the lease agreement provides that part of the lease
payment is escrowed as a nonrefundable down payment on the
housing;
(5) the administering agency verifies the occupant's income
eligibility and certifies to the county assessor that the
occupant meets the income standards; and
(6) the property owner applies to the county assessor by
May 30 of each year.
For purposes of this subdivision, "qualifying buildings and
appurtenances" means a one- or two-unit residential building
which was unoccupied, abandoned, and boarded for at least six
months.
Sec. 20. Minnesota Statutes 1996, section 273.13,
subdivision 23, is amended to read:
Subd. 23. [CLASS 2.] (a) Class 2a property is agricultural
land including any improvements that is homesteaded. The market
value of the house and garage and immediately surrounding one
acre of land has the same class rates as class 1a property under
subdivision 22. The value of the remaining land including
improvements up to $115,000 has a net class rate of .45 0.4
percent of market value and a gross class rate of 1.75 percent
of market value. The remaining value of class 2a property over
$115,000 of market value that does not exceed 320 acres has a
net class rate of one 0.9 percent of market value, and a gross
class rate of 2.25 percent of market value. The remaining
property over the $115,000 market value in excess of 320 acres
has a class rate of 1.5 1.4 percent of market value, and a gross
class rate of 2.25 percent of market value.
(b) Class 2b property is (1) real estate, rural in
character and used exclusively for growing trees for timber,
lumber, and wood and wood products; (2) real estate that is not
improved with a structure and is used exclusively for growing
trees for timber, lumber, and wood and wood products, if the
owner has participated or is participating in a cost-sharing
program for afforestation, reforestation, or timber stand
improvement on that particular property, administered or
coordinated by the commissioner of natural resources; (3) real
estate that is nonhomestead agricultural land; or (4) a landing
area or public access area of a privately owned public use
airport. Class 2b property has a net class rate of 1.5 1.4
percent of market value, and a gross class rate of 2.25 percent
of market value.
(c) Agricultural land as used in this section means
contiguous acreage of ten acres or more, primarily used during
the preceding year for agricultural purposes. Agricultural use
may include "Agricultural purposes" as used in this section
means the raising or cultivation of agricultural products or
enrollment in the Reinvest in Minnesota program under sections
103F.501 to 103F.535 or the federal Conservation Reserve Program
as contained in Public Law Number 99-198. Contiguous acreage on
the same parcel, or contiguous acreage on an immediately
adjacent parcel under the same ownership, may also qualify as
agricultural land, but only if it is pasture, timber, waste,
unusable wild land, and or land included in state or federal
farm or conservation programs. "Agricultural purposes" as used
in this section means the raising or cultivation of agricultural
products. Land enrolled in the Reinvest in Minnesota program
under sections 103F.505 to 103F.531 or the federal Conservation
Reserve Program as contained in Public Law Number 99-198, and
consisting of a minimum of ten contiguous acres, shall be
classified as agricultural. Agricultural classification for
property shall be determined with respect to the use of the
whole parcel, excluding the house, garage, and immediately
surrounding one acre of land, and shall not be based upon the
market value of any residential structures on the parcel or
contiguous parcels under the same ownership.
(d) Real estate, excluding the house, garage, and
immediately surrounding one acre of land, of less than ten acres
which is exclusively and intensively used principally for
raising or cultivating agricultural products, shall be
considered as agricultural land, if it is not used primarily for
residential purposes.
Land shall be classified as agricultural even if all or a
portion of the agricultural use of that property is the leasing
to, or use by another person for agricultural purposes.
Classification under this subdivision is not determinative
for qualifying under section 273.111.
The property classification under this section supersedes,
for property tax purposes only, any locally administered
agricultural policies or land use restrictions that define
minimum or maximum farm acreage.
(e) The term "agricultural products" as used in this
subdivision includes production for sale of:
(1) livestock, dairy animals, dairy products, poultry and
poultry products, fur-bearing animals, horticultural and nursery
stock described in sections 18.44 to 18.61, fruit of all kinds,
vegetables, forage, grains, bees, and apiary products by the
owner;
(2) fish bred for sale and consumption if the fish breeding
occurs on land zoned for agricultural use;
(3) the commercial boarding of horses if the boarding is
done in conjunction with raising or cultivating agricultural
products as defined in clause (1);
(4) property which is owned and operated by nonprofit
organizations used for equestrian activities, excluding racing;
and
(5) game birds and waterfowl bred and raised for use on a
shooting preserve licensed under section 97A.115.
(f) If a parcel used for agricultural purposes is also used
for commercial or industrial purposes, including but not limited
to:
(1) wholesale and retail sales;
(2) processing of raw agricultural products or other goods;
(3) warehousing or storage of processed goods; and
(4) office facilities for the support of the activities
enumerated in clauses (1), (2), and (3),
the assessor shall classify the part of the parcel used for
agricultural purposes as class 1b, 2a, or 2b, whichever is
appropriate, and the remainder in the class appropriate to its
use. The grading, sorting, and packaging of raw agricultural
products for first sale is considered an agricultural purpose.
A greenhouse or other building where horticultural or nursery
products are grown that is also used for the conduct of retail
sales must be classified as agricultural if it is primarily used
for the growing of horticultural or nursery products from seed,
cuttings, or roots and occasionally as a showroom for the retail
sale of those products. Use of a greenhouse or building only
for the display of already grown horticultural or nursery
products does not qualify as an agricultural purpose.
The assessor shall determine and list separately on the
records the market value of the homestead dwelling and the one
acre of land on which that dwelling is located. If any farm
buildings or structures are located on this homesteaded acre of
land, their market value shall not be included in this separate
determination.
(g) To qualify for classification under paragraph (b),
clause (4), a privately owned public use airport must be
licensed as a public airport under section 360.018. For
purposes of paragraph (b), clause (4), "landing area" means that
part of a privately owned public use airport properly cleared,
regularly maintained, and made available to the public for use
by aircraft and includes runways, taxiways, aprons, and sites
upon which are situated landing or navigational aids. A landing
area also includes land underlying both the primary surface and
the approach surfaces that comply with all of the following:
(i) the land is properly cleared and regularly maintained
for the primary purposes of the landing, taking off, and taxiing
of aircraft; but that portion of the land that contains
facilities for servicing, repair, or maintenance of aircraft is
not included as a landing area;
(ii) the land is part of the airport property; and
(iii) the land is not used for commercial or residential
purposes.
The land contained in a landing area under paragraph (b), clause
(4), must be described and certified by the commissioner of
transportation. The certification is effective until it is
modified, or until the airport or landing area no longer meets
the requirements of paragraph (b), clause (4). For purposes of
paragraph (b), clause (4), "public access area" means property
used as an aircraft parking ramp, apron, or storage hangar, or
an arrival and departure building in connection with the airport.
Sec. 21. Minnesota Statutes 1996, section 273.13, is
amended by adding a subdivision to read:
Subd. 25a. [ELDERLY ASSISTED LIVING FACILITY
PROPERTY.] "Elderly assisted living facility property" means
residential real estate containing more than one unit held for
use by the tenants or lessees as a residence for periods of 30
days or more, along with community rooms, lounges, activity
rooms, and related facilities, designed to meet the housing,
health, and financial security needs of the elderly. The real
estate may be owned by an individual, partnership, limited
partnership, for-profit corporation or nonprofit corporation
exempt from federal income taxation under United States Code,
title 26, section 501(c)(3) or related sections.
An admission or initiation fee may be required of tenants.
Monthly charges may include charges for the residential unit,
meals, housekeeping, utilities, social programs, a health care
alert system, or any combination of them. On-site health care
may be provided by in-house staff or an outside health care
provider.
The assessor shall classify elderly assisted living
facility property, depending upon the property's ownership,
occupancy, and use. The applicable class rates shall apply
based on its classification, if taxable.
Sec. 22. Minnesota Statutes 1996, section 273.18, is
amended to read:
273.18 [LISTING, VALUATION, AND ASSESSMENT OF EXEMPT
PROPERTY BY COUNTY AUDITORS.]
(a) In every sixth year after the year 1926, the county
auditor shall enter, in a separate place in the real estate
assessment books, the description of each tract of real property
exempt by law from taxation, with the name of the owner, if
known, and the assessor shall value and assess the same in the
same manner that other real property is valued and assessed, and
shall designate in each case the purpose for which the property
is used.
(b) For purposes of the apportionment of fire state aid
under section 69.021, subdivision 7, the county auditor shall
include on the abstract of assessment of exempt real property
filed under this section, the total number of acres of all
natural resources lands for which in lieu payments are made
under sections 477A.11 to 477A.14. The assessor shall estimate
its market value, provided that if the assessor is not able to
estimate the market value of the land on a per parcel basis, the
assessor shall furnish the commissioner of revenue with an
estimate of the average value per acre of this land within the
county.
Sec. 23. Minnesota Statutes 1996, section 274.01, is
amended to read:
274.01 [BOARD OF REVIEW.]
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 (1) in cities whose charters provide for a board of
equalization or (2) in any city or town that has transferred its
local board of review power and duties to the county board as
provided in subdivision 3. 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 countywide
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 in those cities
or towns that hold a local board of review; 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 in those
cities or towns that hold a local board of review 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) Except as provided in subdivision 3, 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.
Subd. 2. [SPECIAL BOARD; DUTIES DELEGATED.] The governing
body of a city, including a city whose charter provides for a
board of equalization, may appoint a special board of review.
The city may delegate to the special board of review all of the
powers and duties in subdivision 1. The special board of review
shall serve at the direction and discretion of the appointing
body, subject to the restrictions imposed by law. The
appointing body shall determine the number of members of the
board, the compensation and expenses to be paid, and the term of
office of each member. At least one member of the special board
of review must be an appraiser, realtor, or other person
familiar with property valuations in the assessment district.
Subd. 3. [LOCAL BOARD DUTIES TRANSFERRED TO COUNTY.] The
town board of any town or the governing body of any home rule
charter or statutory city may transfer its powers and duties
under subdivision 1 to the county board, and no longer perform
the function of a local board. Before the town board or the
governing body of a city transfers the powers and duties to the
county board, the town board or city's governing body shall give
public notice of the meeting at which the proposal for transfer
is to be considered. The public notice shall follow the
procedure contained in section 471.705, subdivision 1c,
paragraph (b). A transfer of duties as permitted under this
subdivision must be communicated to the county assessor, in
writing, before December 1 of any year to be effective for the
following year's assessment. This transfer of duties to the
county may either be permanent or for a specified number of
years, provided that the transfer cannot be for less than three
years. Its length must be stated in writing. A town or city
may renew its option to transfer. The option to transfer duties
under this subdivision is only available to a town or city whose
assessment is done by the county.
Sec. 24. Minnesota Statutes 1996, section 274.13, is
amended by adding a subdivision to read:
Subd. 1b. [ASSESSMENT CHANGES.] No changes in valuation or
classification that are intended to correct errors in judgment
by the county assessor may be made by the county assessor after
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.
Sec. 25. Minnesota Statutes 1996, section 274.13, is
amended by adding a subdivision to read:
Subd. 1c. [ALTERNATIVE REVIEW OPTION.] The county shall
notify taxpayers whose town or city elected to transfer its
powers and duties under section 274.01 to the county. Prior to
the time of the county board of equalization, the county shall
make available to those taxpayers a procedure for a review of
its assessments, including, but not limited to, open book
meetings. This alternative review process shall take place in
April and May.
Sec. 26. Minnesota Statutes 1996, section 281.13, is
amended to read:
281.13 [NOTICE OF EXPIRATION OF REDEMPTION.]
Every person holding a tax certificate after expiration of
three years, or the redemption period specified in section
281.17 if shorter, after the date of the tax sale under which
the same was issued, may present such certificate to the county
auditor; and thereupon the auditor shall prepare, under the
auditor's hand and official seal, a notice, directed to the
person or persons in whose name such lands are assessed,
specifying the description thereof, the amount for which the
same was sold, the amount required to redeem the same, exclusive
of the costs to accrue upon such notice, and the time when the
redemption period will expire. If, at the time when any tax
certificate is so presented, such lands are assessed in the name
of the holder of the certificate, such notice shall be directed
also to the person or persons in whose name title in fee of such
land appears of record in the office of the county recorder.
The auditor shall deliver such notice to the party applying
therefor, who shall deliver it to the sheriff of the proper
county or any other person not less than 18 years of age for
service. Within 20 days after receiving it, the sheriff or
other person serving the notice shall serve such notice upon the
persons to whom it is directed, if to be found in the sheriff's
county, in the manner prescribed for serving a summons in a
civil action; if not so found, then upon the person in
possession of the land, and make return thereof to the auditor.
In the case of land held in joint tenancy the notice shall be
served upon each joint tenant. If one or more of the persons to
whom the notice is directed cannot be found in the county, and
there is no one in possession of the land, of each of which
facts the return of the sheriff or other person serving the
notice so specifying shall be prima facie evidence, service
shall be made upon those persons that can be found and service
shall also be made by two weeks' published notice, proof of
which publication shall be filed with the auditor.
When the records in the office of the county recorder show
that any lot or tract of land is encumbered by an unsatisfied
mortgage or other lien, and show the post office address of the
mortgagee or lienee, or if the same has been assigned, the post
office address of the assignee, the person holding such tax
certificate shall serve a copy of such notice upon such
mortgagee, lienee, or assignee by certified mail addressed to
such mortgagee, lienee, or assignee at the post office address
of the mortgagee, lienee, or assignee as disclosed by the
records in the office of the county recorder, at least 60 days
prior to the time when the redemption period will expire.
The notice herein provided for shall be sufficient if
substantially in the following form:
"NOTICE OF EXPIRATION OF REDEMPTION
Office of the County Auditor
County of ......................., State of Minnesota.
To ..............................
You are hereby notified that the following described piece
or parcel of land, situated in the county of
......................., and State of Minnesota, and known and
described as follows: .........
............................................................
.........., is now assessed in your name; that on the
........................ day of May, ....................., at
the sale of land pursuant to the real estate tax judgment, duly
given and made in and by the district court in and for said
county of ......................................, on the
................................. day of March, ..............,
in proceedings to enforce the payment of taxes delinquent upon
real estate for the year .............. for said county of
........... ......................., the above described piece
or parcel of land was sold for the sum of $............., and
the amount required to redeem such piece or parcel of land from
such sale, exclusive of the cost to accrue upon this notice, is
the sum of $............, and interest at the rate of
............... percent per annum from said
............................. day of ......................,
..................., to the day such redemption is made, and
that the tax certificate has been presented to me by the holder
thereof, and the time for redemption of such piece or parcel of
land from such sale will expire 60 days after the service of
this notice and proof thereof has been filed in my office.
Witness my hand and official seal this
............................ day of ................,
.................
.................
(OFFICIAL SEAL)
County Auditor of
...................... County, Minnesota."
Sec. 27. Minnesota Statutes 1996, section 281.23, is
amended by adding a subdivision to read:
Subd. 5a. [DEFINITION.] In this section, "occupied parcel"
means a parcel containing a structure subject to property
taxation.
Sec. 28. Minnesota Statutes 1996, section 281.23,
subdivision 6, is amended to read:
Subd. 6. [SERVICE BY SHERIFF OF NOTICE.] (a) Forthwith
after the commencement of such publication or mailing the county
auditor shall deliver to the sheriff of the county or any other
person not less than 18 years of age a sufficient number of
copies of such notice of expiration of redemption for service
upon the persons in possession of all parcels of such land as
are actually occupied and documentation if the certified mail
notice was returned as undeliverable or the notice was not
mailed to the address associated with the property. Within 30
days after receipt thereof, the sheriff or other person serving
the notice shall make such investigation as may be necessary to
ascertain whether or not the parcels covered by such notice are
actually occupied or not parcels, and shall serve a copy of such
notice of expiration of redemption upon the person in possession
of each parcel found to be so an occupied parcel, in the manner
prescribed for serving summons in a civil action. The
sheriff or other person serving the notice shall make prompt
return to the auditor as to all notices so served and as to all
parcels found vacant and unoccupied. Such return shall be made
upon a copy of such notice and shall be prima facie evidence of
the facts therein stated.
Unless compensation for such services is otherwise provided
by law, If the notice is served by the sheriff, the sheriff
shall receive from the county, in addition to other compensation
prescribed by law, such fees and mileage for service on persons
in possession as are prescribed by law for such service in other
cases, and shall also receive such compensation for making
investigation and return as to vacant and unoccupied lands as
the county board may fix, subject to appeal to the district
court as in case of other claims against the county. As to
either service upon persons in possession or return as to vacant
lands, the sheriff shall charge mileage only for one trip if the
occupants of more than two tracts are served simultaneously, and
in such case mileage shall be prorated and charged equitably
against all such owners.
(b) The secretary of state shall receive sheriff's service
for all out-of-state interests.
Sec. 29. Minnesota Statutes 1996, section 281.273, is
amended to read:
281.273 [EXPIRATION OF TIME OF REDEMPTION ON LANDS OWNED BY
PERSONS IN MILITARY SERVICE.]
When a county sheriff or other person serves notice of
expiration of the time for redemption of any parcel of real
property from delinquent taxes upon any occupant of the real
property, the sheriff or other person shall inquire of the
occupant and otherwise as the sheriff or other person may deem
proper whether the real property was owned and occupied for
dwelling, professional, business or agricultural purposes by a
person in the military service of the United States as defined
in the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended, or the person's dependents at the commencement of the
period of military service. On finding that the real property
is so owned, the sheriff or other person shall make a
certificate to the county auditor, setting forth the description
of the property, the name of the owner, the particulars of the
owner's military service so far as ascertained or claimed, and
the names and addresses of the persons of whom the sheriff or
other person made inquiry. The certificate shall be filed with
the county auditor and shall be prima facie evidence of the
facts stated. If the real property described in the certificate
becomes forfeited to the state, it shall be withheld from sale
or conveyance as tax-forfeited property in accordance with and
subject to the provisions of the Soldiers' and Sailors' Civil
Relief Act of 1940, as amended, except that the requirement in
United States Code, title 50, section 560, that the property be
occupied by the dependent or employee of the person in military
service does not apply. The period of withholding from sale or
conveyance shall be no longer than is required by that act. If
upon further investigation the sheriff or other person finds at
any time that the certificate is erroneous in any particular,
the sheriff or other person shall file a supplemental
certificate referring to the matter in error and stating the
facts as found. The supplemental certificate shall be prima
facie evidence of the facts stated, and shall supersede any
prior certificate so far as in conflict therewith. If it
appears from the supplemental certificate that the owner of the
real property affected is not entitled to have the same withheld
from sale under the Soldiers' and Sailors' Civil Relief Act of
1940, as amended, the property shall not be withheld from sale
further under this section.
Sec. 30. Minnesota Statutes 1996, section 281.276, is
amended to read:
281.276 [RETURN OF SHERIFF MUST SHOW MILITARY SERVICE.]
Unless a sheriff's certificate showing military service is
filed as required by section 281.273, it shall be presumed that
the owner of the property described in the notice of expiration
of the time for redemption from delinquent taxes is not in such
service. The filing of the sheriff's certificate provided for
in section 281.273 shall not affect the forfeiture of the real
property described in such notice of the expiration of the time
for redemption from delinquent taxes or their proceedings
relating thereto except as expressly herein provided.
Sec. 31. Minnesota Statutes 1996, section 373.40,
subdivision 7, is amended to read:
Subd. 7. [REPEALER.] This section is repealed effective
for bonds issued after July 1, 1998 2003, but continues to apply
to bonds issued before that date.
Sec. 32. Minnesota Statutes 1996, section 375.192,
subdivision 2, is amended to read:
Subd. 2. [PROCEDURE, CONDITIONS.] Upon written application
by the owner of any property, the county board may grant the
reduction or abatement of estimated market valuation or taxes
and of any costs, penalties, or interest on them as the board
deems just and equitable and order the refund in whole or part
of any taxes, costs, penalties, or interest which have been
erroneously or unjustly paid. Except as provided in sections
469.1812 to 469.1815, no reduction or abatement may be granted
on the basis of providing an incentive for economic development
or redevelopment. Except as provided in section 375.194, the
county board is authorized to consider and grant reductions or
abatements on applications only as they relate to taxes payable
in the current year and the two prior years; provided that
reductions or abatements for the two prior years shall be
considered or granted only for (i) clerical errors, or (ii) when
the taxpayer fails to file for a reduction or an adjustment due
to hardship, as determined by the county board. The application
must include the social security number of the applicant. The
social security number is private data on individuals as defined
by section 13.02, subdivision 12. All applications must be
approved by the county assessor, or, if the property is located
in a city of the first or second class having a city assessor,
by the city assessor, and by the county auditor before
consideration by the county board, except that the part of the
application which is for the abatement of penalty or interest
must be approved by the county treasurer and county auditor.
Approval by the county or city assessor is not required for
abatements of penalty or interest. No reduction, abatement, or
refund of any special assessments made or levied by any
municipality for local improvements shall be made unless it is
also approved by the board of review or similar taxing authority
of the municipality. Before taking action on any reduction or
abatement where the reduction of taxes, costs, penalties, and
interest exceed $10,000, the county board shall give 20 days'
notice to the school board and the municipality in which the
property is located. The notice must describe the property
involved, the actual amount of the reduction being sought, and
the reason for the reduction. If the school board or the
municipality object to the granting of the reduction or
abatement, the county board must refer the abatement or
reduction to the commissioner of revenue with its
recommendation. The commissioner shall consider the abatement
or reduction under section 270.07, subdivision 1.
An appeal may not be taken to the tax court from any order
of the county board made in the exercise of the discretionary
authority granted in this section.
The county auditor shall notify the commissioner of revenue
of all abatements resulting from the erroneous classification of
real property, for tax purposes, as nonhomestead property. For
the abatements relating to the current year's tax processed
through June 30, the auditor shall notify the commissioner on or
before July 31 of that same year of all abatement applications
granted. For the abatements relating to the current year's tax
processed after June 30 through the balance of the year, the
auditor shall notify the commissioner on or before the following
January 31 of all applications granted. The county auditor
shall submit a form containing the social security number of the
applicant and such other information the commissioner prescribes.
Sec. 33. Minnesota Statutes 1996, section 465.71, is
amended to read:
465.71 [INSTALLMENT AND LEASE PURCHASES; CITIES; COUNTIES;
SCHOOL DISTRICTS.]
A home rule charter city, statutory city, county, town, or
school district may purchase personal property under an
installment contract, or lease real or personal property with an
option to purchase under a lease-purchase agreement, by which
contract or agreement title is retained by the seller or vendor
or assigned to a third party as security for the purchase price,
including interest, if any, but such purchases are subject to
statutory and charter provisions applicable to the purchase of
real or personal property. For purposes of the bid requirements
contained in section 471.345, "the amount of the contract" shall
include the total of all lease payments for the entire term of
the lease under a lease-purchase agreement. The obligation
created by a lease-purchase agreement for personal property or a
lease-purchase agreement for real property if the amount of the
contract for purchase of the real property is less than
$1,000,000 shall not be included in the calculation of net debt
for purposes of section 475.53, and shall not constitute debt
under any other statutory provision. No election shall be
required in connection with the execution of a lease-purchase
agreement authorized by this section. The city, county, town,
or school district must have the right to terminate a lease-
purchase agreement at the end of any fiscal year during its term.
Sec. 34. Minnesota Statutes 1996, 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 cooperation period
that may not exceed two years and then:
(1) to merge into a single unit of government over the
succeeding two-year period; or
(2) to agree to apportion the entire area of at least one
local government unit between or among two or more local
government units contiguous to the unit to be apportioned,
resulting in the elimination of at least one local government
unit over the succeeding two years.
Sec. 35. Minnesota Statutes 1996, section 465.81,
subdivision 3, is amended to read:
Subd. 3. [COMBINATION REQUIREMENTS.] Counties may combine
with one or more other counties. Cities may combine with one or
more other cities or with one or more towns. Towns may combine
with one or more other towns or with one or more cities. Units
that combine must be contiguous. A county, through the adoption
of a resolution by all county boards that are affected by the
combination, may apportion its territory between or among two or
more counties contiguous to the county that is to be
apportioned. A city, through the adoption of a resolution by
all city councils that are affected by the combination, may
apportion its territory between or among two or more cities
contiguous to the city that is to be apportioned. A township,
through the adoption of a resolution by all town boards or city
councils that are affected by the combination, may apportion its
territory between or among two or more townships or cities
contiguous to the township that is to be apportioned.
Sec. 36. Minnesota Statutes 1996, section 465.82,
subdivision 1, is amended to read:
Subdivision 1. [ADOPTION AND STATE AGENCY REVIEW.] Each
governing body that proposes to combine take part in a
combination under sections 465.81 to 465.87 must adopt by
resolution adopt a plan for cooperation and combination. The
plan must address each item in this section. The plan must be
specific for any item that will occur within three years and may
be general or set forth alternative proposals for an item that
will occur more than three years in the future. The plan must
be submitted to the board of government innovation and
cooperation for review and comment. For a metropolitan area
local government unit, the plan must also be submitted to the
metropolitan council for review and comment. The council may
point out any resources or technical assistance it may be able
to provide a governing body submitting a plan under this
subdivision. Significant modifications and specific resolutions
of items must be submitted to the board and council, if
appropriate, for review and comment. In the official newspaper
of each local government unit proposed for proposing to take
part in the combination, the governing body must shall publish
at least a summary of the adopted plans, each significant
modification and resolution of items, and, if appropriate, the
results of each board and council, if appropriate, review and
comment. If a territory of a unit is to be apportioned between
or among two or more units contiguous to the unit that is to be
apportioned, the plan must specify the area that will become a
part of each remaining unit.
Sec. 37. Minnesota Statutes 1996, section 465.82,
subdivision 2, is amended to read:
Subd. 2. [CONTENTS OF PLAN.] The plan 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, with completion no later than four years
after the process begins;
(3) the steps by which a single governing body will be
created or, when the entire territory of a unit will be
apportioned between or among two or more units contiguous to the
unit that is to be apportioned, the steps to be taken by the
governing bodies of the remaining units to provide for
representation of the residents of the apportioned unit;
(4) changes in services provided, facilities used, and
administrative operations and staffing required 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 exclusive representatives, 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 units;
(7) one- and two-year impact analysis analyses, 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,
including an impact analysis, prepared by the department of
revenue, of any property tax revenue implications, if any,
associated with tax increment financing districts and fiscal
disparities under chapter 276A or 473F resulting from the
merger;
(8) procedures for a referendum to be held 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 is 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 government 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. 38. Minnesota Statutes 1996, section 465.82, is
amended by adding a subdivision to read:
Subd. 3. [INTERIM GOVERNING BODY.] The plan for
cooperation and combination adopted in accordance with
subdivision 1 may establish an interim governing body to act on
behalf of the new local government unit before the effective
date of the combination. If established, the interim governing
body must consist of at least a majority of the elected
officials from each local government unit taking part in the
combination. If the plan establishes an interim governing body,
the governing body of each unit taking part in the combination
shall appoint its representatives to serve on the interim
governing body. An interim governing body may not take any
official action on behalf of the new local government unit
before approval of the combination through the referendum
required by section 465.84. After approval of the combination
through the referendum, and before the effective date of the
combination, an interim governing body may exercise all
statutory authority of the governing body of the new local
government unit, including the authority to enter into contracts
and adopt policies and local ordinances.
Sec. 39. Minnesota Statutes 1996, section 465.87,
subdivision 1a, is amended to read:
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 or orders combining the two units of government is
forwarded to the board. If the municipal board issues two or
more orders within 30 days for the annexation of the area of an
entire township by two or more cities contiguous to the
township, the cities subject to the board's order are eligible
to receive pro rata shares, on the basis of their populations,
of the total amount of cooperation and combination aid all
participating units of government would be eligible to receive
under subdivision 2. 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.
Sec. 40. Minnesota Statutes 1996, section 465.87,
subdivision 2, is amended to read:
Subd. 2. [AMOUNT OF AID.] The annual amount of aid to be
paid to each eligible local government unit may not exceed the
following per capita amounts, based on the combined population
of the units, 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
If two or more units are eligible for a single award under this
subdivision, the award must be divided among the units in pro
rata shares based on each unit's population. Payments 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 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.
Sec. 41. Minnesota Statutes 1996, section 465.88, is
amended to read:
465.88 [PLANNING AID FOR CONSOLIDATION STUDIES.]
Two or more local units of government with a combined
population of 2,500 30,000 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
proceeding 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 is to be used. The
governing bodies of the local units of government must shall
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. Two or more local
government units with a combined population of at least 2,500
but not greater than 30,000, based on the most recent decennial
census, must agree to provide at least $1 for the study of a
possible consolidation or combination for each dollar of aid
granted by the board under this section.
Sec. 42. Minnesota Statutes 1996, section 469.012,
subdivision 1, is amended to read:
Subdivision 1. [SCHEDULE OF POWERS.] An authority shall be
a public body corporate and politic and shall have all the
powers necessary or convenient to carry out the purposes of
sections 469.001 to 469.047, except that the power to levy and
collect taxes or special assessments is limited to the power
provided in sections 469.027 to 469.033. Its powers include the
following powers in addition to others granted in sections
469.001 to 469.047:
(1) to sue and be sued; to have a seal, which shall be
judicially noticed, and to alter it; to have perpetual
succession; and to make, amend, and repeal rules consistent with
sections 469.001 to 469.047;
(2) to employ an executive director, technical experts, and
officers, agents, and employees, permanent and temporary, that
it requires, and determine their qualifications, duties, and
compensation; for legal services it requires, to call upon the
chief law officer of the city or to employ its own counsel and
legal staff; so far as practicable, to use the services of local
public bodies in its area of operation, provided that those
local public bodies, if requested, shall make the services
available;
(3) to delegate to one or more of its agents or employees
the powers or duties it deems proper;
(4) within its area of operation, to undertake, prepare,
carry out, and operate projects and to provide for the
construction, reconstruction, improvement, extension,
alteration, or repair of any project or part thereof;
(5) subject to the provisions of section 469.026, to give,
sell, transfer, convey, or otherwise dispose of real or personal
property or any interest therein and to execute leases, deeds,
conveyances, negotiable instruments, purchase agreements, and
other contracts or instruments, and take action that is
necessary or convenient to carry out the purposes of these
sections;
(6) within its area of operation, to acquire real or
personal property or any interest therein by gifts, grant,
purchase, exchange, lease, transfer, bequest, devise, or
otherwise, and by the exercise of the power of eminent domain,
in the manner provided by chapter 117, to acquire real property
which it may deem necessary for its purposes, after the adoption
by it of a resolution declaring that the acquisition of the real
property is necessary to eliminate one or more of the conditions
found to exist in the resolution adopted pursuant to section
469.003 or to provide decent, safe, and sanitary housing for
persons of low and moderate income, or is necessary to carry out
a redevelopment project. Real property needed or convenient for
a project may be acquired by the authority for the project by
condemnation pursuant to this section. This includes any
property devoted to a public use, whether or not held in trust,
notwithstanding that the property may have been previously
acquired by condemnation or is owned by a public utility
corporation, because the public use in conformity with the
provisions of sections 469.001 to 469.047 shall be deemed a
superior public use. Property devoted to a public use may be so
acquired only if the governing body of the municipality has
approved its acquisition by the authority. An award of
compensation shall not be increased by reason of any increase in
the value of the real property caused by the assembly, clearance
or reconstruction, or proposed assembly, clearance or
reconstruction for the purposes of sections 469.001 to 469.047
of the real property in an area;
(7) within its area of operation, and without the adoption
of an urban renewal plan, to acquire, by all means as set forth
in clause (6) but without the adoption of a resolution provided
for in clause (6), real property, and to demolish, remove,
rehabilitate, or reconstruct the buildings and improvements or
construct new buildings and improvements thereon, or to so
provide through other means as set forth in Laws 1974, chapter
228, or to grade, fill, and construct foundations or otherwise
prepare the site for improvements. The authority may dispose of
the property pursuant to section 469.029, provided that the
provisions of section 469.029 requiring conformance to an urban
renewal plan shall not apply. The authority may finance these
activities by means of the redevelopment project fund or by
means of tax increments or tax increment bonds or by the methods
of financing provided for in section 469.033 or by means of
contributions from the municipality provided for in section
469.041, clause (9), or by any combination of those means. Real
property with buildings or improvements thereon shall only be
acquired under this clause when the buildings or improvements
are substandard. The exercise of the power of eminent domain
under this clause shall be limited to real property which
contains, or has contained within the three years immediately
preceding the exercise of the power of eminent domain and is
currently vacant, buildings and improvements which are vacated
and substandard. Notwithstanding the prior sentence, in cities
of the first class the exercise of the power of eminent domain
under this clause shall be limited to real property which
contains, or has contained within the three years immediately
preceding the exercise of the power of eminent domain, buildings
and improvements which are substandard. For the purpose of this
clause, substandard buildings or improvements mean hazardous
buildings as defined in section 463.15, subdivision 3, or
buildings or improvements that are dilapidated or obsolescent,
faultily designed, lack adequate ventilation, light, or sanitary
facilities, or any combination of these or other factors that
are detrimental to the safety or health of the community;
(8) within its area of operation, to determine the level of
income constituting low or moderate family income. The
authority may establish various income levels for various family
sizes. In making its determination, the authority may consider
income levels that may be established by the Department of
Housing and Urban Development or a similar or successor federal
agency for the purpose of federal loan guarantees or subsidies
for persons of low or moderate income. The authority may use
that determination as a basis for the maximum amount of income
for admissions to housing development projects or housing
projects owned or operated by it;
(9) to provide in federally assisted projects any
relocation payments and assistance necessary to comply with the
requirements of the Federal Uniform Relocation Assistance and
Real Property Acquisition Policies Act of 1970, and any
amendments or supplements thereto;
(10) to make an agreement with the governing body or bodies
creating the authority which provides exemption from all ad
valorem real and personal property taxes levied or imposed by
the state, city, county, or other political subdivisions, for
which the authority shall make payments in lieu of taxes to the
state, city, county, or other political subdivisions as provided
in section 469.040 body or bodies creating the authority. The
governing body shall agree on behalf of all the applicable
governing bodies affected that local cooperation as required by
the federal government shall be provided by the local governing
body or bodies in whose jurisdiction the project is to be
located, at no cost or at no greater cost than the same public
services and facilities furnished to other residents;
(11) to cooperate with or act as agent for the federal
government, the state or any state public body, or any agency or
instrumentality of the foregoing, in carrying out any of the
provisions of sections 469.001 to 469.047 or of any other
related federal, state, or local legislation; and upon the
consent of the governing body of the city to purchase, lease,
manage, or otherwise take over any housing project already owned
and operated by the federal government;
(12) to make plans for carrying out a program of voluntary
repair and rehabilitation of buildings and improvements, and
plans for the enforcement of laws, codes, and regulations
relating to the use of land and the use and occupancy of
buildings and improvements, and to the compulsory repair,
rehabilitation, demolition, or removal of buildings and
improvements. The authority may develop, test, and report
methods and techniques, and carry out demonstrations and other
activities for the prevention and elimination of slums and
blight;
(13) to borrow money or other property and accept
contributions, grants, gifts, services, or other assistance from
the federal government, the state government, state public
bodies, or from any other public or private sources;
(14) to include in any contract for financial assistance
with the federal government any conditions that the federal
government may attach to its financial aid of a project, not
inconsistent with purposes of sections 469.001 to 469.047,
including obligating itself (which obligation shall be
specifically enforceable and not constitute a mortgage,
notwithstanding any other laws) to convey to the federal
government the project to which the contract relates upon the
occurrence of a substantial default with respect to the
covenants or conditions to which the authority is subject; to
provide in the contract that, in case of such conveyance, the
federal government may complete, operate, manage, lease, convey,
or otherwise deal with the project until the defaults are cured
if the federal government agrees in the contract to reconvey to
the authority the project as then constituted when the defaults
have been cured;
(15) to issue bonds for any of its corporate purposes and
to secure the bonds by mortgages upon property held or to be
held by it or by pledge of its revenues, including grants or
contributions;
(16) to invest any funds held in reserves or sinking funds,
or any funds not required for immediate disbursement, in
property or securities in which savings banks may legally invest
funds subject to their control or in the manner and subject to
the conditions provided in section 118A.04 for the deposit and
investment of public funds;
(17) within its area of operation, to determine where
blight exists or where there is unsafe, unsanitary, or
overcrowded housing;
(18) to carry out studies of the housing and redevelopment
needs within its area of operation and of the meeting of those
needs. This includes study of data on population and family
groups and their distribution according to income groups, the
amount and quality of available housing and its distribution
according to rentals and sales prices, employment, wages,
desirable patterns for land use and community growth, and other
factors affecting the local housing and redevelopment needs and
the meeting of those needs; to make the results of those studies
and analyses available to the public and to building, housing,
and supply industries;
(19) if a local public body does not have a planning agency
or the planning agency has not produced a comprehensive or
general community development plan, to make or cause to be made
a plan to be used as a guide in the more detailed planning of
housing and redevelopment areas;
(20) to lease or rent any dwellings, accommodations, lands,
buildings, structures, or facilities included in any project
and, subject to the limitations contained in sections 469.001 to
469.047 with respect to the rental of dwellings in housing
projects, to establish and revise the rents or charges therefor;
(21) to own, hold, and improve real or personal property
and to sell, lease, exchange, transfer, assign, pledge, or
dispose of any real or personal property or any interest
therein;
(22) to insure or provide for the insurance of any real or
personal property or operations of the authority against any
risks or hazards;
(23) to procure or agree to the procurement of government
insurance or guarantees of the payment of any bonds or parts
thereof issued by an authority and to pay premiums on the
insurance;
(24) to make expenditures necessary to carry out the
purposes of sections 469.001 to 469.047;
(25) to enter into an agreement or agreements with any
state public body to provide informational service and
relocation assistance to families, individuals, business
concerns, and nonprofit organizations displaced or to be
displaced by the activities of any state public body;
(26) to compile and maintain a catalog of all vacant, open
and undeveloped land, or land which contains substandard
buildings and improvements as that term is defined in clause
(7), that is owned or controlled by the authority or by the
governing body within its area of operation and to compile and
maintain a catalog of all authority owned real property that is
in excess of the foreseeable needs of the authority, in order to
determine and recommend if the real property compiled in either
catalog is appropriate for disposal pursuant to the provisions
of section 469.029, subdivisions 9 and 10;
(27) to recommend to the city concerning the enforcement of
the applicable health, housing, building, fire prevention, and
housing maintenance code requirements as they relate to
residential dwelling structures that are being rehabilitated by
low- or moderate-income persons pursuant to section 469.029,
subdivision 9, for the period of time necessary to complete the
rehabilitation, as determined by the authority;
(28) to recommend to the city the initiation of municipal
powers, against certain real properties, relating to repair,
closing, condemnation, or demolition of unsafe, unsanitary,
hazardous, and unfit buildings, as provided in section 469.041,
clause (5);
(29) to sell, at private or public sale, at the price or
prices determined by the authority, any note, mortgage, lease,
sublease, lease purchase, or other instrument or obligation
evidencing or securing a loan made for the purpose of economic
development, job creation, redevelopment, or community
revitalization by a public agency to a business, for-profit or
nonprofit organization, or an individual;
(30) within its area of operation, to acquire and sell real
property that is benefited by federal housing assistance
payments, other rental subsidies, interest reduction payments,
or interest reduction contracts for the purpose of preserving
the affordability of low- and moderate-income multifamily
housing;
(31) to apply for, enter into contracts with the federal
government, administer, and carry out a section 8 program.
Authorization by the governing body creating the authority to
administer the program at the authority's initial application is
sufficient to authorize operation of the program in its area of
operation for which it was created without additional local
governing body approval. Approval by the governing body or
bodies creating the authority constitutes approval of a housing
program for purposes of any special or general law requiring
local approval of section 8 programs undertaken by city, county,
or multicounty authorities; and
(32) to secure a mortgage or loan for a rental housing
project by obtaining the appointment of receivers or assignments
of rents and profits under sections 559.17 and 576.01, except
that the limitation relating to the minimum amounts of the
original principal balances of mortgages specified in sections
559.17, subdivision 2, clause (2); and 576.01, subdivision 2,
does not apply.
Sec. 43. Minnesota Statutes 1996, section 469.033,
subdivision 6, is amended to read:
Subd. 6. [OPERATION AREA AS TAXING DISTRICT, SPECIAL TAX.]
All of the territory included within the area of operation of
any authority shall constitute a taxing district for the purpose
of levying and collecting special benefit taxes as provided in
this subdivision. All of the taxable property, both real and
personal, within that taxing district shall be deemed to be
benefited by projects to the extent of the special taxes levied
under this subdivision. Subject to the consent by resolution of
the governing body of the city in and for which it was created,
an authority may levy a tax upon all taxable property within
that taxing district. The tax shall be extended, spread, and
included with and as a part of the general taxes for state,
county, and municipal purposes by the county auditor, to be
collected and enforced therewith, together with the penalty,
interest, and costs. As the tax, including any penalties,
interest, and costs, is collected by the county treasurer it
shall be accumulated and kept in a separate fund to be known as
the "housing and redevelopment project fund." The money in the
fund shall be turned over to the authority at the same time and
in the same manner that the tax collections for the city are
turned over to the city, and shall be expended only for the
purposes of sections 469.001 to 469.047. It shall be paid out
upon vouchers signed by the chair of the authority or an
authorized representative. The amount of the levy shall be an
amount approved by the governing body of the city, but shall not
exceed 0.0131 0.0144 percent of taxable market value. The
authority may levy an additional levy, not to exceed 0.0013
percent of taxable market value, to be used to defray costs of
providing informational service and relocation assistance as set
forth in section 469.012, subdivision 1. The authority shall
each year formulate and file a budget in accordance with the
budget procedure of the city in the same manner as required of
executive departments of the city or, if no budgets are required
to be filed, by August 1. The amount of the tax levy for the
following year shall be based on that budget.
Sec. 44. Minnesota Statutes 1996, section 469.040,
subdivision 3, is amended to read:
Subd. 3. [STATEMENT FILED WITH ASSESSOR; PERCENTAGE TAX ON
RENTALS.] Notwithstanding the provisions of subdivision 1, after
a housing project or a housing development project carried on
under sections 469.016 to 469.026 has become occupied, in whole
or in part, an authority shall file with the assessor, on or
before April 15 of each year, a statement of the aggregate
shelter rentals of that project collected during the preceding
calendar year. Unless a greater amount has been agreed upon
between the authority and the governing body or bodies for which
the authority was created, in whose jurisdiction the project is
located, five percent of the aggregate shelter rentals shall be
charged to the authority as a service charge for the services
and facilities to be furnished with respect to that project.
The service charge shall be collected from the authority in the
manner provided by law for the assessment and collection of
taxes. The amount so collected shall be distributed to the
several taxing bodies in the same proportion as the tax rate of
each bears to the total tax rate of those taxing bodies. The
governing body or bodies for which the authority has been
created, in whose jurisdiction the project is located, may agree
with the authority for the payment of a service charge for a
housing project or a housing development project in an amount
greater than five percent of the aggregate annual shelter
rentals of any project, upon the basis of shelter rentals or
upon another basis agreed upon. The service charge may not
exceed the amount which would be payable in taxes were the
property not exempt. If such an agreement is made, the service
charge so agreed upon shall be collected and distributed in the
manner above provided. If the project has become occupied, or
if the land upon which the project is to be constructed has been
acquired, the agreement shall specify the location of the
project for which the agreement is made. "Shelter rental" means
the total rentals of a housing project exclusive of any charge
for utilities and special services such as heat, water,
electricity, gas, sewage disposal, or garbage removal. "Service
charge" means payment in lieu of taxes. The records of each
housing project shall be open to inspection by the proper
assessing officer.
Sec. 45. [469.1812] [DEFINITIONS.]
Subdivision 1. [SCOPE.] For purposes of sections 469.1812
to 469.1815, the following terms have the meanings given.
Subd. 2. [GOVERNING BODY.] "Governing body" means, for a
city, the city council; for a school district, the school board;
for a county, the county board; and for a town, the annual
meeting of the town.
Subd. 3. [MUNICIPALITY.] "Municipality" means a statutory
or home rule charter city or a town.
Subd. 4. [POLITICAL SUBDIVISION OR SUBDIVISION.]
"Political subdivision" or "subdivision" means a statutory or
home rule charter city, town, school district, or county.
Sec. 46. [469.1813] [ABATEMENT AUTHORITY.]
Subdivision 1. [AUTHORITY.] The governing body of a
political subdivision may grant an abatement of the taxes
imposed by the political subdivision on a parcel of property, if:
(a) it expects the benefits to the political subdivision of
the proposed abatement agreement to at least equal the costs to
the political subdivision of the proposed agreement; and
(b) it finds that doing so is in the public interest
because it will:
(1) increase or preserve tax base;
(2) provide employment opportunities in the political
subdivision;
(3) provide or help acquire or construct public facilities;
(4) help redevelop or renew blighted areas; or
(5) help provide access to services for residents of the
political subdivision.
Subd. 2. [ABATEMENT RESOLUTION.] The governing body of a
political subdivision may grant an abatement only by adopting an
abatement resolution, specifying the terms of the abatement.
The resolution must also include a specific statement as to the
nature and extent of the public benefits which the governing
body expects to result from the agreement. The abatement may
reduce all or part of the property tax levied by the political
subdivision on the parcel. The political subdivision may limit
the abatement:
(1) to a specific dollar amount per year or in total;
(2) to the increase in property taxes resulting from
improvement of the property;
(3) to the increases in property taxes resulting from
increases in the market value or tax capacity of the property;
or
(4) in any other manner the governing body of the
subdivision determines is appropriate.
The political subdivision may not abate tax attributable to the
value of the land or the areawide tax under chapter 276A or 473F.
Subd. 3. [SCHOOL DISTRICT ABATEMENT PROCEDURE.]
Notwithstanding the amounts in subdivision 2, a school district
that grants an abatement under this section must limit the
abatement for any property to not more than an amount equal to
the product of: (1) the property's net tax capacity, and (2)
the difference between the district's total tax rate for that
year and one-half of the general education tax rate for that
year. An abatement granted under this section is not an
abatement for purposes of state aid or local levy under chapter
124.
Subd. 4. [PROPERTY LOCATED IN TAX INCREMENT FINANCING
DISTRICTS.] The governing body of a governmental subdivision may
not enter into a property tax abatement agreement under sections
469.1812 to 469.1815 if the property is located in a tax
increment financing district.
Subd. 5. [NOTICE AND PUBLIC HEARING.] (a) The governing
body of the political subdivision may approve an abatement under
sections 469.1812 to 469.1815 only after holding a public
hearing on the abatement.
(b) Notice of the hearing must be published in a newspaper
of general circulation in the political subdivision at least
once more than ten days but less than 30 days before the
hearing. The newspaper must be one of general interest and
readership in the community, and not one of limited subject
matter. The newspaper must be published at least once per
week. The notice must indicate that the governing body will
consider granting a property tax abatement, identify the
property or properties for which an abatement is under
consideration, and the total estimated amount of the abatement.
Subd. 6. [DURATION LIMIT.] (a) A political subdivision
other than a school district may grant an abatement for a period
no longer than ten years. The subdivision may specify in the
abatement resolution a shorter duration. If the resolution does
not specify a period of time, the abatement is for eight years.
If an abatement has been granted to a parcel of property and the
period of the abatement has expired, the political subdivision
that granted the abatement may not grant another abatement for
eight years after the expiration of the first abatement. This
prohibition does not apply to improvements added after and not
subject to the first abatement.
(b) A school district may grant an abatement for only one
year at a time. Once a school district has authorized an
abatement for a property, it may reauthorize the abatement in
any subsequent year for the next seven years, or nine years if
provided in the original abatement agreement. This prohibition
does not apply to improvements added after and not subject to
the original abatement agreement.
Subd. 7. [REVIEW AND MODIFICATION OF ABATEMENTS.] The
political subdivision may provide in the abatement resolution
that the abatement may not be modified or changed during its
term. If the abatement resolution does not provide that the
abatement may not be modified or changed, the governing body of
the political subdivision may review and modify the abatement
every second year after it was approved.
Subd. 8. [LIMITATION ON ABATEMENTS.] In any year, the
total amount of property taxes abated by a political subdivision
under this section may not exceed (1) five percent of the
current levy, or (2) $100,000, whichever is greater.
Sec. 47. [469.1814] [BONDING AUTHORITY.]
Subdivision 1. [AUTHORITY.] A political subdivision may
issue bonds or other obligations to provide an amount equal to
the sum of the abatements granted for a property under section
469.1813. The maximum principal amount of these bonds may not
exceed the estimated sum of the abatements for the property for
the years authorized. The bonds may be general obligations of
the political subdivision if the governing body of the political
subdivision elects to pledge the full faith and credit of the
subdivision in the resolution issuing the bonds.
Subd. 2. [BOND CODE APPLIES.] Chapter 475 applies to the
obligations authorized by this section, except bonds are
excluded from the calculation of the net debt limit.
Subd. 3. [MUNICIPAL ISSUE FOR COMBINED ABATEMENTS.] If two
or more political subdivisions decide to grant abatements for
the same property, the municipality in which the property is
located may issue bonds to provide an amount equal to the sum of
the abatements for each of the jurisdictions that agrees. The
governing body of each of the other jurisdictions must guarantee
and pledge to pay annually to the municipality the amount of the
abatement. This pledge and guarantee is a binding obligation of
the political subdivision and must be included in the abatement
resolution.
Subd. 4. [BONDED ABATEMENTS NOT SUBJECT TO REVIEW.] If
bonds are issued to provide advance payment of abatements under
this section, the amount of abatement is not subject to periodic
review by the political subdivision under section 469.1813,
subdivision 7.
Subd. 5. [USE OF PROCEEDS.] The proceeds of bonds issued
under this section may be used to (1) pay for public
improvements that benefit the property, (2) to acquire and
convey land or other property, as provided under this section,
(3) to reimburse the property owner for the cost of improvements
made to the property, or (4) to pay the costs of issuance of the
bonds.
Sec. 48. [469.1815] [ADMINISTRATIVE.]
Subdivision 1. [INCLUSION IN PROPOSED AND FINAL
LEVIES.] The political subdivision must add to its levy amount
for the current year under sections 275.065 and 275.07 the total
estimated amount of all current year abatements granted. The
tax amounts shown on the proposed notice under section 275.065,
subdivision 3, and on the property tax statement under section
276.04, subdivision 2, are the total amounts before the
reduction of any abatements that will be granted on the property.
Subd. 2. [PROPERTY TAXES; ABATEMENT PAYMENT.] The total
property taxes shall be levied on the property and shall be due
and payable to the county at the times provided under section
279.01. The political subdivision will pay the abatement to the
property owner, lessee, or a representative of the bondholders,
as provided by the abatement resolution.
Sec. 49. Minnesota Statutes 1996, section 477A.011,
subdivision 36, is amended to read:
Subd. 36. [CITY AID BASE.] (a) Except as provided in
paragraphs (b) and, (c), and (d), "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.
(d) The city aid base for a city is increased by $20,000 in
1998 and thereafter and the maximum amount of total aid it may
receive under section 477A.013, subdivision 9, paragraph (c), is
also increased by $20,000 in calendar year 1998 only, provided
that:
(i) the city has a population in 1994 of 2,500 or more;
(ii) the city is located in a county, outside of the
metropolitan area, which contains a city of the first class;
(iii) the city's net tax capacity used in calculating its
1996 aid under section 477A.013 is less than $400 per capita;
and
(iv) at least four percent of the total net tax capacity,
for taxes payable in 1996, of property located in the city is
classified as railroad property.
Sec. 50. Laws 1992, chapter 511, article 2, section 52, is
amended to read:
Sec. 52. [WATERSHED DISTRICT LEVIES.]
(a) The Nine Mile Creek watershed district, the
Riley-Purgatory Bluff Creek watershed district, the Minnehaha
Creek watershed district, the Coon Creek watershed district, and
the Lower Minnesota River watershed district may levy in 1992
and thereafter a tax not to exceed $200,000 on property within
the district for the administrative fund. The levy authorized
under this section is in lieu of section 103D.905, subdivision
3. The administrative fund shall be used for the purposes
contained in Minnesota Statutes, section 103D.905, subdivision
3. The board of managers shall make the levy for the
administrative fund in accordance with Minnesota Statutes,
section 103D.915.
(b) The Wild Rice watershed district may levy, for taxes
payable in 1993, 1994, 1995, 1996, and 1997, 1998, 1999, 2000,
2001, and 2002, an ad valorem tax not to exceed $200,000 on
property within the district for the administrative fund. The
additional $75,000 above the amount authorized in Minnesota
Statutes, section 103D.905, subdivision 3, must be used for
costs incurred in connection with the development and
maintenance of cost-sharing projects with the United States Army
Corps of Engineers. The board of managers shall make the levy
for the administrative fund in accordance with Minnesota
Statutes, section 103D.915.
Sec. 51. Laws 1997, chapter 75, section 2, is amended to
read:
Sec. 2. [EFFECTIVE DATE; EXPIRATION.]
Section 1 is effective May 2, 1997, and expires January 1,
1998.
Sec. 52. [273.11] [Subd. 19.] [VALUATION EXCLUSION FOR
IMPROVEMENTS TO CERTAIN
BUSINESS PROPERTY.] Property classified under Minnesota Statutes,
section
273.13, subdivision 24, which is eligible for the preferred
class rate on the market value up to $150,000, shall qualify for
a valuation exclusion for assessment purposes, provided all of
the following conditions are met:
(1) the building must be at least 50 years old at the time
of the improvement or damaged by the 1997 floods;
(2) the building must be located in a city or town with a
population of 10,000 or less that is located outside the
seven-county metropolitan area, as defined in section 473.121,
subdivision 2;
(3) the total estimated market value of the land and
buildings must be $100,000 or less prior to the improvement and
prior to the damage caused by the 1997 floods;
(4) the current year's estimated market value of the
property must be equal to or less than the property's estimated
market value in each of the two previous years' assessments;
(5) a building permit must have been issued prior to the
commencement of the improvement, or if the building is located
in a city or town which does not have a building permit process,
the property owner must notify the assessor prior to the
commencement of the improvement;
(6) the property, including its improvements, has received
no public assistance, grants or financing;
(7) the property is not receiving a property tax abatement
under section 469.1813; and
(8) the improvements are made after the effective date of
this act and prior to January 1, 1999.
The assessor shall estimate the market value of the
building in the assessment year immediately following the year
that (1) the building permit was taken out, or (2) the taxpayer
notified the assessor that an improvement was to be made. If
the estimated market value of the building has increased over
the prior year's assessment, the assessor shall note the amount
of the increase on the property's record, and that amount shall
be subtracted from the value of the property in each year for
five years after the improvement has been made, at which time an
amount equal to 20 percent of the excluded value shall be added
back in each of the five subsequent assessment years.
For any property, there can be no more than two
improvements qualifying for exclusion under this subdivision.
The maximum amount of value that can be excluded from any
property under this subdivision is $50,000.
The assessor shall require an application, including
documentation of the age of the building from the owner, if
unknown by the assessor. Applications must be received prior to
July 1 of any year in order to be effective for taxes payable in
the following year.
For purposes of this subdivision, "population" has the same
meaning given in Minnesota Statutes, section 477A.011,
subdivision 3.
Sec. 53. [CITY OF DULUTH; REASSESSMENTS OF CANCELED
SPECIAL ASSESSMENTS.]
Subdivision 1. [AUTHORIZATION.] Notwithstanding any law,
city charter provision, or ordinance to the contrary, if a
parcel of tax-forfeited land located in the city of Duluth is
returned to private ownership and the parcel is benefited by an
improvement for which special assessments were canceled because
of the forfeiture, the city council may, upon notice and hearing
as provided for in the original assessment, make a reassessment
or a new assessment as to the parcel in an amount equal to the
amount remaining unpaid on the original assessment.
Subd. 2. [LOCAL APPROVAL REQUIRED.] This section is
effective upon approval by the governing body of the city of
Duluth and compliance with Minnesota Statutes, section 645.021,
subdivision 3.
Sec. 54. [FLOODWOOD JOINT RECREATION BOARD TAX.]
Subdivision 1. [LEVY AUTHORIZATION.] Each year, the
Floodwood joint recreation board may levy a tax not to exceed
$25,000 on the value of property situated in the territory of
independent school district No. 698 in accordance with this
section. Property in territory in the school district may be
made subject to the tax permitted by this section by the
agreement of the governing body or town board of the city or
town where it is located. The agreement may be by resolution of
a governing body or town board or by a joint powers agreement
pursuant to Minnesota Statutes, section 471.59. If levied, the
tax is in addition to all other taxes on the property subject to
it permitted to be levied for park and recreation purposes by
the cities and towns other than for the support of the joint
recreation board. It shall be disregarded in the calculation of
all other mill rate or per capita tax levy limitations imposed
by law or charter upon them. A city or town may withdraw its
agreement to future taxes by notice to the recreation board and
the county auditor unless provided otherwise by a joint powers
agreement. The tax shall be collected by the applicable county
auditor and treasurer and paid directly to the Floodwood joint
recreation board.
Subd. 2. [LOCAL APPROVAL.] This section is effective in
the city of Floodwood, the towns of Arrowhead, Fine Lakes,
Floodwood, Halden, Van Buren, Cedar Valley, Prairie Lake, and
Unorganized Township 52-21 in St. Louis county, and Unorganized
Township 52-22 in Aitkin county the day after compliance with
Minnesota Statutes, section 645.021, subdivision 3, by the
governing body of each. This section is effective for each
city, town, and unorganized township regardless of the action of
the others.
Approval of this section is not agreement to be subject to
the tax permitted by it. Agreement to the tax must be by
separate action in accordance with subdivision 1.
Sec. 55. [SAUK RIVER WATERSHED DISTRICT.]
Subdivision 1. [LEVY AUTHORIZATION.] Notwithstanding
Minnesota Statutes, section 103D.905, subdivision 3, the Sauk
River watershed district may levy up to $150,000 for its
administrative fund for taxes levied in 1997, payable in 1998.
Subd. 2. [EFFECTIVE DATE.] This section is effective the
day following final enactment.
Sec. 56. [VIRGINIA AREA AMBULANCE DISTRICT.]
Subdivision 1. [AGREEMENT; POWERS; GENERAL DESCRIPTION.]
(a) The cities of Virginia, Mountain Iron, and Gilbert, and the
towns of Pike, Clinton, McDavitt, Colvin, Sandy, Cherry,
Ellsburg, Wouri, Lavell, Cotton, and Embarrass, may by
resolution of their city councils and town boards establish the
Virginia area ambulance district.
(b) The St. Louis county board may by resolution provide
that property located in unorganized townships described in
clauses (1) to (6) may be included within the district:
(1) Township 61 North, Range 17 West;
(2) Township 59 North, Ranges 16 and 18 West;
(3) Township 56 North, Range 16 West;
(4) Township 60 North, Range 18 West;
(5) Township 55 North, Range 15; and
(6) Township 57, Range 16.
(c) The district shall make payments of the proceeds of the
tax authorized in this section to the city of Virginia, which
shall provide ambulance services throughout the district and may
exercise all the powers of the cities and towns that relate to
ambulance service anywhere within its territory.
(d) Any other contiguous town or home rule charter or
statutory city may join the district with the agreement of the
cities and towns that comprise the district at the time of its
application to join. Action to join the district may be taken
by the city council or town board of the city or town.
Subd. 2. [BOARD.] The district shall be governed by a
board composed of one member appointed by the city council or
town board of each city and town in the district. A district
board member may, but is not required to, be a member of a city
council or town board. Except as provided in this section,
members shall serve two-year terms ending the first Monday in
January and until their successors are appointed and qualified.
Of the members first appointed, as far as possible, the terms of
one-half shall expire on the first Monday in January in the
first year following appointment and one-half the first Monday
in January in the second year. The terms of those initially
appointed must be determined by lot. If an additional member is
added because an additional city or town joins the district, the
member's term must be fixed so that, as far as possible, the
terms of one-half of all the members expire on the same date.
Subd. 3. [TAX.] The district may impose a property tax on
real and personal property in the district in an amount
sufficient to discharge its operating expenses and debt payable
in each year, but not to exceed .0528 percent of the district's
taxable market value. The St. Louis county auditor shall
collect the tax and distribute it to the Virginia area ambulance
district.
Subd. 4. [EXPENDITURES.] The taxes collected under
subdivision 3 shall be used for licensed ambulance services and
first responders. Licensed ambulance services shall receive 80
percent of the available funds and first responders shall
receive 20 percent of the available funds. The amounts
allocated to first responders shall be used for education,
training, and reimbursement for their allowable expenses. Only
education and training that meets the recognized education and
training guidelines set by the emergency medical services
regulatory board under Minnesota Statutes, chapter 144E, shall
be reimbursable under this subdivision.
Subd. 5. [PUBLIC INDEBTEDNESS.] The district may incur
debt in the manner provided for a municipality by Minnesota
Statutes, chapter 475, when necessary to accomplish a duty
charged to it.
Subd. 6. [WITHDRAWAL.] Upon two years' notice, a city or
town may withdraw from the district. Its territory shall remain
subject to taxation for debt incurred prior to its withdrawal
under Minnesota Statutes, chapter 475.
Subd. 7. [EFFECTIVE DATE.] This section is effective (1)
in the cities of Virginia, Mountain Iron, and Gilbert, and the
towns of Pike, Clinton, McDavitt, Colvin, Sandy, Cherry,
Ellsburg, Wouri, Lavell, Cotton, and Embarrass, the day after
compliance with Minnesota Statutes, section 645.021, subdivision
2, by the governing body of each, and (2) for unorganized
townships described in subdivision 1, paragraph (b), clauses (1)
to (6), the day after compliance with Minnesota Statutes,
section 645.021, subdivision 2, by the St. Louis county board,
provided that the district must be established by September 1,
2000. Any of the cities, towns, and unorganized townships
listed in subdivision 1 that do not join the district initially
may join the district after its establishment.
Sec. 57. [ST. LOUIS COUNTY; UTILITY PERSONAL PROPERTY
EXEMPTION.]
(a) An electric generating facility with a capacity of
110,000 kilowatts located in St. Louis County whose operation is
integral to the development and operation of a new, adjacent
industrial park is exempt from property taxes on attached
machinery and other personal property for replacement equipment
and improvements installed after July 1, 1997. If the
industrial park is not built by July 1, 2001, this exemption
expires.
(b) The governing bodies of the county, city or town, and
school district must each approve by resolution the exemption of
the personal property under this section. The resolution shall
contain the number of years for which the exemption is granted.
Each of the governing bodies shall file a copy of the resolution
with the county auditor. The county auditor shall publish the
resolutions in newspapers of general circulation within the
county. The voters of the county may request a referendum on
the proposed exemption by filing a petition within 30 days after
the resolutions are published. The petition must be signed by
voters who reside in the county. The number of signatures must
equal at least ten percent of the number of persons voting in
the county in the last general election. If such a petition is
timely filed, the resolutions are not effective until they have
been submitted to the voters residing in the county at a general
or special election and a majority of votes cast on the question
of approving the resolution are in the affirmative. The
commissioner of revenue shall prepare a suggested form of
question to be presented at the referendum.
(c) The exemption under this section is limited to a
maximum of five years, beginning with the assessment year
immediately following when the personal property is put in
operation and expires thereafter.
Sec. 58. [WASHINGTON COUNTY; LEVY TO FUND THE COUNTY
HOUSING AND REDEVELOPMENT AUTHORITY.]
Subdivision 1. [AUTHORIZATION.] In addition to all other
levies authorized by law, Washington county may levy an amount
not to exceed $2,000,000 over a ten-year period beginning in
1997 for taxes payable in 1998, and transfer the proceeds of the
levy to the Washington county housing and redevelopment
authority to be used to support the activities of the authority,
which may include refinancing of indebtedness of the authority,
in the city of Landfall.
Subd. 2. [LOCAL APPROVAL.] This section is effective upon
approval by the governing body of Washington county and
compliance with Minnesota Statutes, section 645.021, subdivision
3.
Sec. 59. [BROOKLYN PARK; CERTIFICATION OF CHARGES;
DEFINITIONS.]
Subdivision 1. [SCOPE.] For the purpose of sections 60 and
61, the terms defined in this section have the meanings given
them.
Subd. 2. [ASSOCIATION.] "Association" has the meaning
given it in Minnesota Statutes, section 515B.1-103, paragraph
(4).
Subd. 3. [AUTHORITY.] "Authority" means the Brooklyn Park
economic development authority.
Subd. 4. [COMMON ELEMENTS.] "Common elements" has the
meaning given it in Minnesota Statutes, section 515B.1-103,
paragraph (7).
Subd. 5. [COMMON ELEMENT IMPROVEMENTS.] "Common element
improvements" means any physical repair, replacement, or
modification of, or addition to, the common elements of a common
interest community.
Subd. 6. [COMMON INTEREST COMMUNITY.] "Common interest
community" has the meaning given it in Minnesota Statutes,
section 515B.1-103, paragraph (10).
Subd. 7. [UNIT.] "Unit" has the meaning given it in
Minnesota Statutes, section 515B.1-103, paragraph (33).
Subd. 8. [UNIT OWNER.] "Unit owner" has the meaning given
it in Minnesota Statutes, section 515B.1-103, paragraph (35).
Sec. 60. [BROOKLYN PARK; AUTHORITY GRANTED.]
If:
(1) the authority lends or agrees to lend funds to an
association for the provision or construction of common element
improvements;
(2) the association has duly levied common expense
assessments against the units in order to provide the
association with funds to:
(i) pay principal and interest on the loan;
(ii) provide coverage in excess of principal and interest
payments on the loan;
(iii) create or replenish reserve funds pledged as security
for the loan; or
(iv) pay expenses related to the loan or the assessments
that are identified in the loan agreement between the authority
and the association;
(3) a unit owner has become delinquent in the payment of
any assessment installment; and
(4) the association has declared the entire amount of the
assessment due and owing pursuant to Minnesota Statutes, section
515B.3-115, paragraph (k), then
the authority may certify the delinquent assessment, together
with interest and penalties, to the county auditor for
collection to the same extent and in the same manner provided by
law for the assessment and collection of real estate taxes.
Sec. 61. [BROOKLYN PARK; DISCLOSURE REQUIRED.]
For any common interest community located in the city of
Brooklyn Park, the disclosure statement required under Minnesota
Statutes, section 515B.4-102, must include a description of the
potential applicability and consequences of section 60.
Sec. 62. [MINNEAPOLIS UTILITY CHARGE ASSESSMENTS.]
Subdivision 1. [BECOMES LIEN WHEN DELINQUENT.] An
assessment levied by the city of Minneapolis for delinquent
utility charges, and interest and penalties on the charges under
Minnesota Statutes, section 272.32; Laws 1969, chapter 499; Laws
1973, chapter 320; or Laws 1994, chapter 587, article 9, section
4, with accruing interest, is a lien upon all property included
in the assessment, concurrent with general taxes, from the date
the utility charges become delinquent, regardless of the date
the assessment is levied. The time of effect of a lien attached
for delinquent utility charge assessments supersedes any
contrary law in Minnesota Statutes, section 272.32 or 429.061.
Subd. 2. [WHEN DELINQUENT; STATEMENT REQUIRED.] Utility
charges become delinquent for the purposes of this section when
they are set forth in a statement sent by the city of
Minneapolis to the current billpayer of the property subject to
the utility charges and are not paid in full on or before the
due date stated in the statement. The utility billing office of
the city of Minneapolis shall provide a written summary of
unpaid utility statements within ten business days of receipt of
a written request for a specified real property title
transaction. If a summary is not provided by the utility
billing office within the requested time or a previous statement
charge is omitted, those charges and the lien under subdivision
1 are not enforceable against third parties who rely upon the
summary for real property transaction purposes.
Subd. 3. [UTILITY CHARGES DEFINED.] "Utility charges," in
this section, includes all fees, taxes, special charges, or
other charges imposed by the city of Minneapolis in connection
with the provision of services for sewer, water, solid waste
collection and management, nuisance abatement, or other services
or improvements specified in Minnesota Statutes, section
429.101; Laws 1969, chapter 499; and Laws 1973, chapter 320.
Subd. 4. [NOT CONVEYANCES.] The statement issued by the
city of Minneapolis for utility charges or any instrument in
writing created in connection with any assessment for delinquent
utility charges subject to this section are not conveyances as
defined in Minnesota Statutes, section 507.01, and are not
subject to the requirements of Minnesota Statutes, chapter 507,
regarding conveyances of real estate.
Sec. 63. [BROOKLYN CENTER, RICHFIELD, AND ST. LOUIS PARK;
APARTMENT EXCLUSIONS.]
Subdivision 1. [IMPROVEMENTS MADE TO CERTAIN
APARTMENTS.] (a) Notwithstanding any other provisions to the
contrary, the market value increase resulting from improvements
made after the effective date of this act and prior to January
1, 1999, to qualifying property located in the city of Brooklyn
Center, Richfield, or St. Louis Park shall be excluded for
assessment purposes under the conditions provided in this
subdivision.
(b) "Qualifying property" means property that meets all of
the following criteria:
(1) the building is at least 30 years old at the time of
the improvements;
(2) the building is residential real estate of four or more
units and is classified under Minnesota Statutes, section
273.13, subdivision 25, as class 4a, 4c, or 4d property; and
(3) the total cost of the qualifying improvements exceeds
$5,000 per unit.
(c) A building permit must have been issued prior to the
commencement of the improvements. Only improvements to the
residential structure and garages qualify under this
subdivision. The assessor shall require an application,
including, if unknown by the assessor, documentation of the age
of the building from the owner. 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.
(d) If the property qualifies under this subdivision, the
assessor shall note the qualifying value of the improvements on
the property's record and that amount shall be subtracted from
the qualifying property's market value for the five assessment
years immediately following the year in which the improvements
were completed, at which time the assessor shall determine the
property's estimated market value, and 20 percent of the
qualifying value shall be added back in each of the next five
subsequent assessment years. The assessor may require from the
owner any documentation necessary to verify that the cost of
improvements exceed the $5,000 per unit minimum.
Subd. 2. [EFFECTIVE DATE.] This section is effective for
each of the cities of Brooklyn Center, Richfield, and St. Louis
Park upon compliance with Minnesota Statutes, section 645.021,
subdivision 3, by the governing body of that city.
Sec. 64. [PROPERTY TAX ABATEMENTS; FLOOD PROPERTY.]
Subdivision 1. [AUTHORIZATION.] Notwithstanding the
requirements of Minnesota Statutes, section 375.192, the county
board of a qualified county may grant abatements of the full
amount of taxes on eligible property for taxes payable in 1997
as provided in this section. The owner of the property is not
required to apply for the abatement.
Subd. 2. [DEFINITIONS.] (a) As used in this section, the
terms defined in this subdivision have the meanings given them.
(b) "Qualified county" means any county that has been
designated between April 1, 1997, and May 1, 1997, by the
director of the Federal Emergency Management Agency as eligible
for federal aid due to flooding.
(c) "Eligible property" means a parcel of taxable property
located in a qualified county that contains a structure that has
been determined by the assessor to have lost over 50 percent of
its estimated market value due to flooding and flood damage. In
the case of agricultural property, the abatement is limited to
the taxes on the parcel attributable to the value of the house,
garage, and surrounding one acre, if the house has lost over 50
percent of its estimated market value, and the tax attributable
to the value of any farm buildings and structures that have lost
over 50 percent of their estimated market value.
Subd. 3. [ASSESSORS' DUTIES.] As soon as practicable,
local and county assessors in qualified counties shall notify
the county board and property owners of parcels of eligible
property.
Sec. 65. [DISASTER AREA; DUE DATE EXTENDED FOR BUSINESS
PROPERTY TAXES.]
(a) Notwithstanding Minnesota Statutes, section 279.01,
subdivision 1, a penalty shall not accrue if (1) because of a
natural disaster, a taxpayer is unable to pay the first half of
the payable 1997 property taxes on class 3a or 3b property,
classified under Minnesota Statutes, section 273.13, subdivision
24, located in an area designated by the Federal Emergency
Management Agency pursuant to a major disaster declaration
issued for Minnesota by President Clinton between April 1, 1997,
and April 14, 1997, and (2) the taxpayer pays the first half of
the payable 1997 taxes by October 15, 1997.
(b) If the first one half payment is paid after October 15,
1997, then all penalties that would have occurred on the due
date under Minnesota Statutes, section 279.01, subdivision 1,
shall be charged on the amount of the unpaid tax.
(c) The property taxpayer shall attach to the payment a
statement that the property is located in a disaster area and
qualified for an extension under this section.
Sec. 66. [DELAY OF FINANCIAL REPORT FILING; DISASTER
AREAS.]
For any city or town located in whole or in part within a
county that has been designated between April 1, 1997, and May
1, 1997, by the director of the Federal Emergency Management
Agency as eligible for federal aid due to flooding, the deadline
by which financial reports are required to be filed under
Minnesota Statutes, section 471.697 or 471.698, is extended by
90 days.
Sec. 67. [LOW-INCOME HOUSING CREDITS; PRIORITY IN DISASTER
AREAS.]
For its 1998 allocation of low-income housing tax credits
through the greater Minnesota pool under Minnesota Statutes,
section 462A.222, the Minnesota housing finance agency must give
priority to projects located in areas that have lost low-income
housing due to the floods that occurred in this state during
1997.
Sec. 68. [ELDERLY ASSISTED LIVING FACILITIES.]
Subdivision 1. [APPLICATION.] To facilitate a review by
the 1998 legislature of the property taxation of elderly
assisted living facilities and the development of standards and
criteria for the taxation of these facilities, this section:
(1) requires the commissioner of revenue to conduct a
survey of the tax status of these facilities under subdivision
2; and
(2) prohibits changes in assessment practices and policies
regarding these facilities under subdivision 3.
Subd. 2. [REPORT BY COMMISSIONER OF REVENUE.] The
commissioner of revenue shall survey all county assessors on the
tax status of all elderly assisted living facilities as defined
in Minnesota Statutes, section 273.13, subdivision 25a, located
in the state, and report the findings to the chairs of the house
and senate tax committees by February 1, 1998. The survey must
include, but is not limited to, estimates of the amount of
charitable contributions, if any, for each elderly assisted
living facility and the relative portion of those charitable
contributions to the total operating costs of the elderly
assisted living facility.
Subd. 3. [MORATORIUM ON CHANGES IN ASSESSMENT
PRACTICES.] (a) An assessor may not change the current practices
or policies used generally in assessing elderly assisted living
facilities.
(b) An assessor may not change the assessment of an
existing elderly assisted living facility, unless the change is
made as a result of a change in ownership, occupancy, or use of
the facility. This paragraph does not apply to:
(1) a facility that was constructed during calendar year
1997;
(2) a facility that was converted to an elderly assisted
living facility during calendar year 1997; or
(3) a change in market value.
(c) This subdivision expires and no longer applies on the
earlier of:
(1) the enactment of legislation establishing criteria for
the property taxation of elderly assisted living facilities; or
(2) final adjournment of the 1998 legislature.
Subd. 4. [DEFINITION.] For purposes of this section,
"elderly assisted living facility" has the meaning given in
Minnesota Statutes, section 273.13, subdivision 25a.
Sec. 69. [INSTRUCTION TO THE REVISOR.]
The revisor of statutes shall change the phrase "implicit
price deflator for state and local government purchases of goods
and services" wherever it appears in the next edition of
Minnesota Statutes and Minnesota Rules to "implicit price
deflator for government consumption expenditures and gross
investment for state and local governments" unless the reference
is to the implicit price deflator as of a specified date before
January 1, 1996.
Sec. 70. [REPEALER.]
(a) Minnesota Statutes 1996, sections 270B.12, subdivision
11; 276.012; 290A.055; and 290A.26; and Laws 1995, chapter 264,
article 4, as amended by Laws 1996, chapter 471, article 3, are
repealed. Notwithstanding Minnesota Statutes, section 645.34,
the sections of statutes amended by the repealed Laws 1995,
chapter 264, article 4, as amended, remain in effect as if not
so amended.
(b) Minnesota Statutes 1996, section 469.181, is repealed.
(c) Minnesota Statutes 1996, sections 276.20; and 276.21,
are repealed.
Sec. 71. [EFFECTIVE DATE.]
Section 1 is effective for aids distributed in 1999 and
thereafter.
Sections 2 to 4, 6, 17, 23 to 25, 32, 51, 57, 64 to 67, and
70, paragraph (a), are effective the day following final
enactment.
Sections 7, 8, 12 to 16, 18, 20, 21, 45 to 48, and 70,
paragraph (c), are effective for the 1997 assessment and
thereafter, for taxes payable in 1998 and thereafter.
Section 10 is effective beginning with the 1997 assessment.
Section 11 is effective beginning with the 1997 assessment
and ending with the 2002 assessment, for qualifying improvements
made after January 2, 1993, to a residence that has been
relocated; provided, that any residence that originally
qualifies in that time period is allowed to receive the benefits
provided under section 11 for the full ten-year time period. In
order to qualify for a market value exclusion under Minnesota
Statutes, section 273.11, subdivision 10, for the 1997
assessment for improvements made to a relocated residence, a
homeowner must notify the assessor by July 1, 1997.
Section 19 is effective payable 1999 and thereafter.
Section 22 is effective for the abstracts of exempt real
property filed in 1998, and thereafter.
Sections 33 and 42 are effective for agreements executed on
or after the day following final enactment.
Section 44 is effective the day following final enactment
for all housing development projects.
Section 49 is effective for aids payable in 1998 and
thereafter.
Sections 59 to 61 are effective the day after the governing
body of Brooklyn Park complies with Minnesota Statutes, section
645.021, subdivision 3.
Section 70, paragraph (b), is effective for property tax
deferrals granted after June 30, 1997.
ARTICLE 3
LEVY LIMITS
Section 1. Minnesota Statutes 1996, section 275.16, is
amended to read:
275.16 [COUNTY AUDITOR TO FIX AMOUNT OF LEVY.]
If any such municipality shall return to the county auditor
a levy greater than permitted by chapters 124, 124A, 124B, 136C,
and 136D, and sections 275.124 to 275.16, and sections 275.70 to
275.74, such county auditor shall extend only such amount of
taxes as the limitations herein prescribed will permit;
provided, if such levy shall include any levy for the payment of
bonded indebtedness or judgments, such levies for bonded
indebtedness or judgments shall be extended in full, and the
remainder of the levies shall be reduced so that the total
thereof, including levies for bonds and judgments, shall not
exceed such amount as the limitations herein prescribed will
permit.
Sec. 2. Minnesota Statutes 1996, section 275.62,
subdivision 1, is amended to read:
Subdivision 1. [REPORT ON TAXES LEVIED.] The commissioner
of revenue shall establish procedures for the annual reporting
of local government levies. Each local governmental unit shall
submit a report to the commissioner by December 30 of the year
in which the tax is levied. The report shall include, but is
not limited to, information on the amount of the tax levied by
the governmental unit for the following purposes:
(1) debt, which includes taxes levied for the purposes
defined in Minnesota Statutes 1991 Supplement, section 275.50,
subdivision 5, clauses (b), (c), (d), and (e);
(2) social services and related programs, which include
taxes levied for the purposes defined in Minnesota Statutes 1991
Supplement, section 275.50, subdivision 5, clauses (a), (j), and
(v);
(3) libraries, which include taxes levied for the purposes
defined in Minnesota Statutes 1991 Supplement, section 275.50,
subdivision 5, clause (n); and
(4) for counties only, the amount of levy needed to fund
increased county costs associated with the welfare reform under
Minnesota Laws 1997, chapter 85, including increased
administration and program costs of the income maintenance
programs and also related support services as they relate
directly to the welfare reform; and
(5) other levies, which include the taxes levied for all
purposes not included in clause (1), (2), or (3), or (4).
Sec. 3. [275.70] [LEVY LIMITATIONS; DEFINITIONS.]
Subdivision 1. [APPLICATION.] For the purposes of sections
275.70 to 275.74, the following terms shall have the meanings
given them, unless provided otherwise.
Subd. 2. [IMPLICIT PRICE DEFLATOR.] "Implicit price
deflator" means the implicit price deflator for government
consumption expenditures and gross investment for state and
local governments prepared by the bureau of economic analysis of
the United States Department of Commerce for the 12-month period
ending March 31 of the levy year.
Subd. 3. [LOCAL GOVERNMENTAL UNIT.] "Local governmental
unit" means a county, or a statutory or home rule charter city
with a population greater than 2,500.
Subd. 4. [POPULATION AND HOUSEHOLD ESTIMATES.] "Population"
or "number of households" means the population or number of
households for the local governmental unit as established by the
last federal census, by a census taken under section 275.14, or
by an estimate made by the metropolitan council or by the state
demographer under section 4A.02, whichever is most recent as to
the stated date of the count or estimate up to and including
July 1 of the current levy year.
Subd. 5. [SPECIAL LEVIES.] "Special levies" means those
portions of ad valorem taxes levied by a local governmental unit
for the following purposes or in the following manner:
(1) to pay the costs of the principal and interest on
bonded indebtedness or to reimburse for the amount of liquor
store revenues used to pay the principal and interest due on
municipal liquor store bonds in the year preceding the year for
which the levy limit is calculated;
(2) to pay the costs of principal and interest on
certificates of indebtedness issued for any corporate purpose
except for the following:
(i) tax anticipation or aid anticipation certificates of
indebtedness;
(ii) certificates of indebtedness issued under sections
298.28 and 298.282;
(iii) certificates of indebtedness used to fund current
expenses or to pay the costs of extraordinary expenditures that
result from a public emergency; or
(iv) certificates of indebtedness used to fund an
insufficiency in tax receipts or an insufficiency in other
revenue sources;
(3) to provide for the bonded indebtedness portion of
payments made to another political subdivision of the state of
Minnesota;
(4) to fund payments made to the Minnesota state armory
building commission under section 193.145, subdivision 2, to
retire the principal and interest on armory construction bonds;
(5) for unreimbursed expenses related to flooding that
occurred during the first half of calendar year 1997, as allowed
by the commissioner of revenue under section 275.74, paragraph
(b);
(6) for local units of government located in an area
designated by the Federal Emergency Management Agency pursuant
to a major disaster declaration issued for Minnesota by
President Clinton after April 1, 1997, and before April 21,
1997, for the amount of tax dollars lost due to abatements
authorized under section 273.123, subdivision 7, to the extent
that they are related to the major disaster;
(7) property taxes approved by voters which are levied
against the referendum market value as provided under section
275.61;
(8) to fund matching requirements needed to qualify for
federal or state grants or programs to the extent that either
(i) the matching requirement exceeds the matching requirement in
calendar year 1997, or (ii) it is a new matching requirement
that didn't exist prior to 1998; and
(9) to pay the expenses reasonably and necessarily incurred
in preparing for or repairing the effects of natural disaster
including the occurrence or threat of widespread or severe
damage, injury, or loss of life or property resulting from
natural causes, in accordance with standards formulated by the
emergency services division of the state department of public
safety, as allowed by the commissioner of revenue under section
275.74, paragraph (b).
Sec. 4. [275.71] [LEVY LIMITS.]
Subdivision 1. [LIMIT ON LEVIES.] Notwithstanding any
other provision of law or municipal charter to the contrary
which authorize ad valorem taxes in excess of the limits
established by sections 275.70 to 275.74, the provision of this
section shall apply to local governmental units for all purposes
other than those for which special levies and special
assessments are made.
Subd. 2. [LEVY LIMIT BASE.] (a) The levy limit base for a
local governmental unit for taxes levied in 1997 shall be equal
to the sum of:
(1) the amount the local governmental unit levied in 1996,
less any amount levied for debt, as reported to the department
of revenue under section 275.62, subdivision 1, clause (1), and
less any tax levied in 1996 against market value as provided for
in section 275.61;
(2) the amount of aids the local governmental unit was
certified to receive in calendar year 1997 under sections
477A.011 to 477A.03 before any reductions for state tax
increment financing aid under section 273.1399, subdivision 5;
(3) the amount of homestead and agricultural credit aid the
local governmental unit was certified to receive under section
273.1398 in calendar year 1997 before any reductions for tax
increment financing aid under section 273.1399, subdivision 5;
(4) the amount of local performance aid the local
governmental unit was certified to receive in calendar year 1997
under section 477A.05;
(5) the amount of any payments certified to the local
government unit in 1997 under sections 298.28 and 298.282; and
(6) the amount of any adjustments authorized under section
275.72.
If a governmental unit was not required to report under
section 275.62 for taxes levied in 1997, the commissioner shall
request information on levies used for debt from the local
governmental unit and adjust its levy limit base accordingly.
(b) The levy limit base for a local governmental unit for
taxes levied in 1998 is limited to its adjusted levy limit base
in the previous year, subject to any adjustments under section
275.72.
Subd. 3. [ADJUSTED LEVY LIMIT BASE.] For taxes levied in
1997 and 1998, the adjusted levy limit is equal to the levy
limit base computed under subdivision 2, multiplied by:
(1) one plus a percentage equal to the percentage growth in
the implicit price deflator; and
(2) for all cities and for counties outside of the
seven-county metropolitan area, one plus a percentage equal to
the percentage increase in number of households, if any, for the
most recent 12-month period for which data is available; and
(3) for counties located in the seven-county metropolitan
area, one plus a percentage equal to the greater of the
percentage increase in the number of households in the county or
the percentage increase in the number of households in the
entire seven-county metropolitan area for the most recent
12-month period for which data is available.
Subd. 4. [PROPERTY TAX LEVY LIMIT.] For taxes levied in
1997 and 1998, the property tax levy limit for a local
governmental unit is equal to its adjusted levy limit base
determined under subdivision 3 plus any additional levy
authorized under section 275.73, which is levied against net tax
capacity, reduced by the sum of (1) the total amount of aids
that the local governmental unit is certified to receive under
sections 477A.011 to 477A.014, (2) homestead and agricultural
aids it is certified to receive under section 273.1398, (3)
local performance aid it is certified to receive under section
477A.05, and (4) taconite aids under sections 298.28 and 298.282
including any aid which was required to be placed in a special
fund for expenditure in the next succeeding year.
Subd. 5. [LEVIES IN EXCESS OF LEVY LIMITS.] If the levy
made by a city or county exceeds the levy limit provided in
sections 275.70 to 275.74, except when the excess levy is due to
the rounding of the rate in accordance with section 275.28, the
county auditor shall only extend the amount of taxes permitted
under sections 275.70 to 275.74, as provided for in section
275.16.
Sec. 5. [275.72] [LEVY LIMIT ADJUSTMENTS FOR CONSOLIDATION
AND ANNEXATION.]
Subdivision 1. [ADJUSTMENTS FOR CONSOLIDATION.] If all of
the area included in two or more local governmental units is
consolidated, merged, or otherwise combined to constitute a
single governmental unit, the levy limit base for the resulting
governmental unit in the first levy year in which the
consolidation is effective shall be equal to (1) the highest tax
rate in any of the merging governmental units in the previous
year multiplied by the net tax capacity of all the merging
governmental units in the previous year, minus (2) the sum of
all levies in the merging governmental units in the previous
year that qualify as special levies under section 275.70,
subdivision 3.
Subd. 2. [ADJUSTMENTS FOR ANNEXATION.] If a local
governmental unit increases its tax base through annexation of
an area which is not the area of an entire local governmental
unit, the levy limit base of the local governmental unit in the
first year in which the annexation is effective shall be equal
to its adjusted levy limit base from the previous year
multiplied by the ratio of the net tax capacity in the local
governmental unit after the annexation compared to its net tax
capacity before the annexation.
Subd. 3. [TRANSFER OF GOVERNMENTAL FUNCTIONS.] If a
function or service of one local governmental unit is
transferred to another local governmental unit, the levy limits
established under section 275.71 shall be adjusted by the
commissioner of revenue in such manner so as to fairly and
equitably reflect the reduced or increased property tax burden
resulting from the transfer. The aggregate of the adjusted
limitations shall not exceed the aggregate of the limitations
prior to adjustment.
Subd. 4. [EFFECTIVE DATE FOR LEVY LIMITS PURPOSES.]
Annexations, mergers, and shifts in services and functional
responsibilities that are effective by June 30 of the levy year
are included in the calculation of the levy limit for that levy
year. Annexations, mergers, and shifts in services and
functional responsibilities that are effective after June 30 of
a levy year are not included in the calculation of the levy
limit until the subsequent levy year.
Sec. 6. [275.73] [ELECTIONS FOR ADDITIONAL LEVIES.]
Subdivision 1. [ADDITIONAL LEVY AUTHORIZATION.]
Notwithstanding the provisions of sections 275.70 to 275.72, but
subject to other law or charter provisions establishing other
limitations on the amount of property taxes a local governmental
unit may levy, a local governmental unit may levy an additional
levy in any amount which is approved by the majority of voters
of the governmental unit voting on the question at a general or
special election. Notwithstanding section 275.61, any levy
authorized under this section shall be levied against net tax
capacity unless the levy required voter approval under another
general or special law or any charter provisions. When the
governing body of the local governmental unit resolves to
increase the levy pursuant to this section, it shall provide for
submission of the proposition of an additional levy at a general
or special election. Notice of the election shall be given in
the manner required by law. The notice shall state the purpose
and the maximum yearly amount of the additional levy.
Subd. 2. [LEVY EFFECTIVE DATE.] An additional levy
approved under subdivision 1 at a general or special election
held prior to September 1 in any levy year may be levied in that
same levy year and subsequent levy years. An additional levy
approved under subdivision 1 at a general or special election
held after August 31 in any levy year shall not be levied in
that same levy but may be levied in subsequent levy years.
Sec. 7. [275.74] [STATE REGULATION OF LEVIES.]
(a) The commissioner of revenue shall make all necessary
calculations for determining levy limits for local governmental
units and notify the affected governmental units of their levy
limits directly by August 1 of each levy year. The local
governmental unit shall report by September 15, in a manner
prescribed by the commissioner, the maximum amount of taxes it
plans to levy for each of the purposes listed under special
levies and any additional levy authorized under section 275.73,
along with any necessary documentation. The commissioner shall
review the proposed special levies and make any adjustments
needed. The commissioner's decision is final. The final
allowed special levy amounts and any levy limit adjustments
shall be certified back to the local governments by December
10. In addition, the commissioner of revenue shall notify all
county auditors on or before five working days after December 20
of the sum of the levy limit plus the total of allowed special
levies for each local governmental unit located within their
boundaries so that they may fix the levies as required in
section 275.16. The local governmental units shall provide the
commissioner of revenue with all information that the
commissioner deems necessary to make the calculations provided
for in sections 275.70 to 275.73.
(b) A local governmental unit may request authorization to
levy under section 275.70, subdivision 5, clause (5), if (i) the
governmental unit is located in an area designated by the
Federal Emergency Management Agency pursuant to a major disaster
declaration issued for Minnesota by President Clinton after
April 1, 1997, and before April 21, 1997, and (ii) the amount of
direct unreimbursed costs incurred by the governmental unit
related to the flooding and its clean up, including emergency
disaster assistance to residents, exceeds five percent of its
levy in 1997. A local governmental unit may request
authorization to levy for unreimbursed costs for other natural
disasters, except the 1997 floods, under section 275.70,
subdivision 5, clause (9). The local governmental unit must
submit a request to levy under section 275.70, subdivision 5,
clause (5) or (9), to the commissioner of revenue by September
15 of the levy year and the request must include information
documenting the estimated unreimbursed costs. The commissioner
of revenue may grant levy authority, up to the amount requested
based on the documentation submitted. All decisions of the
commissioner are final. The commissioner shall send a report to
the chairs of the house and senate tax committees on the levies
authorized and levied under this provision by February 28 of the
year following the levy year.
Sec. 8. [FARIBAULT COUNTY; CITY OF BLUE EARTH; SPECIAL
LEVY.]
The amount of taxes levied by Faribault county and by the
city of Blue Earth is a special levy for the purposes of levy
limits under Minnesota Statutes, sections 275.70 to 275.73, if
the levy's purpose is to raise the matching funds required to
receive restitution funds awarded by plea agreement in the case
of United States v. Darling International, Inc., for developing
environmental projects that will improve water quality in the
Blue Earth and Minnesota rivers.
Sec. 9. [EFFECTIVE DATE.]
Sections 1 to 7 are effective for taxes levied in 1997 and
1998, payable in 1998 and 1999.
Upon compliance with Minnesota Statutes, section 645.021,
subdivision 3, by the governing body of Faribault county or the
city of Blue Earth, section 8 is effective for taxes levied in
1997 and 1998 in the county or city that approves it.
ARTICLE 4
TRUTH IN TAXATION
Section 1. Minnesota Statutes 1996, 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 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
shall certify the proposed levy as:
(1) a specific dollar amount; or the state determined
school levy amount as prescribed under section 124A.23,
subdivision 2;
(2) voter approved referendum and debt levies; and
(2) an amount equal to (3) the sum of the remaining school
levies, or the maximum levy limitation certified by the
commissioner of children, families, and learning to the county
auditor according to section 124.918, subdivision 1, less the
amounts levied under clauses (1) and (2).
(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. 2. Minnesota Statutes 1996, section 275.065, is
amended by adding a subdivision to read:
Subd. 1c. [LEVY; SHARED, MERGED, CONSOLIDATED
SERVICES.] If two or more taxing authorities are in the process
of negotiating an agreement for sharing, merging, or
consolidating services between those taxing authorities at the
time the proposed levy is to be certified under subdivision 1,
each taxing authority involved in the negotiation shall certify
its total proposed levy as provided in that subdivision,
including a notification to the county auditor of the specific
service involved in the agreement which is not yet finalized.
The affected taxing authorities may amend their proposed levies
under subdivision 1 until October 10 for levy amounts relating
only to the specific service involved.
Sec. 3. Minnesota Statutes 1996, 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 In the case of a
town, or in the case of the state determined portion of the
school district levy, the final tax amount will be its proposed
tax. The notice 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.
(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) the items listed below, shown separately by county,
city or town, school district excess referenda levy state
determined school tax net of the education homestead credit
under section 273.1382, remaining voter approved school levy,
other local 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
all 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:
(i) the actual tax for taxes payable in the current year;
(ii) the tax change due to spending factors, defined as the
proposed tax minus the constant spending tax amount;
(iii) the tax change due to other factors, defined as the
constant spending tax amount minus the actual current year tax;
and
(iv) the proposed tax amount.
In the case of a town or the state determined school tax,
the final tax shall also be its proposed tax unless the town
changes its levy at a special town meeting under section
365.52. If a school district has certified under section
124A.03, subdivision 2, that a referendum will be held in the
school district at the November general election, the county
auditor must note next to the school district's proposed amount
that a referendum is pending and that, if approved by the
voters, the tax amount may be higher than shown on the
notice. 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 under chapter 276A or 473F 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 between the total taxes payable in the current year to and
the total proposed or, for a town, final taxes payable the
following year taxes, 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 used as the owner's homestead, the
assessor shall reclassify the property to homestead for taxes
payable in the following year.
(h) In the case of class 4 residential property used as a
residence for lease or rental periods of 30 days or more, the
taxpayer must either:
(1) mail or deliver a copy of the notice of proposed
property taxes to each tenant, renter, or lessee; or
(2) post a copy of the notice in a conspicuous place on the
premises of the property.
The notice must be mailed or posted by the taxpayer by
November 27 or within three days of receipt of the notice,
whichever is later. A taxpayer may notify the county treasurer
of the address of the taxpayer, agent, caretaker, or manager of
the premises to which the notice must be mailed in order to
fulfill the requirements of this paragraph.
(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.
(j) For taxes levied in 1996, payable in 1997 only, in the
case of a statutory or home rule charter city or town that
exercises the local levy option provided in section 473.388,
subdivision 7, the notice of its proposed taxes may include a
statement of the amount by which its proposed tax increase for
taxes payable in 1997 is attributable to its exercise of that
option, together with a statement that the levy of the
metropolitan council was decreased by a similar amount because
of the exercise of that option.
Sec. 4. Minnesota Statutes 1996, section 275.065, is
amended by adding a subdivision to read:
Subd. 3a. [CONSTANT SPENDING LEVY AMOUNT.] (a) For
purposes of this section, "constant spending levy amount" for a
county, city, town, or special taxing district means the
property tax levy that the taxing authority would need to levy
so that the sum of (i) its levy, including its fiscal
disparities distribution levy under section 276A.06, subdivision
3, clause (a), or 473F.08, subdivision 3, clause (a), plus (ii)
its property tax aid amounts, would remain constant from the
current year to the proposed year, taking into account the
fiscal disparities distribution levy amounts and the property
tax aid amounts that have been certified for the proposed year.
For the purposes of this paragraph, property tax aids include
homestead and agricultural credit aid under section 273.1398,
subdivision 2, local government aid under section 477A.013,
local performance aid under section 477A.05, county criminal
justice aid under section 477A.0121, and family preservation aid
under section 477A.0122.
(b) For the state determined school tax, "constant spending
levy amount" is the same as the proposed tax.
(c) For the voter approved school levy, "constant spending
levy amount" is the result of the following computation: (i)
compute the current year's revenue per pupil in average daily
membership as the ratio of the voter approved referendum and
debt service levy plus aid revenue to the number of pupils in
average daily membership, as estimated at the time of levy
certification the previous December; (ii) compute the proposed
year's levy ratio as ratio of the proposed year's levy
limitation for voter approved referendum and debt service
revenue to the maximum referendum and debt service levy plus aid
revenue for the proposed year, at the time of proposed levy
certification in September; and (iii) compute the "constant
spending levy amount" as the product of the current year's
revenue per pupil from clause (i) times the proposed year's levy
ratio from clause (ii) times the proposed year's pupils in
average daily membership.
(d) For the sum of all other school levies not included in
paragraph (b) or (c), "constant spending levy amount" is the
result of the following computation: (i) compute the current
year's revenue per pupil in average daily membership as the
ratio of the levy plus associated aid revenue to the number of
pupils in average daily membership, as estimated at the time of
levy certification the previous December; (ii) compute the
proposed year's levy ratio as ratio of the proposed year's levy
limitation to the maximum levy plus associated aid revenue for
the proposed year, estimated at the time of proposed levy
certification in September; and (iii) compute the "constant
spending levy amount" as the product of the current year's
revenue per pupil from clause (i) times the proposed year's levy
ratio from clause (ii) times the proposed year's pupils in
average daily membership.
(e) Each year, the commissioner of children, families, and
learning must compute and report to the county auditor each
school district's constant spending levy amounts by September
30. In no case shall a constant spending levy amount be less
than $0. For the purposes of this subdivision, school homestead
and agricultural credit aid under section 273.1398, subdivision
2, shall be included in the other school levy category. For
purposes of this subdivision, the school fiscal disparities
distribution levy shall be apportioned proportionately among
levy categories.
(f) For the tax increment financing tax, and the fiscal
disparities tax, the "constant spending levy amount" is the same
as the proposed tax.
Sec. 5. Minnesota Statutes 1996, section 275.065,
subdivision 5a, is amended to read:
Subd. 5a. [PUBLIC ADVERTISEMENT.] (a) A city that has a
population of more than 2,500, county, a metropolitan special
taxing district as defined in subdivision 3, paragraph (i), a
regional library district established under section 134.201, or
school district shall advertise in a newspaper a notice of its
intent to adopt a budget and property tax levy or, in the case
of a school district, to review its current budget and proposed
property taxes payable in the following year, at a public
hearing. The notice must be published not less than two
business days nor more than six business days before the hearing.
The advertisement must be at least one-eighth page in size
of a standard-size or a tabloid-size newspaper. The
advertisement must not be placed in the part of the newspaper
where legal notices and classified advertisements appear. The
advertisement must be published in an official newspaper of
general circulation in the taxing authority. The newspaper
selected must be one of general interest and readership in the
community, and not one of limited subject matter. The
advertisement must appear in a newspaper that is published at
least once per week.
For purposes of this section, the metropolitan special
taxing district's advertisement must only be published in the
Minneapolis Star and Tribune and the Saint Paul Pioneer Press.
(b) The advertisement for school districts, metropolitan
special taxing districts, and regional library districts must be
in the following form, except that the notice for a school
district may include references to the current budget in regard
to proposed property taxes.
"NOTICE OF
PROPOSED PROPERTY TAXES
(City/County/School District/Metropolitan
Special Taxing District/Regional
Library District) of .........
The governing body of ........ will soon hold budget hearings
and vote on the property taxes for (city/county/metropolitan
special taxing district/regional library district services that
will be provided in 199_ (year)/school district services that
will be provided in 199_ (year) and 199_ (year)).
NOTICE OF PUBLIC HEARING:
All concerned citizens are invited to attend a public hearing
and express their opinions on the proposed (city/county/school
district/metropolitan special taxing district/regional library
district) budget and property taxes, or in the case of a school
district, its current budget and proposed property taxes,
payable in the following year. The hearing will be held on
(Month/Day/Year) at (Time) at (Location, Address)."
(c) The advertisement for cities and counties must be in
the following form.
"NOTICE OF PROPOSED
TOTAL BUDGET AND PROPERTY TAXES
The (city/county) governing body or board of commissioners will
hold a public hearing to discuss the budget and to vote on the
amount of property taxes to collect for services the
(city/county) will provide in (year).
SPENDING: The total budget amounts below compare
(city's/county's) (year) total actual budget with the amount the
(city/county) proposes to spend in (year).
(Year) Total Proposed (Year) Change from
Actual Budget Budget (Year)-(Year)
$....... $....... ...%
TAXES: The property tax amounts below compare that portion of
the current budget levied in property taxes in (city/county) for
(year) with the property taxes the (city/county) proposes to
collect in (year).
(Year) Property Proposed (Year) Change from
Taxes Property Taxes (Year)-(Year)
$....... $....... ...%
ATTEND THE PUBLIC HEARING
All (city/county) residents are invited to attend the public
hearing of the (city/county) to express your opinions on the
budget and the proposed amount of (year) property taxes. The
hearing will be held on:
(Month/Day/Year/Time)
(Location/Address)
If the discussion of the budget cannot be completed, a time and
place for continuing the discussion will be announced at the
hearing. You are also invited to send your written comments to:
(City/County)
(Location/Address)"
(d) For purposes of this subdivision, the budget amounts
listed on the advertisement mean:
(1) for cities, the total government fund expenditures, as
defined by the state auditor under section 471.6965, less any
expenditures for improvements or services that are specially
assessed or charged under chapter 429, 430, 435, or the
provisions of any other law or charter; and
(2) for counties, the total government fund expenditures,
as defined by the state auditor under section 375.169, less any
expenditures for direct payments to recipients or providers for
the human service aids listed below:
(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) emergency assistance under section 256.871, subdivision
6;
(6) Minnesota supplemental aid under section 256D.36,
subdivision 1;
(7) preadmission screening under section 256B.0911, and
alternative care grants under section 256B.0913;
(8) general assistance medical care claims processing,
medical transportation and related costs under section 256D.03,
subdivision 4;
(9) medical transportation and related costs under section
256B.0625, subdivisions 17 to 18a;
(10) group residential housing under 256I.05, subdivision
8, transferred from programs in clauses (4) and (6); or
(11) any successor programs to those listed in clauses (1)
to (10).
(c) (e) A city with a population of over 500 but not more
than 2,500 must advertise by posted notice as defined in section
645.12, subdivision 1. The advertisement must be posted at the
time provided in paragraph (a). It must be in the form required
in paragraph (b).
(d) (f) For purposes of this subdivision, the population of
a city is the most recent population as determined by the state
demographer under section 4A.02.
(e) (g) The commissioner of revenue, subject to the
approval of the chairs of the house and senate tax committees,
shall prescribe the form and format of the advertisement.
(f) For calendar year 1993, each taxing authority required
to publish an advertisement must include on the advertisement a
statement that information on the increases or decreases of the
total budget, including employee and independent contractor
compensation in the prior year, current year, and proposed
budget year will be discussed at the hearing.
(g) Notwithstanding paragraph (f), for 1993, the
commissioner of revenue shall prescribe the form, format, and
content of an advertisement comparing current and proposed
expense budgets for the metropolitan council, the metropolitan
airports commission, and the metropolitan mosquito control
commission. The expense budget must include occupancy,
personnel, contractual and capital improvement expenses. The
form, format, and content of the advertisement must be approved
by the chairs of the house and senate tax committees prior to
publication.
Sec. 6. Minnesota Statutes 1996, section 275.065,
subdivision 6, is amended to read:
Subd. 6. [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.]
(a) For purposes of this section, the following terms shall
have the meanings given:
(1) "Initial hearing" means the first and primary hearing
held to discuss the taxing authority's proposed budget and
proposed property tax levy for taxes payable in the following
year, or, for school districts, the current budget and the
proposed property tax levy for taxes payable in the following
year.
(2) "Continuation hearing" means a hearing held to complete
the initial hearing, if the initial hearing is not completed on
its scheduled date.
(3) "Subsequent hearing" means the hearing held to adopt
the taxing authority's final property tax levy, and, in the case
of taxing authorities other than school districts, the final
budget, for taxes payable in the following year.
(b) Between November 29 and December 20, the governing
bodies of a city that has a population over 500, county,
metropolitan special taxing districts as defined in subdivision
3, paragraph (i), and regional library districts shall each hold
a an initial 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 an initial 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 initial
public hearing, the location of which will be determined by the
affected metropolitan agencies.
(c) The initial hearing must be held after 5:00 p.m. if
scheduled on a day other than Saturday. No initial hearing may
be held on a Sunday.
(d) At the initial 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. 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 public hearing, the school district must also
provide and discuss information on the distribution of its
revenues by revenue source, and the distribution of its spending
by program area.
(e) If the initial 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 continuation hearing must be
held at least five business days but no more than 14 business
days after the initial hearing. A continuation hearing may not
be held later than December 20 except as provided in paragraphs
(f) and (g). A continuation hearing must be held after 5:00
p.m. if scheduled on a day other than Saturday. No continuation
hearing may be held on a Sunday.
(f) The governing body of a county shall hold its initial
hearing on the second Tuesday in December each year, and may
hold additional initial 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 continuation
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.
(g) The metropolitan special taxing districts shall hold a
joint initial public hearing on the first Monday of December. A
continuation hearing, if necessary, shall be held on the second
Monday of December even if that second Monday is after December
10.
(h) The county auditor shall provide for the coordination
of initial and continuation hearing dates for all school
districts and cities within the county to prevent conflicts
under clauses (i) and (j).
(i) 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
initial hearing and any continuation hearing. If a school board
or regional library district does not certify these dates by
August 10, the auditor will assign the initial and continuation
hearing dates. The dates elected or assigned must not conflict
with the initial and continuation hearing dates of the county or
the metropolitan special taxing districts.
(j) By August 20, the county auditor shall notify the
clerks of the cities within the county of the dates on which
school districts and regional library districts have elected to
hold their initial and continuation 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 initial hearing
and any continuation hearing. If a city does not certify these
dates by September 15, the auditor shall assign the initial and
continuation hearing dates. The dates elected or assigned for
the initial hearing must not conflict with the initial hearing
dates of the county, metropolitan special taxing districts,
regional library districts, or school districts within which the
city is located. To the extent possible, the dates of the
city's continuation hearing should not conflict with the
continuation hearing dates of the county, metropolitan special
taxing districts, regional library districts, or school
districts within which the city is located. This paragraph does
not apply to cities of 500 population or less.
(k) The county initial hearing date and the city,
metropolitan special taxing district, regional library district,
and school district initial hearing dates must be designated on
the notices required under subdivision 3. The continuation
hearing dates need not be stated on the notices.
(l) At a subsequent hearing, each county, school district,
city over 500 population, and metropolitan special taxing
district may amend its proposed property tax levy and must adopt
a final property tax levy. Each county, city over 500
population, and metropolitan special taxing district may also
amend its proposed budget and must adopt a final budget at the
subsequent hearing. The final property tax levy must be adopted
prior to adopting the final budget. 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 must be held either immediately following the
continuation hearing or on a date subsequent to the continuation
hearing. 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 date, time, and place of the subsequent hearing must
be announced at the initial public hearing or at the
continuation hearing.
(m) The property tax levy certified under section 275.07 by
a city of any population, 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, or 124B.03, subdivision
2, 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 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 children, families,
and learning or the commissioner of revenue 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.
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
or the metropolitan special taxing districts. By August 20, the
county auditor shall notify the clerks of the cities within the
county of the dates on which school 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. For its initial hearing and for the
subsequent hearing at which the final property tax levy will be
adopted, 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. For continuation hearings, the city may select dates
that conflict with other taxing authorities' dates if the city
deems it necessary.
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.
(n) This subdivision does not apply to towns and special
taxing districts other than regional library districts and
metropolitan special taxing districts.
(o) Notwithstanding the requirements of this section, the
employer is required to meet and negotiate over employee
compensation as provided for in chapter 179A.
Sec. 7. Minnesota Statutes 1996, section 275.065, is
amended by adding a subdivision to read:
Subd. 6b. [JOINT PUBLIC HEARINGS.] Notwithstanding any
other provision of law, any city with a population of 10,000 and
over, may conduct a more comprehensive public hearing than is
contained in subdivision 6 by including a board member from the
county, a board member from the school district located within
the city's boundary, and a representative of the metropolitan
council, if the city is in the metropolitan area, as defined in
section 473.121, subdivision 2, at the city's public hearing.
All provisions regarding the public hearings under subdivision 6
are applicable to the joint public hearings under this
subdivision.
Upon the adoption of a resolution by the governing body of
the city to hold a joint hearing, the city shall notify the
county, the school district, and the metropolitan council if the
city is in the metropolitan area, of the decision to hold a
joint public hearing and request a board member from each of
those taxing authorities, and the member or the designee of the
metropolitan council if applicable, to be at the joint hearing.
If the city is located in more than one county, the city may
choose to request a county board member from each county or only
from the county containing the majority of the city's market
value. If more than one school district is partially or totally
located within the city, the city may choose to request a school
district board member from each school district, or a board
member only from the school district containing the majority of
the city's market value. If, as a result of requests under this
subdivision, there are not sufficient board members in the
county or the school district to attend the joint hearing, the
county or school district may send a nonelected person working
for its taxing authority to speak on the authority's behalf.
The city may also invite each state senator and representative
who represents the city, or a portion of the city, to come to
the joint hearing.
The primary purpose of the joint hearing is to discuss the
city's budget and property tax levy. The county and school
district officials, and metropolitan council representative, if
the city is in the metropolitan area, should be prepared to
answer questions relevant to its budget and levy and the effect
that its levy has on the property owners in the city.
If a city conducts a hearing under this subdivision, this
hearing is in lieu of the initial hearing required under
subdivision 6. However, the city is still required to adopt its
proposed property tax levy at a subsequent hearing as provided
under subdivision 6. The hearings under this subdivision do not
relieve a county, school district, or the metropolitan council
of the requirement to hold its individual hearing under
subdivision 6.
Sec. 8. Minnesota Statutes 1996, section 275.065,
subdivision 8, is amended to read:
Subd. 8. [HEARING.] Notwithstanding any other provision of
law, Ramsey county, the city of St. Paul, and independent school
district No. 625 are authorized to and shall hold their initial
public hearing jointly. The hearing must be held on the second
Tuesday of December each year. The advertisement required in
subdivision 5a may be a joint advertisement. The hearing is
otherwise subject to the requirements of this section.
Ramsey county is authorized to hold an additional initial
hearing or hearings as provided under this section, provided
that any additional hearings must not conflict with the initial
or continuation hearing dates of the other taxing districts.
However, if Ramsey county elects not to hold such
additional initial hearing or hearings, the joint initial
hearing required by this subdivision must be held in a St. Paul
location convenient to residents of Ramsey county.
Sec. 9. Minnesota Statutes 1996, section 275.07,
subdivision 4, is amended to read:
Subd. 4. [REPORT TO COMMISSIONER.] (a) On or before
October 8 of each year, the county auditor shall report to the
commissioner of revenue the proposed levy certified by local
units of government under section 275.065, subdivision 1. If
any taxing authorities have notified the county auditor that
they are in the process of negotiating an agreement for sharing,
merging, or consolidating services but that when the proposed
levy was certified under section 275.065, subdivision 1c, the
agreement was not yet finalized, the county auditor shall supply
that information to the commissioner when filing the report
under this section and shall recertify the affected levies as
soon as practical after October 10.
(b) On or before January 15 of each year, the county
auditor shall report to the commissioner of revenue the final
levy certified by local units of government under subdivision 1.
(c) The levies must be reported in the manner prescribed by
the commissioner. The reports must show a total levy and the
amount of each special levy.
Sec. 10. Minnesota Statutes 1996, 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 and the amount of the state determined school tax from
the parcel of real property for which a particular tax statement
is prepared. The dollar amounts due attributable to the county,
the state determined school tax, the voter approved school tax,
the other local school tax, the township or municipality, and
the total of the metropolitan special taxing districts as
defined in section 275.065, subdivision 3, paragraph (i), school
district excess referenda levy, remaining school district levy,
and the total of other voter approved referenda levies based on
market value under section 275.61 must be separately stated.
The amounts due all other special taxing districts, if any, may
be aggregated. 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 sentences, printed in upper case letters in
boldface print: "EVEN THOUGH THE STATE OF MINNESOTA DOES NOT
RECEIVE ANY PROPERTY TAX REVENUES, IT SETS THE AMOUNT OF THE
STATE-DETERMINED SCHOOL TAX LEVY. 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 the property's total property tax to the result the sum
of the aids enumerated in clause (4);
(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; and
(iv) homestead and agricultural credit aid under section
273.1398;
(5) for homestead residential and agricultural properties,
the education 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 under
section 273.1382;
(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).
(d) If the county uses envelopes for mailing property tax
statements and if the county agrees, a taxing district may
include a notice with the property tax statement notifying
taxpayers when the taxing district will begin its budget
deliberations for the current year, and encouraging taxpayers to
attend the hearings. If the county allows notices to be
included in the envelope containing the property tax statement,
and if more than one taxing district relative to a given
property decides to include a notice with the tax statement, the
county treasurer or auditor must coordinate the process and may
combine the information on a single announcement.
The commissioner of revenue shall certify to the county
auditor the actual or estimated aids enumerated in clauses (3)
and clause (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 January 1 of each year.
Sec. 11. Minnesota Statutes 1996, section 383A.75,
subdivision 3, is amended to read:
Subd. 3. [DUTIES.] The committee is authorized to and
shall meet from time to time to make appropriate recommendations
for the efficient and effective use of property tax dollars
raised by the jurisdictions for programs, buildings, and
operations. In addition, the committee shall:
(1) identify trends and factors likely to be driving budget
outcomes over the next five years with recommendations for how
the jurisdictions should manage those trends and factors to
increase efficiency and effectiveness;
(2) agree, by September October 1 of each year, on the
appropriate level of overall property tax levy for the three
jurisdictions and publicly report such to the governing bodies
of each jurisdiction for ratification or modification by
resolution;
(3) plan for the joint truth-in-taxation hearings under
section 275.065, subdivision 8; and
(4) identify, by December 31 of each year, areas of the
budget to be targeted in the coming year for joint review to
improve services or achieve efficiencies.
In carrying out its duties, the committee shall consult
with public employees of each jurisdiction and with other
stakeholders of the city, county, and school district, as
appropriate.
Sec. 12. Laws 1993, chapter 375, article 7, section 29, is
amended to read:
Sec. 29. [EFFECTIVE DATE.]
Sections 1, 6 to 8, 13, 15 to 25, 27, and 28 are effective
for taxes levied in 1993, payable in 1994 and thereafter.
Section 3, subdivision 5, and the provisions of sections 9
to 11 relating to regional library districts are effective for
property taxes levied in 1994, payable in 1995, and thereafter.
The other provisions of sections 9 to 11 are effective for
property taxes levied in 1993, payable in 1994 and thereafter.
Sections 12 and 14 are effective the day following final
enactment and without local approval, as provided in Minnesota
Statutes, section 645.023, subdivision 1, clause (a), and shall
expire after December 31, 1997.
Section 26 is effective beginning with aids payable in
calendar year 1993.
Sec. 13. [EXCEPTION FOR TAXES PAYABLE IN 1998.]
(a) Notwithstanding Minnesota Statutes, section 275.065,
subdivision 3, for taxes payable in 1998 only, the commissioner
of revenue may allow a county auditor, upon request, to prepare
notices of proposed property taxes that do not itemize school
district levies as required by that section, if the county
determines that it is not able to compute the separate levies
for the actual tax payable in 1997.
(b) Notwithstanding Minnesota Statutes, section 276.04,
subdivision 2, for taxes payable in 1998 only, the commissioner
of revenue may allow a county treasurer, upon request, to
prepare property tax statements that (i) do not itemize school
levies as required by that section, and (ii) do not include
homestead and agricultural credit aid as required by paragraph
(c), clause (4), if the county determines that it is not able to
compute the separate items for the tax payable in 1997.
Sec. 14. [APPROPRIATION.]
$1,000,000 is appropriated for fiscal year 1998 to the
commissioner of revenue for distribution to the 87 counties for
implementing the various provisions of this act, including the
added expenses of the truth in taxation provisions. The
commissioner shall distribute the dollars using the following
formula: 25 percent shall be distributed equally, 25 percent
shall be distributed based on population within each county, and
the remaining 50 percent shall be distributed based on the
number of property tax statements within each county.
Sec. 15. [EFFECTIVE DATE.]
Sections 1 to 4 and 9 are effective for levies and notices
for taxes payable in 1998, and thereafter.
Section 5 is effective for newspaper advertisements
prepared in 1997 for taxes payable in 1998, and thereafter.
Sections 6 to 8 are effective for public hearings held in
1997, and thereafter.
Section 10 is effective for property tax statements
prepared in 1998, and thereafter.
ARTICLE 5
INCOME TAXES AND PROPERTY TAX REFUNDS
Section 1. Minnesota Statutes 1996, section 270B.02, is
amended by adding a subdivision to read:
Subd. 6. [CLIENT LISTS; THIRD-PARTY BULK FILERS.] Client
lists required under section 290.92, subdivision 30, are
classified as private data on individuals or nonpublic data, as
defined in section 13.02, subdivisions 9 and 12.
Sec. 2. Minnesota Statutes 1996, section 290.01,
subdivision 19b, is amended to read:
Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For
individuals, estates, and trusts, there shall be subtracted from
federal taxable income:
(1) interest income on obligations of any authority,
commission, or instrumentality of the United States to the
extent includable in taxable income for federal income tax
purposes but exempt from state income tax under the laws of the
United States;
(2) if included in federal taxable income, the amount of
any overpayment of income tax to Minnesota or to any other
state, for any previous taxable year, whether the amount is
received as a refund or as a credit to another taxable year's
income tax liability;
(3) the amount paid to others not to exceed $650 for each
dependent in grades kindergarten to 6 and $1,000 for each
dependent in grades 7 to 12, for tuition, textbooks, and
transportation of each dependent in attending an elementary or
secondary school situated in Minnesota, North Dakota, South
Dakota, Iowa, or Wisconsin, wherein a resident of this state may
legally fulfill the state's compulsory attendance laws, which is
not operated for profit, and which adheres to the provisions of
the Civil Rights Act of 1964 and chapter 363. As used in this
clause, "textbooks" includes books and other instructional
materials and equipment used in elementary and secondary schools
in teaching only those subjects legally and commonly taught in
public elementary and secondary schools in this state.
"Textbooks" does not include instructional books and materials
used in the teaching of religious tenets, doctrines, or worship,
the purpose of which is to instill such tenets, doctrines, or
worship, nor does it include books or materials for, or
transportation to, extracurricular activities including sporting
events, musical or dramatic events, speech activities, driver's
education, or similar programs. In order to qualify for the
subtraction under this clause the taxpayer must elect to itemize
deductions under section 63(e) of the Internal Revenue Code;
(4) to the extent included in federal taxable income,
distributions from a qualified governmental pension plan, an
individual retirement account, simplified employee pension, or
qualified plan covering a self-employed person that represent a
return of contributions that were included in Minnesota gross
income in the taxable year for which the contributions were made
but were deducted or were not included in the computation of
federal adjusted gross income. The distribution shall be
allocated first to return of contributions until the
contributions included in Minnesota gross income have been
exhausted. This subtraction applies only to contributions made
in a taxable year prior to 1985;
(5) income as provided under section 290.0802;
(6) the amount of unrecovered accelerated cost recovery
system deductions allowed under subdivision 19g;
(7) to the extent included in federal adjusted gross
income, income realized on disposition of property exempt from
tax under section 290.491;
(8) to the extent not deducted in determining federal
taxable income, the amount paid for health insurance of
self-employed individuals as determined under section 162(l) of
the Internal Revenue Code, except that the 25 percent limit does
not apply. If the taxpayer deducted insurance payments under
section 213 of the Internal Revenue Code of 1986, the
subtraction under this clause must be reduced by the lesser of:
(i) the total itemized deductions allowed under section
63(d) of the Internal Revenue Code, less state, local, and
foreign income taxes deductible under section 164 of the
Internal Revenue Code and the standard deduction under section
63(c) of the Internal Revenue Code; or
(ii) the lesser of (A) the amount of insurance qualifying
as "medical care" under section 213(d) of the Internal Revenue
Code to the extent not deducted under section 162(1) of the
Internal Revenue Code or excluded from income or (B) the total
amount deductible for medical care under section 213(a); and
(9) the exemption amount allowed under Laws 1995, chapter
255, article 3, section 2, subdivision 3; and
(10) to the extent included in federal taxable income,
postservice benefits for youth community service under section
121.707 for volunteer service under United States Code, title
42, section 5011(d), as amended.
Sec. 3. Minnesota Statutes 1996, section 290.01,
subdivision 19c, is amended to read:
Subd. 19c. [CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE
INCOME.] For corporations, there shall be added to federal
taxable income:
(1) the amount of any deduction taken for federal income
tax purposes for income, excise, or franchise taxes based on net
income or related minimum taxes paid by the corporation to
Minnesota, another state, a political subdivision of another
state, the District of Columbia, or any foreign country or
possession of the United States;
(2) interest not subject to federal tax upon obligations
of: the United States, its possessions, its agencies, or its
instrumentalities; the state of Minnesota or any other state,
any of its political or governmental subdivisions, any of its
municipalities, or any of its governmental agencies or
instrumentalities; the District of Columbia; or Indian tribal
governments;
(3) exempt-interest dividends received as defined in
section 852(b)(5) of the Internal Revenue Code;
(4) the amount of any windfall profits tax deducted under
section 164 or 471 of the Internal Revenue Code;
(5) the amount of any net operating loss deduction taken
for federal income tax purposes under section 172 or 832(c)(10)
of the Internal Revenue Code or operations loss deduction under
section 810 of the Internal Revenue Code;
(6) (5) the amount of any special deductions taken for
federal income tax purposes under sections 241 to 247 of the
Internal Revenue Code;
(7) (6) losses from the business of mining, as defined in
section 290.05, subdivision 1, clause (a), that are not subject
to Minnesota income tax;
(8) (7) the amount of any capital losses deducted for
federal income tax purposes under sections 1211 and 1212 of the
Internal Revenue Code;
(9) (8) the amount of any charitable contributions deducted
for federal income tax purposes under section 170 of the
Internal Revenue Code;
(10) (9) the exempt foreign trade income of a foreign sales
corporation under sections 921(a) and 291 of the Internal
Revenue Code;
(11) (10) the amount of percentage depletion deducted under
sections 611 through 614 and 291 of the Internal Revenue Code;
(12) (11) for certified pollution control facilities placed
in service in a taxable year beginning before December 31, 1986,
and for which amortization deductions were elected under section
169 of the Internal Revenue Code of 1954, as amended through
December 31, 1985, the amount of the amortization deduction
allowed in computing federal taxable income for those
facilities; and
(13) (12) the amount of any deemed dividend from a foreign
operating corporation determined pursuant to section 290.17,
subdivision 4, paragraph (g); and
(13) the amount of any environmental tax paid under section
59(a) of the Internal Revenue Code.
Sec. 4. Minnesota Statutes 1996, section 290.01,
subdivision 19d, is amended to read:
Subd. 19d. [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL
TAXABLE INCOME.] For corporations, there shall be subtracted
from federal taxable income after the increases provided in
subdivision 19c:
(1) the amount of foreign dividend gross-up added to gross
income for federal income tax purposes under section 78 of the
Internal Revenue Code;
(2) the amount of salary expense not allowed for federal
income tax purposes due to claiming the federal jobs credit
under section 51 of the Internal Revenue Code;
(3) any dividend (not including any distribution in
liquidation) paid within the taxable year by a national or state
bank to the United States, or to any instrumentality of the
United States exempt from federal income taxes, on the preferred
stock of the bank owned by the United States or the
instrumentality;
(4) amounts disallowed for intangible drilling costs due to
differences between this chapter and the Internal Revenue Code
in taxable years beginning before January 1, 1987, as follows:
(i) to the extent the disallowed costs are represented by
physical property, an amount equal to the allowance for
depreciation under Minnesota Statutes 1986, section 290.09,
subdivision 7, subject to the modifications contained in
subdivision 19e; and
(ii) to the extent the disallowed costs are not represented
by physical property, an amount equal to the allowance for cost
depletion under Minnesota Statutes 1986, section 290.09,
subdivision 8;
(5) the deduction for capital losses pursuant to sections
1211 and 1212 of the Internal Revenue Code, except that:
(i) for capital losses incurred in taxable years beginning
after December 31, 1986, capital loss carrybacks shall not be
allowed;
(ii) for capital losses incurred in taxable years beginning
after December 31, 1986, a capital loss carryover to each of the
15 taxable years succeeding the loss year shall be allowed;
(iii) for capital losses incurred in taxable years
beginning before January 1, 1987, a capital loss carryback to
each of the three taxable years preceding the loss year, subject
to the provisions of Minnesota Statutes 1986, section 290.16,
shall be allowed; and
(iv) for capital losses incurred in taxable years beginning
before January 1, 1987, a capital loss carryover to each of the
five taxable years succeeding the loss year to the extent such
loss was not used in a prior taxable year and subject to the
provisions of Minnesota Statutes 1986, section 290.16, shall be
allowed;
(6) an amount for interest and expenses relating to income
not taxable for federal income tax purposes, if (i) the income
is taxable under this chapter and (ii) the interest and expenses
were disallowed as deductions under the provisions of section
171(a)(2), 265 or 291 of the Internal Revenue Code in computing
federal taxable income;
(7) in the case of mines, oil and gas wells, other natural
deposits, and timber for which percentage depletion was
disallowed pursuant to subdivision 19c, clause (11), a
reasonable allowance for depletion based on actual cost. In the
case of leases the deduction must be apportioned between the
lessor and lessee in accordance with rules prescribed by the
commissioner. In the case of property held in trust, the
allowable deduction must be apportioned between the income
beneficiaries and the trustee in accordance with the pertinent
provisions of the trust, or if there is no provision in the
instrument, on the basis of the trust's income allocable to
each;
(8) for certified pollution control facilities placed in
service in a taxable year beginning before December 31, 1986,
and for which amortization deductions were elected under section
169 of the Internal Revenue Code of 1954, as amended through
December 31, 1985, an amount equal to the allowance for
depreciation under Minnesota Statutes 1986, section 290.09,
subdivision 7;
(9) the amount included in federal taxable income
attributable to the credits provided in Minnesota Statutes 1986,
section 273.1314, subdivision 9, or Minnesota Statutes, section
469.171, subdivision 6;
(10) amounts included in federal taxable income that are
due to refunds of income, excise, or franchise taxes based on
net income or related minimum taxes paid by the corporation to
Minnesota, another state, a political subdivision of another
state, the District of Columbia, or a foreign country or
possession of the United States to the extent that the taxes
were added to federal taxable income under section 290.01,
subdivision 19c, clause (1), in a prior taxable year;
(11) the following percentage 80 percent of royalties,
fees, or other like income accrued or received from a foreign
operating corporation or a foreign corporation which is part of
the same unitary business as the receiving corporation:
Taxable Year
Beginning After .......... Percentage
December 31, 1988 ........ 50 percent
December 31, 1990 ........ 80 percent;
(12) income or gains from the business of mining as defined
in section 290.05, subdivision 1, clause (a), that are not
subject to Minnesota franchise tax;
(13) the amount of handicap access expenditures in the
taxable year which are not allowed to be deducted or capitalized
under section 44(d)(7) of the Internal Revenue Code;
(14) the amount of qualified research expenses not allowed
for federal income tax purposes under section 280C(c) of the
Internal Revenue Code, but only to the extent that the amount
exceeds the amount of the credit allowed under section 290.068;
and
(15) the amount of salary expenses not allowed for federal
income tax purposes due to claiming the Indian employment credit
under section 45A(a) of the Internal Revenue Code; and
(16) the amount of any refund of environmental taxes paid
under section 59A of the Internal Revenue Code.
Sec. 5. Minnesota Statutes 1996, section 290.06, is
amended by adding a subdivision to read:
Subd. 25. [CREDIT FOR PROPERTY TAXES PAID ON SEASONAL
RESIDENTIAL RECREATIONAL PROPERTY.] A taxpayer may take as a
credit against the tax due from the taxpayer and a spouse, if
any, under this chapter the credit allowed under section
290A.04, subdivision 2j. The credit allowed may not exceed the
tax due under this chapter. In the case of a nonresident, or a
part-year resident, the credit must be allocated based on the
ratio in subdivision 2c.
Sec. 6. Minnesota Statutes 1996, section 290.067,
subdivision 1, is amended to read:
Subdivision 1. [AMOUNT OF CREDIT.] (a) A taxpayer may take
as a credit against the tax due from the taxpayer and a spouse,
if any, under this chapter an amount equal to the dependent care
credit for which the taxpayer is eligible pursuant to the
provisions of section 21 of the Internal Revenue Code subject to
the limitations provided in subdivision 2 except that in
determining whether the child qualified as a dependent, income
received as an aid to families with dependent children grant or
allowance to or on behalf of the child, or as a grant or
allowance to or on behalf of the child under the successor
program pursuant to Public Law 104-193, 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 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 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. 7. [290.0672] [LONG-TERM CARE INSURANCE CREDIT.]
Subdivision 1. [DEFINITIONS.] (a) For purposes of this
section, the following terms have the meanings given.
(b) "Long-term care insurance" means a policy that:
(1) qualifies for a deduction under section 213 of the
Internal Revenue Code, disregarding the 7.5 percent income test;
or meets the requirements given in section 62A.46; or provides
similar coverage issued under the laws of another jurisdiction;
and
(2) does not have a lifetime long-term care benefit limit
of less than $100,000; and
(3) includes inflation protection that meets or exceeds the
inflation protection requirements of the long-term care
insurance model regulation cited under section
7702B(g)(2)(A)(i)(x) of the Internal Revenue Code.
(c) "Qualified beneficiary" means the taxpayer or the
taxpayer's spouse.
(d) "Premiums deducted in determining federal taxable
income" means the lesser of (1) long-term care insurance
premiums that qualify as deductions under section 213 of the
Internal Revenue Code; and (2) the total amount deductible for
medical care under section 213 of the Internal Revenue Code.
Subd. 2. [CREDIT.] A taxpayer is allowed a credit against
the tax imposed by this chapter for long-term care insurance
policy premiums paid during the tax year. The credit for each
policy equals the lesser of (1) 25 percent of premiums paid to
the extent not deducted in determining federal taxable income;
or (2) $100. A taxpayer may claim a credit for only one policy
for each qualified beneficiary. Only one credit may be claimed
by any taxpayer for each policy. The maximum total credit
allowed per year is $200 for married couples filing joint
returns and $100 for all other filers. For a nonresident or
part-year resident, the credit determined under this section
must be allocated based on the percentage calculated under
section 290.06, subdivision 2c, paragraph (e).
Sec. 8. [290.0673] [JOB TRAINING PROGRAM CREDIT.]
Subdivision 1. [CREDIT ALLOWED.] (a) A credit is allowed
against the tax imposed by section 290.06, subdivision 1, equal
to the sum of:
(1) placement fees paid to a job training program upon
hiring a qualified graduate of the program; and
(2) retention fees paid to a job training program for
retention of a qualified graduate of the program.
(b) The maximum placement fee qualifying for a credit under
this section is $8,000 per qualified graduate in the year
hired. The maximum retention fee qualifying for a credit under
this section is $6,000 per qualified graduate retained as an
employee per year. Only retention fees paid in the second and
third years after the qualified graduate is hired qualify for
the credit.
(c) A credit is allowed only up to the dollar amount of
certificates, issued under subdivision 4, and provided by the
job training program to the taxpayer.
Subd. 2. [QUALIFIED JOB TRAINING PROGRAM.] (a) To qualify
for credits under this section, a job training program must
satisfy the following requirements:
(1) It must be operated by a nonprofit corporation that
qualifies under section 501(c)(3) of the Internal Revenue Code.
(2) The organization must spend at least $5,000 per
graduate of the program.
(3) The program must provide education and training in:
(i) basic skills, such as reading, writing, mathematics,
and communications;
(ii) thinking skills, such as reasoning, creative thinking,
decision making, and problem solving; and
(iii) personal qualities, such as responsibility,
self-esteem, self-management, honesty, and integrity.
(4) The program must provide income supplements, when
needed, to participants for housing, counseling, tuition, and
other basic needs.
(5) The education and training course must last for at
least six months.
(6) Individuals served by the program must:
(i) be 18 years old or older;
(ii) have had federal adjusted gross income of no more than
$10,000 per year in the last two years;
(iii) have assets of no more than $5,000, excluding the
value of a homestead; and
(iv) not have been claimed as a dependent on the federal
tax return of another person in the previous taxable year.
(7) The program must charge placement and retention fees
that exceed the amount of credit certificates provided to the
employer by at least 20 percent.
(b) The program must be certified by the commissioner of
children, families, and learning as meeting the requirements of
this subdivision.
Subd. 3. [QUALIFIED GRADUATE.] A qualified graduate is a
graduate of a job training program qualifying under subdivision
1, who is placed in a job in Minnesota that pays at least $9 per
hour or its equivalent. To qualify for a credit under this
section for a retention fee, a job in which the graduate is
retained must pay at least $10 per hour at the end for the first
and second years of employment. A business, other than the
business that originally hired the graduate, may pay a retention
fee for the graduate and qualify for the credit.
Subd. 4. [DUTIES OF PROGRAM.] (a) Each program certified
by the commissioner under subdivision 2 must comply with the
requirements of this subdivision.
(b) Each program must maintain records for each graduate
for which the program provides a credit certificate to an
employer. These records must include information sufficient to
verify the graduate's eligibility under this section, identify
the employer, describe the job including its compensation rate
and benefits, and determine the amount of placement and
retention fees received.
(c) Each program must report to the commissioner of revenue
by January 1, 1999, and by January 1, 2001, on its use of the
credit. Each report must include, at least, information on:
(1) the number of graduates placed;
(2) demographic information on the graduates;
(3) the types of position in which each graduate is placed,
including compensation information;
(4) the tenure of each graduate at the placed position or
in other jobs;
(5) the amount of employer fees paid to the program;
(6) the amount of money raised by the program from other
sources; and
(7) the types and sizes of employers with which graduates
have been placed and retained.
(d) The commissioner shall compile and summarize this
information and report to the legislature by February 15, 1999,
and February 15, 2001.
Subd. 5. [ISSUANCE OF CREDIT CERTIFICATES.] (a) The total
amount of credits under this section is limited to $1,200,000
for taxable years beginning after December 31, 1996, and before
January 1, 2002. The commissioner may issue under paragraph (b)
no more than the specified amount of certificates for taxable
years beginning during each calendar year:
1997 $100,000
1998 $200,000
1999 $300,000
2000 $300,000
2001 $300,000
Unused certificates for a taxable year carry over and may
be used for a later taxable year, regardless of when issued by
the commissioner.
(b) Upon application, the commissioner of children,
families, and learning shall issue certificates to job training
programs, certified under subdivision 2, up to the dollar amount
available for the taxable year. The certificates must be in a
dollar amount that is no greater than the dollar amount applied
for, and reflects the commissioner's estimate of the job
training program's projected fees for placements and retentions
of qualifying graduates. The commissioner shall issue the
certificates in the order in which applications are received
until the available authority has been issued.
(c) To the extent available, the job training program must
provide to employers of its qualified graduates certificates
issued by the commissioner of children, families, and learning
under this subdivision.
Subd. 6. [NONREFUNDABLE.] The taxpayer must use the tax
credit for the taxable year in which the certificate is issued
to the employer. The credit for the taxable year may not exceed
the liability for tax under section 290.06, subdivision 1, for
the taxable year, before reduction by the nonrefundable credits
allowed under this chapter.
Subd. 7. [MANNER OF CLAIMING.] The commissioner shall
prescribe the manner in which the credit may be claimed. This
may include allowing the credit only as a separately processed
claim for a refund.
Subd. 8. [EXPIRATION.] This section expires effective for
taxable years beginning after December 31, 2001.
Sec. 9. Minnesota Statutes 1996, section 290.191,
subdivision 4, is amended to read:
Subd. 4. [APPORTIONMENT FORMULA FOR CERTAIN MAIL ORDER
BUSINESSES.] If the business of a corporation, partnership, or
proprietorship consists exclusively of the selling of tangible
personal property and services in response to orders received by
United States mail or, telephone, facsimile, or other electronic
media, and 99 percent of the taxpayer's property and payroll is
within Minnesota, then the taxpayer may apportion net income to
Minnesota based solely upon the percentage that the sales made
within this state in connection with its trade or business
during the tax period are of the total sales wherever made in
connection with the trade or business during the tax period.
Property and payroll factors are disregarded. In determining
eligibility for this subdivision:
(1) the sale not in the ordinary course of business of
tangible or intangible assets used in conducting business
activities must be disregarded; and
(2) property and payroll at a distribution center outside
of Minnesota are disregarded if the sole activity at the
distribution center is the filling of orders, and no
solicitation of orders occurs at the distribution center.
Sec. 10. Minnesota Statutes 1996, section 290.92, is
amended by adding a subdivision to read:
Subd. 30. [REGISTRATION; THIRD-PARTY BULK FILER.] (a) For
purposes of this subdivision, the following terms have the
meanings given:
(1) Notwithstanding section 290.01, "person" means an
individual, fiduciary, partnership, corporation, limited
liability company, association, or other entity organized under
the laws of this state or any other jurisdiction.
(2) "Third-party bulk filer" means a person that collects
withholding taxes from more than one employer for the purpose of
filing returns and depositing the withheld taxes with the
commissioner.
(b) A person shall not act as a third-party bulk filer
unless the person is registered with the commissioner under this
subdivision.
(c) A person may apply to the commissioner, on a form
prescribed by the commissioner, for registration as a
third-party bulk filer under this subdivision, and the
commissioner shall grant the application if the application
indicates that the person will comply with this subdivision.
(d) A third-party bulk filer must:
(1) keep client funds held for payment of federal or state
withholding taxes or other client obligations in an account
separate from the third-party bulk filer's own funds;
(2) permit the commissioner to conduct scheduled or
unscheduled audits of the third-party bulk filer's books and
records relating to compliance with this subdivision and fully
cooperate with the audits or, at the discretion of the
commissioner, submit an audit conducted by a certified public
accountant;
(3) file returns electronically and make deposits
electronically with the commissioner in compliance with the
commissioner's requirements for electronic filing and
depositing;
(4) provide to the commissioner at least monthly, in the
form requested by the commissioner, an updated client list that
includes at least the name, address, tax identification number,
and federal deposit frequency of each client. The address
listed for the client must be the client's actual street or post
office box address and not the third-party bulk filer's address;
(5) disclose in writing to prospective clients that:
(i) the third-party bulk filer may invest client funds
prior to depositing them with the commissioner and with the
Internal Revenue Service and that earnings from those
investments will be the property of the third-party bulk filer;
(ii) if the third-party bulk filer incurs losses on those
investments or uses the client's funds for other purposes, the
third-party bulk filer will still be liable to the client for
the amounts withheld but will be able to make required tax
deposits on behalf of the client only by using the third-party
bulk filer's own funds or other assets to replace the funds lost
through the investments or used for other purposes; and
(iii) no state or federal agency monitors or assumes any
responsibility for the financial solvency of third-party bulk
filers;
(6) timely file all returns and timely make all tax
deposits required under its contracts with its clients;
(7) upon request, provide to the commissioner, within the
time specified in the request, a copy of any contract with a
client; and
(8) comply with all other requirements of this section or
of rules adopted under this section.
(e) When the commissioner sends an order of assessment
issued under section 289A.37, in either paper or electronic
form, to a third-party bulk filer regarding a client, the
commissioner shall also send a paper copy of the order of
assessment to the client.
(f) If the commissioner determines that a required deposit
appears not to have been made, the commissioner shall send a
written notice of the delinquency, in electronic or paper form,
to the third-party bulk filer, and a copy to the client as
required under paragraph (e).
(g) If the commissioner determines that a required deposit
has not been made, and that continued operation of the
third-party bulk filer would present a risk of loss to its
clients, the commissioner may, upon ten business days' written
notice by certified mail to the third-party bulk filer, suspend
the registration of the third-party bulk filer for an indefinite
period, and notify the third-party bulk filer's clients that the
registration has been suspended. A registration may not be
suspended if the failure to make a deposit was caused by the
client's failure to deposit funds or provide the information
necessary to calculate appropriate tax withholding payments.
The commissioner shall, upon request, provide the third-party
bulk filer with the opportunity for an administrative appeal
under section 289A.65, subdivisions 1, 4, and 10, prior to
suspension; the hearing, if any, on the administrative appeal
must occur within the ten-day period unless the commissioner, in
the commissioner's sole discretion, agrees to delay the
suspension to permit a later hearing. The 60-day period
specified in section 289A.65, subdivision 4, does not apply to a
proceeding under this paragraph. Within 30 days after the
beginning of a suspension under this paragraph, the commissioner
may commence a proceeding to suspend or revoke under paragraph
(h); if the commissioner fails to do so, the suspension under
this paragraph terminates.
(h) If the commissioner determines, in compliance with
paragraph (i), that a third-party bulk filer has violated this
section without reasonable cause or is no longer eligible for
registration under this subdivision, the commissioner may
suspend or revoke the third-party bulk filer's registration or
may assess a civil penalty upon the third-party bulk filer, not
to exceed $5,000 per violation. A suspension of registration
may be for any period of less than six months and may include
conditions for reinstatement. If the commissioner revokes the
registration, the third-party bulk filer may not apply for
reregistration for six months after the revocation. If the
commissioner suspends or revokes a registration, the
commissioner shall notify the former registrant's clients that
the registration has been suspended or revoked. If the
commissioner assesses a civil penalty, the commissioner shall
not notify the third-party bulk filer's clients of the
assessment.
(i) Prior to a suspension, revocation, or assessment of a
civil penalty under paragraph (h), the commissioner shall first
provide 30 days' written notice to the third-party bulk filer,
specifying the violations and informing the third-party bulk
filer that the commissioner intends, based upon those
violations, to take action against the third-party bulk filer as
permitted under this paragraph and paragraph (h). The notice
shall advise the third-party bulk filer of the right to contest
the suspension, revocation, or assessment of a civil penalty and
of the general procedures for a contested case hearing under
chapter 14. The notice may be served personally or by mail in
the manner prescribed for service of an order of assessment
issued under section 289A.37. A suspension or revocation of
registration under this paragraph is effective when the
commissioner serves a notice of suspension or revocation upon
the third-party bulk filer after 30 days have passed following
the date of the notice of intent to suspend or revoke without
the third-party bulk filer requesting a hearing. If a hearing
is timely requested and held, the suspension or revocation is
effective upon service by the commissioner of an order of
suspension or revocation under section 14.62, subdivision 1.
(j) A third-party bulk filer may terminate its registration
by written notice to the commissioner, but the termination does
not affect the commissioner's authority to begin or continue a
proceeding to take action permitted under paragraph (h). The
commissioner shall notify the third-party bulk filer's clients
of a termination of registration under this paragraph.
(k) The commissioner shall remind employers at least
annually, through the department's regular informational
publications that it sends to employers, that employers may
telephone the department to determine whether a required filing
or deposit has been made by a third-party bulk filer.
Sec. 11. Minnesota Statutes 1996, section 290A.03,
subdivision 7, is amended to read:
Subd. 7. [DEPENDENT.] "Dependent" means any person who is
considered a dependent under sections 151 and 152 of the
Internal Revenue Code. In the case of a son, stepson, daughter,
or stepdaughter of the claimant, amounts received as an aid to
families with dependent children grant, allowance to or on
behalf of the child, or as a grant or allowance to or on behalf
of the child under the successor program pursuant to Public Law
Number 104-193, surplus food, or other relief in kind supplied
by a governmental agency must not be taken into account in
determining whether the child received more than half of the
child's support from the claimant.
Sec. 12. Minnesota Statutes 1996, section 290A.03,
subdivision 11, is amended to read:
Subd. 11. [RENT CONSTITUTING PROPERTY TAXES.] "Rent
constituting property taxes" means the amount of gross rent
actually paid in cash, or its equivalent, which is attributable
(a) to the property tax paid on the unit or (b) to the amount 18
percent of the gross rent actually paid in cash, or its
equivalent, or the portion of rent paid in lieu of property
taxes, in any calendar year by a claimant for the right of
occupancy of the claimant's Minnesota homestead in the calendar
year, and which rent constitutes the basis, in the succeeding
calendar year of a claim for relief under this chapter by the
claimant. The amount of rent attributable to property taxes
paid or payments in lieu made on the unit shall be determined by
multiplying the gross rent paid by the claimant for the calendar
year for the unit by a fraction, the numerator of which is the
net tax on the property where the unit is located and the
denominator of which is the total scheduled rent. In no case
may the rent constituting property taxes exceed 50 percent of
the gross rent paid by the claimant during that calendar year.
In the case of a claimant who resides in a unit for which (1) a
rent subsidy is paid to, or for, the claimant based on the
income of the claimant or the claimant's family, or (2) a
subsidy is paid to a public housing authority that owns or
operates the claimant's rental unit, pursuant to United States
Code, title 42, section 1437c, 20 percent of gross rent actually
paid in cash or its equivalent shall be the claimant's "rent
constituting property taxes paid." For purposes of this
subdivision, "rent subsidy" does not include any housing
assistance received under aid to families with dependent
children, general assistance, Minnesota supplemental assistance,
supplemental security income, or similar income maintenance
programs.
Sec. 13. Minnesota Statutes 1996, 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 273.125, 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 18 percent 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
273.124, 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. 14. Minnesota Statutes 1996, section 290A.04, is
amended by adding a subdivision to read:
Subd. 2j. [SEASONAL RESIDENTIAL RECREATIONAL CREDIT.] If
the net property taxes payable on a seasonal residential
recreational property not used for commercial purposes,
classified under section 273.13, subdivision 25, increase more
than ten percent over its net property taxes payable in the
previous year, and if the amount of the increase is $100 or
more, a claimant who is an owner of the property in both years
is allowed a credit under section 290.06, subdivision 25, equal
to 75 percent of the first $300 of the excess of the increase
over ten percent. This subdivision does not apply to the
portion of an increase in taxes payable that are attributable to
improvements to the property.
In addition to the other proofs required by this chapter,
each claimant under this subdivision shall file with the
application a copy of the property tax statement for property
taxes payable in the current year and the previous year and any
other documents required by the commissioner.
For purposes of this subdivision, "net property taxes
payable" means property taxes payable minus credit amounts for
which a claimant qualify's under this subdivision for the
previous year.
The credit under this subdivision is effective for property
taxes payable in 1998, for credits under section 290.06,
subdivision 25, for tax year 1998, income tax returns filed in
1999; and for property taxes payable in 1999, for credits under
section 290.06, subdivision 25, for tax year 1999, income tax
returns filed in 2000.
Sec. 15. Minnesota Statutes 1996, section 290A.19, is
amended to read:
290A.19 [OWNER OR MANAGING AGENT TO FURNISH RENT
CERTIFICATE.]
(a) The owner or managing agent of any property for which
rent is paid for occupancy as a homestead must furnish a
certificate of rent constituting property tax paid to a person
who is a renter on December 31, in the form prescribed by the
commissioner. If the renter moves before December 31, the owner
or managing agent may give the certificate to the renter at the
time of moving, or mail the certificate to the forwarding
address if an address has been provided by the renter. The
certificate must be made available to the renter before February
1 of the year following the year in which the rent was paid.
The owner or managing agent must retain a duplicate of each
certificate or an equivalent record showing the same information
for a period of three years. The duplicate or other record must
be made available to the commissioner upon request. For the
purposes of this section, "owner" includes a park owner as
defined under section 327C.01, subdivision 6, and "property"
includes a lot as defined under section 327C.01, subdivision 3.
(b) The certificate of rent constituting property taxes
must include the address of the property, including the county,
and the property tax parcel identification number and any
additional information that the commissioner determines is
appropriate.
(c) If the owner or managing agent fails to provide the
renter with a certificate of rent constituting property taxes,
the commissioner shall allocate the net tax on the building to
the unit on a square footage basis or other appropriate basis as
the commissioner determines. The renter shall supply the
commissioner with a statement from the county treasurer that
gives the amount of property tax on the parcel, the address and
property tax parcel identification number of the property, and
the number of units in the building.
(d) By January 31 of the year following the year in which
the rent was collected, each owner or managing agent shall
report to the commissioner on a form prescribed by the
commissioner the net tax pertaining to the rental residential
part of the property, the total scheduled rent, and the fraction
computed under section 290A.03, subdivision 11. A copy of the
property tax statement for taxes payable in that year must be
attached.
Sec. 16. Laws 1995, chapter 255, article 3, section 2,
subdivision 1, as amended by Laws 1996, chapter 464, article 4,
section 1, is amended to read:
Subdivision 1. [URBAN REVITALIZATION AND STABILIZATION
ZONES.] (a) By September 1, 1995, the metropolitan council shall
designate one or more urban revitalization and stabilization
zones in the metropolitan area, as defined in section 473.121,
subdivision 2. The designated zones must contain no more than
1,000 single family homes in total. In designating urban
revitalization and stabilization zones, the council shall choose
areas that are in transition toward blight and poverty. The
council shall use indicators that evidence increasing
neighborhood distress such as declining residential property
values, declining resident incomes, declining rates of
owner-occupancy, and other indicators of blight and poverty in
determining which areas are to be urban revitalization and
stabilization zones.
(b) An urban revitalization and stabilization zone is
created in the geographic area composed entirely of parcels that
are in whole or in part located within the 1996 65Ldn contour
surrounding the Minneapolis-St. Paul International Airport, or
within one mile of the boundaries of the 1996 65Ldn contour.
For residents of the zone created under this paragraph,
eligibility for the program as provided in subdivision 2 is
limited to persons buying and occupying a residence in the zone
after June 1, 1996, who have entered into purchase agreements
related to those homes before July 1, 1997.
Sec. 17. Laws 1997, chapter 34, section 2, is amended to
read:
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective the day following final enactment
for time limitations which expire or due dates specified in
Minnesota Statutes, section 289A.20, which fall in the period
between March 31, 1997, and May 30, 1997.
Sec. 18. [LEGISLATIVE TAX STUDIES.]
Subdivision 1. [COMMISSION RESPONSIBILITIES.] (a) The
legislative coordinating commission shall prepare studies of
business taxation and the taxation of telecommunications
services during the 1997-98 legislative session, as provided by
this section. The commission is responsible for managing any
contracts under this section and for preparing the studies. It
may delegate any or all of its responsibilities under this
section to the legislative commission on planning and fiscal
policy.
(b) For the business tax study under subdivision 2, the
commission may appoint a formal or informal bipartisan working
group of house and senate members to oversee and coordinate the
study.
(c) For the study of the taxation of telecommunications
services under subdivision 4, the commission shall appoint a
bipartisan working group that includes house and senate members
and members of the public, at least two of whom are
representatives of Internet service businesses who are
knowledgeable about the technologies and practices of the
Internet and at least two of whom are the representatives of
businesses that conduct commerce on the Internet.
Subd. 2. [BUSINESS TAX STUDY.] The study of business taxes
must analyze the following taxes paid by businesses:
(1) the corporate franchise tax;
(2) the sales tax on capital or other business inputs;
(3) the personal property tax on utility property;
(4) the real property tax on commercial and industrial
property.
The study must consider the impact of alternative methods
of taxing business and the impact of doing so on the fairness,
efficiency, simplicity, elasticity, and stability of revenues,
and competitiveness of Minnesota's taxation of business.
Subd. 3. [APPROPRIATION.] $50,000 is appropriated from the
general fund for fiscal years 1998 and 1999 to the legislative
coordinating commission to study alternative methods of taxing
businesses. This appropriation may be used to hire a consultant
or consultants to prepare all or part of the study and is fully
available in either fiscal year.
Subd. 4. [TELECOMMUNICATIONS STUDY.] The commission and
the working group shall:
(1) study existing and emerging tax policies, both
federally and nationally, that apply to telecommunications and
computer industries and identify any inequities which may exist
in the current system of taxation as it applies to those
industries;
(2) identify potential for erosion of the sales tax base as
a result of evolving technologies in the telecommunications and
computer industries;
(3) consider methods of addressing potential impediments to
extension of state taxes to emerging technologies;
(4) suggest options for changing the tax system to maintain
or broaden the sales tax base and to provide equitable tax
treatment for users of existing and emerging technologies.
Subd. 5. [STAFFING.] The department of revenue shall
provide administrative and staff assistance when requested by
the commissions or working groups.
Sec. 19. [REPEALER.]
Minnesota Statutes 1996, section 290A.03, subdivisions 12a
and 14, are repealed.
Sec. 20. [EFFECTIVE DATE.]
Sections 1, 5, 6, 11, 16, and 18 are effective the day
following final enactment.
Sections 2 to 4, and 9 are effective for taxable years
beginning after December 31, 1996.
Section 7 is effective for taxable years beginning after
December 31, 1998.
Section 8 is effective for tax credit certificates issued
after December 31, 1996, and used in taxable years beginning
after December 31, 1996.
Section 10 is effective January 1, 1998.
Sections 12, 13, 15, and 19 are effective beginning for
property tax refunds based on rent paid after December 31, 1996.
Section 17 is effective April 16, 1997.
ARTICLE 6
FEDERAL UPDATE
Section 1. Minnesota Statutes 1996, section 289A.02,
subdivision 7, is amended to read:
Subd. 7. [INTERNAL REVENUE CODE.] Unless specifically
defined otherwise, "Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through March 22 December 31,
1996, and includes the provisions of section 1(a) and (b) of
Public Law Number 104-117.
Sec. 2. Minnesota Statutes 1996, 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; and
(3) the deduction for dividends paid must also be applied
in the amount of any undistributed capital gains which the
regulated investment company elects to have treated as provided
in section 852(b)(3)(D) 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, and the provisions of sections
1305, 1704(r), and 1704(e)(1) of the Small Business Job
Protection Act, Public Law Number 104-188, 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, and the
provisions of sections 1702(g) and 1704(f)(2)(A) and (B) of the
Small Business Job Protection Act, Public Law Number 104-188,
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, and the provisions of sections 1703(a), 1703(d),
1703(i), 1703(l), and 1703(m) of the Small Business Job
Protection Act, Public Law Number 104-188, 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, the provision of section 501(b)(2) of the Health
Insurance Portability and Accountability Act, Public Law Number
104-191, and the provisions of sections 1604 and 1704(p)(1) and
(2) of the Small Business Job Protection Act, Public Law Number
104-188, 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.
The provisions of sections 1119(a), 1120, 1121, 1202(a),
1444, 1449(b), 1602(a), 1610(a), 1613, and 1805 of the Small
Business Job Protection Act, Public Law Number 104-188, and the
provision of section 511 of the Health Insurance Portability and
Accountability Act, Public Law Number 104-191, shall become
effective at the time they become effective for federal purposes.
The Internal Revenue Code of 1986, as amended through March
22, 1996, is in effect for taxable years beginning after
December 31, 1995.
The provisions of sections 1113(a), 1117, 1206(a), 1313(a),
1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612,
1616, 1617, 1704(l), and 1704(m) of the Small Business Job
Protection Act, Public Law Number 104-188, and the provisions of
Public Law Number 104-117 become effective at the time they
become effective for federal purposes.
The Internal Revenue Code of 1986, as amended through
December 31, 1996, shall be in effect for taxable years
beginning after December 31, 1996.
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. Minnesota Statutes 1996, section 290.01,
subdivision 19a, is amended to read:
Subd. 19a. [ADDITIONS TO FEDERAL TAXABLE INCOME.] For
individuals, estates, and trusts, there shall be added to
federal taxable income:
(1)(i) interest income on obligations of any state other
than Minnesota or a political or governmental subdivision,
municipality, or governmental agency or instrumentality of any
state other than Minnesota exempt from federal income taxes
under the Internal Revenue Code or any other federal statute,
and
(ii) exempt-interest dividends as defined in section
852(b)(5) of the Internal Revenue Code, except the portion of
the exempt-interest dividends derived from interest income on
obligations of the state of Minnesota or its political or
governmental subdivisions, municipalities, governmental agencies
or instrumentalities, but only if the portion of the
exempt-interest dividends from such Minnesota sources paid to
all shareholders represents 95 percent or more of the
exempt-interest dividends that are paid by the regulated
investment company as defined in section 851(a) of the Internal
Revenue Code, or the fund of the regulated investment company as
defined in section 851(h) of the Internal Revenue Code, making
the payment; and
(iii) for the purposes of items (i) and (ii), interest on
obligations of an Indian tribal government described in section
7871(c) of the Internal Revenue Code shall be treated as
interest income on obligations of the state in which the tribe
is located;
(2) the amount of income taxes paid or accrued within the
taxable year under this chapter and income taxes paid to any
other state or to any province or territory of Canada, to the
extent allowed as a deduction under section 63(d) of the
Internal Revenue Code, but the addition may not be more than the
amount by which the itemized deductions as allowed under section
63(d) of the Internal Revenue Code exceeds the amount of the
standard deduction as defined in section 63(c) of the Internal
Revenue Code. For the purpose of this paragraph, the
disallowance of itemized deductions under section 68 of the
Internal Revenue Code of 1986, income tax is the last itemized
deduction disallowed;
(3) the capital gain amount of a lump sum distribution to
which the special tax under section 1122(h)(3)(B)(ii) of the Tax
Reform Act of 1986, Public Law Number 99-514, applies; and
(4) the amount of income taxes paid or accrued within the
taxable year under this chapter and income taxes paid to any
other state or any province or territory of Canada, to the
extent allowed as a deduction in determining federal adjusted
gross income. For the purpose of this paragraph, income taxes
do not include the taxes imposed by sections 290.0922,
subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729.;
(5) the amount of loss or expense included in federal
taxable income under section 1366 of the Internal Revenue Code
flowing from a corporation that has a valid election in effect
for the taxable year under section 1362 of the Internal Revenue
Code, but which is not allowed to be an "S" corporation under
section 290.9725; and
(6) the amount of any distributions in cash or property
made to a shareholder during the taxable year by a corporation
that has a valid election in effect for the taxable year under
section 1362 of the Internal Revenue code, but which is not
allowed to be an "S" corporation under section 290.9725 to the
extent not already included in federal taxable income under
section 1368 of the Internal Revenue Code.
Sec. 4. Minnesota Statutes 1996, section 290.01,
subdivision 19b, is amended to read:
Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For
individuals, estates, and trusts, there shall be subtracted from
federal taxable income:
(1) interest income on obligations of any authority,
commission, or instrumentality of the United States to the
extent includable in taxable income for federal income tax
purposes but exempt from state income tax under the laws of the
United States;
(2) if included in federal taxable income, the amount of
any overpayment of income tax to Minnesota or to any other
state, for any previous taxable year, whether the amount is
received as a refund or as a credit to another taxable year's
income tax liability;
(3) the amount paid to others not to exceed $650 for each
dependent in grades kindergarten to 6 and $1,000 for each
dependent in grades 7 to 12, for tuition, textbooks, and
transportation of each dependent in attending an elementary or
secondary school situated in Minnesota, North Dakota, South
Dakota, Iowa, or Wisconsin, wherein a resident of this state may
legally fulfill the state's compulsory attendance laws, which is
not operated for profit, and which adheres to the provisions of
the Civil Rights Act of 1964 and chapter 363. As used in this
clause, "textbooks" includes books and other instructional
materials and equipment used in elementary and secondary schools
in teaching only those subjects legally and commonly taught in
public elementary and secondary schools in this state.
"Textbooks" does not include instructional books and materials
used in the teaching of religious tenets, doctrines, or worship,
the purpose of which is to instill such tenets, doctrines, or
worship, nor does it include books or materials for, or
transportation to, extracurricular activities including sporting
events, musical or dramatic events, speech activities, driver's
education, or similar programs. In order to qualify for the
subtraction under this clause the taxpayer must elect to itemize
deductions under section 63(e) of the Internal Revenue Code;
(4) to the extent included in federal taxable income,
distributions from a qualified governmental pension plan, an
individual retirement account, simplified employee pension, or
qualified plan covering a self-employed person that represent a
return of contributions that were included in Minnesota gross
income in the taxable year for which the contributions were made
but were deducted or were not included in the computation of
federal adjusted gross income. The distribution shall be
allocated first to return of contributions until the
contributions included in Minnesota gross income have been
exhausted. This subtraction applies only to contributions made
in a taxable year prior to 1985;
(5) income as provided under section 290.0802;
(6) the amount of unrecovered accelerated cost recovery
system deductions allowed under subdivision 19g;
(7) to the extent included in federal adjusted gross
income, income realized on disposition of property exempt from
tax under section 290.491;
(8) to the extent not deducted in determining federal
taxable income, the amount paid for health insurance of
self-employed individuals as determined under section 162(l) of
the Internal Revenue Code, except that the 25 percent limit does
not apply. If the taxpayer deducted insurance payments under
section 213 of the Internal Revenue Code of 1986, the
subtraction under this clause must be reduced by the lesser of:
(i) the total itemized deductions allowed under section
63(d) of the Internal Revenue Code, less state, local, and
foreign income taxes deductible under section 164 of the
Internal Revenue Code and the standard deduction under section
63(c) of the Internal Revenue Code; or
(ii) the lesser of (A) the amount of insurance qualifying
as "medical care" under section 213(d) of the Internal Revenue
Code to the extent not deducted under section 162(1) of the
Internal Revenue Code or excluded from income or (B) the total
amount deductible for medical care under section 213(a); and
(9) the exemption amount allowed under Laws 1995, chapter
255, article 3, section 2, subdivision 3.; and
(10) the amount of income or gain included in federal
taxable income under section 1366 of the Internal Revenue Code
flowing from a corporation that has a valid election in effect
for the taxable year under section 1362 of the Internal Revenue
Code which is not allowed to be an "S" corporation under section
290.9725.
Sec. 5. Minnesota Statutes 1996, section 290.01,
subdivision 19f, is amended to read:
Subd. 19f. [BASIS MODIFICATIONS AFFECTING GAIN OR LOSS ON
DISPOSITION OF PROPERTY.] (a) For individuals, estates, and
trusts, the basis of property is its adjusted basis for federal
income tax purposes except as set forth in paragraphs (f) and,
(g) and (m). For corporations, the basis of property is its
adjusted basis for federal income tax purposes, without regard
to the time when the property became subject to tax under this
chapter or to whether out-of-state losses or items of tax
preference with respect to the property were not deductible
under this chapter, except that the modifications to the basis
for federal income tax purposes set forth in paragraphs (b) to
(j) are allowed to corporations, and the resulting modifications
to federal taxable income must be made in the year in which gain
or loss on the sale or other disposition of property is
recognized.
(b) The basis of property shall not be reduced to reflect
federal investment tax credit.
(c) The basis of property subject to the accelerated cost
recovery system under section 168 of the Internal Revenue Code
shall be modified to reflect the modifications in depreciation
with respect to the property provided for in subdivision 19e.
For certified pollution control facilities for which
amortization deductions were elected under section 169 of the
Internal Revenue Code of 1954, the basis of the property must be
increased by the amount of the amortization deduction not
previously allowed under this chapter.
(d) For property acquired before January 1, 1933, the basis
for computing a gain is the fair market value of the property as
of that date. The basis for determining a loss is the cost of
the property to the taxpayer less any depreciation,
amortization, or depletion, actually sustained before that
date. If the adjusted cost exceeds the fair market value of the
property, then the basis is the adjusted cost regardless of
whether there is a gain or loss.
(e) The basis is reduced by the allowance for amortization
of bond premium if an election to amortize was made pursuant to
Minnesota Statutes 1986, section 290.09, subdivision 13, and the
allowance could have been deducted by the taxpayer under this
chapter during the period of the taxpayer's ownership of the
property.
(f) For assets placed in service before January 1, 1987,
corporations, partnerships, or individuals engaged in the
business of mining ores other than iron ore or taconite
concentrates subject to the occupation tax under chapter 298
must use the occupation tax basis of property used in that
business.
(g) For assets placed in service before January 1, 1990,
corporations, partnerships, or individuals engaged in the
business of mining iron ore or taconite concentrates subject to
the occupation tax under chapter 298 must use the occupation tax
basis of property used in that business.
(h) In applying the provisions of sections 301(c)(3)(B),
312(f) and (g), and 316(a)(1) of the Internal Revenue Code, the
dates December 31, 1932, and January 1, 1933, shall be
substituted for February 28, 1913, and March 1, 1913,
respectively.
(i) In applying the provisions of section 362(a) and (c) of
the Internal Revenue Code, the date December 31, 1956, shall be
substituted for June 22, 1954.
(j) The basis of property shall be increased by the amount
of intangible drilling costs not previously allowed due to
differences between this chapter and the Internal Revenue Code.
(k) The adjusted basis of any corporate partner's interest
in a partnership is the same as the adjusted basis for federal
income tax purposes modified as required to reflect the basis
modifications set forth in paragraphs (b) to (j). The adjusted
basis of a partnership in which the partner is an individual,
estate, or trust is the same as the adjusted basis for federal
income tax purposes modified as required to reflect the basis
modifications set forth in paragraphs (f) and (g).
(l) The modifications contained in paragraphs (b) to (j)
also apply to the basis of property that is determined by
reference to the basis of the same property in the hands of a
different taxpayer or by reference to the basis of different
property.
(m) If a corporation has a valid election in effect for the
taxable year under section 1362 of the Internal Revenue Code,
but is not allowed to be an "S" corporation under section
290.9725, and the corporation is liquidated or the individual
shareholder disposes of the stock and there is no capital loss
reflected in federal adjusted gross income because of the fact
that corporate losses have exhausted the shareholders' basis for
federal purposes, the shareholders shall be entitled to a
capital loss commensurate to their Minnesota basis for the stock.
Sec. 6. Minnesota Statutes 1996, section 290.01,
subdivision 19g, is amended to read:
Subd. 19g. [ACRS MODIFICATION FOR INDIVIDUALS.] (a) An
individual is allowed a subtraction from federal taxable income
for the amount of accelerated cost recovery system deductions
that were added to federal adjusted gross income in computing
Minnesota gross income for taxable year 1981, 1982, 1983, or
1984 and that were not deducted in a later taxable year. The
deduction is allowed beginning in the first taxable year after
the entire allowable deduction for the property has been allowed
under federal law or the first taxable year beginning after
December 31, 1987, whichever is later. The amount of the
deduction is computed by deducting the amount added to federal
adjusted gross income in computing Minnesota gross income (less
any deduction allowed under Minnesota Statutes 1986, section
290.01, subdivision 20f) in equal annual amounts over five years.
(b) In the event of a sale or exchange of the property, a
deduction is allowed equal to the lesser of (1) the remaining
amount that would be allowed as a deduction under paragraph (a)
or (2) the amount of capital gain recognized and the amount of
cost recovery deductions that were subject to recapture under
sections 1245 and 1250 of the Internal Revenue Code of 1986 for
the taxable year.
(c) In the case of a corporation electing S corporation
status under section 1362 of the Internal Revenue Code treated
as an "S" corporation under section 290.9725, the amount of the
corporation's cost recovery allowances that have been deducted
in computing federal tax, but have been added to federal taxable
income or not deducted in computing tax under this chapter as a
result of the application of subdivision 19e, paragraphs (a) and
(c) or Minnesota Statutes 1986, section 290.09, subdivision 7,
is allowed as a deduction to the shareholders under the
provisions of paragraph (a).
Sec. 7. Minnesota Statutes 1996, section 290.01,
subdivision 31, is amended to read:
Subd. 31. [INTERNAL REVENUE CODE.] Unless specifically
defined otherwise, "Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through March 22 December 31,
1996, and includes the provisions of section 1(a) and (b) of
Public Law Number 104-117.
Sec. 8. Minnesota Statutes 1996, section 290.014,
subdivision 2, is amended to read:
Subd. 2. [NONRESIDENT INDIVIDUALS.] Except as provided in
section 290.015, a nonresident individual is subject to the
return filing requirements and to tax as provided in this
chapter to the extent that the income of the nonresident
individual is:
(1) allocable to this state under section 290.17, 290.191,
or 290.20;
(2) taxed to the individual under the Internal Revenue Code
(or not taxed under the Internal Revenue Code by reason of its
character but of a character which is taxable under this
chapter) in the individual's capacity as a beneficiary of an
estate with income allocable to this state under section 290.17,
290.191, or 290.20 and the income, taking into account the
income character provisions of section 662(b) of the Internal
Revenue Code, would be allocable to this state under section
290.17, 290.191, or 290.20 if realized by the individual
directly from the source from which realized by the estate;
(3) taxed to the individual under the Internal Revenue Code
(or not taxed under the Internal Revenue Code by reason of its
character but of a character that is taxable under this chapter)
in the individual's capacity as a beneficiary or grantor or
other person treated as a substantial owner of a trust with
income allocable to this state under section 290.17, 290.191, or
290.20 and the income, taking into account the income character
provisions of section 652(b), 662(b), or 664(b) of the Internal
Revenue Code, would be allocable to this state under section
290.17, 290.191, or 290.20 if realized by the individual
directly from the source from which realized by the trust;
(4) taxed to the individual under the Internal Revenue Code
(or not taxed under the Internal Revenue Code by reason of its
character but of a character which is taxable under this
chapter) in the individual's capacity as a limited or general
partner in a partnership with income allocable to this state
under section 290.17, 290.191, or 290.20 and the income, taking
into account the income character provisions of section 702(b)
of the Internal Revenue Code, would be allocable to this state
under section 290.17, 290.191, or 290.20 if realized by the
individual directly from the source from which realized by the
partnership; or
(5) taxed to the individual under the Internal Revenue Code
(or not taxed under the Internal Revenue Code by reason of its
character but of a character which is taxable under this
chapter) in the individual's capacity as a shareholder of a
corporation having a valid election in effect under section 1362
of the Internal Revenue Code treated as an "S" corporation under
section 290.9725, and income allocable to this state under
section 290.17, 290.191, or 290.20 and the income, taking into
account the income character provisions of section 1366(b) of
the Internal Revenue Code, would be allocable to this state
under section 290.17, 290.191, or 290.20 if realized by the
individual directly from the source from which realized by the
corporation.
Sec. 9. Minnesota Statutes 1996, section 290.014,
subdivision 3, is amended to read:
Subd. 3. [TRUSTS AND ESTATES.] Except as provided in
section 290.015, a trust or estate, whether resident or
nonresident, is subject to the return filing requirements and to
tax as provided in this chapter to the extent that the income of
the trust or estate is:
(1) allocable to this state under section 290.17, 290.191,
or 290.20;
(2) taxed to the trust or estate under the Internal Revenue
Code (or not taxed under the Internal Revenue Code by reason of
its character but of a character which is taxable under this
chapter) in its capacity as a beneficiary of a trust or estate
with income allocable to this state under section 290.17,
290.191, or 290.20 and the income, taking into account the
income character provisions of section 662(b) of the Internal
Revenue Code, would be allocable to this state under section
290.17, 290.191, or 290.20 if realized by the trust or
beneficiary estate directly from the source from which realized
by the distributing estate;
(3) taxed to the trust or estate under the Internal Revenue
Code (or not taxed under the Internal Revenue Code by reason of
its character but of a character which is taxable under this
chapter) in its capacity as a beneficiary or grantor or other
person treated as a substantial owner of a trust with income
allocable to this state under section 290.17, 290.191, or 290.20
and the income, taking into account the income character
provisions of section 652(b), 662(b), or 664(b) of the Internal
Revenue Code, would be allocable to this state under section
290.17, 290.191, or 290.20 if realized by the beneficiary trust
or estate directly from the source from which realized by the
distributing trust;
(4) taxed to the trust or estate under the Internal Revenue
Code (or not taxed under the Internal Revenue Code by reason of
its character but of a character which is taxable under this
chapter) in its capacity as a limited or general partner in a
partnership with income allocable to this state under section
290.17, 290.191, or 290.20 and the income, taking into account
the income character provisions of section 702(b) of the
Internal Revenue Code, would be allocable to this state under
section 290.17, 290.191, or 290.20 if realized by the trust or
estate directly from the source from which realized by the
partnership; or
(5) taxed to the trust or estate under the Internal Revenue
Code (or not taxed under the Internal Revenue Code by reason of
its character but of a character which is taxable under this
chapter) in its capacity as a shareholder of a
corporation having a valid election in effect under section 1362
of the Internal Revenue Code treated as an "S" corporation under
section 290.9725, and income allocable to this state under
section 290.17, 290.191, or 290.20 and the income, taking into
account the income character provisions of section 1366(b) of
the Internal Revenue Code, would be allocable to this state
under section 290.17, 290.191, or 290.20 if realized by the
trust or estate directly from the source from which realized by
the corporation.
Sec. 10. Minnesota Statutes 1996, section 290.015,
subdivision 3, is amended to read:
Subd. 3. [EXCEPTIONS.] (a) A person is not subject to tax
under this chapter if the person is engaged in the business of
selling tangible personal property and taxation of that person
under this chapter is precluded by Public Law Number 86-272,
United States Code, title 15, sections 381 to 384, or would be
so precluded except for the fact that the person stored tangible
personal property in a state licensed facility under chapter 231.
(b) Ownership of an interest in the following types of
property (including those contacts with this state reasonably
required to evaluate and complete the acquisition or disposition
of the property, the servicing of the property or the income
from it, the collection of income from the property, or the
acquisition or liquidation of collateral relating to the
property) shall not be a factor in determining whether the owner
is subject to tax under this chapter:
(1) an interest in a real estate mortgage investment
conduit, a real estate investment trust, a financial asset
securitization investment trust, or a regulated investment
company or a fund of a regulated investment company, as those
terms are defined in the Internal Revenue Code;
(2) an interest in money market instruments or securities
as defined in section 290.191, subdivision 6, paragraphs (c) and
(d);
(3) an interest in a loan-backed, mortgage-backed, or
receivable-backed security representing either: (i) ownership
in a pool of promissory notes, mortgages, or receivables or
certificates of interest or participation in such notes,
mortgages, or receivables, or (ii) debt obligations or equity
interests which provide for payments in relation to payments or
reasonable projections of payments on the notes, mortgages, or
receivables;
(4) an interest acquired from a person in assets described
in section 290.191, subdivision 11, paragraphs (e) to (l),
subject to the provisions of paragraph (c), clause (2)(A);
(5) an interest acquired from a person in the right to
service, or collect income from any assets described in section
290.191, subdivision 11, paragraphs (e) to (l), subject to the
provisions of paragraph (c), clause (2)(A);
(6) an interest acquired from a person in a funded or
unfunded agreement to extend or guarantee credit whether
conditional, mandatory, temporary, standby, secured, or
otherwise, subject to the provisions of paragraph (c), clause
(2)(A);
(7) an interest of a person other than an individual,
estate, or trust, in any intangible, tangible, real, or personal
property acquired in satisfaction, whether in whole or in part,
of any asset embodying a payment obligation which is in default,
whether secured or unsecured, the ownership of an interest in
which would be exempt under the preceding provisions of this
subdivision, provided the property is disposed of within a
reasonable period of time; or
(8) amounts held in escrow or trust accounts, pursuant to
and in accordance with the terms of property described in this
subdivision.
(c)(1) For purposes of paragraph (b), clauses (4) to (6),
an interest in the type of assets or credit agreements described
is deemed to exist at the time the owner becomes legally
obligated, conditionally or unconditionally, to fund, acquire,
renew, extend, amend, or otherwise enter into the credit
arrangement.
(2)(A) An owner has acquired an interest from a person in
paragraph (b), clauses (4) to (6), assets if:
(i) the owner at the time of the acquisition of the asset
does not own, directly or indirectly, 15 percent or more of the
outstanding stock or in the case of a partnership 15 percent or
more of the capital or profit interests of the person from whom
it acquired the asset;
(ii) the person from whom the owner acquired the asset
regularly sells, assigns, or transfers interests in paragraph
(b), clauses (4) to (6), assets during the 12 calendar months
immediately preceding the month of acquisition to three or more
persons; and
(iii) the person from whom the owner acquired the asset
does not sell, assign, or transfer 75 percent or more of its
paragraph (b), clauses (4) to (6), assets during the 12 calendar
months immediately preceding the month of acquisition to the
owner.
For purposes of determining indirect ownership under item (i),
the owner is deemed to own all stock, capital, or profit
interests owned by another person if the owner directly owns 15
percent or more of the stock, capital, or profit interests in
the other person. The owner is also deemed to own through any
intermediary parties all stock, capital, and profit interests
directly owned by a person to the extent there exists a 15
percent or more chain of ownership of stock, capital, or profit
interests between the owner, intermediary parties and the person.
(B) If the owner of the asset is a member of the unitary
group, paragraph (b), clauses (4) to (8), do not apply to an
interest acquired from another member of the unitary group. If
the interest in the asset was originally acquired from a
nonunitary member and at that time qualified as a section
290.015, subdivision 3, paragraph (b), asset, the foregoing
limitation does not apply.
Sec. 11. Minnesota Statutes 1996, section 290.015,
subdivision 5, is amended to read:
Subd. 5. [DETERMINATION AT ENTITY LEVEL.] Determinations
under this section with respect to trades or businesses
conducted by a partnership, trust, estate, or corporation with
an election in effect under section 1362 of the Internal Revenue
Code treated as an "S" corporation under section 290.9725, or
any other entity, the income of which is or may be taxed to its
owners or beneficiaries must be made with respect to the entity
carrying on the trade or business and not with respect to owners
or beneficiaries of the trade or business, the taxability of
which under this chapter must be determined under section
290.014.
Sec. 12. Minnesota Statutes 1996, section 290.06,
subdivision 22, is amended to read:
Subd. 22. [CREDIT FOR TAXES PAID TO ANOTHER STATE.] (a) A
taxpayer who is liable for taxes on or measured by net income to
another state or province or territory of Canada, as provided in
paragraphs (b) through (f), upon income allocated or apportioned
to Minnesota, is entitled to a credit for the tax paid to
another state or province or territory of Canada if the tax is
actually paid in the taxable year or a subsequent taxable year.
A taxpayer who is a resident of this state pursuant to section
290.01, subdivision 7, clause (2), and who is subject to income
tax as a resident in the state of the individual's domicile is
not allowed this credit unless the state of domicile does not
allow a similar credit.
(b) For an individual, estate, or trust, the credit is
determined by multiplying the tax payable under this chapter by
the ratio derived by dividing the income subject to tax in the
other state or province or territory of Canada that is also
subject to tax in Minnesota while a resident of Minnesota by the
taxpayer's federal adjusted gross income, as defined in section
62 of the Internal Revenue Code, modified by the addition
required by section 290.01, subdivision 19a, clause (1), and the
subtraction allowed by section 290.01, subdivision 19b, clause
(1), to the extent the income is allocated or assigned to
Minnesota under sections 290.081 and 290.17.
(c) If the taxpayer is an athletic team that apportions all
of its income under section 290.17, subdivision 5, paragraph
(c), the credit is determined by multiplying the tax payable
under this chapter by the ratio derived from dividing the total
net income subject to tax in the other state or province or
territory of Canada by the taxpayer's Minnesota taxable income.
(d) The credit determined under paragraph (b) or (c) shall
not exceed the amount of tax so paid to the other state or
province or territory of Canada on the gross income earned
within the other state or province or territory of Canada
subject to tax under this chapter, nor shall the allowance of
the credit reduce the taxes paid under this chapter to an amount
less than what would be assessed if such income amount was
excluded from taxable net income.
(e) In the case of the tax assessed on a lump sum
distribution under section 290.032, the credit allowed under
paragraph (a) is the tax assessed by the other state or province
or territory of Canada on the lump sum distribution that is also
subject to tax under section 290.032, and shall not exceed the
tax assessed under section 290.032. To the extent the total
lump sum distribution defined in section 290.032, subdivision 1,
includes lump sum distributions received in prior years or is
all or in part an annuity contract, the reduction to the tax on
the lump sum distribution allowed under section 290.032,
subdivision 2, includes tax paid to another state that is
properly apportioned to that distribution.
(f) If a Minnesota resident reported an item of income to
Minnesota and is assessed tax in such other state or province or
territory of Canada on that same income after the Minnesota
statute of limitations has expired, the taxpayer shall receive a
credit for that year under paragraph (a), notwithstanding any
statute of limitations to the contrary. The claim for the
credit must be submitted within one year from the date the taxes
were paid to the other state or province or territory of
Canada. The taxpayer must submit sufficient proof to show
entitlement to a credit.
(g) For the purposes of this subdivision, a resident
shareholder of a corporation having a valid election in effect
under section 1362 of the Internal Revenue Code treated as an "S"
corporation under section 290.9725, must be considered to have
paid a tax imposed on the shareholder in an amount equal to the
shareholder's pro rata share of any net income tax paid by the S
corporation to another state. For the purposes of the preceding
sentence, the term "net income tax" means any tax imposed on or
measured by a corporation's net income.
(h) For the purposes of this subdivision, a resident member
of a limited liability company taxed as a partnership under the
Internal Revenue Code must be considered to have paid a tax
imposed on the member in an amount equal to the member's pro
rata share of any net income tax paid by the limited liability
company to a state that does not measure the income of the
member of the limited liability company by reference to the
income of the limited liability company. For purposes of the
preceding sentence, the term "net income" tax means any tax
imposed on or measured by a limited liability company's net
income.
Sec. 13. Minnesota Statutes 1996, section 290.068,
subdivision 1, is amended to read:
Subdivision 1. [CREDIT ALLOWED.] A corporation, other than
a corporation with a valid election in effect under section 1362
of the Internal Revenue Code treated as an "S" corporation under
section 290.9725, is allowed a credit against the portion of the
franchise tax computed under section 290.06, subdivision 1, for
the taxable year equal to:
(a) 5 percent of the first $2 million of the excess (if
any) of
(1) the qualified research expenses for the taxable year,
over
(2) the base amount; and
(b) 2.5 percent on all of such excess expenses over $2
million.
Sec. 14. Minnesota Statutes 1996, section 290.0922,
subdivision 1, is amended to read:
Subdivision 1. [IMPOSITION.] (a) In addition to the tax
imposed by this chapter without regard to this section, the
franchise tax imposed on a corporation required to file under
section 289A.08, subdivision 3, other than a corporation having
a valid election in effect under section 1362 of the Internal
Revenue Code treated as an "S" corporation under section
290.9725 for the taxable year includes a tax equal to the
following amounts:
If the sum of the corporation's
Minnesota property, payrolls, and sales
or receipts is: the tax equals:
less than $500,000 $0
$ 500,000 to $ 999,999 $100
$ 1,000,000 to $ 4,999,999 $300
$ 5,000,000 to $ 9,999,999 $1,000
$10,000,000 to $19,999,999 $2,000
$20,000,000 or more $5,000
(b) A tax is imposed for each taxable year on a corporation
required to file a return under section 289A.12, subdivision 3,
that has a valid election in effect for the taxable year under
section 1362 of the Internal Revenue Code is treated as an "S"
corporation under section 290.9725 and on a partnership required
to file a return under section 289A.12, subdivision 3, other
than a partnership that derives over 80 percent of its income
from farming. The tax imposed under this paragraph is due on or
before the due date of the return for the taxpayer due under
section 289A.18, subdivision 1. The commissioner shall
prescribe the return to be used for payment of this tax. The
tax under this paragraph is equal to the following amounts:
If the sum of the S corporation's or partnership's
Minnesota property, payrolls, and sales
or receipts is: the tax equals:
less than $500,000 $0
$ 500,000 to $ 999,999 $100
$ 1,000,000 to $ 4,999,999 $300
$ 5,000,000 to $ 9,999,999 $1,000
$10,000,000 to $19,999,999 $2,000
$20,000,000 or more $5,000
Sec. 15. Minnesota Statutes 1996, section 290.17,
subdivision 1, is amended to read:
Subdivision 1. [SCOPE OF ALLOCATION RULES.] (a) The income
of resident individuals is not subject to allocation outside
this state. The allocation rules apply to nonresident
individuals, estates, trusts, nonresident partners of
partnerships, nonresident shareholders of corporations having a
valid election in effect under section 1362 of the Internal
Revenue Code treated as "S" corporations under section 290.9725,
and all corporations not having such an election in effect. If
a partnership or corporation would not otherwise be subject to
the allocation rules, but conducts a trade or business that is
part of a unitary business involving another legal entity that
is subject to the allocation rules, the partnership or
corporation is subject to the allocation rules.
(b) Expenses, losses, and other deductions (referred to
collectively in this paragraph as "deductions") must be
allocated along with the item or class of gross income to which
they are definitely related for purposes of assignment under
this section or apportionment under section 290.191, 290.20,
290.35, or 290.36. Deductions not definitely related to any
item or class of gross income are assigned to the taxpayer's
domicile.
(c) In the case of an individual who is a resident for only
part of a taxable year, the individual's income, gains, losses,
and deductions from the distributive share of a partnership, S
corporation, trust, or estate are not subject to allocation
outside this state to the extent of the distributive share
multiplied by a ratio, the numerator of which is the number of
days the individual was a resident of this state during the tax
year of the partnership, S corporation, trust, or estate, and
the denominator of which is the number of days in the taxable
year of the partnership, S corporation, trust, or estate.
Sec. 16. Minnesota Statutes 1996, section 290.371,
subdivision 2, is amended to read:
Subd. 2. [EXEMPTIONS.] A corporation is not required to
file a notice of business activities report if:
(1) by the end of an accounting period for which it was
otherwise required to file a notice of business activities
report under this section, it had received a certificate of
authority to do business in this state;
(2) a timely return has been filed under section 289A.08;
(3) the corporation is exempt from taxation under this
chapter pursuant to section 290.05;
(4) the corporation's activities in Minnesota, or the
interests in property which it owns, consist solely of
activities or property exempted from jurisdiction to tax under
section 290.015, subdivision 3, paragraph (b); or
(5) the corporation has a valid election in effect under
section 1362 of the Internal Revenue Code is an "S" corporation
under section 290.9725.
Sec. 17. Minnesota Statutes 1996, section 290.9725, is
amended to read:
290.9725 [S CORPORATION.]
For purposes of this chapter, the term "S corporation"
means any corporation having a valid election in effect for the
taxable year under section 1362 of the Internal Revenue Code,
except that a corporation which either:
(1) is a financial institution to which either section 585
or section 593 of the Internal Revenue Code applies; or
(2) has a wholly owned subsidiary which is a financial
institution as described above
is not an "S" corporation for the purposes of this chapter. An
S corporation shall not be subject to the taxes imposed by this
chapter, except the taxes imposed under sections 290.0922,
290.92, 290.9727, 290.9728, and 290.9729.
Sec. 18. Minnesota Statutes 1996, section 290.9727,
subdivision 1, is amended to read:
Subdivision 1. [TAX IMPOSED.] For a an "S" corporation
electing S corporation status pursuant to section 1362 of the
Internal Revenue Code after December 31, 1986, and having a
recognized built-in gain as defined in section 1374 of the
Internal Revenue Code, there is imposed a tax on the taxable
income of such S corporation, as defined in this section, at the
rate prescribed by section 290.06, subdivision 1. This
subdivision does not apply to any corporation having an S
election in effect for each of its taxable years. An S
corporation and any predecessor corporation must be treated as
one corporation for purposes of the preceding sentence.
Sec. 19. Minnesota Statutes 1996, section 290.9728,
subdivision 1, is amended to read:
Subdivision 1. [TAX IMPOSED.] There is imposed a tax on
the taxable income of a an "S" corporation that has:
(1) elected S corporation status pursuant to section 1362
of the Internal Revenue Code of 1986, as amended through
December 31, 1986, before January 1, 1987;
(2) a net capital gain for the taxable year (i) in excess
of $25,000 and (ii) exceeding 50 percent of the corporation's
federal taxable income for the taxable year; and
(3) federal taxable income for the taxable year exceeding
$25,000.
The tax is imposed at the rate prescribed by section
290.06, subdivision 1. For purposes of this section, "federal
taxable income" means federal taxable income determined under
section 1374(4)(d) of the Internal Revenue Code. This section
does not apply to an S corporation which has had an election
under section 1362 of the Internal Revenue Code of 1954, in
effect for the three immediately preceding taxable years. This
section does not apply to an S corporation that has been in
existence for less than four taxable years and has had an
election in effect under section 1362 of the Internal Revenue
Code of 1954 for each of the corporation's taxable years. For
purposes of this section, an S corporation and any predecessor
corporation are treated as one corporation.
Sec. 20. [290.9743] [ELECTION BY FASIT.]
An entity having a valid election as a financial asset
securitization investment trust in effect for a taxable year
under section 860L(a) of the Internal Revenue Code shall not be
subject to the taxes imposed by this chapter, except the tax
imposed under section 290.92.
Sec. 21. [290.9744] [FASIT INCOME TAXABLE TO HOLDERS OF
INTERESTS.]
The income of a financial asset securitization investment
trust is taxable to the holders of interests in the financial
asset securitization investment trust as provided in sections
860H to 860L of the Internal Revenue Code. The income of the
holders must be computed under the provisions of this chapter.
Sec. 22. Minnesota Statutes 1996, section 291.005,
subdivision 1, is amended to read:
Subdivision 1. Unless the context otherwise clearly
requires, the following terms used in this chapter shall have
the following meanings:
(1) "Federal gross estate" means the gross estate of a
decedent as valued and otherwise determined for federal estate
tax purposes by federal taxing authorities pursuant to the
provisions of the Internal Revenue Code.
(2) "Minnesota gross estate" means the federal gross estate
of a decedent after (a) excluding therefrom any property
included therein which has its situs outside Minnesota and (b)
including therein any property omitted from the federal gross
estate which is includable therein, has its situs in Minnesota,
and was not disclosed to federal taxing authorities.
(3) "Personal representative" means the executor,
administrator or other person appointed by the court to
administer and dispose of the property of the decedent. If
there is no executor, administrator or other person appointed,
qualified, and acting within this state, then any person in
actual or constructive possession of any property having a situs
in this state which is included in the federal gross estate of
the decedent shall be deemed to be a personal representative to
the extent of the property and the Minnesota estate tax due with
respect to the property.
(4) "Resident decedent" means an individual whose domicile
at the time of death was in Minnesota.
(5) "Nonresident decedent" means an individual whose
domicile at the time of death was not in Minnesota.
(6) "Situs of property" means, with respect to real
property, the state or country in which it is located; with
respect to tangible personal property, the state or country in
which it was normally kept or located at the time of the
decedent's death; and with respect to intangible personal
property, the state or country in which the decedent was
domiciled at death.
(7) "Commissioner" means the commissioner of revenue or any
person to whom the commissioner has delegated functions under
this chapter.
(8) "Internal Revenue Code" means the United States
Internal Revenue Code of 1986, as amended through March 22
December 31, 1996, and includes the provisions of section
1(a)(4) of Public Law Number 104-117.
Sec. 23. [FEDERAL CHANGES.]
The changes made by sections 1118(a), 1305, 1603, 1702(e),
and 1702(f) of the Small Business Job Protection Act, Public Law
Number 104-188, sections 451(a), 451(b), 909, and 910 of the
Personal Responsibility and Work Opportunity Reconciliation Act,
Public Law Number 104-193, and the federal changes to taxable
income of section 2 of this article which affect the Minnesota
definition of wages under Minnesota Statutes, section 290.92,
subdivision 1, S corporation status under Minnesota Statutes,
section 290.9725, unrelated business income tax under Minnesota
Statutes, section 290.05, subdivision 3, corporate alternative
minimum tax under Minnesota Statutes, section 290.0921,
subdivision 3, estate tax under Minnesota Statutes, sections
291.005 and 291.03, the Minnesota working family credit under
Minnesota Statutes, section 290.0671, subdivision 1, and the
definition of income under Minnesota Statutes, section 290A.03,
subdivision 3, shall become effective at the same time the
changes become effective for federal purposes.
Sec. 24. [INSTRUCTION TO REVISOR.]
In the next edition of Minnesota Statutes, the revisor of
statutes shall substitute the phrase "Internal Revenue Code of
1986, as amended through December 31, 1996," for the words
"Internal Revenue Code of 1986, as amended through April 15,
1995," wherever the phrase occurs in chapters 290A, 297, 298,
and 469.
Sec. 25. [EFFECTIVE DATE.]
Sections 3 to 5, 7 to 20 and the provision of section 2
dealing with regulated investment companies are effective for
tax years beginning after December 31, 1996. The remainder of
this article is effective at the same time and for the same
years as the federal changes made in 1996 were effective for
federal purposes.
ARTICLE 7
SALES AND SPECIAL TAXES
Section 1. Minnesota Statutes 1996, section 289A.56,
subdivision 4, is amended to read:
Subd. 4. [CAPITAL EQUIPMENT REFUNDS; REFUNDS TO
PURCHASERS.] Notwithstanding subdivision 3, for refunds payable
under sections section 297A.15, subdivision 5, and 289A.50,
subdivision 2a, interest is computed from the date the refund
claim is filed with the commissioner. For refunds payable under
section 289A.50, subdivision 2a, interest is computed from the
20th day of the month following the month of the invoice date
for the purchase which is the subject of the refund.
Sec. 2. Minnesota Statutes 1996, section 296.141,
subdivision 4, is amended to read:
Subd. 4. [CREDIT OR REFUND OF TAX PAID.] The commissioner
shall allow the distributor credit or refund of the tax paid on
gasoline and special fuel:
(1) exported or sold for export from the state, other than
in the supply tank of a motor vehicle or of an aircraft;
(2) sold to the United States government to be used
exclusively in performing its governmental functions and
activities or to any "cost plus a fixed fee" contractor employed
by the United States government on any national defense project;
(3) if the fuel is placed in a tank used exclusively for
residential heating;
(4) destroyed by accident while in the possession of the
distributor;
(5) in error;
(6) in the case of gasoline only, sold for storage in an
on-farm bulk storage tank, if the tax was not collected on the
sale; and
(6) (7) in such other cases as the commissioner may permit,
not inconsistent with the provisions of this chapter and other
laws relating to the gasoline and special fuel excise taxes.
Sec. 3. Minnesota Statutes 1996, 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 claim in the form and manner prescribed by the
commissioner, and containing the information the commissioner
shall require. 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 a written claim is mailed shall determine 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 off the public
highway by a person in that person's trade, business, or
activity for the production of income. "Off-highway business
use" includes:
(a) use of a passenger snowmobile off the public highways
as part of the operations of a resort as defined in section
157.15.; and
(b) use of gasoline or special fuel to operate a power
takeoff unit on a vehicle, but not including fuel consumed
during idling time.
"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.
By July 1, 1998, the commissioner shall adopt rules that
determine the rates and percentages necessary to develop
formulas for calculating and administering the refund under
clause (2)(b).
Sec. 4. Minnesota Statutes 1996, 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" or "purchase"
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; prepared by the retailer for
immediate consumption either on or off the retailer's premises.
For purposes of this subdivision, "food or drinks prepared for
immediate consumption" includes any food product upon which an
act of preparation including, but not limited to, cooking,
mixing, sandwich making, blending, heating, or pouring has been
performed by the retailer so the food product may be immediately
consumed by the purchaser. For purposes of this subdivision,
"premises" means the total space and facilities, including
buildings, grounds, and parking lots that are made available or
that are available for use by the retailer or customer for the
purpose of sale or consumption of prepared food and drinks.
Food and drinks sold within a building or grounds which require
an admission charge for entrance are presumed to be sold for
consumption on the premises. The premises of a caterer is the
place where the catered food or drinks are served;
(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 ice
cream, ice milk, or frozen yogurt products including novelties,
cones, sundaes, and snow cones, sold in single or individual
servings. For purposes of this subdivision, "single or
individual servings" does not include products prepackaged and
sold in bulk containers or packaging;
(v) (iii) soft drinks and other beverages prepared or
served by the retailer; including all carbonated and
noncarbonated beverages or drinks sold in liquid form except
beverages or drinks which contain milk or milk products,
beverages or drinks containing 15 or more percent fruit juice,
or noncarbonated and noneffervescent bottled water sold in
individual containers of one-half gallon or more in size;
(vi) (iv) gum;, candy, and candy products, except when sold
for fundraising purposes by a nonprofit organization that
provides educational and social activities primarily for young
people 18 years of age and under;
(vii) (v) ice;
(viii) (vi) all food sold in from vending machines,
pushcarts, lunch carts, motor vehicles, or any other form of
vehicle except home delivery vehicles;
(ix) (vii) party trays prepared by the retailers; and
(x) (viii) all meals and single servings of packaged snack
food, single cans or bottles of pop, sold in restaurants and
bars; and
(ix) bakery products prepared by the retailer for
consumption on the retailer's premises;
(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
does not include services purchased with prepaid telephone
calling cards. Telephone service includes paging services and
private communication service, as defined in United States Code,
title 26, section 4252(d), as amended through December 31, 1991,
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) The furnishing for a consideration of parking services,
whether on a contractual, hourly, or other periodic basis,
except for parking at a meter;
(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) detective services, security services, burglar, fire
alarm, and armored car services; but not including services
performed within the jurisdiction they serve by off-duty
licensed peace officers as defined in section 626.84,
subdivision 1, or services provided by a nonprofit organization
for monitoring and electronic surveillance of persons placed on
in-home detention pursuant to court order or under the direction
of the Minnesota department of corrections;
(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; indoor plant care;
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 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, as amended through December
31, 1987, and who are eligible to file a consolidated tax return
for federal income tax purposes;
(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
(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. 5. Minnesota Statutes 1996, section 297A.01,
subdivision 4, is amended to read:
Subd. 4. (a) A "retail sale" or "sale at retail" means a
sale for any purpose other than resale in the regular course of
business.
(b) Property utilized by the owner only by leasing such
property to others or by holding it in an effort to so lease it,
and which is put to no use by the owner other than resale after
such lease or effort to lease, shall be considered property
purchased for resale.
(c) Master computer software programs that are purchased
and used to make copies for sale or lease are considered
property purchased for resale.
(d) Sales of building materials, supplies and equipment to
owners, contractors, subcontractors or builders for the erection
of buildings or the alteration, repair or improvement of real
property are "retail sales" or "sales at retail" in whatever
quantity sold and whether or not for purpose of resale in the
form of real property or otherwise.
(e) A sale of carpeting, linoleum, or other similar floor
covering which includes installation of the carpeting, linoleum,
or other similar floor covering is a contract for the
improvement of real property.
(f) A sale of shrubbery, plants, sod, trees, and similar
items that includes installation of the shrubbery, plants, sod,
trees, and similar items is a contract for the improvement of
real property.
(g) Aircraft and parts for the repair thereof purchased by
a nonprofit, incorporated flying club or association utilized
solely by the corporation by leasing such aircraft to
shareholders of the corporation shall be considered property
purchased for resale. The leasing of the aircraft to the
shareholders by the flying club or association shall be
considered a sale. Leasing of aircraft utilized by a lessee for
the purpose of leasing to others, whether or not the lessee also
utilizes the aircraft for flight instruction where no separate
charge is made for aircraft rental or for charter service, shall
be considered a purchase for resale; provided, however, that a
proportionate share of the lease payment reflecting use for
flight instruction or charter service is subject to tax pursuant
to section 297A.14.
(h) Tangible personal property that is awarded as prizes
shall not be considered property purchased for resale.
(i) Tangible personal property that is utilized or employed
in the furnishing or providing of services under section
297A.01, subdivision 3, paragraph (d), or in conducting lawful
gambling under chapter 349 or the state lottery under chapter
349A, including property given as promotional items, shall not
be considered property purchased for resale. Machines,
equipment, or devices that are used to furnish, provide, or
dispense goods or services, including coin-operated devices,
shall not be considered property purchased for resale.
Sec. 6. Minnesota Statutes 1996, section 297A.01,
subdivision 7, is amended to read:
Subd. 7. "Storage" and "use" do not include the keeping,
or retaining or exercising of any right or power over in a
public warehouse of tangible personal property or tickets or
admissions to places of amusement or athletic events when
shipped or brought into Minnesota by common carrier, for the
purpose of subsequently being transported outside Minnesota and
thereafter used solely outside Minnesota, except in the course
of interstate commerce, or for the purpose of being processed,
fabricated or manufactured into, attached to or incorporated
into other tangible personal property to be transported outside
Minnesota and not thereafter returned to a point within
Minnesota, except in the course of interstate commerce.
Sec. 7. Minnesota Statutes 1996, section 297A.01,
subdivision 11, is amended to read:
Subd. 11. "Tangible personal property" means corporeal
personal property of any kind whatsoever, including property
which is to become real property as a result of incorporation,
attachment, or installation following its acquisition.
Personal property does not include:
(a) large ponderous machinery and equipment used in a
business or production activity which at common law would be
considered to be real property;
(b) property which is subject to an ad valorem property
tax;
(c) property described in section 272.02, subdivision 1,
clause (8), paragraphs (a) to (d);
(d) property described in section 272.03, subdivision 2,
clauses (3) and (5).
Tangible personal property includes computer software,
whether contained on tape, discs, cards, or other
devices. Tangible personal property also includes prepaid
telephone calling cards.
Sec. 8. Minnesota Statutes 1996, section 297A.01,
subdivision 16, is amended to read:
Subd. 16. [CAPITAL EQUIPMENT.] (a) Capital equipment means
machinery and equipment purchased or leased for use in this
state and used by the purchaser or lessee primarily for
manufacturing, fabricating, mining, or refining tangible
personal property to be sold ultimately at retail and for
electronically transmitting results retrieved by a customer of
an on-line computerized data retrieval system.
(b) Capital equipment includes all machinery and equipment
that is essential to the integrated production process. Capital
equipment includes, but is not limited to:
(1) machinery and equipment used or required to operate,
control, or regulate the production equipment;
(2) machinery and equipment used for research and
development, design, quality control, and testing activities;
(3) environmental control devices that are used to maintain
conditions such as temperature, humidity, light, or air pressure
when those conditions are essential to and are part of the
production process; or
(4) materials and supplies necessary to construct and
install machinery or equipment.;
(5) repair and replacement parts, including accessories,
whether purchased as spare parts, repair parts, or as upgrades
or modifications to machinery or equipment;
(6) materials used for foundations that support machinery
or equipment; or
(7) materials used to construct and install special purpose
buildings used in the production process.
(c) Capital equipment does not include the following:
(1) repair or replacement parts, including accessories,
whether purchased as spare parts, repair parts, or as upgrades
or modifications, and whether purchased before or after the
machinery or equipment is placed into service. Parts or
accessories are treated as capital equipment only to the extent
that they are a part of and are essential to the operation of
the machinery or equipment as initially purchased;
(2) motor vehicles taxed under chapter 297B;
(3) (2) machinery or equipment used to receive or store raw
materials;
(4) (3) building materials;
(5) (4) machinery or equipment used for nonproduction
purposes, including, but not limited to, the following:
machinery and equipment used for plant security, fire
prevention, first aid, and hospital stations; machinery and
equipment used in support operations or for administrative
purposes; machinery and equipment used solely for pollution
control, prevention, or abatement; and machinery and equipment
used in plant cleaning, disposal of scrap and waste, plant
communications, space heating, lighting, or safety;
(6) (5) "farm machinery" as defined by subdivision 15, and
"aquaculture production equipment" as defined by subdivision 19,
and "replacement capital equipment" as defined by subdivision
20; or
(7) (6) any other item that is not essential to the
integrated process of manufacturing, fabricating, mining, or
refining.
(d) For purposes of this subdivision:
(1) "Equipment" means independent devices or tools separate
from machinery but essential to an integrated production
process, including computers and software, used in operating,
controlling, or regulating machinery and equipment; and any
subunit or assembly comprising a component of any machinery or
accessory or attachment parts of machinery, such as tools, dies,
jigs, patterns, and molds.
(2) "Fabricating" means to make, build, create, produce, or
assemble components or property to work in a new or different
manner.
(3) "Machinery" means mechanical, electronic, or electrical
devices, including computers and software, that are purchased or
constructed to be used for the activities set forth in paragraph
(a), beginning with the removal of raw materials from inventory
through the completion of the product, including packaging of
the product.
(4) "Manufacturing" means an operation or series of
operations where raw materials are changed in form, composition,
or condition by machinery and equipment and which results in the
production of a new article of tangible personal property. For
purposes of this subdivision, "manufacturing" includes the
generation of electricity or steam to be sold at retail.
(5) "Mining" means the extraction of minerals, ores, stone,
and peat.
(6) "On-line data retrieval system" means a system whose
cumulation of information is equally available and accessible to
all its customers.
(7) "Pollution control equipment" means machinery and
equipment used to eliminate, prevent, or reduce pollution
resulting from an activity described in paragraph (a).
(8) "Primarily" means machinery and equipment used 50
percent or more of the time in an activity described in
paragraph (a).
(9) "Refining" means the process of converting a natural
resource to a product, including the treatment of water to be
sold at retail.
(e) For purposes of this subdivision the requirement that
the machinery or equipment "must be used by the purchaser or
lessee" means that the person who purchases or leases the
machinery or equipment must be the one who uses it for the
qualifying purpose. When a contractor buys and installs
machinery or equipment as part of an improvement to real
property, only the contractor is considered the purchaser.
(f) Notwithstanding prior provisions of this subdivision,
machinery and equipment purchased or leased to replace machinery
and equipment used in the mining or production of taconite shall
qualify as capital equipment.
Sec. 9. Minnesota Statutes 1996, section 297A.09, is
amended to read:
297A.09 [PRESUMPTION OF TAX; BURDEN OF PROOF.]
For the purpose of the proper administration of sections
297A.01 to 297A.44 and to prevent evasion of the tax, it shall
be presumed that all gross receipts are subject to the tax until
the contrary is established. The burden of proving that a sale
is not a sale at retail is upon the person who makes the sale,
but that person may take from the purchaser, at the time the
exempt purchase occurs, an exemption certificate to the effect
that the property purchased is for resale or that the sale is
otherwise exempt from the application of the tax imposed by
sections 297A.01 to 297A.44. A person asserting a claim that
certain sales are exempt, who does not have the required
exemption certificates in their possession, shall acquire the
certificates within 60 days after receiving written notice from
the commissioner that the certificates are required. If the
certificates are not obtained within the 60-day period, the
sales are deemed taxable sales under this chapter.
Sec. 10. Minnesota Statutes 1996, section 297A.15,
subdivision 7, is amended to read:
Subd. 7. [REFUND; APPROPRIATION; ADULT AND JUVENILE
CORRECTIONAL FACILITIES.] (a) If construction materials and
supplies described in paragraph (b) section 297A.25, subdivision
63, 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. The tax must be imposed and collected
as if the sales were taxable and the rate under section 297A.02,
subdivision 1, applied. An application for refund 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. 11. Minnesota Statutes 1996, section 297A.211,
subdivision 1, is amended to read:
Subdivision 1. Every person, as defined in this chapter,
who is engaged in interstate for-hire transportation of tangible
personal property or passengers by motor vehicle may at their
option, under rules prescribed by the commissioner, register as
retailers and pay the taxes imposed by this chapter in
accordance with this section. Any taxes paid under this section
are deemed use taxes, except local sales taxes when no
corresponding local use tax is imposed. Persons referred to
herein are: (1) persons possessing a certificate or permit or
having completed a registration process that authorizes for-hire
transportation of property or passengers from the United States
Department of Transportation, the transportation regulation
board, or the department of transportation; or (2) persons
transporting commodities defined as "exempt" in for-hire
transportation in interstate commerce; or (3) persons who,
pursuant to contracts with persons described in clause (1) or
(2) above, transport tangible personal property in interstate
commerce. Persons qualifying under clauses (2) and (3) must
maintain on a current basis the same type of mileage records
that are required by persons specified in clause (1) by the
United States Department of Transportation. Persons who in the
course of their business are transporting solely their own goods
in interstate commerce may also register as retailers pursuant
to rules prescribed by the commissioner and pay the taxes
imposed by this chapter in accordance with this section.
Sec. 12. [297A.213] [DIRECT PAYMENT BY PURCHASERS
PERMITTED.]
The commissioner may permit purchasers to pay taxes imposed
by this chapter directly to the commissioner. Any taxes paid by
purchasers under this section are deemed use taxes, except local
sales taxes when no corresponding local use tax is imposed.
Sec. 13. Minnesota Statutes 1996, section 297A.25,
subdivision 2, is amended to read:
Subd. 2. [FOOD PRODUCTS.] The gross receipts from the sale
of food products including but not limited to cereal and cereal
products, butter, cheese, milk and milk products, oleomargarine,
meat and meat products, fish and fish products, eggs and egg
products, vegetables and vegetable products, fruit and fruit
products, spices and salt, sugar and sugar products, coffee and
coffee substitutes, tea, cocoa and cocoa products, and food
products which are not taxable pursuant to section 297A.01,
subdivision 3, clause (c) are exempt. This exemption does not
include the following:
(1) candy and candy products, except when sold for
fundraising purposes by a nonprofit organization that provides
educational and social activities for young people primarily
aged 18 and under;
(2) carbonated beverages, beverages commonly referred to as
soft drinks containing less than 15 percent fruit juice, or
bottled water other than noncarbonated and noneffervescent
bottled water sold in individual containers of one-half gallon
or more in size.
Sec. 14. Minnesota Statutes 1996, section 297A.25,
subdivision 3, is amended to read:
Subd. 3. [MEDICINES; MEDICAL DEVICES.] The gross receipts
from the sale of prescribed drugs, prescribed medicine and
insulin, intended for use, internal or external, in the cure,
mitigation, treatment or prevention of illness or disease in
human beings are exempt, together with prescription glasses,
fever thermometers, therapeutic, and prosthetic devices.
"Prescribed drugs" or "prescribed medicine" includes
over-the-counter drugs or medicine prescribed by a licensed
physician. "Therapeutic devices" includes reusable finger
pricking devices for the extraction of blood, blood glucose
monitoring machines, and other diagnostic agents used in
diagnosing, monitoring, or treating diabetes. Nonprescription
analgesics consisting principally (determined by the weight of
all ingredients) of acetaminophen, acetylsalicylic acid,
ibuprofen, ketoprofen, naproxen, and other nonprescription
analgesics that are approved by the United States Food and Drug
Administration for internal use by human beings, or a
combination thereof, are exempt.
Sec. 15. Minnesota Statutes 1996, section 297A.25,
subdivision 5, is amended to read:
Subd. 5. [OUTSTATE TRANSPORT OR DELIVERY.] The gross
receipts from the following sales of, and storage, use, or
consumption of, tangible personal property are exempt:
(1) property which, without intermediate use, is shipped or
transported outside Minnesota by the purchaser and thereafter
used in a trade or business or is stored, processed, fabricated
or manufactured into, attached to or incorporated into other
tangible personal property transported or shipped outside
Minnesota and thereafter used in a trade or business outside
Minnesota, and which is not thereafter returned to a point
within Minnesota, except in the course of interstate commerce
(storage shall not constitute intermediate use); provided that
the property is not subject to tax in that state or country to
which it is transported for storage or use and provided further
that sales of tangible personal property to be used in other
states or countries as part of a maintenance contract shall be
specifically exempt; or
(2) property which the seller delivers to a common carrier
for delivery outside Minnesota, places in the United States mail
or parcel post directed to the purchaser outside Minnesota, or
delivers to the purchaser outside Minnesota by means of the
seller's own delivery vehicles, and which is not thereafter
returned to a point within Minnesota, except in the course of
interstate commerce.
Sec. 16. Minnesota Statutes 1996, section 297A.25,
subdivision 7, is amended to read:
Subd. 7. [PETROLEUM PRODUCTS.] The gross receipts from the
sale of and storage, use or consumption of the following
petroleum products are exempt:
(1) products upon which a tax has been imposed and paid
under the provisions of chapter 296, and no refund has been or
will be allowed because the buyer used the fuel for nonhighway
use;
(2) products which are used in the improvement of
agricultural land by constructing, maintaining, and repairing
drainage ditches, tile drainage systems, grass waterways, water
impoundment, and other erosion control structures;
(3) products purchased by a transit system receiving
financial assistance under section 174.24 or 473.384; or
(4) products used in a passenger snowmobile, as defined in
section 296.01, subdivision 27a, for off-highway business use as
part of the operations of a resort as provided under section
296.18, subdivision 1, clause (2); or
(5) products purchased by a state or a political
subdivision of a state for use in motor vehicles exempt from
registration under section 168.012, subdivision 1, paragraph (b).
Sec. 17. Minnesota Statutes 1996, section 297A.25,
subdivision 56, is amended to read:
Subd. 56. [FIREFIGHTERS PERSONAL PROTECTIVE EQUIPMENT.]
The gross receipts from the sale of and storage, use, or
consumption of firefighters personal protective equipment are
exempt if purchased by, or when authorized by and for the use
of, an organized fire department, fire protection district, or
fire company, regularly charged with the responsibility of
providing fire protection to the state or a political
subdivision. For purposes of this subdivision, "personal
protective equipment" includes: helmets (including face
shields, chin straps, and neck liners), bunker coats and pants
(including pant suspenders), boots, gloves, head covers or
hoods, wildfire jackets, protective coveralls, goggles,
self-contained breathing apparatuses, canister filter masks,
personal alert safety systems, spanner belts, optical or thermal
imaging search devices, and all safety equipment required by the
Occupational Safety and Health Administration.
Sec. 18. Minnesota Statutes 1996, section 297A.25,
subdivision 59, is amended to read:
Subd. 59. [FARM MACHINERY.] From July 1, 1994, until June
30, 1997, The gross receipts from the sale of used farm
machinery are exempt.
Sec. 19. Minnesota Statutes 1996, section 297A.25, is
amended by adding a subdivision to read:
Subd. 62. [MATERIALS USED IN PROVIDING TAXABLE
SERVICES.] (a) The gross receipts from the sale of and the
storage, use, or consumption of all materials used or consumed
in providing a taxable service intended to be sold ultimately at
retail are exempt.
(b) This exemption includes, but is not limited to:
(1) chemicals, lubricants, packaging materials, seeds,
trees, fertilizers, and herbicides, used or consumed in
providing the taxable service;
(2) chemicals used to treat waste generated as a result of
providing the taxable service; and
(3) accessory tools, equipment, and other items that are
separate detachable units used in providing the service and that
have an ordinary useful life of less than 12 months.
(c) This exemption does not include:
(1) machinery, equipment, implements, tools, accessories,
appliances, contrivances, furniture, and fixtures used in
providing the taxable service; and
(2) fuel, electricity, gas, and steam used for space
heating or lighting.
(d) For purposes of this subdivision, "taxable services"
means the services listed in section 297A.01, subdivision 3,
paragraph (i).
Sec. 20. Minnesota Statutes 1996, section 297A.25, is
amended by adding a subdivision to read:
Subd. 63. [HOSPITALS.] The gross receipts from the sale of
tangible personal property to, and the storage, use, or
consumption of such property by, a hospital are exempt, if the
property purchased is to be used in providing hospital services
to human beings. For purposes of this subdivision, "hospital"
means a hospital organized and operated for charitable purposes
within the meaning of section 501(c)(3) of the Internal Revenue
Code of 1986, as amended, and licensed under chapter 144 or by
any other jurisdiction. For purposes of this subdivision,
"hospital services" are services authorized or required to be
performed by a "hospital" under chapter 144 and regulations
thereunder or under the applicable licensure law of any other
jurisdiction. This exemption does not apply to purchases made
by a clinic, physician's office, or any other medical facility
not operating as a hospital, even though the clinic, office, or
facility may be owned and operated by a hospital. Sales
exempted by this subdivision do not include sales under section
297A.01, subdivision 3, paragraphs (c) and (e). This exemption
does 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 hospital.
This exemption does not apply to construction materials to be
used in constructing buildings or facilities which will not be
used principally by a hospital. This exemption does not apply
to the leasing of a motor vehicle as defined in section 297B.01,
subdivision 5.
Sec. 21. Minnesota Statutes 1996, section 297A.25, is
amended by adding a subdivision to read:
Subd. 64. [COPIES OF COURT REPORTER DOCUMENTS.] The gross
receipts from sales of, and use, storage, or consumption of,
transcripts or copies of transcripts of verbatim testimony
produced and sold by court reporters or other transcribers of
legal proceedings to individuals or entities that are parties to
or representatives of parties to the proceeding to which the
transcript relates, are exempt.
Sec. 22. Minnesota Statutes 1996, section 297A.25, is
amended by adding a subdivision to read:
Subd. 65. [CONSTRUCTION MATERIALS FOR CORRECTIONAL
FACILITIES.] The gross receipts from the sale of and storage,
use, or consumption of construction materials and supplies are
exempt from the tax imposed under this chapter if purchased 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 if the project is mandated by state or
federal law, rule, or regulation. The exemption 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. 23. Minnesota Statutes 1996, section 297A.25, is
amended by adding a subdivision to read:
Subd. 66. [CONSTRUCTION MATERIALS; LAKE SUPERIOR
CENTER.] Construction materials and supplies are exempt from the
tax imposed under this chapter, regardless of whether purchased
by the owner, a contractor, subcontractor, or builder, provided
the materials and supplies are used or consumed in constructing
the Lake Superior Center.
Sec. 24. Minnesota Statutes 1996, section 297A.25, is
amended by adding a subdivision to read:
Subd. 67. [CONSTRUCTION MATERIALS; SCIENCE
MUSEUM.] Construction materials and supplies are exempt from the
tax imposed under this chapter, regardless of whether purchased
by the owner, a contractor, subcontractor, or builder, provided
the materials and supplies are used or consumed in constructing
the Science Museum of Minnesota.
Sec. 25. Minnesota Statutes 1996, section 297A.25, is
amended by adding a subdivision to read:
Subd. 68. [CONSTRUCTION MATERIALS; BUSINESS INCUBATOR AND
INDUSTRIAL PARK FACILITY.] Materials and supplies used or
consumed in constructing, or incorporated into the construction
of, an exempted facility as defined in this subdivision are
exempt from the taxes imposed under this chapter and from any
sales and use tax imposed by a local unit of government,
notwithstanding any ordinance or city charter provision.
As used in this subdivision, an "exempted facility" is a
facility that includes a business incubator and industrial park
that:
(1) is owned and operated by a nonprofit charitable
organization that qualifies for tax exemption under section
501(c)(3) of the Internal Revenue Code;
(2) is 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 and job creation in the area served by the
organization, and emphasizes development of businesses that
manufacture products from materials found in the waste stream,
or manufacture alternative energy and conservation systems, or
make use of emerging environmental technologies;
(3) includes in its structure systems of material and
energy exchanges that use waste products from one industrial
process as sources of energy and material for other processes;
and
(4) makes use of solar and wind energy technology and
incorporates salvaged materials in its construction.
Sec. 26. Minnesota Statutes 1996, section 297A.25, is
amended by adding a subdivision to read:
Subd. 69. [REGIONWIDE PUBLIC SAFETY RADIO COMMUNICATION
SYSTEM; PRODUCTS AND SERVICES.] The gross receipts from the sale
of, and the storage, use, or consumption of, products and
services including end user equipment used for construction,
ownership, operation, maintenance, and enhancement of the
backbone system of the regionwide public safety radio
communication system established under sections 473.891 to
473.905, are exempt. For purposes of this subdivision, backbone
system is defined in section 473.891, subdivision 9.
Sec. 27. Minnesota Statutes 1996, section 297A.25, is
amended by adding a subdivision to read:
Subd. 70. [ALFALFA PROCESSING FACILITIES CONSTRUCTION
MATERIALS.] Purchases of construction materials and supplies are
exempt from the sales and use taxes imposed under this chapter,
regardless of whether purchased by the owner or a contractor,
subcontractor, or builder, if:
(1) the materials and supplies are used or consumed in
constructing a facility which either (i) develops market-value
agricultural products made from alfalfa leaf material, or (ii)
produces biomass energy fuel or electricity from alfalfa stems
in accordance with the biomass mandate imposed under section
216B.2424; and
(2) the total capital investment made in the value-added
agricultural products and biomass electric generation facilities
is at least $50,000,000; or
(3) the materials and supplies are used or consumed in
constructing, equipping or modifying a district heating and
cooling system cogeneration facility that:
(i) utilizes wood waste as a primary fuel source; and
(ii) satisfies the requirements of the biomass mandate in
section 216B.2424, subdivision 5.
Sec. 28. Minnesota Statutes 1996, section 297A.25, is
amended by adding a subdivision to read:
Subd. 71. [FIREWOOD.] The gross receipts from the sale of
and the storage, use, or consumption of wood used for fires for
heating, cooking, or any other purpose, except for the
generation of electricity, steam, or heat to be sold at retail,
are exempt.
Sec. 29. Minnesota Statutes 1996, section 297A.25, is
amended by adding a subdivision to read:
Subd. 72. [WIND ENERGY CONVERSION SYSTEMS.] The gross
receipts from the sale of and the storage, use, or consumption
of wind energy conversion systems, as defined in section
216C.06, subdivision 12, and the materials used to manufacture,
install, construct, repair, or replace them are exempt if the
systems are used as an electric power source.
Sec. 30. [297A.48] [LOCAL SALES TAX RULES.]
Subdivision 1. [AUTHORIZATION; SCOPE.] (a) A political
subdivision of this state may impose a general sales tax if
permitted by special law or if the subdivision enacted and
imposed the tax before the effective date of section 477A.016
and its predecessor provision.
(b) This section governs the imposition of a general sales
tax by the political subdivision. The provisions of this
section preempt the provisions of any special law:
(1) enacted before its effective date, or
(2) enacted after its effective date that does not
explicitly exempt the special law provision from this section's
rules by reference.
(c) This section does not apply to or preempt a sales tax
on motor vehicles or a special excise tax on motor vehicles.
Subd. 2. [TAX BASE.] (a) The tax applies to sales taxable
under this chapter that occur within the political subdivision.
(b) Taxable services are subject to a political
subdivision's sales tax, if they are performed either:
(1) within the political subdivision, or
(2) partly within and partly without the political
subdivision and more of the service is performed within the
political subdivision, based on the cost of performance.
Subd. 3. [TAX RATE.] (a) The tax rate is as specified in
the special law authorization and as imposed by the political
subdivision.
(b) The full political subdivision rate applies to any
sales that are taxed at a state rate less than or more than the
state general sales and use tax rate.
Subd. 4. [USE TAX.] A compensating use tax applies, at the
same rate as the sales tax, on the use, storage, distribution,
or consumption of tangible personal property or taxable services.
Subd. 5. [EXEMPTIONS.] (a) All goods or services that are
otherwise exempt from taxation under this chapter are exempt
from a political subdivision's tax.
(b) The gross receipts from the sale of tangible personal
property that meets the requirement of section 297A.25,
subdivision 5, are exempt, except the qualification test applies
based on the boundaries of the political subdivision instead of
the state of Minnesota.
(c) All mobile transportation equipment, and parts and
accessories attached to or to be attached to the equipment are
exempt, if purchased by a holder of a motor carrier direct pay
permit under section 297A.211.
Subd. 6. [CREDIT FOR OTHER LOCAL TAXES.] If a person paid
sales or use tax to another political subdivision on tangible
personal property or another item subject to tax under this
section, a credit applies against the tax imposed under this
section. The credit equals the tax the person paid to the other
political subdivision for the item.
Subd. 7. [ENFORCEMENT; COLLECTION; AND ADMINISTRATION.] (a)
The commissioner of revenue shall collect the taxes subject to
this section. The commissioner may collect the tax with the
state sales and use tax. All taxes under this section are
subject to the same penalties, interest, and enforcement
provisions as apply to the state sales and use tax.
(b) A request for a refund of state sales tax paid in
excess of the amount of tax legally due includes a request for a
refund of the political subdivision taxes paid on the goods or
services. The commissioner must refund to the taxpayer the full
amount of the political subdivision taxes paid on exempt sales
or use.
(c) A political subdivision that is collecting and
administering its own sales and use tax before January 1, 1998,
may elect to be exempt from this subdivision and subdivision 8.
Subd. 8. [REVENUES; COST OF COLLECTION.] The commissioner
shall remit the proceeds of the tax, less refunds and a
proportionate share of the cost of collection, at least
quarterly, to the political subdivision. The commissioner shall
deduct from the proceeds remitted an amount that equals
(1) the direct and indirect costs of the department to
administer, audit, and collect the political subdivision's tax,
plus
(2) the political subdivision's proportionate share of the
indirect cost of administering all taxes under this section.
Subd. 9. [EFFECTIVE DATES; NOTIFICATION.] (a) A political
subdivision may impose a tax under this section starting only on
the first day of a calendar quarter. A political subdivision
may repeal a tax under this section stopping only on the last
day of a calendar quarter.
(b) The political subdivision must notify the commissioner
of revenue at least 90 days before imposing or repealing a tax
under this section.
Subd. 10. [APPLICATION.] This section applies to all local
sales taxes authorized on or after the day of enactment of this
act. Starting January 1, 2000, this section applies to all
local sales tax that were authorized before the day of enactment
of this act.
Sec. 31. Minnesota Statutes 1996, section 297B.01,
subdivision 7, is amended to read:
Subd. 7. [SALE, SELLS, SELLING, PURCHASE, PURCHASED, OR
ACQUIRED.] "Sale," "sells," "selling," "purchase," "purchased,"
or "acquired" means any transfer of title of any motor vehicle,
whether absolutely or conditionally, for a consideration in
money or by exchange or barter for any purpose other than resale
in the regular course of business. Any motor vehicle utilized
by the owner only by leasing such vehicle to others or by
holding it in an effort to so lease it, and which is put to no
other use by the owner other than resale after such lease or
effort to lease, shall be considered property purchased for
resale. The terms also shall include any transfer of title or
ownership of a motor vehicle by way of gift or by any other
manner or by any other means whatsoever, for or without
consideration, except that these terms shall not include:
(a) the acquisition of a motor vehicle by inheritance from
or by bequest of, a decedent who owned it;
(b) the transfer of a motor vehicle which was previously
licensed in the names of two or more joint tenants and
subsequently transferred without monetary consideration to one
or more of the joint tenants;
(c) the transfer of a motor vehicle by way of gift between
a husband and wife or parent and child; or
(d) the voluntary or involuntary transfer of a motor
vehicle between a husband and wife in a divorce proceeding.; or
(e) the transfer of a motor vehicle by way of a gift to an
organization that is exempt from federal income taxation under
section 501(c)(3) of the Internal Revenue Code, as amended
through December 31, 1996, when the motor vehicle will be used
exclusively for religious, charitable, or educational purposes.
Sec. 32. Minnesota Statutes 1996, section 297B.01,
subdivision 8, is amended to read:
Subd. 8. [PURCHASE PRICE.] "Purchase price" means the
total consideration valued in money for a sale, whether paid in
money or otherwise. The purchase price excludes the amount of a
manufacturer's rebate paid or payable to the purchaser. If a
motor vehicle is taken in trade as a credit or as part payment
on a motor vehicle taxable under this chapter, the credit or
trade-in value allowed by the person selling the motor vehicle
shall be deducted from the total selling price to establish the
purchase price of the vehicle being sold and the trade-in
allowance allowed by the seller shall constitute the purchase
price of the motor vehicle accepted as a trade-in. The purchase
price in those instances where the motor vehicle is acquired by
gift or by any other transfer for a nominal or no monetary
consideration shall also include the average value of similar
motor vehicles, established by standards and guides as
determined by the motor vehicle registrar. The purchase price
in those instances where a motor vehicle is manufactured by a
person who registers it under the laws of this state shall mean
the manufactured cost of such motor vehicle and manufactured
cost shall mean the amount expended for materials, labor and
other properly allocable costs of manufacture, except that in
the absence of actual expenditures for the manufacture of a part
or all of the motor vehicle, manufactured costs shall mean the
reasonable value of the completed motor vehicle.
The term "purchase price" shall not include the portion of
the value of a motor vehicle due solely to modifications
necessary to make the motor vehicle handicapped accessible. The
term "purchase price" shall not include the transfer of a motor
vehicle by way of gift between a husband and wife or parent and
child, or to a nonprofit organization as provided under section
297B.01, paragraph (e), nor shall it include the transfer of a
motor vehicle by a guardian to a ward when there is no monetary
consideration and the title to such vehicle was registered in
the name of the guardian, as guardian, only because the ward was
a minor. There shall not be included in "purchase price" the
amount of any tax imposed by the United States upon or with
respect to retail sales whether imposed upon the retailer or the
consumer.
The term "purchase price" shall not include the transfer of
a motor vehicle as a gift between a foster parent and foster
child. For purposes of this subdivision, a foster relationship
exists, regardless of the age of the child, if (1) a foster
parent's home is or was licensed as a foster family home under
Minnesota Rules, parts 9545.0010 to 9545.0260, and (2) the
county verifies that the child was a state ward or in permanent
foster care.
Sec. 33. Minnesota Statutes 1996, section 349.154,
subdivision 2, is amended to read:
Subd. 2. [NET PROFIT REPORTS.] (a) Each licensed
organization must report monthly to the board on a form
prescribed by the board each expenditure and contribution of net
profits from lawful gambling. The reports must provide for each
expenditure or contribution:
(1) the name, address, and telephone number of the
recipient of the expenditure or contribution;
(2) the date the contribution was approved by the
organization;
(3) the date, amount, and check number of the expenditure
or contribution;
(4) a brief description of how the expenditure or
contribution meets one or more of the purposes in section
349.12, subdivision 25; and
(5) in the case of expenditures authorized under section
349.12, subdivision 25, paragraph (a), clause (7), whether the
expenditure is for a facility or activity that primarily
benefits male or female participants.
(b) The board shall make available to the commissioners of
revenue and public safety copies of reports received under this
subdivision and requested by them.
(c) The report required under this subdivision must provide
for a separate accounting for all expenditures made from the
reporting organization's tax refund and or credit account
authorized under section 297E.02, subdivision 4, paragraph (d).
Sec. 34. Minnesota Statutes 1996, section 349.19,
subdivision 2a, is amended to read:
Subd. 2a. [TAX REFUND AND OR CREDIT ACCOUNT.] (a) Each
organization that receives a refund or credit under section
297E.02, subdivision 4, paragraph (d), must establish a separate
account designated as the tax and credit refund account. The
organization must (1) within four business days of receiving a
refund under that paragraph deposit the refund in
the organization's gambling account, and (2) within four
business days of filing a tax return that claims a credit under
that paragraph, transfer from the separate account established
under subdivision 2 to the tax refund and credit account an
amount equal to the tax credit.
(b) The name and address of the bank, the account number
for the tax refund and credit account, and the names of
organization members authorized as signatories on the account
must be provided to the board within 30 days of the date when
the organization establishes the account. Changes in the
information must be submitted to the board at least ten days
before the change is made.
(c) (b) The organization may expend money in the account
the tax refund or credit issued under section 297E.02,
subdivision 4, paragraph (d), only for lawful purposes, other
than lawful purposes described in section 349.012, subdivision
25, paragraph (a), clauses (8), (9), and (12). Amounts in the
account received as refunds or allowed as credits must be spent
for qualifying lawful purposes no later than one year after the
refund or credit is deposited received.
Sec. 35. Minnesota Statutes 1996, section 349.191,
subdivision 1b, is amended to read:
Subd. 1b. [CREDIT AND SALES TO DELINQUENT DISTRIBUTORS.]
(a) If a manufacturer does not receive payment in full from a
distributor within 30 35 days of the delivery of gambling
equipment, the manufacturer must notify the board in writing of
the delinquency.
(b) If a manufacturer who has notified the board under
paragraph (a) has not received payment in full from the
distributor within 60 days of the notification under paragraph
(a), the manufacturer must notify the board of the continuing
delinquency.
(c) On receipt of a notice under paragraph (a), the board
shall order all manufacturers that until further notice from the
board, they may sell gambling equipment to the delinquent
distributor only on a cash basis with no credit extended. On
receipt of a notice under paragraph (b), the board shall order
all manufacturers not to sell any gambling equipment to the
delinquent distributor.
(d) No manufacturer may extend credit or sell gambling
equipment to a distributor in violation of an order under
paragraph (c) until the board has authorized such credit or sale.
Sec. 36. Laws 1993, chapter 375, article 9, section 45,
subdivision 2, is amended to read:
Subd. 2. [USE OF REVENUES.] (a) Revenues received from
taxes authorized by subdivision 1 shall be used by Cook county
to pay the cost of collecting the tax and to pay all or a
portion of the costs of expanding and improving the health care
facility located in the county and known as North Shore hospital.
Authorized costs include, but are not limited to, securing or
paying debt service on bonds or other obligations issued to
finance the expansion and improvement of North Shore hospital.
The total capital expenditures payable from bond proceeds,
excluding investment earnings on bond proceeds and tax revenues,
shall not exceed $4,000,000.
(b) Additional revenues received from taxes authorized by
subdivision 1 may be used by Cook county to pay all or a portion
of the costs of betterment of North Shore care center and
providing additional improvements to North Shore hospital.
Authorized costs include, but are not limited to, securing or
paying debt service on bonds or other obligations issued to
finance the remodeling of North Shore care center and additional
improvements to North Shore hospital. The total capital
expenditures payable from bond proceeds, excluding investment
earnings on bond proceeds and tax revenues, shall not exceed
$2,200,000.
Sec. 37. Laws 1993, chapter 375, article 9, section 45,
subdivision 3, is amended to read:
Subd. 3. [EXPIRATION OF TAXING AUTHORITY AND EXPENDITURE
LIMITATION.] The authority granted by subdivision 1 to Cook
county to impose a sales tax shall expire when the principal and
interest on any bonds or obligations issued under subdivision 4,
paragraph (a), to finance the expansion and improvement of North
Shore hospital described in subdivision 2, paragraph (a), have
been paid, or at an earlier time as the county shall, by
resolution, determine. Any funds remaining after completion of
the improvements and retirement or redemption of the bonds may
be placed in the general fund of the county.
Sec. 38. Laws 1993, chapter 375, article 9, section 45,
subdivision 4, is amended to read:
Subd. 4. [BONDS.] (a) Cook county may issue general
obligation bonds in an amount not to exceed $4,000,000 for the
expansion and improvement of North Shore hospital,.
(b) Additionally, Cook county may issue general obligation
bonds in an amount not to exceed $2,200,000 for the betterment
of North Shore care center and additional improvements to North
Shore hospital.
(c) The bonds may be issued without election under
Minnesota Statutes, chapter 475, on the question of issuance of
the bonds or a property tax to pay them. The debt represented
by the bonds issued for the expansion and improvement of North
Shore hospital shall not be included in computing any debt
limitations applicable to Cook county, and the levy of taxes
required by Minnesota Statutes, section 475.61, to pay principal
of and interest on the bonds shall not be subject to any levy
limitation or be included in computing or applying any levy
limitation applicable to the county.
Sec. 39. Laws 1993, chapter 375, article 9, section 45, is
amended by adding a subdivision to read:
Subd. 5a. [REFERENDUM.] If the governing body of Cook
county intends to use the sales tax proceeds as authorized by
subdivision 2, paragraph (b), it shall conduct a referendum on
the issue. The question of so using the tax proceeds must be
submitted to the voters at a special or general election. The
tax proceeds may not be used as provided in subdivision 2,
paragraph (b), unless a majority of votes cast on the question
are in the affirmative. The commissioner of revenue shall
prepare a suggested form of question to be presented at the
election. The referendum must be held at a special or general
election before December 1, 1997.
Sec. 40. Laws 1993, chapter 375, article 9, section 46,
subdivision 2, is amended to read:
Subd. 2. [USE OF REVENUES.] Revenues received from the tax
authorized by subdivision 1 may only be used by the city to pay
the cost of collecting the tax, and to pay for the following
projects or to secure or pay any principal, premium, or interest
on bonds issued in accordance with subdivision 3 for the
following projects.
(a) To pay all or a portion of the capital expenses of
construction, equipment and acquisition costs for the expansion
and remodeling of the St. Paul Civic Center complex.
(b) The remainder of the funds must be spent for:
(1) capital projects to further residential, cultural,
commercial, and economic development in both downtown St. Paul
and St. Paul neighborhoods; and
(2) the operating expenses of cultural organizations in the
city, provided that the amount spent under this clause may not
exceed ten percent of the total amount spent under this
paragraph.
By January 15 of each odd-numbered year, the mayor and the
city council must report to the legislature on the use of sales
tax revenues during the preceding two-year period.
Sec. 41. [CITY OF WILLMAR; TAXES.]
Subdivision 1. [SALES AND USE TAX AUTHORIZED.] Pursuant to
the approval of the city voters at the general election held on
November 5, 1996, the city of Willmar may, by ordinance, impose,
for the purposes specified in subdivision 3, a sales and use tax
of up to one-half of one percent. The provisions of Minnesota
Statutes, section 297A.48, govern the imposition,
administration, collection, and enforcement of the tax
authorized under this subdivision.
Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding
Minnesota Statutes, section 477A.016, or any other contrary
provision of law, ordinance, or city charter, the city of
Willmar may, by ordinance, impose, for the purposes specified in
subdivision 3, an excise tax of up to $20 per motor vehicle, as
defined by ordinance, purchased or acquired from any person
engaged within the city in the business of selling motor
vehicles at retail.
Subd. 3. [USE OF REVENUES.] Revenues received from taxes
authorized by subdivisions 1 and 2 must be used to pay the costs
of collecting the taxes, and to pay all or a part of the capital
and administrative costs of the acquisition, construction, and
improvement of public library facilities, including securing or
paying debt service on bonds issued for the project under
subdivision 4. The total capital and administrative
expenditures payable from bond proceeds and revenues received
from the taxes authorized by subdivisions 1 and 2, excluding
investment earnings thereon, must not exceed $4,500,000.
Subd. 4. [BONDS.] The city of Willmar, pursuant to the
approval of the city voters at the general election held on
November 5, 1996, may issue without additional election general
obligation bonds of the city in an amount not to exceed
$4,500,000 to pay capital and administrative expenses for the
acquisition, construction, and improvement of public library
facilities. The debt represented by the bonds must not be
included in computing any debt limitations applicable to the
city, and the levy of taxes required by Minnesota Statutes,
section 475.61, to pay the principal of and interest on the
bonds must not be subject to any levy limitation or be included
in computing or applying any levy limitation applicable to the
city.
Subd. 5. [TERMINATION OF TAXES.] The taxes imposed under
subdivisions 1 and 2 expire when the city council determines
that sufficient funds have been received from the taxes to
finance the capital and administrative costs for the
acquisition, construction, and improvement of public library
facilities and to prepay or retire at maturity the principal,
interest, and premium due on any bonds issued for the project
under subdivision 4. Any funds remaining after completion of
the project and retirement or redemption of the bonds may be
placed in the general fund of the city. The taxes imposed under
subdivisions 1 and 2 may expire at an earlier time if the city
so determines by ordinance.
Subd. 6. [EFFECTIVE DATE.] This section is effective
August 1, 1997, upon compliance by the governing body of the
city of Willmar with Minnesota Statutes, section 645.021,
subdivision 3.
Sec. 42. [STATEMENT OF PURPOSE.]
The purpose of section 5, paragraph (i), is to confirm and
clarify the original intent of the legislature in enacting an
exemption from the sales tax for property to be resold in the
normal course of business. Section 5, paragraph (i), ratifies
the existing state interpretation that a resale requires the
transfer of title to the property or the complete transfer of
possession and control over the property. This section does not
apply to litigation currently pending before the Minnesota
Supreme Court.
Sec. 43. [RECODIFICATION.]
In coordination with legislative staff, the revisor of
statutes shall prepare a bill for introduction in the 1998
session of the legislature that clarifies and recodifies chapter
297A. The department of revenue shall assist in the preparation
of the legislation as requested by the revisor. The revisor may
consult professional groups and other interested persons in
preparing the legislation.
Sec. 44. [EXPIRATION.]
Minnesota Statutes, section 297A.24, subdivision 3, as
added by Laws 1997, chapter 84, article 3, section 5, expires
January 1, 2000.
Sec. 45. [APPLICATION.]
Section 26 applies in the counties of Anoka, Carver,
Dakota, Hennepin, Ramsey, Scott, and Washington.
Sec. 46. [REPEALER.]
Minnesota Statutes 1996, sections 297A.01, subdivision 20;
and 297A.02, subdivision 5, are repealed.
Sec. 47. [EFFECTIVE DATES.]
Section 1 is effective for refund claims filed after June
30, 1997.
Sections 2, 6, 7, 9, 13, 15, 16, 17, 18, 20, 21, 25, 31,
and 32 are effective for purchases, sales, storage, use, or
consumption occurring after June 30, 1997.
Section 3 is effective on July 1, 1997, or upon adoption of
the corresponding rules, whichever occurs earlier.
Section 4, paragraph (i), clause (iv), is effective for
purchases and sales occurring after September 30, 1987; the
remainder of section 4 is effective for purchases and sales
occurring after June 30, 1997.
Section 5, paragraph (h), is effective for purchases and
sales occurring after June 30, 1997, and paragraph (i) is
effective for purchases and sales occurring after December 31,
1992.
Sections 8 and 46 are effective July 1, 1998.
Sections 10 and 22 are effective for purchases, sales,
storage, use, or consumption occurring after August 31, 1996.
Sections 11, 12, 33, 34, and 35 are effective July 1, 1997.
Sections 14 and 19 are effective for purchases and sales
after June 30, 1999.
Section 23 is effective January 1, 1997.
Section 24 is effective for purchases, sales, storage, use,
or consumption occurring after April 30, 1997.
Sections 26 and 45 are effective for purchases, sales,
storage, use, or consumption occurring after July 31, 1997, and
before August 1, 2003.
Section 27 is effective for purchases, sales, storage, use,
or consumption occurring after May 31, 1997.
Section 28 is effective for sales made after December 31,
1989, and before January 1, 1997. The provisions of Minnesota
Statutes, section 289A.50, apply to refunds claimed under
section 28. Refunds claimed under section 28 must be filed by
the later of December 31, 1997, or the time limit under
Minnesota Statutes, section 289A.40, subdivision 1.
Section 29 is effective for sales or first use after May
31, 1997, and before June 1, 1998.
Sections 30, 42, and 43 are effective the day following
final enactment.
Sections 36 to 39 are effective the day after compliance by
the governing body of Cook county with Minnesota Statutes,
section 645.021, subdivision 3.
Section 40 is effective for STAR funds collected after June
30, 1997.
ARTICLE 8
MINERALS TAXES
Section 1. Minnesota Statutes 1996, section 93.41, is
amended to read:
93.41 [STATE-OWNED IRON-BEARING MATERIALS.]
Subdivision 1. [USE FOR ROAD CONSTRUCTION AND OTHER
PURPOSES.] In case the commissioner of natural resources shall
determine that any paint rock, taconite, or other iron-bearing
material belonging to the state and containing not more than 45
percent dried iron by analysis is needed and suitable for use in
the construction or maintenance of any road, tailings basin,
settling basin, dike, dam, bank fill, or other works on public
or private property, and that such use would be in the best
interests of the public, the commissioner may authorize the
disposal of such material therefor as hereinafter provided.
Subd. 2. [MATERIALS SUBJECT TO STATE IRON ORE MINING
LEASE.] If such material is subject to an existing state iron
ore mining lease or located on property subject to an existing
state iron ore mining lease, the commissioner, by written
agreement with the holder of the lease, may authorize the use of
the material for any purpose specified in subdivision 1 that
will facilitate the mining and disposal of the iron ore therein
on such terms as the commissioner may prescribe consistent with
the interests of the state, or may authorize the holder of the
lease to dispose of the material otherwise for any purpose
specified in subdivision 1 upon payment of an amount therefor
equivalent to the royalty that would be payable under the terms
of the lease if the material were shipped or otherwise disposed
of as iron ore, but not less than the applicable minimum rate
prescribed by section 93.20.
Subd. 3. [ISSUANCE OF LEASES, ROYALTIES.] If such
material, whether in the ground or in stockpile, is not subject
to an existing lease, the commissioner may issue leases for the
taking and removal thereof for the purposes specified in
subdivision 1 in like manner as provided by section 92.50 for
leases for the taking and removal of sand, gravel, and other
materials specified in said section, and subject to all the
provisions thereof, so far as applicable; provided, that the
amount payable for such material shall be at least equivalent to
the minimum royalty that would be payable therefor under the
provisions of section 93.20.
Subd. 4. [SALE OF STOCKPILED IRON-BEARING MATERIAL IN
PLACE.] If such material is in stockpile and is not subject to
an existing lease, the commissioner may sell stockpiled
iron-bearing material in place. The sale must be to a person
holding an interest in the surface of the property upon which
the stockpile is located or to a person holding an interest in
publicly or privately owned stockpiled iron-bearing material
located in the same stockpile.
Sec. 2. Minnesota Statutes 1996, section 273.11,
subdivision 1, is amended to read:
Subdivision 1. [GENERALLY.] Except as provided in this
section or section 273.17, subdivision 1, all property shall be
valued at its market value. The market value as determined
pursuant to this section shall be stated such that any amount
under $100 is rounded up to $100 and any amount exceeding $100
shall be rounded to the nearest $100. In estimating and
determining such value, the assessor shall not adopt a lower or
different standard of value because the same is to serve as a
basis of taxation, nor shall the assessor adopt as a criterion
of value the price for which such property would sell at a
forced sale, or in the aggregate with all the property in the
town or district; but the assessor shall value each article or
description of property by itself, and at such sum or price as
the assessor believes the same to be fairly worth in money. The
assessor shall take into account the effect on the market value
of property of environmental factors in the vicinity of the
property. In assessing any tract or lot of real property, the
value of the land, exclusive of structures and improvements,
shall be determined, and also the value of all structures and
improvements thereon, and the aggregate value of the property,
including all structures and improvements, excluding the value
of crops growing upon cultivated land. In valuing real property
upon which there is a mine or quarry, it shall be valued at such
price as such property, including the mine or quarry, would sell
for at a fair, voluntary sale, for cash, if the material being
mined or quarried is not subject to taxation under section
298.015 and the mine or quarry is not exempt from the general
property tax under section 298.25. In valuing real property
which is vacant, platted property shall be assessed as provided
in subdivision 14. All property, or the use thereof, which is
taxable under section 272.01, subdivision 2, or 273.19, shall be
valued at the market value of such property and not at the value
of a leasehold estate in such property, or at some lesser value
than its market value.
Sec. 3. Minnesota Statutes 1996, section 273.12, is
amended to read:
273.12 [ASSESSMENT OF REAL PROPERTY.]
It shall be the duty of every assessor and board, in
estimating and determining the value of lands for the purpose of
taxation, to consider and give due weight to every element and
factor affecting the market value thereof, including its
location with reference to roads and streets and the location of
roads and streets thereon or over the same, and to take into
consideration a reduction in the acreage of each tract or lot
sufficient to cover the amount of land actually used for any
improved public highway and the reduction in area of land caused
thereby. It shall be the duty of every assessor and board, in
estimating and determining the value of lands for the purpose of
taxation, to consider and give due weight to lands which are
comparable in character, quality, and location, to the end that
all lands similarly located and improved will be assessed upon a
uniform basis and without discrimination and, for agricultural
lands, to consider and give recognition to its earning potential
as measured by its free market rental rate.
When mineral, clay, or gravel deposits exist on a property,
and their extent, quality, and costs of extraction are
sufficiently well known so as to influence market value, such
deposits shall be recognized in valuing the property; except for
mineral and energy-resource deposits which are subject to
taxation under section 298.015, and except for taconite and
iron-sulphide deposits which are exempt from the general
property tax under section 298.25.
Sec. 4. [273.1651] [TAXATION AND FORFEITURE OF STOCKPILED
METALLIC MINERALS MATERIAL.]
Subdivision 1. [DEFINITION.] "Stockpiled metallic minerals
material" for purposes of this section, means surface
overburden, rock, lean ore, tailings, or other material that has
been removed from the ground and deposited elsewhere on the
surface in the process of iron ore, taconite, or other metallic
minerals mining, or in the process of beneficiation. Stockpiled
metallic minerals material does not include processed metallic
minerals concentrates in the form of pellets, chips, briquettes,
fines, or other form which have been prepared for or are in the
process of shipment.
Subd. 2. [PURPOSE.] The purpose of this section is to
clarify the ownership of stockpiled metallic minerals material
in this state. Depending on the intent of the person who
extracted the material from the ground, stockpiled metallic
minerals material may or may not be owned separately and apart
from the fee title to the surface of the real property. The
legislature finds that the uncertainty of ownership of
stockpiled metallic minerals material located on real property
that becomes tax forfeited has created a burden on the public
owner of the surface of the real property and an impediment to
productive management or use of a public resource.
Subd. 3. [TAXATION AND FORFEITURE.] From and after the
effective date of this section, for purposes of taxation, the
definition of "real property," as contained in section 272.03,
subdivision 1, includes stockpiled metallic minerals material.
Nothing in this subdivision shall be construed to subject
stockpiled metallic minerals material to the general property
tax when the stockpiled metallic minerals material is exempt
from the general property tax pursuant to section 298.015 or
298.25. If the surface of the real property forfeits for
delinquent taxes, stockpiled metallic minerals material located
on the real property forfeits with the surface of the property.
Subd. 4. [PRIOR FORFEITURE.] Stockpiled metallic minerals
material located on real property that forfeited prior to the
effective date of this section or forfeits due to a judgment for
delinquent taxes issued prior to the effective date of this
section shall be assessed and taxed as real property. The tax
applies only to stockpiled metallic minerals material located on
real property that remains in the ownership of the state or a
political subdivision of the state. The tax shall be based on
the market value of the rental of the property for storage of
stockpiled metallic minerals material.
Subd. 5. [EXCEPTIONS; TAX LAWS.] (a) The tax imposed
pursuant to this section shall not be imposed on the following:
(1) stockpiled metallic minerals material valued and taxed
under other laws relating to the taxation of minerals, gas,
coal, oil, or other similar interests;
(2) stockpiled metallic minerals material that is exempt
from taxation pursuant to constitutional or related statutory
provisions; or
(3) stockpiled metallic minerals material that is owned by
the state.
(b) All laws for the enforcement of taxes on real property
shall apply to the tax imposed pursuant to this section on
stockpiled metallic minerals material.
Subd. 6. [FEE OWNER.] For purposes of section 276.041, the
owner of stockpiled metallic minerals material is a fee owner.
Sec. 5. Minnesota Statutes 1996, section 282.01,
subdivision 8, is amended to read:
Subd. 8. [MINERALS IN TAX-FORFEITED LAND AND TAX-FORFEITED
STOCKPILED METALLIC MINERALS MATERIAL SUBJECT TO MINING;
PROCEDURES.] In case the commissioner of natural resources shall
notify the county auditor of any county in writing that the
minerals in any tax-forfeited land or tax-forfeited stockpiled
metallic minerals material located on tax-forfeited land in such
county have been designated as a mining unit as provided by law,
or that such minerals or tax-forfeited stockpiled metallic
minerals material are subject to a mining permit or lease issued
therefor as provided by law, the surface of such tax-forfeited
land shall be subject to disposal and use for mining purposes
pursuant to such designation, permit, or lease, and shall be
withheld from sale or lease by the county auditor until the
commissioner shall notify the county auditor that such land has
been removed from the list of mining units or that any mining
permit or lease theretofore issued thereon is no longer in
force; provided, that the surface of such tax-forfeited land may
be leased by the county auditor as provided by law, with the
written approval of the commissioner, subject to disposal and
use for mining purposes as herein provided and to any special
conditions relating thereto that the commissioner may prescribe,
also subject to cancellation for mining purposes on three months
written notice from the commissioner to the county auditor.
Sec. 6. Minnesota Statutes 1996, section 282.04,
subdivision 1, is amended to read:
Subdivision 1. [TIMBER SALES; LAND LEASES AND USES.] (a)
The county auditor may sell timber upon any tract that may be
approved by the natural resources commissioner. Such sale of
timber shall be made for cash at not less than the appraised
value determined by the county board to the highest bidder after
not less than one week's published notice in an official paper
within the county. Any timber offered at such public sale and
not sold may thereafter be sold at private sale by the county
auditor at not less than the appraised value thereof, until such
time as the county board may withdraw such timber from sale.
The appraised value of the timber and the forestry practices to
be followed in the cutting of said timber shall be approved by
the commissioner of natural resources.
(b) Payment of the full sale price of all timber sold on
tax-forfeited lands shall be made in cash at the time of the
timber sale, except in the case of oral or sealed bid auction
sales, the down payment shall be no less than 15 percent of the
appraised value, and the balance shall be paid prior to entry.
In the case of auction sales that are partitioned and sold as a
single sale with predetermined cutting blocks, the down payment
shall be no less than 15 percent of the appraised price of the
entire timber sale which may be held until the satisfactory
completion of the sale or applied in whole or in part to the
final cutting block. The value of each separate block must be
paid in full before any cutting may begin in that block. With
the permission of the county administrator the purchaser may
enter unpaid blocks and cut necessary timber incidental to
developing logging roads as may be needed to log other blocks
provided that no timber may be removed from an unpaid block
until separately scaled and paid for.
(c) The county board may require final settlement on the
basis of a scale of cut products. Any parcels of land from
which timber is to be sold by scale of cut products shall be so
designated in the published notice of sale above mentioned, in
which case the notice shall contain a description of such
parcels, a statement of the estimated quantity of each species
of timber thereon and the appraised price of each specie of
timber for 1,000 feet, per cord or per piece, as the case may
be. In such cases any bids offered over and above the appraised
prices shall be by percentage, the percent bid to be added to
the appraised price of each of the different species of timber
advertised on the land. The purchaser of timber from such
parcels shall pay in cash at the time of sale at the rate bid
for all of the timber shown in the notice of sale as estimated
to be standing on the land, and in addition shall pay at the
same rate for any additional amounts which the final scale shows
to have been cut or was available for cutting on the land at the
time of sale under the terms of such sale. Where the final
scale of cut products shows that less timber was cut or was
available for cutting under terms of such sale than was
originally paid for, the excess payment shall be refunded from
the forfeited tax sale fund upon the claim of the purchaser, to
be audited and allowed by the county board as in case of other
claims against the county. No timber, except hardwood pulpwood,
may be removed from such parcels of land or other designated
landings until scaled by a person or persons designated by the
county board and approved by the commissioner of natural
resources. Landings other than the parcel of land from which
timber is cut may be designated for scaling by the county board
by written agreement with the purchaser of the timber. The
county board may, by written agreement with the purchaser and
with a consumer designated by the purchaser when the timber is
sold by the county auditor, and with the approval of the
commissioner of natural resources, accept the consumer's scale
of cut products delivered at the consumer's landing. No timber
shall be removed until fully paid for in cash. Small amounts of
timber not exceeding $3,000 in appraised valuation may be sold
for not less than the full appraised value at private sale to
individual persons without first publishing notice of sale or
calling for bids, provided that in case of such sale involving a
total appraised value of more than $200 the sale shall be made
subject to final settlement on the basis of a scale of cut
products in the manner above provided and not more than two such
sales, directly or indirectly to any individual shall be in
effect at one time.
(d) As directed by the county board, the county auditor may
lease tax-forfeited land to individuals, corporations or
organized subdivisions of the state at public or private vendue,
and at such prices and under such terms as the county board may
prescribe, for use as cottage and camp sites and for
agricultural purposes and for the purpose of taking and removing
of hay, stumpage, sand, gravel, clay, rock, marl, and black dirt
therefrom, and for garden sites and other temporary uses
provided that no leases shall be for a period to exceed ten
years; provided, further that any leases involving a
consideration of more than $1,500 per year, except to an
organized subdivision of the state shall first be offered at
public sale in the manner provided herein for sale of timber.
Upon the sale of any such leased land, it shall remain subject
to the lease for not to exceed one year from the beginning of
the term of the lease. Any rent paid by the lessee for the
portion of the term cut off by such cancellation shall be
refunded from the forfeited tax sale fund upon the claim of the
lessee, to be audited and allowed by the county board as in case
of other claims against the county.
(e) As directed by the county board, the county auditor may
lease tax-forfeited land to individuals, corporations, or
organized subdivisions of the state at public or private vendue,
at such prices and under such terms as the county board may
prescribe, for the purpose of taking and removing for use for
road construction and other purposes tax-forfeited stockpiled
iron-bearing material. The county auditor must determine that
the material is needed and suitable for use in the construction
or maintenance of a road, tailings basin, settling basin, dike,
dam, bank fill, or other works on public or private property,
and that the use would be in the best interests of the public.
No lease shall exceed ten years. The use of a stockpile for
these purposes must first be approved by the commissioner of
natural resources. The request shall be deemed approved unless
the requesting county is notified to the contrary by the
commissioner of natural resources within six months after
receipt of a request for approval for use of a stockpile. Once
use of a stockpile has been approved, the county may continue to
lease it for these purposes until approval is withdrawn by the
commissioner of natural resources.
(f) The county auditor, with the approval of the county
board is authorized to grant permits, licenses, and leases to
tax-forfeited lands for the depositing of stripping, lean ores,
tailings, or waste products from mines or ore milling plants,
upon such conditions and for such consideration and for such
period of time, not exceeding 15 years, as the county board may
determine; said permits, licenses, or leases to be subject to
approval by the commissioner of natural resources.
(g) Any person who removes any timber from tax-forfeited
land before said timber has been scaled and fully paid for as
provided in this subdivision is guilty of a misdemeanor.
(h) The county auditor may, with the approval of the county
board, and without first offering at public sale, grant leases,
for a term not exceeding 25 years, for the removal of peat from
tax-forfeited lands upon such terms and conditions as the county
board may prescribe. Any lease for the removal of peat from
tax-forfeited lands must first be reviewed and approved by the
commissioner of natural resources if the lease covers 320 or
more acres. No lease for the removal of peat shall be made by
the county auditor pursuant to this section without first
holding a public hearing on the auditor's intention to lease.
One printed notice in a legal newspaper in the county at least
ten days before the hearing, and posted notice in the courthouse
at least 20 days before the hearing shall be given of the
hearing.
Sec. 7. Minnesota Statutes 1996, section 298.24,
subdivision 1, is amended to read:
Subdivision 1. (a) For concentrate produced in 1992, 1993,
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) On concentrates produced in 1997 and thereafter, an
additional tax is imposed equal to three cents per gross ton of
merchantable iron ore concentrate for each one percent that the
iron content of the product exceeds 72 percent, when dried at
212 degrees Fahrenheit.
(c) For concentrates produced in 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, provided that, for concentrates
produced in 1996 only, the increase in the rate of tax imposed
under this section over the rate imposed for the previous year
may not exceed four cents per ton. "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) (d) 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) (e) 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) (f) 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) (g) (1) Notwithstanding any other provision of this
subdivision, for 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 two years of a plant's
production of direct reduced ore, no tax is imposed under this
section. 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. For the third year of a plant's production of
direct reduced ore, 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 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. For the fourth such
production year, the rate is 50 percent of the rate otherwise
determined under this subdivision; for the fifth such production
year, the rate is 75 percent of the rate otherwise determined
under this subdivision; and for all subsequent production years,
the full rate is imposed.
(2) Subject to clause (1), 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. 8. Minnesota Statutes 1996, section 298.28,
subdivision 9a, is amended to read:
Subd. 9a. [TACONITE ECONOMIC DEVELOPMENT FUND.] (a) 15.4
cents per ton for distributions in 1996, 1998, and 1999 and 20.4
cents per ton for distributions in 1997, 1998, and 1999 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. 9. Minnesota Statutes 1996, section 298.28, is
amended by adding a subdivision to read:
Subd. 9b. [TACONITE ENVIRONMENTAL FUND.] Five cents per
ton for distributions in 1998 and 1999 shall be paid to the
taconite environmental fund for use under section 298.2961. No
distribution may be made under this paragraph in any year in
which total industry production falls below 30,000,000 tons.
Sec. 10. Minnesota Statutes 1996, section 298.296,
subdivision 4, is amended to read:
Subd. 4. [TEMPORARY LOAN AUTHORITY.] (a) The board may
recommend that up to $10,000,000 $7,500,000 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 paragraph may not exceed $5,000,000 for any
facility.
(b) Additionally, the board must reserve the first
$2,000,000 of the net interest, dividends, and earnings arising
from the investment of the trust after June 30, 1996, to be used
for additional grants for the purposes set forth in paragraph
(a). This amount must be reserved until it is used for the
grants or until June 30, 1998, whichever is earlier.
(c) Additionally, the board may recommend that up to
$3,000,000 $5,500,000 from the corpus of the trust may be used
for additional grants for the purposes set forth in paragraph
(a).
(d) The board may require that it receive an equity
percentage in any project to which it contributes under this
section.
(e) The authority to make loans and grants under this
subdivision terminates June 30, 1998.
Sec. 11. Minnesota Statutes 1996, section 298.2961,
subdivision 1, is amended to read:
Subdivision 1. [APPROPRIATION.] (a) $10,000,000 is
appropriated from the northeast Minnesota economic protection
trust fund to a special account in the taconite area
environmental protection fund for grants or loans to producers
on a project-by-project basis as provided in this section.
(b) The proceeds of the tax designated under section
298.28, subdivision 9b, are appropriated for grants and loans to
producers on a project-by-project basis as provided in this
section.
Sec. 12. Minnesota Statutes 1996, section 298.75,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] Except as may otherwise be
provided, the following words, when used in this section, shall
have the meanings herein ascribed to them.
(1) "Aggregate material" shall mean nonmetallic natural
mineral aggregate including, but not limited to sand, silica
sand, gravel, building stone, crushed rock, limestone, and
granite. Aggregate material shall not include dimension stone
and dimension granite. Aggregate material must be measured or
weighed after it has been extracted from the pit, quarry, or
deposit.
(2) "Person" shall mean any individual, firm, partnership,
corporation, organization, trustee, association, or other entity.
(3) "Operator" shall mean any person engaged in the
business of removing aggregate material from the surface or
subsurface of the soil, for the purpose of sale, either directly
or indirectly, through the use of the aggregate material in a
marketable product or service.
(4) "Extraction site" shall mean a pit, quarry, or deposit
containing aggregate material and any contiguous property to the
pit, quarry, or deposit which is used by the operator for
stockpiling the aggregate material.
(5) "Importer" shall mean any person who buys aggregate
material produced from a county not listed in paragraph (6) or
another state and causes the aggregate material to be imported
into a county in this state which imposes a tax on aggregate
material.
(6) "County" shall mean the counties of Pope, Stearns,
Benton, Sherburne, Carver, Scott, Dakota, Le Sueur, Kittson,
Marshall, Pennington, Red Lake, Polk, Norman, Mahnomen, Clay,
Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone,
Sibley, Hennepin, Washington, Chisago, and Ramsey.
Sec. 13. Minnesota Statutes 1996, section 298.75,
subdivision 4, is amended to read:
Subd. 4. If the county auditor has not received the report
by the 15th day after the last day of each calendar quarter from
the operator or importer as required by subdivision 3 or has
received an erroneous report, the county auditor shall estimate
the amount of tax due and notify the operator or importer by
registered mail of the amount of tax so estimated within the
next 14 days. An operator or importer may, within 30 days from
the date of mailing the notice, and upon payment of the amount
of tax determined to be due, file in the office of the county
auditor a written statement of objections to the amount of taxes
determined to be due. The statement of objections shall be
deemed to be a petition within the meaning of chapter 278, and
shall be governed by sections 278.02 to 278.13.
Sec. 14. Minnesota Statutes 1996, section 298.75, is
amended by adding a subdivision to read:
Subd. 8. The county auditor or its duly authorized agent
may examine records, including computer records, maintained by
an importer or operator. The term "record" includes, but is not
limited to, all accounts of an importer or operator. The county
auditor must have access at all reasonable times to inspect and
copy all business records related to an importer's or operator's
collection, transportation, and disposal of aggregate to the
extent necessary to ensure that all aggregate material
production taxes required to be paid have been remitted to the
county. The records must be maintained by the importer or
operator for no less than six years.
Sec. 15. [ST. LOUIS COUNTY TOWNS.]
Subdivision 1. [TAX MAY BE IMPOSED; CONDITIONS.] If the St.
Louis county board does not approve section 12, as provided in
section 18, each of the following towns in St. Louis county may
impose the aggregate materials tax under Minnesota Statutes,
section 298.75: the towns of Alden, Brevator, Canosia, Duluth,
Fredenberg, Gnesen, Grand Lake, Industrial, Lakewood, Midway,
Normanna, North Star, Rice Lake, and Solway.
Subd. 2. [PROVISIONS THAT APPLY.] For purposes of
exercising the powers contained in Minnesota Statutes, section
298.75, the "town" is deemed to be the "county."
In those towns located in St. Louis County that impose the
tax under Minnesota Statutes, section 298.75, all provisions in
that section shall apply to those towns, except that in lieu of
the distribution of the tax proceeds under subdivision 7, all
proceeds from this tax shall be retained by each of the towns
that impose the tax.
Subd. 3. [APPROVAL.] A tax imposed under this section is
effective in the town that approves it the day after compliance
by the town with the requirements of Minnesota Statutes, section
645.021, subdivision 3.
Sec. 16. [USE OF PRODUCTION TAX PROCEEDS.]
The amount distributed to the iron range resources and
rehabilitation board under Minnesota Statutes, section 298.28,
subdivision 7, that is attributable to the tax increase due to
the implicit price deflator increase as provided in Minnesota
Statutes, section 298.24, subdivision 1, paragraph (c), for
concentrates produced in 1997 shall be used by the board to make
a grant to the city of Hoyt Lakes to be used for the
establishment of an industrial park in the city.
Sec. 17. [SALES OF LANDS BY SCOTT COUNTY; AGGREGATE
MATERIALS.]
Minerals subject to reservation by Scott county under
Minnesota Statutes, section 373.01, subdivision 1, clause (1),
do not include minerals defined as aggregate material by
Minnesota Statutes, section 298.75, subdivision 1, that are
present in and upon the following described property:
All that part of the East Half of the Southwest Quarter in
Section 33, Township 115, Range 23, Scott County MN; which lies
westerly of the westerly right of way line of the Chicago, St.
Paul, Minneapolis, and Omaha Railway Company (Chicago and
NorthWestern Railway),
Together with all that part of the East Half of the
Southwest Quarter of Section 33, Township 115, Range 23, Scott
County, MN; lying easterly of the easterly right of way line of
the Chicago, St. Paul, Minneapolis and Omaha Railway Company
(Chicago and NorthWestern Railway); and all that part of the
West Half of the Southeast Quarter of said Section 33 lying
westerly of the westerly right of way line of the Minneapolis
and St. Louis Railroad; excepting therefrom the following
described parcel:
EXCEPTION:
Commencing at the Southwest corner of the Southeast Quarter
of said Section 33; thence on an assumed bearing of North
87 degrees 25 minutes 08 seconds East along the South line
of said Southeast Quarter a distance of 501.49 feet; thence
North 02 degrees 24 minutes 52 seconds West a distance of
750.00 feet; thence South 87 degrees 12 minutes 56 seconds
East a distance of 750.00 feet; thence South 02 degrees 34
minutes 52 seconds East a distance of 750.00 feet to the
South line of said East Half of the Southwest Quarter;
thence North 86 degrees 48 minutes 19 seconds East along
said South line of the East Half of the Southwest Quarter a
distance of 248.52 feet to the point of beginning.
Together with Tract A, Registered Land Survey Number 86;
and Tract C, Registered Land Survey Number 136; as filed in the
office of the Registrar of Titles, Scott County, Minnesota.
The county may sell, lease, or convey the property and
except the aggregate material from the mineral reservation
required by Minnesota Statutes, section 373.01, subdivision 1,
and it may lease the aggregate material upon conditions
different from those prescribed by that subdivision.
Sec. 18. [EFFECTIVE DATE.]
Section 7 is effective for production years beginning after
December 31, 1996.
Section 12 is effective for Pope county the day after
compliance by Pope county with the requirements of Minnesota
Statutes, section 645.021, subdivision 3.
Section 12 is effective for Carlton county the day after
compliance by Carlton county with the requirements of Minnesota
Statutes, section 645.021, subdivision 3.
Section 12 is effective for St. Louis county the day after
compliance by St. Louis county with the requirements of
Minnesota Statutes, section 645.021, subdivision 3.
Sections 16 and 17 are effective the day following final
enactment.
ARTICLE 9
BUDGET RESERVE
Section 1. Minnesota Statutes 1996, section 16A.152,
subdivision 2, is amended to read:
Subd. 2. [ADDITIONAL REVENUES; PRIORITY.] If on the basis
of a forecast of general fund revenues and expenditures after
November 1 in an odd-numbered year, the commissioner of finance
determines that there will be a positive unrestricted budgetary
general fund balance at the close of the biennium, the
commissioner of finance must allocate money to the budget
reserve until the total amount in the account is $270,000,000.
An amount equal to any additional biennial unrestricted
budgetary general fund balance made available as the result of a
forecast in an odd-numbered calendar year after November 1 is
appropriated in January of the following year to reduce the
property tax levy recognition percent under section 121.904,
subdivision 4a, to zero before additional money beyond
$270,000,000 is allocated to the budget reserve account. The
amount appropriated is the full amount forecast to be available
at the end of the biennium and is not limited to the amount
forecast to be available at the end of the current fiscal year
as follows:
(a) first, to the budget reserve until the total amount in
the account equals $522,000,000; then
(b) 60 percent to the property tax reform account
established in section 16A.1521; and
(c) 40 percent is an unrestricted balance in the general
fund.
The amounts necessary to meet the requirements of this
section are appropriated from the general fund within two weeks
after the forecast is released.
Sec. 2. [16A.1521] [PROPERTY TAX REFORM ACCOUNT.]
(a) A property tax reform account is established in the
general fund.
(b) Amounts in the account are available for and may only
be spent to reform the property tax system by:
(1) reducing the class rates to the target rates specified
in section 273.13, subdivision 32, or to further reduce the
ratio of the highest class rate to lowest class rate;
(2) increasing state education aids to reduce property
taxes;
(3) increasing the state share of education funding to 70
percent;
(4) increasing the education homestead credit; or
(5) increasing the property tax refund.
As provided by section 273.13, subdivision 32, the governor
shall recommend to the legislature uses of money in the account
to compress class rate ratios, while mitigating the shifting of
relative property tax burdens from one class to another through
the mechanisms listed in clauses (2) through (5).
(c) The balance in the account does not cancel and remains
in the account until appropriated for property tax reform.
Investment earnings on the account are credited to the account.
Sec. 3. Minnesota Statutes 1996, section 124.195,
subdivision 7, is amended to read:
Subd. 7. [PAYMENTS TO SCHOOL NONOPERATING FUNDS.] Each
fiscal year state general fund payments for a district
nonoperating fund shall be made at 85 percent of the estimated
entitlement during the fiscal year of the entitlement, unless a
higher rate has been established according to section 121.904,
subdivision 4d. This amount shall be paid in 12 equal monthly
installments. The amount of the actual entitlement, after
adjustment for actual data, minus the payments made during the
fiscal year of the entitlement shall be paid prior to October 31
of the following school year. The commissioner may make advance
payments of homestead and agricultural credit aid for a
district's debt service fund earlier than would occur under the
preceding schedule if the district submits evidence showing a
serious cash flow problem in the fund. The commissioner may
make earlier payments during the year and, if necessary,
increase the percent of the entitlement paid to reduce the cash
flow problem.
Sec. 4. Minnesota Statutes 1996, section 124.195,
subdivision 10, is amended to read:
Subd. 10. [AID PAYMENT PERCENTAGE.] Except as provided in
subdivisions 8, 9, and 11, each fiscal year, all education aids
and credits in this chapter and chapters 121, 123, 124A, 124B,
125, 126, 134, and section 273.1392, shall be paid at 90 percent
for districts operating a program under section 121.585 for
grades 1 to 12 for all students in the district and 85 percent
for other districts of the estimated entitlement during the
fiscal year of the entitlement, unless a higher rate has been
established according to section 121.904, subdivision 4d.
Districts operating a program under section 121.585 for grades 1
to 12 for all students in the district shall receive 85 percent
of the estimated entitlement plus an additional amount of
general education aid equal to five percent of the estimated
entitlement. For all districts, the final adjustment payment,
according to subdivision 6, shall be the amount of the actual
entitlement, after adjustment for actual data, minus the
payments made during the fiscal year of the entitlement.
Sec. 5. [APPROPRIATIONS.]
Subdivision 1. [BUDGET RESERVE.] An amount sufficient to
increase the budget reserve to $522,000,000 on July 1, 1997, is
appropriated from the general fund.
Subd. 2. [PROPERTY REFORM ACCOUNT.] $46,000,000 is
appropriated to the property tax reform account from the general
fund for fiscal year 2000.
Sec. 6. [REPEALER.]
Minnesota Statutes 1996, section 121.904, subdivision 4d,
is repealed.
Sec. 7. [EFFECTIVE DATE.]
Sections 1 to 6 are effective July 1, 1997.
ARTICLE 10
TAX INCREMENT FINANCING
Section 1. Minnesota Statutes 1996, section 469.174,
subdivision 10, is amended to read:
Subd. 10. [REDEVELOPMENT DISTRICT.] (a) "Redevelopment
district" means a type of tax increment financing district
consisting of a project, or portions of a project, within which
the authority finds by resolution that one of the following
conditions, reasonably distributed throughout the district,
exists:
(1) parcels consisting of 70 percent of the area of the
district are occupied by buildings, streets, utilities, or other
improvements and more than 50 percent of the buildings, not
including outbuildings, are structurally substandard to a degree
requiring substantial renovation or clearance; or
(2) the property consists of vacant, unused, underused,
inappropriately used, or infrequently used railyards, rail
storage facilities, or excessive or vacated railroad
rights-of-way.
(b) For purposes of this subdivision, "structurally
substandard" shall mean containing defects in structural
elements or a combination of deficiencies in essential utilities
and facilities, light and ventilation, fire protection including
adequate egress, layout and condition of interior partitions, or
similar factors, which defects or deficiencies are of sufficient
total significance to justify substantial renovation or
clearance.
(c) A building is not structurally substandard if it is in
compliance with the building code applicable to new buildings or
could be modified to satisfy the building code at a cost of less
than 15 percent of the cost of constructing a new structure of
the same square footage and type on the site. The municipality
may find that a building is not disqualified as structurally
substandard under the preceding sentence on the basis of
reasonably available evidence, such as the size, type, and age
of the building, the average cost of plumbing, electrical, or
structural repairs, or other similar reliable evidence. If the
evidence supports a reasonable conclusion that the building is
not disqualified as structurally substandard, The municipality
may not make such a determination without an interior inspection
or of the property, but need not have an independent, expert
appraisal prepared of the cost of repair and rehabilitation of
the building. An interior inspection of the property is not
required, if the municipality finds that (1) the municipality or
authority is unable to gain access to the property after using
its best efforts to obtain permission from the party that owns
or controls the property; and (2) the evidence otherwise
supports a reasonable conclusion that the building is
structurally substandard. Items of evidence that support such a
conclusion include recent fire or police inspections, on-site
property tax appraisals or housing inspections, exterior
evidence of deterioration, or other similar reliable evidence.
Written documentation of the findings and reasons why an
interior inspection was not conducted must be made and retained
under section 469.175, subdivision 3, clause (1).
(d) A parcel is deemed to be occupied by a structurally
substandard building for purposes of the finding under paragraph
(a) if all of the following conditions are met:
(1) the parcel was occupied by a substandard building
within three years of the filing of the request for
certification of the parcel as part of the district with the
county auditor;
(2) the substandard building was demolished or removed by
the authority or the demolition or removal was financed by the
authority or was done by a developer under a development
agreement with the authority;
(3) the authority found by resolution before the demolition
or removal that the parcel was occupied by a structurally
substandard building and that after demolition and clearance the
authority intended to include the parcel within a district; and
(4) upon filing the request for certification of the tax
capacity of the parcel as part of a district, the authority
notifies the county auditor that the original tax capacity of
the parcel must be adjusted as provided by section 469.177,
subdivision 1, paragraph (h).
(c) (e) For purposes of this subdivision, a parcel is not
occupied by buildings, streets, utilities, or other improvements
unless 15 percent of the area of the parcel contains
improvements.
(d) (f) For districts consisting of two or more
noncontiguous areas, each area must qualify as a redevelopment
district under paragraph (a) to be included in the district, and
the entire area of the district must satisfy paragraph (a).
Sec. 2. Minnesota Statutes 1996, section 469.174, is
amended by adding a subdivision to read:
Subd. 25. [INCREMENT.] "Increment," "tax increment," "tax
increment revenues," "revenues derived from tax increment," and
other similar terms for a district include:
(1) taxes paid by the captured net tax capacity, but
excluding any excess taxes, as computed under section 469.177;
(2) the proceeds from the sale or lease of property,
tangible or intangible, purchased by the authority with tax
increments;
(3) repayments of loans or other advances made by the
authority with tax increments; and
(4) interest or other investment earnings on or from tax
increments.
Sec. 3. Minnesota Statutes 1996, section 469.174, is
amended by adding a subdivision to read:
Subd. 26. [POPULATION.] "Population" means the population
established as of December 31 by the most recent of the
following:
(1) the federal census;
(2) a special census conducted under contract with the
United States Bureau of the Census;
(3) a population estimate made by the metropolitan council;
and
(4) a population estimate made by the state demographer
under section 4A.02.
The population so established applies to the following
calendar year.
Sec. 4. Minnesota Statutes 1996, section 469.174, is
amended by adding a subdivision to read:
Subd. 27. [SMALL CITY.] "Small city" means any home rule
charter or statutory city that has a population of 5,000 or less
and that is located ten miles or more from a home rule charter
or statutory city, located in this state, with a population of
10,000 or more. For purposes of this definition, the distance
between cities is measured by drawing a straight line from the
nearest boundaries of the two cities.
Sec. 5. Minnesota Statutes 1996, 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 documented in writing and
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 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. 6. Minnesota Statutes 1996, section 469.176,
subdivision 1b, is amended to read:
Subd. 1b. [DURATION LIMITS; TERMS.] (a) No tax increment
shall in any event be paid to the authority
(1) after 25 years from date of receipt by the authority of
the first tax increment for a mined underground space
development district,
(2) after 15 years after receipt by the authority of the
first increment for a renewal and renovation district,
(3) after 12 20 years from approval of the tax increment
financing plan after receipt by the authority of the first
increment for a soils condition district,
(4) after nine years from the date of the receipt, or 11
years from approval of the tax increment financing plan,
whichever is less, for an economic development district,
(5) for a housing district or a redevelopment district,
after 20 years from the date of receipt by the authority of the
first tax increment by the authority pursuant to section
469.175, subdivision 1, paragraph (b); or, if no provision is
made under section 469.175, subdivision 1, paragraph (b), after
25 years from the date of receipt by the authority of the first
increment.
(b) For purposes of determining a duration limit under this
subdivision or subdivision 1e that is based on the receipt of an
increment, any increments from taxes payable in the year in
which the district terminates shall be paid to the authority.
This paragraph does not affect a duration limit calculated from
the date of approval of the tax increment financing plan or
based on the recovery of costs or to a duration limit under
subdivision 1c. This paragraph does not supersede the
restrictions on payment of delinquent taxes in subdivision 1f.
Sec. 7. Minnesota Statutes 1996, 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) qualified border retail facilities;
(7) space necessary for and related to the activities
listed in clauses (1) to (5) (6).
(b) Notwithstanding the provisions of this subdivision,
revenue derived from tax increment from an economic development
district may be used to 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.
(c) Notwithstanding the provisions of this subdivision,
revenues 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 15,000 square feet of any separately owned commercial
facility located within the municipal jurisdiction of a small
city, if the revenues derived from increments are spent only to
assist the facility directly or for administrative expenses, the
assistance is necessary to develop the facility, and all of the
increments, except those for administrative expenses, are spent
only for activities within the district.
(d) For purposes of this subdivision, a qualified border
retail facility is a development consisting of a shopping center
or one or more retail stores, if the authority finds that all of
the following conditions are satisfied:
(1) the district is in a small city located within one mile
or less of the border of the state;
(2) the development is not located in the seven county
metropolitan area, as defined in section 473.121, subdivision 2;
(3) the development will contain new buildings or will
substantially rehabilitate existing buildings that together
contain at least 25,000 square feet of retail space; and
(4) without the use of tax increment financing for the
development, the development or a similar competing development
will instead occur in the bordering state or province.
(e) A city is a small city for purposes of this subdivision
if the city was a small city in the year in which the request
for certification was made and applies for the rest of the
duration of the district, regardless of whether the city
qualifies or ceases to qualify as a small city.
Sec. 8. Minnesota Statutes 1996, section 469.176,
subdivision 4j, is amended to read:
Subd. 4j. [REDEVELOPMENT DISTRICTS.] At least 90 percent
of the revenues derived from tax increments from a redevelopment
district or renewal and renovation district must be used to
finance the cost of correcting conditions that allow designation
of redevelopment and renewal and renovation districts under
section 469.174. These costs include, but are not limited to,
acquiring properties containing structurally substandard
buildings or improvements or hazardous substances, pollution, or
contaminants, acquiring adjacent parcels necessary to provide a
site of sufficient size to permit development, demolition and
rehabilitation of structures, clearing of the land, the removal
of hazardous substances or remediation necessary to development
of the land, and installation of utilities, roads, sidewalks,
and parking facilities for the site. The allocated
administrative expenses of the authority, including the cost of
preparation of the development action response plan, may be
included in the qualifying costs.
Sec. 9. Minnesota Statutes 1996, section 469.176,
subdivision 5, is amended to read:
Subd. 5. [REQUIREMENT FOR AGREEMENTS.] No more than 25
percent, by acreage, of the property to be acquired within a
project which contains a redevelopment district, or ten percent,
by acreage, of the property to be acquired within a project
which contains a housing or economic development district, as
set forth in the tax increment financing plan, shall at any time
be owned by an authority as a result of acquisition with the
proceeds of bonds issued pursuant to section 469.178 to which
tax increment from the property acquired is pledged unless prior
to acquisition in excess of the percentages, the authority has
concluded an agreement for the development or redevelopment of
the property acquired and which provides recourse for the
authority should the development or redevelopment not be
completed. This subdivision does not apply to a parcel of a
district that is a designated hazardous substance site
established under section 469.174, subdivision 16, or part of a
hazardous substance subdistrict established under section
469.175, subdivision 7.
Sec. 10. Minnesota Statutes 1996, 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. In computing the average percentage increase in
market value, the auditor shall exclude the market value, as
estimated by the assessor, that is attributable to new
construction; extension of sewer, water, roads, or other public
utilities; or platting of the land.
(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. 11. Minnesota Statutes 1996, section 469.177,
subdivision 3, is amended to read:
Subd. 3. [TAX INCREMENT, RELATIONSHIP TO CHAPTERS 276A AND
473F.] (a) Unless the governing body elects pursuant to clause
(b) the following method of computation shall apply to a
district other than an economic development district for which
the request for certification was made after June 30, 1997:
(1) The original net tax capacity and the current net tax
capacity shall be determined before the application of the
fiscal disparity provisions of chapter 276A or 473F. Where the
original net tax capacity is equal to or greater than the
current net tax capacity, there is no captured net tax capacity
and no tax increment determination. Where the original net tax
capacity is less than the current net tax capacity, the
difference between the original net tax capacity and the current
net tax capacity is the captured net tax capacity. This amount
less any portion thereof which the authority has designated, in
its tax increment financing plan, to share with the local taxing
districts is the retained captured net tax capacity of the
authority.
(2) The county auditor shall exclude the retained captured
net tax capacity of the authority from the net tax capacity of
the local taxing districts in determining local taxing district
tax rates. The local tax rates so determined are to be extended
against the retained captured net tax capacity of the authority
as well as the net tax capacity of the local taxing districts.
The tax generated by the extension of the lesser of (A) the
local taxing district tax rates or (B) the original local tax
rate to the retained captured net tax capacity of the authority
is the tax increment of the authority.
(b) The following method of computation applies to any
economic development district for which the request for
certification was made after June 30, 1997, and to any other
district for which the governing body may, by resolution
approving the tax increment financing plan pursuant to section
469.175, subdivision 3, elect the following method of
computation elects:
(1) The original net tax capacity shall be determined
before the application of the fiscal disparity provisions of
chapter 276A or 473F. The current net tax capacity shall
exclude any fiscal disparity commercial-industrial net tax
capacity increase between the original year and the current year
multiplied by the fiscal disparity ratio determined pursuant to
section 276A.06, subdivision 7, or 473F.08, subdivision 6.
Where the original net tax capacity is equal to or greater than
the current net tax capacity, there is no captured net tax
capacity and no tax increment determination. Where the original
net tax capacity is less than the current net tax capacity, the
difference between the original net tax capacity and the current
net tax capacity is the captured net tax capacity. This amount
less any portion thereof which the authority has designated, in
its tax increment financing plan, to share with the local taxing
districts is the retained captured net tax capacity of the
authority.
(2) The county auditor shall exclude the retained captured
net tax capacity of the authority from the net tax capacity of
the local taxing districts in determining local taxing district
tax rates. The local tax rates so determined are to be extended
against the retained captured net tax capacity of the authority
as well as the net tax capacity of the local taxing districts.
The tax generated by the extension of the lesser of (A) the
local taxing district tax rates or (B) the original local tax
rate to the retained captured net tax capacity of the authority
is the tax increment of the authority.
(3) An election by the governing body pursuant to paragraph
(b) shall be submitted to the county auditor by the authority at
the time of the request for certification pursuant to
subdivision 1.
(c) The method of computation of tax increment applied to a
district pursuant to paragraph (a) or (b) shall remain the same
for the duration of the district, except that the governing body
may elect to change its election from the method of computation
in paragraph (a) to the method in paragraph (b).
Sec. 12. Laws 1995, chapter 264, article 5, section 44,
subdivision 4, as amended by Laws 1996, chapter 471, article 7,
section 21, is amended to read:
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. For housing replacement projects in
the city of Duluth, "authority" means the Duluth economic
development authority. For housing replacement projects in the
city of Richfield, "authority" is the authority as defined in
Minnesota Statutes, section 469.174, subdivision 2, that is
designated by the governing body of the city of Richfield. For
housing replacement projects in the city of Columbia Heights,
"authority" is the authority as defined in Minnesota Statutes,
section 469.174, subdivision 2, that is designated by the
governing body of the city of Columbia Heights.
Sec. 13. Laws 1995, chapter 264, article 5, section 45,
subdivision 1, as amended by Laws 1996, chapter 471, article 7,
section 22, is amended to read:
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, Fridley, and Richfield, and
Columbia Heights, 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, St. Paul, and Duluth, 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 its
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.
Sec. 14. [CITY OF BROOKLYN CENTER; USE OF TAX INCREMENT
FINANCING.]
Subdivision 1. [APPLICATION OF TIME LIMIT.] For tax
increment financing district number 3, established on December
19, 1994, by Brooklyn Center Resolution No. 94-273, Minnesota
Statutes, section 469.1763, subdivision 3, applies to the
district by permitting a period of ten years for commencement of
activities within the district.
Subd. 2. [EFFECTIVE DATE.] This section is effective upon
approval by the governing body of the city of Brooklyn Center
and compliance with Minnesota Statutes, section 645.021,
subdivision 3.
Sec. 15. [CITY OF BUFFALO LAKE; TAX INCREMENT FINANCING
DISTRICT.]
Subdivision 1. [EXTENSION OF TIME FOR
CERTIFICATION.] Notwithstanding the provisions of Minnesota
Statutes, section 273.1399, subdivision 6, paragraph (b), clause
(2), tax increment financing district 1-1 in the city of Buffalo
Lake is an exempt district under Minnesota Statutes, section
273.1399, paragraph (b), if the facility is certified by the
commissioner of agriculture by December 31, 1998.
Subd. 2. [EFFECTIVE DATE.] This section is effective upon
approval by the governing body of the city of Buffalo Lake and
compliance with Minnesota Statutes, section 645.021, subdivision
3.
Sec. 16. [GAYLORD.]
Subdivision 1. [TIF DISTRICT EXTENSION AND EXPANSION.]
Notwithstanding the provisions of Minnesota Statutes, section
469.176, subdivision 1c, the city of Gaylord may, by resolution,
extend the duration of a tax increment financing district
originally certified in 1978. The city may not extend the
duration beyond December 31, 2008.
Subd. 2. [EFFECTIVE DATE.] This section is effective upon
compliance with the requirements of Minnesota Statutes, sections
469.1782 and 645.021.
Sec. 17. [DEFINITIONS.]
Subdivision 1. [APPLICABILITY.] As used in sections 17 to
19, the terms defined in this section have the meanings given
them.
Subd. 2. [AUTHORITY.] "Authority" or "authorities" means
the Minneapolis public housing authority and the Minneapolis
community development agency if and to the extent that the
governing body has delegated to either the powers and duties
hereunder pursuant to section 18, subdivision 4, paragraph (b).
Subd. 3. [CAPTURED NET TAX CAPACITY.] "Captured net tax
capacity" means the amount by which the current net tax capacity
of the housing transition 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. 4. [CITY.] "City" means the city of Minneapolis,
Minnesota.
Subd. 5. [CONSENT DECREE.] "Consent decree" means the
order of the United States District Court issued in connection
with Hollman et. al. vs. Cisneros et. al., United States
District Court, Civil Case 4-92-712, as may be amended from time
to time.
Subd. 6. [COUNTY AUDITOR.] "County auditor" means the
county auditor of Hennepin county, Minnesota.
Subd. 7. [GOVERNING BODY.] "Governing body" means the city
council of the city.
Subd. 8. [HOUSING TRANSITION DISTRICT; DISTRICT.] "Housing
transition district" or "district" means a geographic area
designated by the governing body within boundaries commencing at
the intersection of Humboldt Avenue North and Plymouth Avenue
North, thence East along Plymouth Avenue North to Seventh Street
North, thence South along Seventh Street North to Lyndale
Avenue, thence South along Lyndale Avenue to Glenwood Avenue
North, thence West along Glenwood Avenue North to Girard Avenue
North, thence North along Girard Avenue North to Girard Terrace,
thence North along Girard Terrace to Olson Memorial Highway,
thence West along Olson Memorial Highway to Humboldt Avenue
North, thence North on Humboldt Avenue North to the point of
beginning.
Subd. 9. [NONTAXABLE PARCEL.] "Nontaxable parcel" means a
parcel to be included within the housing transition district
which at the time of certification is not subject to property
taxation by reason of public ownership.
Subd. 10. [ORIGINAL NET TAX CAPACITY.] (a) With respect to
nontaxable parcels within the district, "original net tax
capacity" means zero.
(b) With respect to taxable parcels within the district,
"original net tax capacity" means the net tax capacity of the
parcels as certified by the commissioner of revenue for the
appropriate assessment year. For purposes of this subdivision,
the appropriate assessment year is the previous assessment year,
if a request by the authority for certification has been made to
the county auditor by June 30. If the request for certification
is filed after June 30, the appropriate assessment year is the
current assessment year.
Subd. 11. [PARCEL.] "Parcel" means a tract or plat of land
established prior to the certification of the district as a
single unit for purposes of assessment.
Subd. 12. [PREEXISTING DISTRICT.] "Preexisting district"
means any tax increment district within which is located a
parcel proposed to be included within the housing transition
district.
Subd. 13. [TAXABLE PARCEL.] "Taxable parcel" means a
parcel to be included within the housing transition district
which is subject to property taxation at the time of
certification.
Sec. 18. [ESTABLISHMENT OF HOUSING TRANSITION DISTRICT.]
Subdivision 1. [CREATION.] The governing body may
establish a housing transition district within the city. The
parcels included within the district need not be contiguous but
must all be designated and included at the time the district is
initially established. Parcels must not be added to the
district after its initial certification.
Subd. 2. [TAX INCREMENT.] (a) Upon request of the
authority, the county auditor shall certify the original net tax
capacity of the district and shall certify in each year
thereafter the amount by which the original net tax capacity
increases as a result of the conditions described in Minnesota
Statutes, section 469.177, subdivision 4, or decreases as a
result of the conditions described in Minnesota Statutes,
section 469.177, subdivision 1, paragraph (g). No other changes
shall be made in original net tax capacity once certified by the
county auditor.
(b) The provisions of Minnesota Statutes, section 469.177,
subdivisions 1a and 3 to 10, apply to the computation of tax
increment for the housing transition district created under
sections 17 to 19.
(c) If an authority request for certification includes
nontaxable parcels then within a preexisting district, the
county auditor shall remove the parcels from the preexisting
district. If an authority request for certification includes
taxable parcels then within a preexisting district, the county
auditor shall allocate all taxes derived from the captured net
tax capacity attributable thereto to the preexisting district.
Subd. 3. [HOUSING TRANSITION DISTRICT PLAN.] To establish
a housing transition district, the governing body shall adopt a
housing transition district plan which constitutes a tax
increment financing plan, as used in those provisions of
Minnesota Statutes, sections 469.174 to 469.1781, made
applicable by sections 17 to 20, and contains the following:
(1) a general description of the plans for development of
the district;
(2) a description of the parcels to be included in the
district, including such information regarding each as shall
establish that the district meets the conditions described in
section 17, subdivision 8;
(3) the most recent net tax capacity of each parcel
included in the district;
(4) a budget containing estimated tax increment collections
and expenditures as authorized or permitted by sections 17 to
19;
(5) estimates of the sources of revenue, public and
private, other than tax increment to pay estimated or budgeted
costs;
(6) statements of the alternate estimated impacts of the
housing transition district on the net tax capacities of all
taxing jurisdictions in which the housing transition district is
located in whole or in part. For purposes of one statement, the
statement shall assume that the estimated captured net tax
capacity would be available to the taxing jurisdictions without
creation of the housing transition district, and for purposes of
the second statement, it shall be assumed that none of the
estimated captured net tax capacity would be available to the
taxing jurisdictions without creation of the housing transition
district.
Subd. 4. [PROCEDURE.] (a) The provisions of Minnesota
Statutes, section 469.175, subdivisions 3, 5, 6, and 6a, apply
to the establishment and operation of the housing transition
district created under sections 17 to 19, except the
determinations required by Minnesota Statutes, section 469.175,
subdivision 3, clauses (1) and (2), are not required.
(b) Upon approval of the housing transition district plan,
the governing body shall delegate to one or both of the
authorities the powers and duties regarding the implementation
and administration of the housing transition district it
determines appropriate.
Sec. 19. [LIMITATIONS.]
Subdivision 1. [DURATION.] Tax increment generated by the
district must cease to be paid to the authority after 20 years
from the receipt by the authority of the first tax increment
from the district.
Subd. 2. [USE.] (a) All tax increment received by the
authority from the district must be used in accordance with the
housing transition district plan.
(b) Tax increment may be used to pay the costs of:
(1) acquiring title to or an ownership interest in any
property within the district;
(2) relocating owners of or tenants in any property within
the district;
(3) demolishing all or a part of any structures or other
improvements within the district;
(4) site preparation, soil correction, and infrastructure
improvements within the district;
(5) rehabilitating or constructing any housing structures
or other improvements within the district;
(6) constructing public improvements associated with
development within the district;
(7) making loans or grants to public or private entities in
order to facilitate development within the district; and
(8) administering the creation and operation of the
district or the implementation of the consent decree, including
reimbursement for costs previously incurred or advanced and not
reimbursed.
(c) The authority may pay the costs authorized by this
subdivision, directly, through the issuance and sale of
obligations pursuant to Minnesota Statutes, section 469.178, by
means of loans or grants to the current or future owners of
property within the district, or through the exercise of any
authority contained in Minnesota Statutes, sections 469.001 to
469.047.
(d) Minnesota Statutes, section 469.176, subdivision 4g,
applies to the district. Minnesota Statutes, section 469.176,
subdivision 3, applies to the district, except "15" is
substituted for "ten" in paragraph (a) of subdivision 3.
Sec. 20. [APPLICABILITY OF OTHER LAWS.]
Minnesota Statutes, sections 469.174 to 469.179, apply to
the housing transition district or tax increment generated
pursuant to sections 17 to 19 only to the extent specified in
sections 17 to 19. The housing transition district is a
redevelopment district for purposes of Minnesota Statutes,
section 273.1399. The housing transition district does not have
a longer duration than permitted by general law for purposes of
Minnesota Statutes, section 469.1782.
Sec. 21. [CITY OF MINNETONKA; HOUSING DEVELOPMENT
ACCOUNT.]
Subdivision 1. [DEPOSITS IN ACCOUNT.] The Minnetonka
economic development authority may deposit the balance of
revenues derived from tax increment from housing tax increment
financing district No. 1 in the housing development account of
the authority. These increments may be expended for housing
activities in accordance with the tax increment financing plan,
if before depositing the increments or making any expenditures
for housing activities under this section, the authority and
city:
(1) elect, by resolution, to decertify housing tax
increment financing district No. 1 as of December 31, 1997; and
(2) identify in the plan the housing activities that will
be assisted by the housing development account.
The election to decertify and any necessary plan amendment
may be approved before or after the effective date of this
section.
Subd. 2. [PERMITTED HOUSING ACTIVITIES.] For the purposes
of this section, housing activities:
(1) may include rehabilitation, acquisition, demolition,
and financing of new or existing single family or multifamily
housing and public improvements directly related to such
activities, together with other related activities specified in
the housing action plan approved by the city or the authority in
compliance with Minnesota Statutes, sections 473.25 to 473.254;
(2) may be located anywhere within the city without regard
to the boundaries of any tax increment financing district or
project area; and
(3) for rental and owner-occupied housing, must meet the
income, rent, or sales price limitations established from time
to time by the metropolitan council under Minnesota Statutes,
sections 473.25 to 473.254.
Subd. 3. [SEPARATE ACCOUNT REQUIRED.] Tax increment to be
expended for housing activities under this section must be
segregated by the authority into a special housing development
account on its official books and records. The account may also
receive funds from other public and private sources.
Subd. 4. [EFFECTIVE DATE.] This section is effective upon
approval by the governing body of the city of Minnetonka and
compliance with Minnesota Statutes, section 645.021, subdivision
3.
Sec. 22. [EAST GRAND FORKS]
Subdivision 1. [TIF EXTENSION.] The governing body of the
city of East Grand Forks may extend the duration of tax
increment financing district No. 2 (Gateway East) by up to five
additional years. The district terminates no later than the end
of calendar year 2005.
Subd. 2. [EFFECTIVE DATE.] This section is effective upon
compliance by the governing body of the city of East Grand Forks
with the provisions of Minnesota Statutes, sections 469.1782,
subdivision 2; and 645.021.
Sec. 23. [TOWN OF WHITE; ECONOMIC DEVELOPMENT.]
Subdivision 1. [AUTHORIZATION.] Notwithstanding the
provisions of Minnesota Statutes, section 469.176, subdivision
1b, upon approval of the governing body of the town of White by
resolution, the duration of tax increment financing districts
numbers 1 and 2 of the joint east range economic development
authority may be extended by three additional years beyond the
limit that otherwise applies under Minnesota Statutes, section
469.176, subdivision 1, to the districts.
Subd. 2. [SPECIAL RULES.] (a) Tax increment financing
districts numbers 1 and 2 of the joint east range economic
development authority are subject to Minnesota Statutes,
sections 469.174 to 469.179, except as provided in this
subdivision.
(b) Minnesota Statutes, sections 273.1399, and 469.1782,
subdivision 1, do not apply.
(c) The application of Minnesota Statutes, section
469.1763, is modified to permit the use of increments from
either district to be used to pay any promissory notes issued in
connection with either district.
Subd. 3. [EFFECTIVE DATE.] This section is effective upon
compliance by the governing bodies of the town of White, the
county of St. Louis, and independent school district No. 2711
with Minnesota Statutes, sections 469.1782, subdivision 2, and
645.021, subdivision 2.
Sec. 24. [TASK FORCE; TIF RECODIFICATION.]
(a) A legislative task force is established on tax
increment financing and local economic development powers. The
task force consists of 12 members as follows:
(1) six members of the house of representatives, at least
two of whom are members of the minority caucus, appointed by the
speaker; and
(2) six members of the senate, at least two of whom are
members of the minority caucus, appointed by the committee on
committees.
(b) The task force shall prepare a bill for the 1998
legislative session that recodifies the Tax Increment Financing
Act and combines the statutes providing local economic
development powers into one law providing a uniform set of
powers relative to the use of tax increment financing.
(c) In preparing the bill under this section, the task
force shall consult with and seek comments from and
participation by representatives of the affected local
governments.
(d) The revisor of statutes and house and senate
legislative staff shall staff the task force.
(e) This section expires on March 1, 1998.
Sec. 25. [EFFECTIVE DATE.]
Sections 1, 3 to 6, 7, and 10, are effective for districts
for which the requests for certification are made after June 30,
1997.
Section 2, clauses (1) and (4), are effective for districts
for which the requests for certification were made after July
31, 1979, and for payments and investment earnings received
after July 1, 1997. Section 2, clauses (2) and (3), are
effective for districts for which the request for certification
was made after June 30, 1982, and proceeds from sales and leases
of properties purchased by the authority after June 30, 1997,
and repayments of advances and loans that were made after June
30, 1997.
Sections 8 and 9 apply to all tax increment districts,
whenever certified, insofar as the underlying law applies to
them, and any uses of tax increment expended prior to the date
of enactment of this act which are in compliance with the
provisions of those sections are deemed valid.
Sections 12 and 13 are effective on the day the chief
clerical officer of the city of Columbia Heights complies with
Minnesota Statutes, sections 645.021, subdivision 3.
Sections 17 to 20 are effective the day following final
enactment and upon compliance by the governing body with
Minnesota Statutes, section 645.021, subdivision 3.
Section 24 is effective the day following final enactment.
ARTICLE 11
INTERGOVERNMENTAL RELATIONS
Section 1. [3.986] [DEFINITIONS.]
Subdivision 1. [SCOPE.] The terms used in sections 3.986
to 3.989 have the meanings given them in this section.
Subd. 2. [LOCAL FISCAL IMPACT.] (a) "Local fiscal impact"
means increased or decreased costs or revenues that a political
subdivision would incur as a result of a law enacted after June
30, 1997, or rule proposed after June 30, 1998:
(1) that mandates a new program, eliminates an existing
mandated program, requires an increased level of service of an
existing program, or permits a decreased level of service in an
existing mandated program;
(2) that implements or interprets federal law and, by its
implementation or interpretation, increases or decreases program
or service levels beyond the level required by the federal law;
(3) that implements or interprets a statute or amendment
adopted or enacted pursuant to the approval of a statewide
ballot measure by the voters and, by its implementation or
interpretation, increases or decreases program or service levels
beyond the levels required by the ballot measure;
(4) that removes an option previously available to
political subdivisions, or adds an option previously unavailable
to political subdivisions, thus requiring higher program or
service levels or permitting lower program or service levels, or
prohibits a specific activity and so forces political
subdivisions to use a more costly alternative to provide a
mandated program or service;
(5) that requires that an existing program or service be
provided in a shorter time period and thus increases the cost of
the program or service, or permits an existing mandated program
or service to be provided in a longer time period, thus
permitting a decrease in the cost of the program or service;
(6) that adds new requirements to an existing optional
program or service and thus increases the cost of the program or
service because the political subdivisions have no reasonable
alternative other than to continue the optional program;
(7) that affects local revenue collections by changes in
property or sales and use tax exemptions;
(8) that requires costs previously incurred at local option
that have subsequently been mandated by the state; or
(9) that requires payment of a new fee or increases the
amount of an existing fee, or permits the elimination or
decrease of an existing fee mandated by the state.
(b) When state law is intended to achieve compliance with
federal law or court orders, state mandates shall be determined
as follows:
(1) if the federal law or court order is discretionary, the
state law is a state mandate;
(2) if the state law exceeds what is required by the
federal law or court order, only the provisions of the state law
that exceed the federal requirements are a state mandate; and
(3) if the state law does not exceed what is required by
the federal statute or regulation or court order, the state law
is not a state mandate.
Subd. 3. [MANDATE.] A "mandate" is a requirement imposed
upon a political subdivision in a law by a state agency or by
judicial authority that, if not complied with, results in:
(1) civil liability;
(2) criminal penalty; or
(3) administrative sanctions such as reduction or loss of
funding.
Subd. 4. [POLITICAL SUBDIVISION.] A "political
subdivision" is a county, home rule charter or statutory city,
town, or other taxing district or municipal corporation.
Subd. 5. [REQUIRING AN INCREASED LEVEL OF
SERVICE.] "Requiring an increased level of service" includes
requiring that an existing service be provided in a shorter time.
Sec. 2. [3.987] [LOCAL IMPACT TO NOTES FOR STATE-MANDATED
ACTIONS.]
Subdivision 1. [LOCAL IMPACT NOTES.] The commissioner of
finance shall coordinate the development of a local impact note
for any proposed legislation introduced after June 30, 1997, or
any rule proposed after June 30, 1998, upon request of the chair
or the ranking minority member of either legislative tax
committee. The local impact note must be prepared as provided
in section 3.98, subdivision 2, and made available to the public
upon request. If the action is among the exceptions listed in
section 3.988, a local impact note need not be requested nor
prepared. The commissioner shall make a reasonable and timely
estimate of the local fiscal impact on each type of political
subdivision that would result from the proposed legislation.
The commissioner of finance may require any political
subdivision or the commissioner of an administrative agency of
the state to supply in a timely manner any information
determined to be necessary to determine local fiscal impact.
The political subdivision, its representative association, or
commissioner shall convey the requested information to the
commissioner of finance with a signed statement to the effect
that the information is accurate and complete to the best of its
ability. The political subdivision, its representative
association, or commissioner, when requested, shall update its
determination of local fiscal impact based on actual cost or
revenue figures, improved estimates, or both.
Subd. 2. [MANDATE EXPLANATIONS.] Any bill introduced in
the legislature after June 30, 1997, that seeks to impose
program or financial mandates on political subdivisions must
include an attachment from the author that gives appropriate
responses to the following guidelines. It must state and list:
(1) the policy goals that are sought to be attained, the
performance standards that are to be imposed, and an explanation
why the goals and standards will best be served by requiring
compliance by political subdivisions;
(2) performance standards that will allow political
subdivisions flexibility and innovation of method in achieving
those goals;
(3) the reasons for each prescribed standard and the
process by which each standard governs input such as staffing
and other administrative aspects of the program;
(4) the sources of additional revenue, in addition to
existing funding for similar programs, that are directly linked
to imposition of the mandates that will provide adequate and
stable funding for their requirements;
(5) what input has been obtained to ensure that the
implementing agencies have the capacity to carry out the
delegated responsibilities; and
(6) the reasons why less intrusive measures such as
financial incentives or voluntary compliance would not yield the
equity, efficiency, or desired level of statewide uniformity in
the proposed program.
Subd. 3. [LOCAL INVOLVEMENT; LAWS.] Any bill introduced in
the legislature after June 30, 1997, that seeks to impose a
program or financial mandate on political subdivisions must
include an attachment prepared by the author that describes the
efforts put forth, if any, to involve political subdivisions in
the creation or development of the proposed mandate.
Subd. 4. [NO MANDATE RESTRICTION.] Except as specifically
provided by this article, nothing in this article restricts or
eliminates the authority of the state to create or impose
programs by law upon political subdivisions.
Sec. 3. [3.988] [EXCEPTIONS TO LOCAL IMPACT NOTES.]
Subdivision 1. [COSTS RESULTING FROM INFLATION.] A local
impact note need not be prepared for increases in the cost of
providing an existing service if the increases result directly
from inflation. "Resulting directly from inflation" means
attributable to maintaining an existing level of service rather
than increasing the level of service. A cost-of-living increase
in welfare benefits is an example of a cost resulting directly
from inflation.
Subd. 2. [COSTS NOT THE RESULT OF A NEW PROGRAM OR
INCREASED SERVICE.] A local impact note need not be prepared for
increased local costs that do not result from a new program or
an increased level of service.
Subd. 3. [MISCELLANEOUS EXCEPTIONS.] A local impact note
or an attachment as provided in section 3.987, subdivision 2,
need not be prepared for the cost of a mandated action if the
law, including a rulemaking, containing the mandate:
(1) accommodates a specific local request;
(2) results in no new local government duties;
(3) leads to revenue losses from exemptions to taxes;
(4) provided only clarifying or conforming, nonsubstantive
charges on local government;
(5) imposes additional net local costs that are minor (less
than $200 for any single local government if the mandate does
not apply statewide or less than $3,000,000 if the mandate is
statewide) and do not cause a financial burden on local
government;
(6) is a law or executive order enacted before July 1,
1997, or a rule initially implementing a law enacted before July
1, 1997;
(7) implements something other than a law or executive
order, such as a federal, court, or voter-approved mandate;
(8) defines a new crime or redefines an existing crime or
infraction;
(9) results in savings that equal or exceed costs;
(10) requires the holding of elections;
(11) ensures due process or equal protection;
(12) provides for the notification and conduct of public
meetings;
(13) establishes the procedures for administrative and
judicial review of actions taken by political subdivisions;
(14) protects the public from malfeasance, misfeasance, or
nonfeasance by officials of political subdivisions;
(15) relates directly to financial administration,
including the levy, assessment, and collection of taxes;
(16) relates directly to the preparation and submission of
financial audits necessary to the administration of state laws;
or
(17) requires uniform standards to apply to public and
private institutions without differentiation.
Sec. 4. [3.989] [REIMBURSEMENT TO LOCAL POLITICAL
SUBDIVISIONS FOR COSTS OF STATE MANDATES.]
Subdivision 1. [DEFINITIONS.] In this section:
(1) "Class A state mandates" means those laws under which
the state mandates to political subdivisions, their
participation, the organizational structure of the program, and
the procedural regulations under which the law must be
administered; and
(2) "Class B state mandates" means those mandates that
allow the political subdivisions to opt for administration of a
law with program elements mandated beforehand and with an
assured revenue level from the state of at least 90 percent of
full program and administrative costs.
Subd. 2. [REPORT.] The commissioner of finance shall
prepare by September 1, 1998, and by September 1 of each
even-numbered year thereafter, a report by political
subdivisions of the costs of class A state mandates established
after June 30, 1997.
The commissioner shall annually include the statewide total
of the statement of costs of class A mandates as a notation in
the state budget for the next fiscal year.
Subd. 3. [CERTAIN POLITICAL SUBDIVISIONS; REPORT.] The
political subdivisions that have opted to administer class B
state mandates shall report to the commissioner of finance by
September 1, 1998, and by September 1 of each year thereafter,
identifying each instance when revenue for a class B state
mandate has fallen below 85 percent of the total cost of the
program and the political subdivision intends to cease
administration of the program.
The commissioner shall forward a copy of the report to the
chairs of the appropriate funding committees of the senate and
the house for proposed inclusion of the shortfall as a line item
appropriation in the state budget for the next fiscal year.
The political subdivision may exercise its option to cease
administration only if the legislature has failed to include the
shortfall as an appropriation in the state budget for the next
fiscal year.
Subd. 4. [EXEMPTIONS.] Laws and executive orders
enumerated in section 3.988 are exempted from this section.
Sec. 5. [14.431] [PERIODIC REVIEW OF ADMINISTRATIVE
RULES.]
Subdivision 1. [DEFINITIONS.] The terms defined in section
3.986, subdivision 1, apply to this section.
Subd. 2. [SIGNIFICANT FINANCIAL IMPACT.] The commissioner
of finance shall review, every five years, rules adopted after
June 30, 1998, that have significant financial impact upon
political subdivisions. In this section, "significant financial
impact" means requiring local political subdivisions to expand
existing services, employ additional personnel, or increase
local expenditures. The commissioner shall determine the costs
and benefits of each rulemaking and submit a report to the
legislative coordinating commission with its opinion, if any,
for the continuation, modification, or elimination of the rules
in the rulemaking.
Sec. 6. Minnesota Statutes 1996, section 273.1398,
subdivision 8, is amended to read:
Subd. 8. [APPROPRIATION.] (a) An amount sufficient to pay
the aids and credits provided under this section for school
districts, intermediate school districts, or any group of school
districts levying as a single taxing entity, is annually
appropriated from the general fund to the commissioner of
children, families, and learning. An amount sufficient to pay
the aids and credits provided under this section for counties,
cities, towns, and special taxing districts is annually
appropriated from the general fund to the commissioner of
revenue. A jurisdiction's aid amount may be increased or
decreased based on any prior year adjustments for homestead
credit or other property tax credit or aid programs.
(b) The commissioner of finance shall bill the commissioner
of revenue for the cost of preparation of local impact notes as
required by section 3.987 only to the extent to which those
costs exceed those costs incurred in fiscal year 1997 and for
any other new costs attributable to the local impact note
function required by section 3.987, not to exceed $100,000 in
fiscal year 1998 and $200,000 in fiscal year 1999 and thereafter.
The commissioner of revenue shall deduct the amount billed
under this paragraph from aid payments to be made to cities and
counties under subdivision 2 on a pro rata basis. The amount
deducted under this paragraph is appropriated to the
commissioner of finance for the preparation of local impact
notes.
Sec. 7. Minnesota Statutes 1996, section 477A.05, is
amended to read:
477A.05 [LOCAL PERFORMANCE AID.]
Subdivision 1. [QUALIFICATION.] By May 15, 1996, and March
31 25 of each year thereafter, the commissioner shall send a
local performance aid qualification form to each county and city
in the state. Jurisdictions that are eligible to receive the
aid must return the completed form by June 30 in order to
receive aid in the following calendar year. For each
determinator specified in subdivision 2, the form shall have a
space for the jurisdiction to indicate that it has satisfied the
conditions of the determinator. For counties, the form must be
signed by the chair of the county board. For cities, the form
must be signed by the mayor, if the city has a mayor, and a
member the chair of the city council. Applications may be filed
jointly by jurisdictions planning to spend the aid jointly.
Subd. 2. [ELIGIBILITY DETERMINATOR.] For calendar year
1997 1998 and subsequent calendar years, a jurisdiction is
eligible to receive local performance aid if the jurisdiction
affirms that it (1) the aid will result in a reduction in
property taxes at least equal to the amount of aid received, and
(2) the jurisdiction will spend the aid on programs for which it
has developed a system of performance measures for the services
provided by the jurisdiction, and that these measures are will
allow for the measurement of continuous improvement and will be
regularly compiled and presented to the county board or the city
council at least once a year. The jurisdiction must identify
the program or programs that are to be funded with the aid. A
jurisdiction is also eligible for aid under this determinator if
it affirms that it is in the process of developing and
implementing a system of performance measures for the program or
programs for which the aid is being sought; however, eligibility
based upon being in the process of development may not be used
for more than two consecutive years aid amounts under this
section may not be spent on the program or programs until the
performance measurement system has been instituted, unless the
aid is being used to establish the performance measurement
system.
Subd. 3. [DETERMINATION OF AID AMOUNT.] The commissioner
shall sum the populations of all jurisdictions that have met the
condition conditions specified in subdivision 2. The
commissioner shall determine a per capita aid amount by dividing
the aggregate aid available under subdivision 5 by the sum of
the populations for all qualifying jurisdictions, separately for
counties and cities. Each jurisdiction shall then be eligible
for aid equal to the jurisdictions's population times the per
capita aid amount. For purposes of this subdivision, population
means the most recent population established under section
477A.011, subdivision 3, in the year in which the aid is
determined.
Subd. 4. [NOTIFICATION AND PAYMENT.] Jurisdictions shall
be notified of their aid under this section at the same time as
the notification for aid under section 477A.014, subdivision 1.
Payments of aid under this section shall be made on the dates
prescribed in section 477A.015.
Subd. 5. [APPROPRIATION.] (a) For payments to counties
under this section, there is annually appropriated from the
general fund to the commissioner of revenue an amount equal to
the sum of $558,625 plus the amount by which county aids were
reduced under Laws 1996, chapter 471, article 3, section 49,
adjusted for inflation as provided under section 477A.03,
subdivision 3. For payments to cities under this section, there
is annually appropriated from the general fund to the
commissioner of revenue an amount equal to the sum of $441,735
plus the amount by which city aids were reduced under Laws 1996,
chapter 471, article 3, section 49, adjusted for inflation as
provided under section 477A.03, subdivision 3.
(b) For aids payable in 1998 under this section, an
additional amount of $560,000 for counties and $440,000 for
cities is appropriated from the general fund to the commissioner
of revenue.
Sec. 8. [REPEALER.]
Minnesota Statutes 1996, section 3.982, is repealed.
Sec. 9. [EFFECTIVE DATE.]
Section 7 is effective beginning with aids payable in 1998.
ARTICLE 12
REGIONAL DEVELOPMENT COMMISSIONS
Section 1. Minnesota Statutes 1996, section 462.381, is
amended to read:
462.381 [TITLE.]
Sections 462.381 to 462.398 may be cited as the "regional
development act of 1969."
Sec. 2. Minnesota Statutes 1996, section 462.383, is
amended to read:
462.383 [PURPOSE: GOVERNMENT COOPERATION AND
COORDINATION.]
Subdivision 1. [LEGISLATIVE FINDINGS.] The legislature
finds that problems of growth and development in urban and rural
regions of the state so transcend the boundary lines of local
government units that no single unit can plan for their solution
without affecting other units in the region; that various
multicounty planning activities conducted under various laws of
the United States are presently being conducted in an
uncoordinated manner that coordination of multijurisdictional
activities is essential to the development and implementation of
effective policies and programs; that intergovernmental
cooperation on a regional basis is an effective means of pooling
the resources of local government to approach common problems;
and that the assistance of the state is needed to make the most
effective use of local, state, federal, and private programs in
serving the citizens of such urban and rural regions.
Subd. 2. [BY CREATING REGIONAL COMMISSION.] It is the
purpose of sections 462.381 to 462.398 to facilitate
intergovernmental cooperation and to insure the orderly and
harmonious coordination of state, federal, and local
comprehensive planning and development programs for the solution
of economic, social, physical, and governmental problems of the
state and its citizens by providing for the creation of regional
development commissions authorize the establishment of regional
development commissions to work with and on behalf of local
units of government to develop plans or implement programs to
address economic, social, physical, and governmental concerns of
each region of the state. The commissions may assist with,
develop, or implement plans or programs for individual local
units of government.
Sec. 3. Minnesota Statutes 1996, section 462.384,
subdivision 5, is amended to read:
Subd. 5. [DEVELOPMENT REGION, REGION.] "Development
region" or "region" means a geographic region composed of a
grouping of counties embodied in an executive order of the
governor or as otherwise established by sections 462.381 to
462.398.
Sec. 4. Minnesota Statutes 1996, section 462.385,
subdivision 1, is amended to read:
Subdivision 1. [BY GOVERNOR'S ORDER; HEARINGS.]
Development regions for the state shall be those regions so
designated by the governor by executive order. The order shall
provide for public hearings within each proposed region after
which any county may request assignment to a region other than
that proposed by the order. If a request for reassignment is
unacceptable to the commissioner, the county shall remain in the
originally designated region until the next session of the
legislature for its review and final assignment. consist of the
following counties:
Region 1: Kittson, Roseau, Marshall, Pennington, Red Lake,
Polk, and Norman.
Region 2: Lake of the Woods, Beltrami, Mahnomen,
Clearwater, and Hubbard.
Region 3: Koochiching, Itasca, St. Louis, Lake, Cook,
Aitkin, and Carlton.
Region 4: Clay, Becker, Wilkin, Otter Tail, Grant,
Douglas, Traverse, Stevens, and Pope.
Region 5: Cass, Wadena, Crow Wing, Todd, and Morrison.
Region 6E: Kandiyohi, Meeker, Renville, and McLeod.
Region 6W: Big Stone, Swift, Chippewa, Lac Qui Parle, and
Yellow Medicine.
Region 7E: Mille Lacs, Kanabec, Pine, Isanti, and Chisago.
Region 7W: Stearns, Benton, Sherburne, and Wright.
Region 8: Lincoln, Lyon, Redwood, Pipestone, Murray,
Cottonwood, Rock, Nobles, and Jackson.
Region 9: Sibley, Nicollet, LeSueur, Brown, Blue Earth,
Waseca, Watonwan, Martin, and Faribault.
Region 10: Rice, Goodhue, Wabasha, Steele, Dodge, Olmsted,
Winona, Freeborn, Mower, Fillmore, and Houston.
Region 11: Anoka, Hennepin, Ramsey, Washington, Carver,
Scott, and Dakota.
Sec. 5. Minnesota Statutes 1996, section 462.385,
subdivision 3, is amended to read:
Subd. 3. [ONGOING BOUNDARY STUDIES; CHANGES.] The
commissioner shall conduct continuous studies and analysis of
the boundaries of regions and shall make recommendations for
their modification where necessary. Modification of regional
boundaries may be initiated by a county, a commission, or by the
commissioner and will be accomplished in accordance with this
section as in the case of initial designation requesting
assignment to a region other than that within which it is
designated. If a request for reassignment is unacceptable to
the commission whose boundaries would be modified, the county
requesting reassignment shall remain in the originally
designated region until the legislature determines the final
assignment.
Sec. 6. Minnesota Statutes 1996, section 462.386,
subdivision 1, is amended to read:
Subdivision 1. [EXCEPTION, WORKING AGREEMENTS.] All
coordination, planning, and development regions assisted or
created by the state of Minnesota or pursuant to federal
legislation shall conform to the regions designated by the
executive order except where, after review and approval by the
commissioner governor or designee, nonconformance is clearly
justified. The commissioner governor or designee shall develop
working agreements with state and federal departments and
agencies to insure conformance with this subdivision.
Sec. 7. Minnesota Statutes 1996, section 462.387, is
amended to read:
462.387 [REGIONAL DEVELOPMENT COMMISSIONS; ESTABLISHMENT.]
Subdivision 1. [PETITION.] Any combination of counties or
municipalities representing a majority of the population of the
region for which a commission is proposed may petition the
commissioner governor or designee by formal resolution setting
forth its desire to establish, and the need for, the
establishment of a regional development commission. For
purposes of this section the population of a county does not
include the population of a municipality within the county.
Subd. 1a. [OPERATING COMMISSION.] Regional development
commissions shall be those organizations operating pursuant to
sections 462.381 to 462.398 which were formed by formal
resolution of local units of government and those which may
petition by formal resolution to establish a regional
development commission.
Subd. 3. [ESTABLISHMENT.] Upon receipt of a petition as
provided in subdivision 1 a regional development commission
shall be established by the commissioner governor or designee
and the notification of all local government units within the
region for which the commission is proposed shall be notified.
The notification shall be made within 60 days of
the commissioner's governor's receipt of a petition under
subdivision 1.
Subd. 4. [SELECTION OF MEMBERSHIP.] The commissioner
governor or designee shall call together each of the membership
classifications except citizen groups, defined in section
462.388, within 60 days of the establishment of a regional
development commission for the purpose of selecting the
commission membership.
Subd. 5. [NAME OF COMMISSION.] The name of the
organization shall be determined by formal resolution of the
commission.
Sec. 8. Minnesota Statutes 1996, section 462.388, is
amended to read:
462.388 [COMMISSION MEMBERSHIP.]
Subdivision 1. [REPRESENTATION OF VARIOUS MEMBERS.] A
commission shall consist of the following members:
(1) one member from each county board of every county in
the development region;
(2) one additional county board member from each county of
over 100,000 population;
(3) the town clerk, town treasurer, or one member of a town
board of supervisors from each county containing organized
towns;
(4) one additional member selected by the county board of
any county containing no townships;
(5) one mayor or council member from a municipality of
under 10,000 population from each county, selected by the mayors
of all such municipalities in the county;
(6) one mayor or council member from each municipality of
over 10,000 in each county;
(7) two school board members elected by a majority of the
chairs of school boards in the development region;
(8) one member from each council of governments;
(9) one member appointed by each native American tribal
council located in each region; and
(10) citizens representing public interests within the
region including members of minority groups to be selected after
adoption of the bylaws of the commission; and
(10) the chair, who shall be selected by the commission.
Subd. 2. [TERMS, SELECTION METHOD.] The terms of office
and method of selection of members other than the chair shall be
provided in the bylaws of the commission which shall not be
inconsistent with the provisions of subdivision 1. The
commission shall adopt rules setting forth its procedures.
Subd. 5. [PER DIEM; BOARD MEMBERS.] Members of the
regional commission may receive a per diem of not over $35 $50,
the amount to be determined by the commission, and shall be
reimbursed for their reasonable expenses as determined by the
commission. The commission shall may provide for the election
of a board of directors, who need not be commission members, and
provide, at its discretion, for a per diem of not over $35 $50 a
day for meetings of the board and expenses. A member of the
board of directors who is a member of the commission shall
receive only the per diem payable to board members when meetings
of the board of directors and the commission are held on the
same day.
Sec. 9. Minnesota Statutes 1996, section 462.389,
subdivision 1, is amended to read:
Subdivision 1. [CHAIR.] The chair of the commission shall
have been a resident of the region for at least one year and
shall be a person experienced in the field of government
affairs. The chair shall preside at the meetings of the
commission and board of directors, appoint all employees
thereof, subject to the approval of the commission, and be
responsible for carrying out all policy decisions of the
commission. The chair's expense allowances shall be fixed by
the commission. The term of the first chair shall be one year,
and the chair shall serve until a successor is selected and
qualifies. At the expiration of the term of the first chair,
the chair shall be elected from the membership of the commission
according to procedures established in its bylaws.
Sec. 10. Minnesota Statutes 1996, section 462.389,
subdivision 3, is amended to read:
Subd. 3. [EXECUTIVE DIRECTOR.] Upon the recommendation of
the chair, The commission may appoint an executive director to
serve as the chief administrative officer. The director may be
chosen from among the citizens of the nation at large, and shall
be selected on the basis of training and experience in the field
of government affairs.
Sec. 11. Minnesota Statutes 1996, section 462.389,
subdivision 4, is amended to read:
Subd. 4. [EMPLOYEES.] The commission may prepare, in
consultation with the state commissioner of employee relations,
and may adopt a merit personnel system for its officers and
employees including terms and conditions for the employment, the
fixing of compensation, their classification, benefits, and the
filing of performance and fidelity bonds, and such policies of
insurance as it may deem advisable, the premiums for which,
however, shall be paid for by the commission. Officers and
employees are public employees within the meaning of chapter
353. The commission shall make the employer's contributions to
pension funds of its employees.
Sec. 12. Minnesota Statutes 1996, section 462.39,
subdivision 2, is amended to read:
Subd. 2. [FEDERAL REGIONAL PROGRAMS.] The commission is
the authorized agency to receive state and federal grants public
and private funds for regional purposes from the following
programs:
(1) Section 403 of the Public Works and Economic
Development Act of 1965 (economic development districts);
(2) Section 701 of the Housing Act of 1954, as amended
(multicounty comprehensive planning);
(3) Omnibus Crime Control Act of 1968;
and for the following to the extent feasible as determined
by the governor:
(a) Economic Opportunity Act of 1964;
(b) Comprehensive Health Planning Act of 1965;
(c) Federal regional manpower planning programs;
(d) Resource, conservation, and development districts; or
(e) Any state and federal programs providing funds
for including, but not limited to program administration,
multicounty planning, coordination, and development
purposes. The director shall, where consistent with state and
federal statutes and regulations, review applications for all
state and federal regional planning and development grants to a
commission.
Sec. 13. Minnesota Statutes 1996, section 462.39,
subdivision 3, is amended to read:
Subd. 3. [PLANNING.] The commission shall may prepare and
adopt submit for adoption, after appropriate study and such
public hearings as may be necessary, a comprehensive development
plan plans for local units of government, individually or
collectively, within the region. The plan shall Plans may
consist of a compilation of policy statements, goals, standards,
programs, and maps prescribing guides for an orderly and
economic development, public and private, of the region. The
comprehensive development plan within the jurisdiction subject
to the plan. The plans shall recognize and incorporate planning
principles which encompass physical, social, or economic needs
of the region, and those future developments which will have an
impact on the entire region including but not limited to such
matters as land use, parks and open space land needs, access to
direct sunlight for solar energy systems, the necessity for and
location of airports, highways, transit facilities, public
hospitals, libraries, schools, public and private, housing, and
other public buildings. In preparing the development plan plans
the commission shall use to the maximum extent feasible the
resources studies and data available from other planning
agencies within the region, including counties, municipalities,
special districts, and subregional planning agencies, and it
shall utilize the resources of the director state agencies to
the same purpose. No development plan or portion thereof for
the region shall be adopted by the commission until it has been
submitted to the director for review and comment and a period of
60 days has elapsed after such submission. When a development
plan has been adopted, the commission shall distribute it to all
local government units within the region.
Sec. 14. Minnesota Statutes 1996, section 462.391, is
amended by adding a subdivision to read:
Subd. 1a. [REVIEW OF LOCAL PLANS.] The commission may
review and provide comments and recommendations on local plans
or development proposals which in the judgment of the commission
have a substantial effect on regional development. Local units
of government may request that a regional commission review,
comment, and provide advisory recommendations on local plans or
development proposals.
Sec. 15. Minnesota Statutes 1996, section 462.391, is
amended by adding a subdivision to read:
Subd. 2a. [STAFF SERVICES.] To avoid duplication of staff
for various regional bodies assisted by federal or state
government, the commission may provide basic administrative,
research, and planning services for all regional planning and
development bodies. The commissions may contract to obtain or
perform services with state agencies, for-profit or nonprofit
entities, subdistricts organized as the result of federal or
state programs, councils of governments organized under section
471.59, or any other law, and with local governments.
Sec. 16. Minnesota Statutes 1996, section 462.391, is
amended by adding a subdivision to read:
Subd. 3a. [DATA AND INFORMATION.] The commission may be
designated as a regional data center providing data collection,
storage, analysis, and dissemination to be used by it and other
governmental and private users, and may accept gifts or grants
to provide this service.
Sec. 17. Minnesota Statutes 1996, section 462.391,
subdivision 5, is amended to read:
Subd. 5. [URBAN AND RURAL RESEARCH.] Where studies have
not been otherwise authorized by law the commission may study
the feasibility of programs relating including, but not limited
to, water, land use, economic development, minority problems
housing, demographics, cultural issues, governmental problems
issues, human and services, natural resources,
communication, technology, transportation, and other subjects of
concern to the citizens of the region, may institute
demonstration projects in connection therewith, and may enter
into contracts or accept gifts or grants for such purposes as
otherwise authorized in sections 462.381 to 462.398.
Sec. 18. Minnesota Statutes 1996, section 462.391, is
amended by adding a subdivision to read:
Subd. 11. [PROGRAM OPERATION.] Upon approval of the
appropriate authority from local, state, and federal government
units, commissions may be regarded as general purpose units of
government to receive funds and operate programs on a regional
or subregional basis to provide economies of scale or to enhance
program efficiency.
Sec. 19. Minnesota Statutes 1996, section 462.391, is
amended by adding a subdivision to read:
Subd. 12. [PROPERTY OWNERSHIP.] A commission may buy,
lease, acquire, own, hold, improve, and use real or personal
property or an interest in property, wherever located in the
state for purposes of housing the administrative office of the
regional commission.
Sec. 20. Minnesota Statutes 1996, section 462.391, is
amended by adding a subdivision to read:
Subd. 13. [PROPERTY DISPOSITION.] A commission may sell,
convey, mortgage, create a security interest in, lease,
exchange, transfer, or dispose of all or part of its real or
personal property or an interest in property, wherever located
in the state.
Sec. 21. Minnesota Statutes 1996, section 462.393, is
amended to read:
462.393 [ANNUAL REPORT TO UNITS, PUBLIC, GOVERNOR,
LEGISLATURE.]
Subdivision 1. [CONTENTS.] On or before August September 1
of each year, the commission shall prepare a report for the
governmental units, the public within the region, the
legislature and the governor. The report shall include:
(1) A statement of the commission's receipts and
expenditures by category since the preceding report;
(2) A detailed budget for the year in which the report is
filed and a tentative budget for the following year including an
outline of its program for such period;
(3) A description of any comprehensive plan adopted in
whole or in part for the region;
(4) Summaries of any studies and the recommendations
resulting therefrom made for the region;
(5) A listing of all applications for federal grants or
loans made by governmental units within the region together with
the action taken by the commission in relation thereto summary
of significant accomplishments;
(6) A listing of plans of local governmental units
submitted to the region, and actions taken in relationship
thereto;
(7) Recommendations of the commission regarding federal and
state programs, cooperation, funding, and legislative needs; and
(8) A summary of any audit report made during the previous
year by the state auditor relative to the commission.
Subd. 2. [ASSESSMENT EVERY 5 YEARS.] In 1981 2001 and
every five years thereafter the commission shall review its
activities and issue a report assessing its performance in
fulfilling the purposes of the regional development act of
1969. The report shall state address whether the existence of
the commission is in the public welfare and interest. The
report shall be included in the report required by subdivision 1.
Sec. 22. Minnesota Statutes 1996, section 462.394, is
amended to read:
462.394 [CITIZEN PARTICIPATION AND ADVISORY COMMITTEES.]
The commission may appoint advisory committees of
interested and affected citizens to assist in the review of
plans, programs, and other matters referred for review by the
commission. Whenever a special advisory committee is required
by any federal or state regional program the commission chair
shall, as far as practical, appoint such committees as advisory
groups to the commission. Members of the advisory committees
shall serve without compensation but shall be reimbursed for
their reasonable expenses as determined by the commission.
Sec. 23. Minnesota Statutes 1996, section 462.396,
subdivision 1, is amended to read:
Subdivision 1. [GRANTMAKING, TAX LEVY.] The director
governor and the legislature shall determine the amount of state
assistance and designate an agency to make grants to any
commission created under sections 462.381 to 462.398 from
appropriations made available for those purposes, provided a
work program is submitted acceptable to the director. Any
regional commission may levy a tax on all taxable property in
the region to provide money for the purposes of sections 462.381
to 462.398.
Sec. 24. Minnesota Statutes 1996, section 462.396,
subdivision 3, is amended to read:
Subd. 3. [GIFTS, GRANTS, LOANS.] The commission is a
special purpose unit of government which may accept gifts, apply
for and use grants or loans of money or other property from the
United States, the state, or any person, local or governmental
body for any commission purpose and may enter into agreements
required in connection therewith and may hold, use, and dispose
of such moneys or property in accordance with the terms of the
gift, grant, loan, agreement, or contract relating thereto.
For purposes of receipt of state or federal funds for
community and economic development, regional commissions shall
be considered general purpose units of government.
Sec. 25. Minnesota Statutes 1996, section 462.396,
subdivision 4, is amended to read:
Subd. 4. [ACCOUNTING; CHECKS; ANNUAL AUDIT.] The
commission shall keep an accurate account of its receipts and
disbursement. Disbursements of funds of the commission shall be
made by check signed by the chair or vice-chair or secretary of
the commission and countersigned by the executive director or an
authorized deputy thereof after such auditing and approval of
the expenditure as may be provided by rules of the commission.
The state auditor shall may audit the books and accounts of the
commission once each year, or as often as funds and personnel of
the state auditor permit. The commission shall pay to the state
the total cost and expenses of such examination, including the
salaries paid to the auditors while actually engaged in making
such examination. The general fund shall be credited with all
collections made for any such examination. In lieu of an annual
audit by the state auditor, the commission may shall contract
with a certified public accountant for the annual audit of the
books and accounts of the commission. If a certified public
accountant performs the audit, the commission shall send a copy
of the audit to the state auditor.
Sec. 26. Minnesota Statutes 1996, section 462.398, is
amended to read:
462.398 [TERMINATION OF COMMISSION.]
Subdivision 1. [PETITION; POPULATION.] Any combination of
counties or municipalities representing a majority of the
population of the region for which a commission exists may
petition the director governor by formal resolution stating that
the existence of the commission is no longer in the public
welfare and interest and is not needed to accomplish the
purposes of the regional development act of 1969. For purposes
of this section the population of a county does not include the
population of a municipality within the county. Any formal
resolution adopted by the governing body of a county or
municipality for the termination of a commission shall be
effective for a period of one year for the purpose of
determining the requisite population of the region needed to
petition the director governor.
Subd. 2. [HEARINGS; RECOMMENDATION, TERMINATION DATE.]
Within 35 days of the receipt filing of the petition, the
director governor or designee shall fix a time and place within
the region for a hearing. The director shall give notice of the
hearing by publication once each week for two successive weeks
before the date of the hearing in a legal newspaper in each of
the counties which the commission represents. The hearing shall
be conducted by members of the commission. If the commission
determines that the existence of the commission is no longer in
the public welfare and interest and that it is not needed to
accomplish the purposes of the regional development act of 1969,
the commission shall recommend to the director governor or
designee that the director governor or designee terminate the
commission. Within 60 days after receipt of the recommendation,
the director governor or designee shall terminate the commission
by giving notice of the termination to all government units
within the region for which the commission was established.
Unless otherwise provided by this subdivision, the hearing shall
be in accordance with sections 14.001 to 14.69.
Subd. 3. [30 MONTHS BETWEEN PETITIONS.] The
director governor or designee shall not accept a petition for
termination more than once in 30 months for each regional
development commission.
Sec. 27. [REPEALER.]
Minnesota Statutes 1996, sections 462.384, subdivision 7;
462.385, subdivision 2; 462.389, subdivision 5; 462.391,
subdivisions 1, 2, 3, 4, 6, 7, 8, and 9; and 462.392, are
repealed.
ARTICLE 13
WASTE MANAGEMENT TAXES
Section 1. Minnesota Statutes 1996, section 270B.01,
subdivision 8, is amended to read:
Subd. 8. [MINNESOTA TAX LAWS.] For purposes of this
chapter only, "Minnesota tax laws" means the taxes administered
by or paid to the commissioner under chapters 289A (except taxes
imposed under sections 298.01, 298.015, and 298.24), 290, 290A,
291, and 297A, and 297H and sections 295.50 to 295.59, or any
similar Indian tribal tax administered by the commissioner
pursuant to any tax agreement between the state and the Indian
tribal government, and includes any laws for the assessment,
collection, and enforcement of those taxes.
Sec. 2. Minnesota Statutes 1996, 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) The furnishing for a consideration of parking services,
whether on a contractual, hourly, or other periodic basis,
except for parking at a meter;
(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) detective 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) mixed municipal solid waste 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) (viii) 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;
(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
(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. 3. Minnesota Statutes 1996, 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 Lola and Rudy Perpich 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, service cooperatives, secondary
vocational cooperative centers, special education cooperatives,
joint purchasing cooperatives, telecommunication cooperatives,
regional management information centers, 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 cataloguing and
circulation equipment, and cataloguing 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 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, 473.448, 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. 4. Minnesota Statutes 1996, section 297A.25,
subdivision 16, is amended to read:
Subd. 16. [SALES TO NONPROFIT GROUPS.] The gross receipts
from the sale of tangible personal property to, and the storage,
use or other consumption of such property by, any corporation,
society, association, foundation, or institution organized and
operated exclusively for charitable, religious, or educational
purposes if the property purchased is to be used in the
performance of charitable, religious, or educational functions,
or any senior citizen group or association of groups that in
general limits membership to persons who are either (1) age 55
or older, or (2) physically disabled, and is organized and
operated exclusively for pleasure, recreation, and other
nonprofit purposes, no part of the net earnings of which inures
to the benefit of any private shareholders, are exempt. For
purposes of this subdivision, charitable purpose includes the
maintenance of a cemetery owned by a religious organization.
Sales exempted by this subdivision include sales pursuant to
section 297A.01, subdivision 3, paragraphs (d) and (f), but do
not include sales under section 297A.01, subdivision 3,
paragraph (j), clause (vii). This exemption shall not apply to
building, construction, or reconstruction materials purchased by
a contractor or a subcontractor as a part of a lump-sum contract
or similar type of contract with a guaranteed maximum price
covering both labor and materials for use in the construction,
alteration, or repair of a building or facility. This exemption
does not apply to construction materials purchased by tax exempt
entities or their contractors to be used in constructing
buildings or facilities which will not be used principally by
the tax exempt entities. This exemption does not apply to the
leasing of a motor vehicle as defined in section 297B.01,
subdivision 5.
Sec. 5. Minnesota Statutes 1996, section 297A.44,
subdivision 1, is amended to read:
Subdivision 1. (a) Except as provided in paragraphs
(b), and (c), and (d), all revenues, including interest and
penalties, derived from the excise and use taxes imposed by
sections 297A.01 to 297A.44 shall be deposited by the
commissioner in the state treasury and credited to the general
fund.
(b) All excise and use taxes derived from sales and use of
property and services purchased for the construction and
operation of an agricultural resource project, from and after
the date on which a conditional commitment for a loan guaranty
for the project is made pursuant to section 41A.04, subdivision
3, shall be deposited in the Minnesota agricultural and economic
account in the special revenue fund. The commissioner of
finance shall certify to the commissioner the date on which the
project received the conditional commitment. The amount
deposited in the loan guaranty account shall be reduced by any
refunds and by the costs incurred by the department of revenue
to administer and enforce the assessment and collection of the
taxes.
(c) All revenues, including interest and penalties, derived
from the excise and use taxes imposed on sales and purchases
included in section 297A.01, subdivision 3, paragraphs (d) and
(l), clauses (1) and (2), must be deposited by the commissioner
in the state treasury, and credited as follows:
(1) first to the general obligation special tax bond debt
service account in each fiscal year the amount required by
section 16A.661, subdivision 3, paragraph (b); and
(2) after the requirements of clause (1) have been met, the
balance must be credited to the general fund.
(d) The revenues, including interest and penalties, derived
from the taxes imposed on solid waste collection services as
described in section 297A.45, shall be deposited by the
commissioner in the state treasury and credited to the general
fund to be used for funding solid waste reduction and recycling
programs.
Sec. 6. [297H.01] [SOLID WASTE MANAGEMENT TAX
DEFINITIONS.]
Subdivision 1. [SCOPE.] When used in this chapter, the
following terms have the meanings given to them in this
section. For terms not defined in this section, the definitions
contained in chapter 115A are incorporated into this chapter.
Subd. 2. [COMMERCIAL GENERATOR.] "Commercial generator"
means any of the following:
(1) an owner or operator of a business, including a
home-operated business, industry, church, nursing home,
nonprofit organization, school, or any other commercial or
institutional enterprise that generates mixed municipal solid
waste or non-mixed-municipal solid waste; or
(2) any other generator of taxable waste that is not a
residential generator defined in subdivision 8. A commercial
generator does not include a self-hauler.
Subd. 3. [CUBIC YARD.] "Cubic yard" means a cubic yard of
non-mixed-municipal solid waste that is not compacted.
Subd. 4. [MARKET PRICE.] "Market price" means the lowest
price available in the area, assuming transactions between
separate parties that are willing buyers and willing sellers in
a market.
Subd. 5. [MIXED MUNICIPAL SOLID WASTE.] "Mixed municipal
solid waste" means mixed municipal solid waste as defined in
section 115A.03, subdivision 21.
Subd. 6. [NON-MIXED-MUNICIPAL SOLID
WASTE.] "Non-mixed-municipal solid waste" means:
(1) infectious waste as defined in section 116.76,
subdivision 12;
(2) pathological waste as defined in section 116.76,
subdivision 14;
(3) industrial waste as defined in section 115A.03,
subdivision 13a; and
(4) construction debris as defined in section 115A.03,
subdivision 7.
Subd. 7. [PERIODIC WASTE COLLECTION.] "Periodic waste
collection" means each time a waste container is emptied by the
person that collects the non-mixed-municipal solid waste at the
point that the waste has been aggregated for collection by the
generator.
Subd. 8. [RESIDENTIAL GENERATOR.] "Residential generator"
means any of the following:
(1) a detached single family residence that generates mixed
municipal solid waste or non-mixed-municipal solid waste;
(2) a person residing in a building or site containing
multiple residences that generates mixed municipal solid waste,
including apartment buildings, condominiums, manufactured home
parks, or townhomes, where each residence is separately billed
by the waste service provider;
(3) an owner of a building or site containing multiple
residences or an association representing residences that
generate mixed municipal solid waste or non-mixed-municipal
solid waste, including apartment buildings, condominiums,
manufactured home parks, or townhomes where no residence is
separately billed for such service by the waste management
service provider and the owner or association is billed directly
for the waste management services. A residential generator does
not include a self-hauler.
Subd. 9. [SALES PRICE.] "Sales price" means total
consideration valued in money for waste management services,
excluding separately stated charges for exemptions listed under
section 297H.06.
Subd. 10. [SELF-HAULER.] "Self-hauler" means a person who
transports mixed municipal solid waste or non-mixed-municipal
solid waste generated by that person or another person without
compensation.
Subd. 11. [WASTE MANAGEMENT SERVICE PROVIDER.] "Waste
management service provider" means the person who directly bills
the generator or self-hauler for waste management services, and
includes, but is not limited to, waste-haulers, waste management
facilities, utility services, and political subdivisions, to the
extent they directly bill for waste management services.
Subd. 12. [WASTE MANAGEMENT SERVICES.] "Waste management
services" means waste collection, transportation, processing,
and disposal.
Sec. 7. [297H.02] [RESIDENTIAL GENERATORS.]
Subdivision 1. [IMPOSITION.] (a) A tax is imposed upon the
sales price of mixed municipal solid waste management services
received by a residential generator.
(b) The tax is imposed upon the difference between the
market price and the tip fee at a processing or disposal
facility where the tip fee is less than the market price and the
political subdivision subsidizes the cost of service at the
facility. The political subdivision is liable for the tax.
(c) The tax is imposed upon the market price of waste
management services where a political subdivision directly bills
on a property tax statement for organized collection of mixed
municipal solid waste. The political subdivision is liable for
the tax.
(d) The political subdivision shall, by resolution,
identify the market price. The political subdivision shall
submit the market price to the director of the office of
environmental assistance for review by October 1 of the year
prior to the calendar year in which the market price will be in
effect. The prices that the state pays for waste management
services in that jurisdiction or the county where the
jurisdiction is located must be a guideline in determining the
market price. The director shall consult with the commissioner
of the pollution control agency in reviewing the market price
and shall inform the political subdivisions of any necessary
changes to market price by November 15 of that year. The market
price shall be effective as of January 1 of the next calendar
year following review. The director may consider adjustment to
the market price if a political subdivision submits a resolution
for adjustment by May 1 of any year. The effective date of the
adjustment shall be July 1.
If the commissioner of revenue believes a market price
declared by resolution is not accurate, the commissioner may
request that the office of environmental assistance advise the
political subdivision to identify by resolution an updated
market price and submit the updated market price to the office
of environmental assistance for review.
Subd. 2. [RATES.] The rate of tax under this section is
9.75 percent.
Subd. 3. [SALES PRICE OF BAGS, STICKERS, OR OTHER
INDICIA.] When the sales price of a bag, sticker, or other
indicia includes mixed municipal solid waste management services
for residential generators, the tax on the bag, sticker, and
other indicia sold by vendors on behalf of a political
subdivision or waste hauler shall be collected when the bag,
sticker, or other indicia are sold to the vendor by the
political subdivision or waste hauler, and shall be taxed at the
rate imposed under subdivision 2. The solid waste management
service and the solid waste management tax shall be included in
the sales price of the bag, sticker, or other indicia.
Sec. 8. [297H.03] [MIXED MUNICIPAL SOLID WASTE COMMERCIAL
GENERATORS.]
Subdivision 1. [IMPOSITION.] (a) A tax is imposed upon the
sales price of mixed municipal solid waste management services
received by a commercial generator.
(b) The tax is imposed upon the difference between the
market price and the tip fee at a processing or disposal
facility where the tip fee is less than the market price and the
political subdivision subsidizes the cost of service at the
facility. The political subdivision is liable for the tax.
(c) The tax is imposed upon the market price of waste
management services where a political subdivision directly bills
on a property tax statement for organized collection of mixed
municipal solid waste. The political subdivision is liable for
the tax.
(d) Section 297H.02, subdivision 1, paragraph (d), applies
to paragraphs (b) and (c) of this subdivision.
Subd. 2. [RATE.] The rate of the tax under this section is
17 percent.
Subd. 3. [SALES PRICE OF BAGS, STICKERS, OR OTHER
INDICIA.] When the sales price of a bag, sticker, or other
indicia includes mixed municipal solid waste management services
for commercial generators, the tax on the bag, sticker, and
other indicia sold by vendors on behalf of a political
subdivision or waste hauler shall be collected when the bag,
sticker, or other indicia are sold to the vendor by the
political subdivision or waste hauler, and shall be taxed at the
rate imposed under subdivision 2. The solid waste management
service and the solid waste management tax shall be included in
the sales price of the bag, sticker, or other indicia.
Sec. 9. [297H.04] [NON-MIXED-MUNICIPAL SOLID WASTE.]
Subdivision 1. [IMPOSITION.] A tax is imposed upon the
volume of non-mixed-municipal solid waste that is managed.
Subd. 2. [RATE.] (a) Commercial generators that generate
non-mixed-municipal solid waste shall pay a solid waste
management tax of 60 cents per noncompacted cubic yard of
periodic waste collection capacity purchased by the generator,
based on the size of the container for the non-mixed-municipal
solid waste, the actual volume, or the weight-to-volume
conversion schedule in paragraph (c). However, the tax must be
calculated by the waste management service provider using the
same method for calculating the waste management service fee so
that both are calculated according to container capacity, actual
volume, or weight.
(b) Notwithstanding section 297H.02, a residential
generator that generates non-mixed-municipal solid waste shall
pay a solid waste management tax in the same manner as provided
in paragraph (a).
(c) The weight-to-volume conversion schedule for:
(1) construction debris as defined in section 115A.03,
subdivision 7, is one ton equals 3.33 cubic yards, or $2 per
ton;
(2) industrial waste as defined in section 115A.03,
subdivision 13a, is equal to 60 cents per cubic yard. The
commissioner of revenue after consultation with the commissioner
of the pollution control agency, shall determine, and may
publish by notice, a conversion schedule for various industrial
wastes; and
(3) infectious waste as defined in section 116.76,
subdivision 12, and pathological waste as defined in section
116.76, subdivision 14, is 150 pounds equals one cubic yard, or
60 cents per 150 pounds.
Sec. 10. [297H.05] [SELF-HAULERS.]
(a) A self-hauler of mixed municipal solid waste shall pay
the tax to the operator of the waste management facility to
which the waste is delivered at the rate imposed under section
297H.03, based on the sales price of the waste management
services.
(b) A self-hauler of non-mixed-municipal solid waste shall
pay the tax to the operator of the waste management facility to
which the waste is delivered at the rate imposed under section
297H.04.
(c) The tax imposed on the self-hauler of
non-mixed-municipal solid waste may be based either on the
capacity of the container, the actual volume, or the
weight-to-volume conversion schedule in paragraph (d). However,
the tax must be calculated by the operator using the same method
for calculating the tipping fee so that both are calculated
according to container capacity, actual volume, or weight.
(d) The weight-to-volume conversion schedule for:
(1) construction debris as defined in section 115A.03,
subdivision 7, is one ton equals 3.33 cubic yards, or $2 per
ton;
(2) industrial waste as defined in section 115A.03,
subdivision 13a, is equal to 60 cents per cubic yard. The
commissioner of revenue, after consultation with the
commissioner of the pollution control agency, shall determine,
and may publish by notice, a conversion schedule for various
industrial wastes; and
(3) infectious waste as defined in section 116.76,
subdivision 12, and pathological waste as defined in section
116.76, subdivision 14, is 150 pounds equals one cubic yard, or
60 cents per 150 pounds.
Sec. 11. [297H.06] [EXEMPTIONS.]
Subdivision 1. [CERTAIN SURCHARGES OR FEES.] The amount of
a surcharge, fee, or charge established pursuant to section
115A.919, 115A.921, 115A.923, or 473.843 is exempt from the
solid waste management tax. The amount shown on a property tax
statement as a county charge for solid waste management service
or as a surcharge, fee, or charge established pursuant to
section 400.08, subdivision 3, or section 473.811, subdivision
3a, is exempt from the solid waste management tax. The
exemption does not apply to the tax imposed on market price
under section 297H.02, subdivision 1, paragraphs (b) and (c), or
section 297H.03, subdivision 1, paragraphs (b) and (c).
Subd. 2. [MATERIALS.] The tax is not imposed upon charges
to generators of mixed municipal solid waste or upon the volume
of non-mixed-municipal solid waste for waste management services
to manage the following materials:
(1) mixed municipal solid waste and non-mixed-municipal
solid waste generated outside of Minnesota;
(2) recyclable materials that are separated for recycling
by the generator, collected separately from other waste, and
recycled, to the extent the price of the service for handling
recyclable material is separately itemized;
(3) recyclable non-mixed-municipal solid waste that is
separated for recycling by the generator, collected separately
from other waste, delivered to a waste facility for the purpose
of recycling, and recycled;
(4) industrial waste, when it is transported to a facility
owned and operated by the same person that generated it;
(5) mixed municipal solid waste from a recycling facility
that separates or processes recyclable materials and reduces the
volume of the waste by at least 85 percent, provided that the
exempted waste is managed separately from other waste;
(6) recyclable materials that are separated from mixed
municipal solid waste by the generator, collected and delivered
to a waste facility that recycles at least 85 percent of its
waste, and are collected with mixed municipal solid waste that
is segregated in leakproof bags, provided that the mixed
municipal solid waste does not exceed five percent of the total
weight of the materials delivered to the facility and is
ultimately delivered to a waste facility identified as a
preferred waste management facility in county solid waste plans
under section 115A.46;
(7) through December 31, 2002, source-separated compostable
waste, if the waste is delivered to a facility exempted as
described in this clause. To initially qualify for an
exemption, a facility must apply for an exemption in its
application for a new or amended solid waste permit to the
pollution control agency. The first time a facility applies to
the agency it must certify in its application that it will
comply with the criteria in items (i) to (v) and the
commissioner of the agency shall so certify to the commissioner
of revenue who must grant the exemption. For each subsequent
calendar year, by October 1 of the preceding year, the facility
must apply to the agency for certification to renew its
exemption for the following year. The application must be filed
according to the procedures of, and contain the information
required by, the agency. The commissioner of revenue shall
grant the exemption if the commissioner of the pollution control
agency finds and certifies to the commissioner of revenue that
based on an evaluation of the composition of incoming waste and
residuals and the quality and use of the product:
(i) generators separate materials at the source;
(ii) the separation is performed in a manner appropriate to
the technology specific to the facility that:
(A) maximizes the quality of the product;
(B) minimizes the toxicity and quantity of residuals; and
(C) provides an opportunity for significant improvement in
the environmental efficiency of the operation;
(iii) the operator of the facility educates generators, in
coordination with each county using the facility, about
separating the waste to maximize the quality of the waste stream
for technology specific to the facility;
(iv) process residuals do not exceed 15 percent of the
weight of the total material delivered to the facility; and
(v) the final product is accepted for use; and
(8) waste and waste by-products for which the tax has been
paid.
Sec. 12. [297H.07] [BILLING.]
The amount of the tax imposed under this chapter shall be
itemized separately on the generator's bill, and shall be
designated as the "solid waste management tax."
Sec. 13. [297H.08] [PAYMENT; REPORTING.]
(a) The waste management service provider, or a political
subdivision specified in section 297H.02, subdivision 1, and
section 297H.03, subdivision 1, shall report the tax on a return
prescribed by the commissioner of revenue, and shall remit the
tax with the return. The return and the tax must be filed using
the filing cycle and due dates provided for taxes imposed under
chapter 297A.
(b) The waste hauler or political subdivision that sells
bags, stickers, or other indicia to vendors must report and
remit the tax imposed by section 297H.02, subdivision 3, and
section 297H.03, subdivision 3, on a return prescribed by the
commissioner of revenue, and shall remit the tax with the
return. The return and the tax must be filed using the filing
cycle provided for taxes imposed under chapter 297A.
(c) Any partial payments received by waste management
service providers for waste management services shall be
prorated between the tax imposed under section 297H.02, 297H.03,
or 297H.04 and the service.
Sec. 14. [297H.09] [BAD DEBTS.]
The remitter of the solid waste management tax may offset
against the tax payable, with respect to any reporting period,
the amount of tax imposed by this chapter previously remitted to
the commissioner of revenue which qualified as a bad debt under
section 166(a) of the Internal Revenue Code, as amended through
December 31, 1993, during such reporting period, but only in
proportion to the portion of such debt which became
uncollectable. This section applies only to accrual basis
remitters that remit tax before it is collected and to the
extent they are unable to collect the tax.
Sec. 15. [297H.10] [ADMINISTRATION; ENFORCEMENT; PENALTY.]
Subdivision 1. [ADMINISTRATION AND ENFORCEMENT.] The
audit, assessment, refund, penalty, interest, enforcement,
collection remedies, appeal, and administrative provisions of
chapters 270 and 289A that are applicable to taxes imposed under
chapter 297A apply to this chapter.
Subd. 2. [PENALTY.] If the form prescribed by the
commissioner of revenue for remitting the tax is the sales tax
return, a penalty is imposed on a person or political
subdivision who fails to separately report the amount of tax due
under this chapter. The specified penalties are ten percent for
the first violation and 20 percent for the second and subsequent
violations. The penalty applies only to that portion of the tax
that should have been reported on the separate lines for the tax
due under this chapter and that was included on other lines of
the sales tax return.
Sec. 16. [297H.11] [REQUIREMENTS AND POTENTIAL LIABILITY
OF WASTE MANAGEMENT SERVICE PROVIDERS.]
Subdivision 1. [REQUIREMENTS.] Waste management service
providers are required to:
(1) separately and accurately state the amount of the tax
in the appropriate statement of charges for waste management
services, or other statement if there are no charges for waste
management services, and in any action to enforce payment on
delinquent accounts;
(2) accurately account for and remit tax received; and
(3) work with the commissioner of revenue to ensure that
generators pay the tax.
Subd. 2. [LIABILITY.] A waste management service provider
is liable for an amount equal to the solid waste management tax
that was either:
(1) received by the waste management service provider but
not timely remitted to the commissioner of revenue; or
(2) not received by the waste management service provider
and the waste management service provider failed to separately
and accurately state the amount of the tax in the appropriate
statement of charges for waste management services and in any
action to enforce payment on delinquent accounts.
Subd. 3. [RECOVERY.] A person who is liable under
subdivision 2 is not prohibited from recovering from the
generator or self-hauler the amount of the liability paid to the
commissioner of revenue that is equal to the solid waste
management tax owed by the generator or self-hauler.
Sec. 17. [297H.12] [INFORMATION REGARDING THE SOLID WASTE
MANAGEMENT TAX.]
The director of the office of environmental assistance,
after consulting with the commissioner of revenue, the
commissioner of the pollution control agency, and waste
management service providers, shall develop information
regarding the solid waste management tax for distribution to
waste generators in the state. The information shall include
facts about the substitution of the solid waste management tax
for the sales tax on solid waste services and the solid waste
generator assessment and the purposes for which revenue from the
tax will be spent.
Sec. 18. [297H.13] [DEPOSIT OF REVENUES; USE OF PROCEEDS;
FUNDING SHORTFALLS; REPORT ON RECEIPTS.]
Subdivision 1. [DEPOSIT OF REVENUES.] The revenues derived
from the taxes imposed on waste management services under this
chapter, less the costs to the department of revenue for
administering the tax under this chapter, shall be deposited by
the commissioner of revenue in the state treasury.
The amounts retained by the department of revenue shall be
deposited in a separate revenue department fund which is hereby
created. Money in this fund is hereby appropriated, up to a
maximum annual amount of $200,000, to the commissioner of
revenue for the costs incurred in administration of the solid
waste management tax under this chapter.
Subd. 2. [ALLOCATION OF REVENUES.] (a) $22,000,000, or 50
percent, whichever is greater, of the amounts remitted under
this chapter must be credited to the solid waste fund
established in section 115B.42.
(b) The remainder must be deposited into the general fund.
Subd. 3. [FUNDING SHORTFALLS.] If less than $22,000,000 is
projected to be available for new encumbrances in any fiscal
year after fiscal year 1999 from all existing dedicated revenue
sources for landfill cleanup and reimbursement costs under
sections 115B.39 to 115B.445, by October 1 before the next
fiscal year in which the shortfall is projected, the
commissioner of the pollution control agency shall certify to
the commissioner of revenue the amount of the shortfall and
notify persons required to collect and remit the tax. To
provide for the shortfall, the commissioner of revenue shall
increase the tax under sections 297H.03, 297H.04, and 297H.05,
proportionately for both mixed municipal solid waste and
non-mixed-municipal solid waste, by an amount sufficient to
generate revenue equal to the amount of the shortfall effective
the following January 1 and shall provide notice of the
increased assessment by November 1 following certification to
persons who are required to collect and remit the tax under this
chapter.
Subd. 4. [EXCESS REVENUE ADJUSTMENT.] If the total tax
revenues collected from the taxes imposed under this chapter in
fiscal year 1999 is projected to exceed $44,500,000, the
commissioner of revenue shall decrease proportionately the
amount of the tax under sections 297H.02, 297H.03, 297H.04, and
297H.05, by an amount sufficient to eliminate the excess
effective October 1, 1999, and shall provide notice of the
decreased tax by August 1, 1999, to waste management service
providers.
Subd. 5. [REPORT ON RECEIPTS.] The commissioner of revenue
shall report to the chairs of the house and senate environment
and natural resources committees; the house environment and
natural resources finance division; the senate environment and
agriculture budget division; the house tax committee and the
senate taxes and tax laws committee; the commissioner of the
pollution control agency; and the director of the office of
environmental assistance on the total tax revenues received from
the taxes imposed under this chapter. The reports shall be made
as follows:
(1) a report by May 31, 1998, based on amounts received by
the commissioner of revenue from January 1, 1998, through April
30, 1998;
(2) a report by September 30, 1998, based on amounts
received by the commissioner of revenue from May 1, 1998,
through August 31, 1998; and
(3) a report by January 31, 1999, based on amounts received
by the commissioner of revenue from September 1, 1998, through
December 31, 1998.
Subd. 6. [ORGANIZED COLLECTION BILLING PRACTICES.] In
preparing the report required under section 115A.981, including
the duty to consider information filed by political subdivisions
under section 115A.929, the commissioner of the pollution
control agency shall report the extent, if any, to which the
solid waste management tax is not being collected on the full
cost of organized collection service because of billings that do
not reflect the full cost of service.
Sec. 19. [MORATORIUM.]
The commissioner of revenue shall not initiate or continue
any action to collect any underpayment from political
subdivisions, or to reimburse any overpayment to any political
subdivisions, of use taxes on solid waste management services
under Minnesota Statutes, section 297A.45, for the period from
January 1, 1990, through December 31, 1996.
Sec. 20. [REPEALER.]
Minnesota Statutes 1996, sections 116.07, subdivision 10;
297A.01, subdivision 21; and 297A.45, as amended by Laws 1997,
chapter 84, article 3, section 8, are repealed.
Sec. 21. [EFFECTIVE DATES.]
Sections 1 to 18 and 20 are effective January 1, 1998.
Section 19 is effective the day following final enactment.
ARTICLE 14
SENIOR CITIZENS PROPERTY TAX DEFERRAL
Section 1. Minnesota Statutes 1996, section 270B.12, is
amended by adding a subdivision to read:
Subd. 12. [PROPERTY TAX DEFERRAL.] The commissioner may
disclose to a county auditor and treasurer, and to their
designated agents or employees, the annual deferral amounts and
the cumulative deferral and interest as determined by the
commissioner under chapter 290B for each parcel of homestead
property in the county that is enrolled in the senior citizen
property tax deferral program under chapter 290B.
Sec. 2. Minnesota Statutes 1996, 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.
(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. If a school district has certified under
section 124A.03, subdivision 2, that a referendum will be held
in the school district at the November general election, the
county auditor must note next to the school district's proposed
amount that a referendum is pending and that, if approved by the
voters, the tax amount may be higher than shown on the notice.
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 under chapter 276A or 473F 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.
For purposes of this section, the amount of the tax on
homesteads qualifying under the senior citizens' property tax
deferral program under chapter 290B is the total amount of
property tax before subtraction of the deferred property tax
amount.
(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 used as the owner's homestead, the
assessor shall reclassify the property to homestead for taxes
payable in the following year.
(h) In the case of class 4 residential property used as a
residence for lease or rental periods of 30 days or more, the
taxpayer must either:
(1) mail or deliver a copy of the notice of proposed
property taxes to each tenant, renter, or lessee; or
(2) post a copy of the notice in a conspicuous place on the
premises of the property.
The notice must be mailed or posted by the taxpayer by
November 27 or within three days of receipt of the notice,
whichever is later. A taxpayer may notify the county treasurer
of the address of the taxpayer, agent, caretaker, or manager of
the premises to which the notice must be mailed in order to
fulfill the requirements of this paragraph.
(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.
(j) For taxes levied in 1996, payable in 1997 only, in the
case of a statutory or home rule charter city or town that
exercises the local levy option provided in section 473.388,
subdivision 7, the notice of its proposed taxes may include a
statement of the amount by which its proposed tax increase for
taxes payable in 1997 is attributable to its exercise of that
option, together with a statement that the levy of the
metropolitan council was decreased by a similar amount because
of the exercise of that option.
Sec. 3. Minnesota Statutes 1996, section 276.04,
subdivision 2, is amended to read:
Subd. 2. [CONTENTS OF TAX STATEMENTS.] (a) The treasurer
shall provide for the printing of the tax statements. The
commissioner of revenue shall prescribe the form of the property
tax statement and its contents. The statement must contain a
tabulated statement of the dollar amount due to each taxing
authority from the parcel of real property for which a
particular tax statement is prepared. The dollar amounts due
the county, township or municipality, the total of the
metropolitan special taxing districts as defined in section
275.065, subdivision 3, paragraph (i), school district excess
referenda levy, remaining school district levy, and the total of
other voter approved referenda levies based on market value
under section 275.61 must be separately stated. The amounts due
all other special taxing districts, if any, may be aggregated.
The amount of the tax on homesteads qualifying under the senior
citizens' property tax deferral program under chapter 290B is
the total amount of property tax before subtraction of the
deferred property tax amount. 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
(4);
(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) any deferred property tax amount under the senior
citizens' property tax deferral program under chapter 290B, as
well as the total deferred amount plus accrued interest; and
(8) the net tax payable in the manner required in paragraph
(a).
(d) If the county uses envelopes for mailing property tax
statements and if the county agrees, a taxing district may
include a notice with the property tax statement notifying
taxpayers when the taxing district will begin its budget
deliberations for the current year, and encouraging taxpayers to
attend the hearings. If the county allows notices to be
included in the envelope containing the property tax statement,
and if more than one taxing district relative to a given
property decides to include a notice with the tax statement, the
county treasurer or auditor must coordinate the process and may
combine the information on a single announcement.
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. 4. [290B.01] [PURPOSE.]
Minnesota's system of ad valorem property taxation does not
adequately recognize the unique financial circumstances of
homestead property owned and occupied by low-income senior
citizens. It is therefore declared to be in the public interest
of this state to stabilize tax burdens on homestead property
owned by qualifying low-income senior citizens through a
deferral of certain property taxes.
Sec. 5. [290B.02] [CITATION.]
This program shall be named the "senior citizens' property
tax deferral program."
Sec. 6. [290B.03] [DEFERRAL OF PROPERTY TAXES.]
Subdivision 1. [PROGRAM QUALIFICATIONS.] The
qualifications for the senior citizens' property tax deferral
program are as follows:
(1) the property must be owned and occupied as a homestead
by a person 65 years of age or older. In the case of a married
couple, both of the spouses must be at least 65 years old at the
time the first property tax deferral is granted, regardless of
whether the property is titled in the name of one spouse or both
spouses, or titled in another way that permits the property to
have homestead status;
(2) the total household income of the qualifying
homeowners, as defined in section 290A.03, subdivision 5, for
the calendar year preceding the year of the initial application
may not exceed $30,000;
(3) the homestead must have been owned and occupied as the
homestead of at least one of the qualifying homeowners for at
least 15 years prior to the year the initial application is
filed;
(4) there are no delinquent property taxes, penalties, or
interest on the homesteaded property;
(5) there are no delinquent special assessments on the
homesteaded property;
(6) there are no state or federal tax liens or judgment
liens on the homesteaded property;
(7) there are no mortgages or other liens on the property
that secure future advances, except for those subject to credit
limits that result in compliance with clause (8); and
(8) the total unpaid balances of debts secured by mortgages
and other liens on the property, including unpaid special
assessments, but not including property taxes payable during the
year, does not exceed 30 percent of the assessor's estimated
market value for the year.
Subd. 2. [QUALIFYING HOMESTEAD; DEFINED.] Qualifying
homestead property is defined as the dwelling occupied as the
homeowner's principal residence and so much of the land
surrounding it, not exceeding one acre, 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, subdivisions 22 and 23. The homestead may be part of a
multidwelling building and the land on which it is built.
Sec. 7. [290B.04] [APPLICATION FOR DEFERRAL.]
Subdivision 1. [INITIAL APPLICATION.] A taxpayer meeting
the program qualifications under section 290B.03 may apply to
the commissioner of revenue for the deferral of taxes.
Applications are due on or before July 1 for deferral of any of
the following year's property taxes. A taxpayer may apply in
the year in which the taxpayer becomes 65 years old, provided
that no deferral of property taxes will be made until the
calendar year after the taxpayer becomes 65 years old. The
application, which shall be prescribed by the commissioner of
revenue, shall include the following items and any other
information which the commissioner deems necessary:
(1) the name, address, and social security number of the
owner or owners;
(2) a copy of the property tax statement for the current
payable year for the homesteaded property;
(3) the initial year of ownership and occupancy as a
homestead;
(4) the owner's household income for the previous calendar
year; and
(5) information on any mortgage loans or other amounts
secured by mortgages or other liens against the property, for
which purpose the commissioner may require the applicant to
provide a copy of the mortgage note, the mortgage, or a
statement of the balance owing on the mortgage loan provided by
the mortgage holder. The commissioner may require the
appropriate documents in connection with obtaining and
confirming information on unpaid amounts secured by other liens.
The application must state that program participation is
voluntary. The application must also state that the deferred
amount depends directly on the applicant's household income, and
that program participation includes authorization for the
deferred amount for each year and the cumulative deferral and
interest to appear on each year's property tax statement as
public data.
Subd. 2. [APPROVAL; RECORDING.] The commissioner shall
approve all initial applications that qualify under this chapter
and shall notify qualifying homeowners on or before December 1.
The commissioner may investigate the facts or require
confirmation in regard to an application. The commissioner
shall record or file a notice of qualification for deferral,
including the names of the qualifying homeowners and a legal
description of the property, in the office of the county
recorder, or registrar of titles, whichever is applicable, in
the county where the qualifying property is located. The notice
must state that it serves as a notice of lien and that it
includes deferrals under this section for future years. The
homeowner shall pay the recording or filing fees.
Subd. 3. [ANNUAL CERTIFICATION BY TAXPAYER.] Annually on
or before July 1, a taxpayer whose initial application has been
approved under subdivision 2, shall complete the certification
form and return it to the commissioner of revenue. The
certification must state whether or not the taxpayer wishes to
have property taxes deferred for the following year provided the
taxes exceed the maximum property tax amount under section
290B.05. If the taxpayer does wish to have property taxes
deferred, the certification must state the homeowner's total
household income for the previous calendar year and any other
information which the commissioner deems necessary.
Sec. 8. [290B.05] [MAXIMUM PROPERTY TAX AMOUNT AND
DEFERRED PROPERTY TAX AMOUNT.]
Subdivision 1. [DETERMINATION BY COMMISSIONER.] The
commissioner shall annually determine the qualifying homeowner's
"maximum property tax amount" and "maximum allowable deferral."
The maximum property tax amount calculated for taxes payable in
the following year is equal to five percent of the homeowner's
total household income for the previous calendar year. No tax
may be deferred for any homeowner whose total household income
for the previous year exceeds $30,000. No tax shall be deferred
in any year in which the homeowner does not meet the program
qualifications in section 290B.03. The maximum allowable total
deferral is equal to 75 percent of the assessor's estimated
market value for the year, less (1) the balance of any mortgage
loans and other amounts secured by liens against the property at
the time of application, including any unpaid special
assessments but not including property taxes payable during the
year; and (2) any outstanding deferral and interest.
Subd. 2. [CERTIFICATION BY COMMISSIONER.] On or before
December 1, the commissioner shall certify to the county auditor
of the county in which the qualifying homestead is located (1)
the maximum property tax amount; (2) the maximum allowable
deferral for the year; and (3) the cumulative deferral and
interest for all years preceding the next taxes payable year.
Subd. 3. [CALCULATION OF DEFERRED PROPERTY TAX AMOUNT.]
When final property tax amounts for the following year have been
determined, the county auditor shall calculate the "deferred
property tax amount." The deferred property tax amount is equal
to the lesser of (1) the maximum allowable deferral for the
year; or (2) the difference between the total amount of property
taxes levied upon the qualifying homestead by all taxing
jurisdictions and the maximum property tax amount. Any special
assessments levied by any local unit of government must not be
included in the total tax used to calculate the deferred tax
amount. No deferral of the current year's property taxes is
allowed if there are any delinquent property taxes or delinquent
special assessments for any previous year. Any tax attributable
to new improvements made to the property after the initial
application has been approved under section 290B.04, subdivision
2, must be excluded when determining any subsequent deferred
property tax amount. The county auditor shall annually, on or
before April 15, certify to the commissioner of revenue the
property tax deferral amounts determined under this subdivision
by property and by owner.
Subd. 4. [LIMITATION ON TOTAL AMOUNT OF DEFERRED TAXES.]
On or before September 1 of each year, the commissioner shall
request, and each county or city assessor shall provide, the
current year's estimated market value of each property on the
list supplied by the commissioner that may be eligible for
deferral under this section for taxes payable in the following
year. The total amount of deferred taxes and interest on a
property, when added to (1) the balance owing on any mortgages
on the property at the time of initial application; and (2)
other amounts secured by liens on the property at the time of
the initial application, may not exceed 75 percent of the
assessor's current estimated market value of the property.
Sec. 9. [290B.06] [PROPERTY TAX REFUNDS.]
For purposes of qualifying for the regular property tax
refund or the special refund for homeowners under chapter 290A,
the qualifying tax is the full amount of taxes, including the
deferred portion of the tax. In any year in which a program
participant chooses to have property taxes deferred under this
section, any regular or special property tax refund awarded
based upon those property taxes must be taken first as a
deduction from the amount of the deferred tax for that year, and
second as a deduction against any outstanding deferral from
previous years, rather than as a cash payment to the homeowner.
The commissioner shall cancel any current year's deferral or
previous years' deferral and interest that is offset by the
property tax refunds. If the total of the regular and the
special property tax refund amounts exceeds the sum of the
deferred tax for the current year and cumulative deferred tax
and interest for previous years, the commissioner shall then
remit the excess amount to the homeowner. On or before the date
on which the commissioner issues property tax refunds, the
commissioner shall notify program participants of any reduction
in the deferred amount for the current and previous years
resulting from property tax refunds.
Sec. 10. [290B.07] [LIEN; DEFERRED PORTION.]
Payment by the state to the county treasurer of taxes
deferred under this section is deemed a loan from the state to
the program participant. The commissioner must compute the
interest as provided in section 270.75, subdivision 5, but not
to exceed five percent, and maintain records of the total
deferred amount and interest for each participant. Interest
shall accrue beginning September 1 of the payable year for which
the taxes are deferred. The lien created under section 272.31
continues to secure payment by the taxpayer, or by the
taxpayer's successors or assigns, of the amount deferred,
including interest, with respect to all years for which amounts
are deferred. The lien for deferred taxes and interest has the
same priority as any other lien under section 272.31, except
that liens, including mortgages, recorded or filed prior to the
recording or filing of the notice under section 290B.04,
subdivision 2, have priority over the lien for deferred taxes
and interest. A seller's interest in a contract for deed, in
which a qualifying homeowner is the purchaser or an assignee of
the purchaser, has priority over deferred taxes and interest on
deferred taxes, regardless of whether the contract for deed is
recorded or filed. The lien for deferred taxes and interest for
future years has the same priority as the lien for deferred
taxes and interest for the first year, which is always higher in
priority than any mortgages or other liens filed, recorded, or
created after the notice recorded or filed under section
290B.04, subdivision 2. The county treasurer or auditor shall
maintain records of the deferred portion and shall list the
amount of deferred taxes for the year and the cumulative
deferral and interest for all previous years as a lien against
the property on the property tax statement. In any
certification of unpaid taxes for a tax parcel, the county
auditor shall clearly distinguish between taxes payable in the
current year, deferred taxes and interest, and delinquent
taxes. Payment of the deferred portion becomes due and owing at
the time specified in section 290B.08. Upon receipt of the
payment, the commissioner shall issue a receipt for it to the
person making the payment upon request and shall notify the
auditor of the county in which the parcel is located, within ten
days, identifying the parcel to which the payment applies. Upon
receipt by the commissioner of revenue of collected funds in the
amount of the deferral, the state's loan to the program
participant is deemed paid in full.
Sec. 11. [290B.08] [TERMINATION OF DEFERRAL; PAYMENT OF
DEFERRED TAXES.]
Subdivision 1. [TERMINATION.] (a) The deferral of taxes
granted under this chapter terminates when one of the following
occurs:
(1) the property is sold or transferred;
(2) the death of the qualifying homeowner(s);
(3) the homeowner notifies the commissioner in writing that
the homeowner desires to discontinue the deferral; or
(4) the property no longer qualifies as a homestead.
(b) A property is not terminated from the program because
no deferred property tax amount is determined on the homestead
for any given year after the homestead's initial enrollment into
the program.
Subd. 2. [PAYMENT UPON TERMINATION.] Upon the termination
of the deferral under subdivision 1, the amount of deferred
taxes and interest plus the recording or filing fees under both
section 290B.04, subdivision 2, and this subdivision becomes due
and payable to the commissioner within 90 days of termination of
the deferral. No additional interest is due on the deferral if
timely paid. On receipt of payment, the commissioner shall
within ten days notify the auditor of the county in which the
parcel is located, identifying the parcel to which the payment
applies and shall remit the recording or filing fees under
section 290B.04, subdivision 2, and this subdivision to the
auditor. A notice of termination of deferral, containing the
legal description and the recording or filing data for the
notice of qualification for deferral under section 290B.04,
subdivision 2, shall be prepared and recorded or filed by the
county auditor in the same office in which the notice of
qualification for deferral under section 290B.04, subdivision 2,
was recorded or filed, and the county auditor shall mail a copy
of the notice of termination to the property owner. The
property owner shall pay the recording or filing fees. Upon
recording or filing of the notice of termination of deferral,
the notice of qualification for deferral under section 290B.04,
subdivision 2, and the lien created by it are discharged. If
the deferral is not timely paid, the penalty, interest, lien,
forfeiture, and other rules for the collection of ad valorem
property taxes apply.
Sec. 12. [290B.09] [STATE REIMBURSEMENT.]
Subdivision 1. [DETERMINATION; PAYMENT.] The commissioner
of revenue shall determine the deferred amount of property tax
in each county, basing determinations on a review of abstracts
of tax lists submitted by the county auditors under section
275.29. The commissioner may make changes in the abstracts of
tax lists as deemed necessary. The commissioner of revenue,
after such review, shall pay the deferred amount of property tax
to each county treasurer on or before August 31.
At least once each year, the commissioner shall report to
the county auditor the total cumulative amount of deferred taxes
and interest that constitute a lien against the property.
The county treasurer shall distribute as part of the
October settlement the funds received as if they had been
collected as a part of the property tax.
Subd. 2. [APPROPRIATION.] An amount sufficient to pay the
total amount of property tax determined under subdivision 1 is
annually appropriated from the general fund to the commissioner
of revenue.
Sec. 13. [DEPARTMENT OF REVENUE APPROPRIATION.]
There is appropriated to the commissioner of revenue
$33,000 for fiscal year 1999 for the purposes of administering
the provisions of this article.
Sec. 14. [EFFECTIVE DATE.]
Sections 1 to 12 are effective for deferral of property
taxes payable in 1999, and thereafter.
ARTICLE 15
INSURANCE PROVISIONS
Section 1. Minnesota Statutes 1996, section 60A.075,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] For the purposes of this
section, the terms in this subdivision have the meanings given
them.
(a) "Eligible member" means a policyholder whose policy is
in force as of the record date, which is the date that the
mutual company's board of directors adopts a plan of conversion
or some other date specified as the record date in the plan of
conversion and approved by the commissioner. Unless otherwise
provided in the plan, a person insured under a group policy is
not an eligible member, unless on the record date:
(1) the person is insured or covered under a group life
policy or group annuity contract under which funds are
accumulated and allocated to the respective covered persons;
(2) the person has the right to direct the application of
the funds so allocated;
(3) the group policyholder makes no contribution to the
premiums or deposits for the policy or contract; and
(4) the converting mutual company has the names and
addresses of the persons covered under the group life policy or
group annuity contract.
(b) "Reorganized company" means a Minnesota domestic stock
insurance company that has converted from a Minnesota domestic
mutual insurance company according to this section.
(c) "Plan of conversion" or "plan" means a plan adopted by
a Minnesota domestic mutual insurance company's board of
directors under this section to convert the mutual company into
a Minnesota domestic stock insurance company.
(d) "Policy" means a policy or contract of insurance issued
by a converting mutual company, including an annuity contract.
(e) "Commissioner" means the commissioner of commerce.
(f) "Converting mutual company" means a Minnesota domestic
mutual insurance company seeking to convert to a Minnesota
domestic stock insurance company according to this section.
(g) "Effective date of a conversion" means the date
determined according to subdivision 6.
(h) "Membership interests" means all policyholders' rights
as members of the converting mutual company, including but not
limited to, rights to vote and to participate in any
distributions of surplus, whether or not incident to the
company's liquidation.
(i) "Equitable surplus" means the converting mutual
company's surplus as regards policyholders as of the
effective record date of the conversion or other date approved
by the commissioner determined in a manner that is not unfair or
inequitable to policyholders.
(j) "Permitted issuer" means: (1) a corporation organized
and owned by the converting mutual company or by any other
insurance company or insurance holding company for the purpose
of purchasing and holding all of the stock securities
representing a majority of voting control of the reorganized
company; (2) a stock insurance company owned by the converting
mutual company or by any other insurance company or insurance
holding company into which the converting mutual company will be
merged; or (3) any other corporation approved by the
commissioner.
Sec. 2. Minnesota Statutes 1996, section 60A.075,
subdivision 8, is amended to read:
Subd. 8. [SHARE CONVERSION.] A plan of conversion under
this subdivision shall provide for exchange of policyholders'
membership interests in return for shares in the reorganized
company, according to paragraphs (a) to (c).
(a) The policyholders' membership interests shall be
exchanged, in a manner that takes into account the estimated
proportionate contribution of equitable surplus of each class of
participating policies and contracts, for all of the common
shares of the reorganized company or common shares of its parent
company or a permitted issuer, or for a combination of the
common shares of the reorganized company or common shares of its
parent company or a permitted issuer.
(b) Unless the anticipated issuance within a shorter period
is disclosed in the plan of conversion, the issuer of common
shares shall not, within two years after the effective date of
reorganization, issue either of the following:
(1) any of its common shares or any securities convertible
with or without consideration into the common shares or carrying
any warrant to subscribe to or purchase common shares; and
(2) any warrant, right, or option to subscribe to or
purchase the common shares or other securities described in
paragraph (a), except for the issue of common shares to or for
the benefit of policyholders according to the plan of conversion
and the issue of options nontransferable subscription rights for
the purchase of common shares being granted to officers,
directors, or employees a tax qualified employee benefit plan of
the reorganized company or its parent company, if any, or a
permitted issuer, according to this section subdivision 11.
(c) Unless the common shares have a public market when
issued, the issuer shall use its best efforts to encourage and
assist in the establishment of a public market for the common
shares within two years of the effective date of the conversion
or a longer period as disclosed in the plan of conversion.
Within one year after any offering of stock other than the
initial distribution, but no later than six years after the
effective date of the conversion, the reorganized company shall
offer to make available to policyholders who received and
retained shares of common stock or securities described in
paragraph (b), clause (1), a procedure to dispose of those
shares of stock at market value without brokerage commissions or
similar fees.
Sec. 3. Minnesota Statutes 1996, section 60A.075,
subdivision 9, is amended to read:
Subd. 9. [SURPLUS DISTRIBUTION.] A plan of conversion
under this subdivision shall provide for the exchange of the
policyholders' membership interests in return for the operation
of the converting mutual company's participating policies as a
closed block of business and for the distribution of the
company's equitable surplus to policyholders, and shall provide
for the issuance of new shares of the reorganized company or its
parent corporation, each according to paragraphs (a) to (i).
(a) The converting mutual company's participating business,
comprised of its participating policies and contracts in force
on the effective date of the conversion or other reasonable date
as provided in the plan, shall be operated by the reorganized
company as a closed block of participating business. However,
at the option of the converting mutual company, group policies
and group contracts may be omitted from the closed block.
(b) Assets of the converting mutual company must be
allocated to the closed block of participating business in an
amount equal to the reserves and liabilities for the converting
mutual life insurer's participating policies and contracts in
force on the effective date of the conversion. The plan must be
accompanied by an opinion of an independent qualified actuary
who meets the standards set forth in the insurance laws or
regulations for the submission of actuarial opinions as to the
adequacy of reserves or assets. The opinion must relate to the
adequacy of the assets allocated to support the closed block of
business. The actuarial opinion must be based on methods of
analysis considered appropriate for those purposes by the
Actuarial Standards Board.
(c) The reorganized company shall keep a separate
accounting for the closed block and shall make and include in
the annual statement to be filed with the commissioner each year
a separate statement showing the gains, losses, and expenses
properly attributable to the closed block.
(d) Notwithstanding the establishment of a closed block,
the entire assets of the reorganized company shall be available
for the payment of benefits to policyholders. Payment must
first be made from the assets supporting the closed block until
exhausted, and then from the general assets of the reorganized
company.
(e) The converting mutual company's equitable surplus shall
be distributed to eligible participating policyholders in a form
or forms selected by the converting mutual company. The form of
distribution may consist of cash, securities of the reorganized
company, securities of another institution, a certificate of
contribution, additional life insurance, annuity benefits,
increased dividends, reduced premiums, or other equitable
consideration or any combination of forms of consideration. The
consideration, if any, given to a class or category of
policyholders may differ from the consideration given to another
class or category of policyholders. A certificate of
contribution must be repayable in ten years, be equal to 100
percent of the value of the policyholders' membership interest,
and bear interest at the highest rate charged by the reorganized
company for policy loans on the effective date of the conversion.
(f) The consideration must be allocated among the
policyholders in a manner that is fair and equitable to the
policyholders.
(g) The reorganized company or its parent corporation shall
issue and sell shares of one or more classes having a total
price equal to the estimated value in the market of the shares
on the initial offering date. The estimated value must take
into account all of the following:
(1) the pro forma market value of the reorganized company;
(2) the consideration to be given to policyholders
according to paragraph (e);
(3) the proceeds of the sale of the shares; and
(4) any additional value attributable to the shares as a
result of a purchaser or a group of purchasers who acted in
concert to obtain shares in the initial offering, attaining,
through such purchase, control of the reorganized company or its
parent corporation.
(h) If a purchaser or a group of purchasers acting in
concert is to attain control in the initial offering, the mutual
company shall not, directly or indirectly, pay for any of the
costs or expenses of conversion of the mutual company, whether
or not the conversion is effected, except with permission of the
commissioner.
(i) Periodically, with the commissioner's approval, the
reorganized company may share in the profits of the closed block
of participating business for the benefit of stockholders if the
assets allocated to the closed block are in excess of those
necessary to support the closed block.
Sec. 4. Minnesota Statutes 1996, section 60A.077,
subdivision 1, is amended to read:
Subdivision 1. [FORMATION.] (a) A domestic mutual
insurance company, upon approval of the commissioner, may
reorganize by forming an insurance holding company based upon a
mutual plan and continuing the corporate existence of the
reorganizing insurance company as a stock insurance company.
The commissioner, if satisfied that the interests of the
policyholders are properly protected and that the plan of
reorganization is fair and equitable to the policyholders, may
approve the proposed plan of reorganization and may require as a
condition of approval the modifications of the proposed plan of
reorganization as the commissioner finds necessary for the
protection of the policyholders' interests. The commissioner
shall retain jurisdiction over the mutual insurance holding
company according to this section and chapter 60D to assure that
policyholder and member interests are protected.
(b) All of the initial voting shares of the capital stock
of the reorganized insurance company must be issued to the
mutual insurance holding company or to an intermediate stock
holding company that is wholly owned by the mutual insurance
holding company. The membership interests of the policyholders
of the reorganized insurance company become membership interests
in the mutual insurance holding company. "Membership interests"
means those interests described in section 60A.075, subdivision
1, paragraph (h). Policyholders of the reorganized insurance
company shall be members of the mutual insurance holding company
and their voting rights must be determined in accordance with
the articles of incorporation and bylaws of the mutual insurance
holding company. The mutual insurance holding company shall, at
all times, directly or through an one or more intermediate stock
holding company companies, control a majority of the voting
shares of the capital stock of the reorganized insurance
company, taking into account any potential dilution resulting
from convertible securities.
(c) A majority of the board of directors of a mutual
insurance holding company must be disinterested directors. For
purposes of this section, a director is disinterested if (i) the
director is not or has not within the past two years been an
officer or employee of the mutual insurance holding company or
any subsidiary or predecessor corporation, and (ii) the director
does not hold, directly or indirectly, a material ownership
interest in any subsidiary of the mutual insurance holding
company. An ownership interest is material if it represents
more than one-half of one percent of the voting securities of
the issuer, or a larger percentage as the commissioner may
approve.
Sec. 5. Minnesota Statutes 1996, section 60A.077,
subdivision 2, is amended to read:
Subd. 2. [MERGER.] (a) A domestic or foreign mutual
insurance company, upon the approval of the commissioner, may
reorganize by merging its policyholders' membership interests
into a mutual insurance holding company formed according to
subdivision 1 and continuing the corporate existence of the
reorganizing insurance company as a stock insurance company
subsidiary of the mutual insurance holding company or of an
intermediate stock holding company. "Membership interests"
means those interests described in section 60A.075, subdivision
1, paragraph (h). The commissioner, if satisfied that the
interests of the policyholder policyholders of the reorganizing
company and the interests of the existing members of the mutual
insurance holding company are properly protected and that the
merger is fair and equitable to the policyholders those parties,
may approve the proposed merger and may require as a condition
of approval the modifications of the proposed merger as the
commissioner finds necessary for the protection of the
policyholders' or members' interests. The commissioner shall
retain jurisdiction, under chapter 60D, over the mutual
insurance holding company organized according to this section to
assure that policyholder and member interests are protected.
(b) All of the initial voting shares of the capital stock
of the reorganized insurance company must be issued to the
mutual insurance holding company, or to an intermediate stock
holding company that is wholly owned by the mutual insurance
holding company. The membership interests of the policyholders
of the reorganized insurance company become membership interests
in the mutual insurance holding company. Policyholders of the
reorganized insurance company shall be members of the mutual
insurance holding company and their voting rights must be
determined according to the articles of incorporation and bylaws
of the mutual insurance holding company. The mutual insurance
holding company shall, at all times, directly or through one or
more intermediate stock holding companies, control a majority of
the voting shares of the capital stock of the reorganized
insurance company, taking into account any potential dilution
resulting from convertible securities.
(c) A domestic mutual insurance holding company may merge
with a domestic or foreign mutual insurance holding company in
the manner prescribed for the merger of insurance companies set
forth in section 60A.16, with any exceptions or modifications
the commissioner may approve.
Sec. 6. Minnesota Statutes 1996, section 60A.077,
subdivision 3, is amended to read:
Subd. 3. [PLAN OF REORGANIZATION; APPROVAL BY
COMMISSIONER.] (a) The A reorganizing or merging insurer or a
merging mutual insurance holding company shall file a plan of
reorganization, approved, by the affirmative vote of a majority
of its board of directors, for review and approval by the
commissioner adopt a plan of reorganization or merger consistent
with the requirements of this section and file the plan with the
commissioner. At any time before the approval of a plan by the
commissioner, the company, by the affirmative vote of a majority
of its directors, may amend or withdraw the plan. The plan must
provide for the following:
(1) in the case of a reorganization under subdivision 1,
establishing a mutual insurance holding company with at least
one stock insurance company subsidiary, the majority of shares
of which must be owned, either directly or through an
intermediate stock holding company, by the mutual insurance
holding company or in the case of a reorganization under
subdivision 2, a description of the terms and conditions of the
proposed merger;
(2) analyzing the benefits and risks attendant to the
proposed reorganization, including the rationale for the
reorganization and analysis of the comparative benefits and
risks of a demutualization under section 60A.075;
(3) protecting the immediate and long-term interests of
existing policyholders;
(4) ensuring immediate membership in the mutual insurance
holding company of all existing policyholders of the
reorganizing domestic insurance company;
(5) describing a plan providing for membership interests of
future policyholders;
(6) describing the number of members of the board of
directors of the mutual insurance holding company required to be
policyholders;
(7) ensuring that, in the event of proceedings under
chapter 60B involving a stock insurance company subsidiary of
the mutual insurance holding company that resulted from the
reorganization of a domestic mutual insurance company, the
assets of the mutual insurance holding company will be available
to satisfy the policyholder obligations of the stock insurance
company;
(8) for periodic distribution of accumulated holding
company earnings to members describing the mutual insurance
holding company's plan for distributions to members or other
uses of accumulated mutual holding company earnings;
(9) (8) describing the nature and content of the annual
report and financial statement to be sent to each member;
(10) (9) a copy of the proposed mutual insurance holding
company's articles of incorporation and bylaws specifying all
membership rights;
(11) (10) the names, addresses, and occupational
information of all corporate officers and members of the
proposed mutual insurance holding company board of directors;
(12) (11) information sufficient to demonstrate that the
financial condition of the reorganizing or merging company will
not be materially diminished upon reorganization, including
information concerning any subsidiaries of the reorganizing or
merging insurers that will become subsidiaries of the mutual
insurance holding company or an intermediate holding company as
part of the reorganization;
(13) (12) a copy of the articles of incorporation and
bylaws for any proposed insurance company subsidiary or
intermediate holding company subsidiary;
(14) (13) describing any plans for the an initial sale or
subscription of stock for or other securities of the reorganized
insurance company or any intermediate holding company; and
(15) (14) any other information requested by the
commissioner or required by rule.
(b) The commissioner may approve the plan upon finding that
the requirements of this section have been fully met and the
plan will protect the immediate and long-term interests of
policyholders.
(c) The commissioner may retain, at the reorganizing or
merging mutual company's expense, any qualified experts not
otherwise a part of the commissioner's staff to assist in
reviewing the plan.
(d) The commissioner may, but need not, conduct a public
hearing regarding the proposed plan. The hearing must be held
within 30 days after submission of a completed plan of
reorganization to the commissioner. The commissioner shall give
the reorganizing mutual company at least 20 days' notice of the
hearing. At the hearing, the reorganizing mutual company, its
policyholders, and any other person whose interest may be
affected by the proposed reorganization, may present evidence,
examine and cross-examine witnesses, and offer oral and written
arguments or comments according to the procedure for contested
cases under chapter 14. The persons participating may conduct
discovery proceedings in the same manner as prescribed for the
district courts of this state. All discovery proceedings must
be concluded no later than three days before the scheduled
commencement of the public hearing.
Sec. 7. Minnesota Statutes 1996, section 60A.077,
subdivision 5, is amended to read:
Subd. 5. [APPROVAL BY MEMBERS.] The plan shall be approved
by the members as provided in section 60A.075, subdivision 5. by
the eligible members described in paragraphs (a) to (c).
(a) In the case of a formation under subdivision 1, the
plan must be approved by the eligible members of the
reorganizing insurance company.
(b) In the case of a merger under subdivision 2, paragraph
(a), the plan must be approved by the eligible members of the
merging insurance company and by the eligible members of the
mutual insurance holding company into which the policyholders'
membership interests are to be merged. The vote of the eligible
members of the mutual insurance holding company is not required
if the commissioner determines that the merger would not be
material to the financial condition of the mutual insurance
holding company.
(c) In the case of a merger of two mutual insurance holding
companies under subdivision 2, paragraph (c), the plan must be
approved by the eligible members of both companies. The vote of
the eligible members of the surviving mutual holding company is
not required if the commissioner determines that the merger
would not be material to the financial condition of the
surviving company.
Sec. 8. Minnesota Statutes 1996, section 60A.077,
subdivision 6, is amended to read:
Subd. 6. [INCORPORATION.] A mutual insurance holding
company resulting from the reorganization of a domestic mutual
insurance company organized under chapter 300 shall be
incorporated pursuant to chapter 300. The articles of
incorporation and any amendments to the articles of the mutual
insurance holding company are subject to approval of the
commissioner in the same manner as those of an insurance
company. Members of a mutual insurance holding company shall be
entitled to vote on all matters required to be submitted to
members under chapter 300 and shall additionally be treated as
shareholders for purposes of the voting approval requirements of
section 300.09.
Sec. 9. Minnesota Statutes 1996, section 60A.077,
subdivision 7, is amended to read:
Subd. 7. [APPLICABILITY OF CERTAIN PROVISIONS.] (a) A In
the event of the insolvency of a mutual insurance holding
company, the mutual insurance holding company is considered to
be an insurer subject to chapter 60B. and shall automatically
be a party to any proceeding under chapter 60B involving an
insurance company that, as a result of a reorganization
according to subdivision 1 or 2, is a subsidiary of the mutual
insurance holding company. In any proceeding under chapter 60B
involving the reorganized insurance company, the assets of the
mutual insurance holding company are considered to be assets of
the estate of the reorganized insurance company for purposes of
satisfying the claims of the reorganized insurance company's
policyholders. A mutual insurance holding company shall not
dissolve or liquidate without the approval of the commissioner
or as ordered by the district a court according to chapter
60B of competent jurisdiction.
(b) A mutual insurance holding company is subject to
chapter 60D to the extent consistent with this section.
(c) As a condition to approval of the plan, the
commissioner may require the mutual insurance holding company to
comply with any provision of the insurance laws necessary to
protect the interests of the policyholders as if the mutual
insurance holding company were a domestic mutual insurance
company.
(d) No person or group of persons other than the chief
executive officer of a mutual insurance holding company, or the
chief executive officer's designee, shall seek to obtain proxies
from the members of the mutual insurance holding company for the
purposes of affecting a change of control of the mutual
insurance holding company unless that person or persons have
filed with the commissioner and have sent to the mutual
insurance holding company a statement containing the information
required by section 60D.17. Section 60D.17, subdivisions 2 to
7, apply in the event of a proxy solicitation regulated by this
paragraph.
(e) For purposes of this subdivision, the term "control,"
including the terms "controlling," "controlled by," and "under
common control with," means the possession, direct or indirect,
of the power to direct or cause the direction of the management
and policies of a person, whether through membership voting
interests, by contract other than a commercial contract for
goods or nonmanagement services, or otherwise, unless the power
is the result of an official position with, corporate office
held by, or court appointment of, the person. Control is
presumed to exist if any person, directly or indirectly, owns,
controls, holds with the power to vote, or holds proxies
representing, ten percent or more of the membership voting
interests of the mutual insurance holding company. This
presumption may be rebutted by a showing made in the manner
provided by section 60D.19, subdivision 11, that control does
not exist in fact. The commissioner may determine after
furnishing all persons in interest notice and opportunity to be
heard and making specific findings of fact to support the
determination, that control exists in fact, notwithstanding the
absence of a presumption to that effect.
Sec. 10. Minnesota Statutes 1996, section 60A.077,
subdivision 8, is amended to read:
Subd. 8. [APPLICABILITY OF DEMUTUALIZATION PROVISIONS.]
(a) Except as otherwise provided, section 60A.075 is not
applicable to a reorganization or merger according to this
section, except for section 60A.075, subdivisions 14 to 16.
(b) Section 60A.075 is applicable to demutualization of a
mutual insurance holding company that resulted from the
reorganization of a domestic mutual insurance company organized
under chapter 300 as if it were a mutual insurance company.
(c) Section 60A.075, subdivisions 14 to 16, are applicable
to a reorganization or merger under this section.
Sec. 11. Minnesota Statutes 1996, section 60A.077,
subdivision 9, is amended to read:
Subd. 9. [MEMBERSHIP INTERESTS.] A membership interest in
a domestic mutual insurance holding company does not constitute
a security as defined in section 80A.14, subdivision 18. No
member of a mutual insurance holding company may transfer or
pledge membership in the mutual insurance holding company or any
right arising from the membership except as attendant to the
valid transfer or assignment of the member's policy in any
reorganized company that gave rise to the member's membership
interest. A member of a mutual insurance holding company is
not, as a member, personally liable for the acts, debts,
liabilities, or obligations of the company. No assessments of
any kind may be imposed upon the members of a mutual insurance
holding company by the directors or members, or because of any
liability of any company owned or controlled by the mutual
insurance holding company or because of any act, debt, or
liability of the mutual insurance holding company. A member's
interest in the mutual insurance holding company shall
automatically terminate upon cancellation, nonrenewal,
expiration, or termination of the member's policy in any
insurance company that gave rise to the member's membership
interest.
Sec. 12. Minnesota Statutes 1996, section 60A.077,
subdivision 10, is amended to read:
Subd. 10. [FINANCIAL STATEMENT REQUIREMENTS.] (a) In
addition to any items required under chapter 60D, each mutual
insurance holding company shall file with the commissioner, by
April 1 of each year, an annual statement consisting of the
following:
(1) an income statement, balance sheet, and cashflow
statement prepared in accordance with generally accepted
accounting principles;
(2) complete information on the status of any closed block
formed as part of a plan of reorganization;
(3) an investment plan covering all assets; and
(4) a statement disclosing any intention to pledge, borrow
against, alienate, hypothecate, or in any way encumber the
assets of the mutual insurance holding company or an
intermediate stock holding company. Action taken according to
the statement is subject to the commissioner's prior written
approval.
(b) The aggregate pledges and encumbrances of a mutual
insurance holding company's assets shall not affect more than 49
percent of the company's stock in ownership of any subsidiary
insurance holding company or subsidiary insurance company that
resulted from a reorganization or merger.
(c) At least 50 percent of the generally accepted
accounting principles (GAAP) net worth of a mutual insurance
holding company must be invested in insurance company
subsidiaries.
Sec. 13. Minnesota Statutes 1996, section 60A.077,
subdivision 11, is amended to read:
Subd. 11. [SALE OF STOCK AND PAYMENT OF DIVIDENDS.] (a) A
reorganized insurance company and an intermediate stock holding
company may issue subscription rights and may issue or grant any
other securities, rights, options, and similar items to the same
extent as any business corporation organized under chapter
302A. However, except as provided in paragraphs (b) to (d),
no solicitation for the sale of the stock securities of the
reorganized insurance company, or of an intermediate stock
holding company of the mutual insurance holding company, that
directly or indirectly controls a majority of voting shares of
the reorganized insurance company, may be made without the
commissioner's prior written approval.
(b) A registration statement covering securities that has
been approved by the commissioner and filed with and declared
effective by the Securities and Exchange Commission under the
Securities Act of 1933 pursuant to any provision of that statute
or rule that allows registration of securities to be sold on a
delayed or continuous basis may be sold without further approval.
(c) Unless the commissioner has granted the mutual
insurance holding company a written exemption from the
requirements of this paragraph, any securities which are
regularly traded on the New York Stock Exchange, the American
Stock Exchange, or another exchange approved by the
commissioner, or designated on the National Association of
Securities Dealers automated quotations (NASDAQ) national market
system, shall be sold according to the procedure in this
paragraph. If the mutual insurance holding company, an
intermediate holding company, or a reorganized insurance company
intends to offer securities that are governed by this paragraph,
that entity shall deliver to the commissioner, not less than ten
days before the offering, a notice of the planned offering and
information regarding: (1) the approximate number of shares
intended to be offered; (2) the target date of sale; (3)
evidence the security is regularly traded on one of the public
exchanges noted above; and (4) the recent history of the trading
price and trading volume of the security. The commissioner is
considered to have approved the sale unless within ten days
following receipt of the notice, the commissioner issues an
objection to the sale. If the commissioner issues an objection
to the sale, the security may not be sold until the commissioner
issues an order approving the sale.
(d) A reorganized insurance company or intermediate holding
company that has issued securities that are regularly traded on
one of the exchanges or markets described in paragraph (c), may
establish stock option, incentive, and share ownership plans
customary for publicly traded companies in the same or similar
industries. If the reorganized insurance company or
intermediate holding company intends to establish a stock
option, incentive or share ownership plan, that entity shall
deliver to the commissioner, not less than 30 days before the
establishment of the plan, a notice of the proposed plan along
with any information about the proposed plan the commissioner
requires. The commissioner is considered to have approved the
plan unless within 30 days following receipt of the notice, the
commissioner issues an objection to the proposed plan. If the
commissioner issues an objection to the proposed plan, the plan
may not be established until the commissioner issues an order
approving the plan. If the commissioner approves the
establishment of the stock option, incentive, or share ownership
plan, the reorganized insurance company or the intermediate
holding company that obtained the approval may sell or issue
securities according to the approved plan without further
approval.
(e) The total number of shares of capital stock issued by
the reorganized insurance company or an intermediate holding
company that may be held by directors and officers of the mutual
insurance holding company, any intermediate holding company, and
of any reorganized insurance company, and acquired according to
subscription rights or stock option, incentive, and share
ownership plans, may not exceed the percentage limits set forth
in section 60A.075, subdivision 11, paragraph (b). Subject to
the requirements of subdivision 1, paragraph (c), nothing in
this section prohibits the acquisition of any securities of a
reorganized insurance company or intermediate stock holding
company through a licensed securities broker-dealer by any
officer or director of the reorganized company, an intermediate
stock holding company, or the mutual insurance holding company.
(f) Dividends and other distributions to the shareholders
of the reorganized stock insurance company or of an intermediate
stock holding company shall not be made except in
compliance must comply with section 60D.20. Any dividends and
other distributions to the members of the mutual insurance
holding company must comply with section 60D.20 and any other
approval requirements contained in the mutual insurance holding
company's articles of incorporation.
(g) Unless previously approved as part of the plan of
reorganization, the initial offering of any voting shares to the
public by a reorganized company, a stock insurance company
subsidiary, or an intermediate holding company which holds a
majority of the voting shares of a reorganized insurance company
or stock insurance company subsidiary, must be approved by a
majority of votes cast at a regular or special meeting of the
members of the mutual insurance holding company. Any issuer
repurchase program, plan of exchange, recapitalization, or
offering of capital securities to the public, shall, in addition
to any other approvals required by law or by the issuer's
articles of incorporation, be approved by a majority of the
board of directors of the mutual insurance holding company and
by a majority of the disinterested members of the board of
directors of the mutual insurance holding company.
Sec. 14. Minnesota Statutes 1996, section 60A.077, is
amended by adding a subdivision to read:
Subd. 12. [PROVISIONS IN THE EVENT OF INSURER
INSOLVENCY.] (a) In the event of any insolvency proceeding
involving an insolvent stock subsidiary, the assets of the
mutual insurance holding company, together with any assets of
any intermediate holding company that directly or indirectly
controls the insolvent stock subsidiary, must be available to
satisfy the policyholder obligations of the insolvent stock
subsidiary in an amount determined by the commissioner, but in
no event more than the total amount of nonpolicyholder dividends
paid by the insolvent stock subsidiary to the mutual insurance
holding company, or any intermediate holding company that
controls the insolvent stock subsidiary, during the ten-year
period immediately preceding the date of insolvency.
(b) In determining the required contribution by the mutual
insurance holding company or any intermediate stock holding
company which controls the insolvent stock subsidiary, the
commissioner shall take into account among other factors:
(1) the possible direct or indirect negative effects of any
required contribution on any insurance company affiliate of the
insolvent stock subsidiary; and
(2) the possible direct or indirect, long-term, or
short-term negative effects on the members of the mutual
insurance holding company, other than those members who, are, or
were policyholders of the insolvent stock subsidiary.
Nothing in this subdivision limits the powers of the
commissioner or the liquidator under chapter 60B.
(c) For purposes of this subdivision, the following terms
have the meanings given:
(1) "date of insolvency" means, as to an insolvent stock
subsidiary, the date established in accordance with chapter 60B
or comparable statute of another state governing the
rehabilitation or liquidation of a foreign insolvent stock
subsidiary;
(2) "insolvency proceeding" means any proceeding under
chapter 60B or comparable statute of another state governing the
rehabilitation and liquidation of a foreign insolvent stock
subsidiary;
(3) "insolvent stock subsidiary" means any stock insurance
company subsidiary of a mutual insurance holding company that
resulted from the reorganization of a domestic or foreign mutual
insurance company according to subdivision 1 or 2, or any other
stock insurance company subsidiary that is subject to an
insolvency proceeding, which on the date of insolvency has in
force policies that have given rise to membership interests in
the mutual insurance holding company;
(4) "control" has the meaning given in section 60D.15,
subdivision 4; and
(5) "dividends" include distributions of cash or any other
assets.
Sec. 15. Minnesota Statutes 1996, section 290.01, is
amended by adding a subdivision to read:
Subd. 4c. [MUTUAL INSURANCE HOLDING COMPANIES.] A "mutual
insurance holding company" is not an insurance company for
purposes of this chapter.
Sec. 16. Minnesota Statutes 1996, section 290.17,
subdivision 4, is amended to read:
Subd. 4. [UNITARY BUSINESS PRINCIPLE.] (a) If a trade or
business conducted wholly within this state or partly within and
partly without this state is part of a unitary business, the
entire income of the unitary business is subject to
apportionment pursuant to section 290.191. Notwithstanding
subdivision 2, paragraph (c), none of the income of a unitary
business is considered to be derived from any particular source
and none may be allocated to a particular place except as
provided by the applicable apportionment formula. The
provisions of this subdivision do not apply to farm income
subject to subdivision 5, paragraph (a), business income subject
to subdivision 5, paragraph (b) or (c), income of an insurance
company determined under section 290.35, or income of an
investment company determined under section 290.36.
(b) The term "unitary business" means business activities
or operations which are of mutual benefit, dependent upon, or
contributory to one another, individually or as a group. The
term may be applied within a single legal entity or between
multiple entities and without regard to whether each entity is a
corporation, a partnership or a trust.
(c) Unity is presumed whenever there is unity of ownership,
operation, and use, evidenced by centralized management or
executive force, centralized purchasing, advertising,
accounting, or other controlled interaction, but the absence of
these centralized activities will not necessarily evidence a
nonunitary business.
(d) Where a business operation conducted in Minnesota is
owned by a business entity that carries on business activity
outside the state different in kind from that conducted within
this state, and the other business is conducted entirely outside
the state, it is presumed that the two business operations are
unitary in nature, interrelated, connected, and interdependent
unless it can be shown to the contrary.
(e) Unity of ownership is not deemed to exist when a
corporation is involved unless that corporation is a member of a
group of two or more business entities and more than 50 percent
of the voting stock of each member of the group is directly or
indirectly owned by a common owner or by common owners, either
corporate or noncorporate, or by one or more of the member
corporations of the group. For this purpose, the term "voting
stock" shall include membership interests of mutual insurance
holding companies formed under section 60A.077.
(f) The net income and apportionment factors under section
290.191 or 290.20 of foreign corporations and other foreign
entities which are part of a unitary business shall not be
included in the net income or the apportionment factors of the
unitary business. A foreign corporation or other foreign entity
which is required to file a return under this chapter shall file
on a separate return basis. The net income and apportionment
factors under section 290.191 or 290.20 of foreign operating
corporations shall not be included in the net income or the
apportionment factors of the unitary business except as provided
in paragraph (g).
(g) The adjusted net income of a foreign operating
corporation shall be deemed to be paid as a dividend on the last
day of its taxable year to each shareholder thereof, in
proportion to each shareholder's ownership, with which such
corporation is engaged in a unitary business. Such deemed
dividend shall be treated as a dividend under section 290.21,
subdivision 4.
Dividends actually paid by a foreign operating corporation
to a corporate shareholder which is a member of the same unitary
business as the foreign operating corporation shall be
eliminated from the net income of the unitary business in
preparing a combined report for the unitary business. The
adjusted net income of a foreign operating corporation shall be
its net income adjusted as follows:
(1) any taxes paid or accrued to a foreign country, the
commonwealth of Puerto Rico, or a United States possession or
political subdivision of any of the foregoing shall be a
deduction; and
(2) the subtraction from federal taxable income for
payments received from foreign corporations or foreign operating
corporations under section 290.01, subdivision 19d, clause (11),
shall not be allowed.
If a foreign operating corporation incurs a net loss,
neither income nor deduction from that corporation shall be
included in determining the net income of the unitary business.
(h) For purposes of determining the net income of a unitary
business and the factors to be used in the apportionment of net
income pursuant to section 290.191 or 290.20, there must be
included only the income and apportionment factors of domestic
corporations or other domestic entities other than foreign
operating corporations that are determined to be part of the
unitary business pursuant to this subdivision, notwithstanding
that foreign corporations or other foreign entities might be
included in the unitary business.
(i) Deductions for expenses, interest, or taxes otherwise
allowable under this chapter that are connected with or
allocable against dividends, deemed dividends described in
paragraph (g), or royalties, fees, or other like income
described in section 290.01, subdivision 19d, clause (11), shall
not be disallowed.
(j) Each corporation or other entity that is part of a
unitary business must file combined reports as the commissioner
determines. On the reports, all intercompany transactions
between entities included pursuant to paragraph (h) must be
eliminated and the entire net income of the unitary business
determined in accordance with this subdivision is apportioned
among the entities by using each entity's Minnesota factors for
apportionment purposes in the numerators of the apportionment
formula and the total factors for apportionment purposes of all
entities included pursuant to paragraph (h) in the denominators
of the apportionment formula.
(k) If a corporation has been divested from a unitary
business and is included in a combined report for a fractional
part of the common accounting period of the combined report:
(1) its income includable in the combined report is its
income incurred for that part of the year determined by
proration or separate accounting; and
(2) its sales, property, and payroll included in the
apportionment formula must be prorated or accounted for
separately.
ARTICLE 16
MISCELLANEOUS
Section 1. Minnesota Statutes 1996, section 6.76, is
amended to read:
6.76 [LOCAL GOVERNMENTAL EXPENDITURES FOR LOBBYISTS.]
(a) On or before January 31, 1990, and of each year
thereafter, all counties, cities, school districts, metropolitan
agencies, regional railroad authorities, and the metropolitan
council shall report to the state auditor, on forms prescribed
by the auditor, their estimated expenditures paid for the
previous calendar year to a lobbyist as defined in section
10A.01, subdivision 11, except payments to associations of local
governments that are reported under paragraph (b), and to any
staff person not registered as a lobbyist, over 25 percent of
whose time is spent during the legislative session on
legislative matters.
(b) Associations of local governments subject to this
section shall report annually, on or before January 31, to the
state auditor and the association's members the proportionate
amount of each member's dues spent for lobbying purposes.
Sec. 2. Minnesota Statutes 1996, section 115A.554, is
amended to read:
115A.554 [AUTHORITY OF SANITARY DISTRICTS.]
A sanitary district has the authorities and duties of
counties within the district's boundary for purposes of sections
115A.0716; 115A.46, subdivisions 4 and 5; 115A.48; 115A.551;
115A.552; 115A.553; 115A.919; 115A.929; 115A.93; 115A.96,
subdivision 6; 115A.961; 116.072; 375.18, subdivision 14;
400.08, except subdivision 4, paragraph (b); 400.16; and 400.161.
Sec. 3. Minnesota Statutes 1996, section 117.155, is
amended to read:
117.155 [PAYMENTS; PARTIAL PAYMENT PENDING APPEAL.]
Except as otherwise provided herein payment of damages
awarded may be made or tendered at any time after the filing of
the report; and the duty of the petitioner to pay the amount of
any award or final judgment upon appeal shall, for all purposes,
be held and construed to be full and just compensation to the
respective owners or the persons interested in the lands. If
either the petitioner or any respondent appeals from an award,
the respondent or respondents, if there is more than one, except
encumbrancers having an interest in the award which has been
appealed, may demand of the petitioner a partial payment of the
award pending the final determination thereof, and it shall be
the duty of the petitioner to comply with such demand and to
promptly pay the amount demanded but not in excess of an amount
equal to three-fourths of the award of damages for the parcel
which has been appealed, less any payments made by petitioner
pursuant to section 117.042; provided, however, that the
petitioner may by motion after due notice to all interested
parties request, and the court may order, reduction in the
amount of the partial payment for cause shown. If an appeal is
taken from an award the petitioner may, but it cannot be
compelled to, pay the entire amount of the award pending the
final determination thereof. If any respondent or respondents
having an interest in the award refuses to accept such payment
the petitioner may pay the amount thereof to the court
administrator of district court to be paid out under direction
of the court. A partial or full payment as herein provided
shall not draw interest from the condemner from the date of
payment or deposit, and upon final determination of any appeal
the total award of damages shall be reduced by the amount of the
partial or full payment. If any partial or full payment exceeds
the amount of the award of compensation as finally determined,
the petitioner shall have a claim against the respondents
receiving such payment for the amount thereof, to be recoverable
in the same manner as in any civil action upon petitioner's
motion, final judgment must be entered in the condemnation
action in favor of the petitioner in the amount of the balance
owed to the petitioner and is recoverable within the original
condemnation action.
Sec. 4. Minnesota Statutes 1996, section 121.15, is
amended by adding a subdivision to read:
Subd. 1a. [PROJECT.] The construction, remodeling, or
improvement of a building or site of an educational facility at
an estimated cost exceeding $100,000 is a project under section
177.42, subdivision 2.
Sec. 5. Minnesota Statutes 1996, section 161.45, is
amended by adding a subdivision to read:
Subd. 3. [UTILITY INTERESTS WHEN REAL PROPERTY
CONVEYED.] In proceedings to vacate, transfer, turn back, or
otherwise convey an interest in real property owned or
controlled by the department, when the property is owned in fee
by the state, the commissioner may specify that the conveyance
of the department's interest does not affect a prior, existing
utility easement in the property or use of the property granted
to a utility under permit issued by the department. In
addition, the commissioner may convey interests in real
property, including an easement, subject to the right of a
utility to enter upon the right-of-way to maintain, repair,
replace, reconstruct, improve, remove, or otherwise attend to
its equipment. Where the utility had no preexisting easement
over the real property, this subdivision does not prohibit a
political subdivision, government agency, or private entity from
negotiating or contracting with a utility with regard to the
utility's easement or other interest in the property, but the
utility shall continue to hold the interest in the property and
the right of reasonable entry unless and until the utility
agrees in writing to relinquish its interests.
Sec. 6. Minnesota Statutes 1996, section 270.60, is
amended by adding a subdivision to read:
Subd. 4. [PAYMENTS TO COUNTIES.] (a) The commissioner
shall pay to a qualified county in which an Indian gaming casino
is located ten percent of the state share of all taxes generated
from activities on reservations and collected under a tax
agreement under this section with the tribal government for the
reservation located in the county. If the tribe has casinos
located in more than one county, the payment must be divided
equally among the counties in which the casinos are located.
(b) A county qualifies for payments under this subdivision
only if one of the following conditions is met:
(1) the county's per capita income is less than 80 percent
of the state per capita personal income, based on the most
recent estimates made by the United States Bureau of Economic
Analysis; or
(2) 30 percent or more of the total market value of real
property in the county is exempt from ad valorem taxation.
(c) The commissioner shall make the payments required under
this subdivision by February 28 of the year following the year
the taxes are collected.
(d) To make the payments authorized by this subdivision,
$1,100,000 is annually appropriated from the general fund to the
commissioner. If the authorized payments exceed the amount of
the appropriation, the commissioner shall proportionately reduce
the rate so that the total amount equals the appropriation.
Sec. 7. Minnesota Statutes 1996, section 271.19, is
amended to read:
271.19 [COSTS AND DISBURSEMENTS.]
Upon the determination of any appeal under this chapter
before the tax court, or of any review hereunder by the supreme
court, the costs and disbursements shall be taxed and allowed in
favor of the prevailing party and against the losing party as in
civil actions or, if there has been an offer of judgment or
settlement by a party prior to ten days before the court hears
the appeal, pursuant to Minnesota Rules of Civil Procedure, rule
68. In any case where a person liable for a tax or other
obligation has lost an appeal or review instituted by the
person, and the tax court or court shall determine that the
person instituted the same merely for the purposes of delay, or
that the taxpayer's position in the proceedings is frivolous,
additional costs, commensurate with the expense incurred and
services performed by the agencies of the state in connection
with the appeal, but not exceeding $5,000 in any case, may be
allowed against the taxpayer, in the discretion of the tax court
or court. Costs and disbursements allowed against any such
person shall be added to the tax or other obligation determined
to be due, and shall be payable therewith. To the extent
described in section 15.471, where an award of costs and
attorney fees is authorized under section 15.472, the costs and
fees shall be allowed against the state, including expenses
incurred by the taxpayer to administratively protest or appeal
to the department of revenue the order, decision, or report of
the commissioner that is the subject of the tax court
proceedings. Costs and disbursements allowed against the state
or other public agencies shall be paid out of funds received
from taxes or other obligations of the kind involved in the
proceeding, or other funds of the agency concerned appropriated
and available therefor. Witnesses in proceedings under this
chapter shall receive like fees as in the district court, to be
paid in the first instance by the parties by whom the witnesses
were called, and to be taxed and allowed as herein provided.
Sec. 8. Minnesota Statutes 1996, section 278.07, is
amended to read:
278.07 [JUDGMENT; AMOUNT; COSTS.]
Judgment shall be for the amount of the taxes for the year
as the court shall determine the same, less the amount paid
thereon, if any. If the tax is sustained in the full amount
levied or increased, costs and disbursements may, in the
discretion of the court, be taxed and allowed as in delinquent
tax proceedings and shall be included in the judgment. If the
tax so determined shall be less than is decreased from the
amount thereof as originally levied, the court may, in its
discretion, award disbursements to the petitioner, which shall
be taxed and allowed and be deducted from the amount of the
taxes as determined unless there has been a previous offer of
reduced taxes that was rejected by the petitioner, in which case
the award of costs and disbursements is governed by Minnesota
Rules of Civil Procedure, rule 68. If there be no judgment for
taxes, a judgment may be entered determining the right of the
parties and for the costs and disbursements as taxed and allowed.
Sec. 9. Minnesota Statutes 1996, section 287.22, is
amended to read:
287.22 [EXCEPTIONS.]
The tax imposed by section 287.21 shall not apply to:
A. Any executory contract for the sale of land under which
the vendee is entitled to or does take possession thereof, or
any assignment or cancellation thereof.
B. Any mortgage or any assignment, extension, partial
release, or satisfaction thereof.
C. Any will.
D. Any plat.
E. Any lease.
F. Any deed, instrument, or writing in which the United
States or any agency or instrumentality thereof is the grantor,
assignor, transferor, conveyor, grantee or assignee.
G. Deeds for cemetery lots.
H. Deeds of distribution by personal representatives.
I. Deeds to or from coowners partitioning undivided
interests in the same piece of property.
J. Any deed or other instrument of conveyance issued
pursuant to a land exchange under section 92.121 and related
laws.
K. A referee's or sheriff's certificate of sale in a
mortgage or lien foreclosure sale.
L. A referee's or sheriff's certificate of redemption from
a mortgage or lien foreclosure sale issued to the redeeming
mortgagor or lienee.
M. A decree of marriage dissolution, as defined in section
287.01, subdivision 4, or any deed or other instrument between
the parties to the dissolution made pursuant to the terms of the
decree.
Sec. 10. [287.221] [NEW RESIDENTIAL CONSTRUCTION.]
The commissioner of revenue may not enforce a deed tax
assessment on the consideration paid for an improvement in the
case of new residential construction if, at or before the time
the first residential owners of the improvement take possession,
the deed tax has been paid on the consideration paid for the
improvement.
Sec. 11. Minnesota Statutes 1996, section 308A.705,
subdivision 1, is amended to read:
Subdivision 1. [DISTRIBUTION OF NET INCOME.] Net income in
excess of dividends on capital stock and additions to reserves
shall be distributed on the basis of patronage. A cooperative
may establish allocation units, whether the units are
functional, divisional, departmental, geographic, or otherwise,
and pooling arrangements and may account for and distribute net
income on the basis of allocation units and pooling
arrangements. A cooperative may offset the net loss of an
allocation unit or pooling arrangement against the net income of
other allocation units or pooling arrangements to the extent
permitted by section 1388(j) of the Internal Revenue Code of
1986, as amended through December 31, 1996.
Sec. 12. Minnesota Statutes 1996, section 325D.33,
subdivision 3, is amended to read:
Subd. 3. [REBATES OR CONCESSIONS.] It is unlawful for a
wholesaler to offer a rebate in price, to give a rebate in
price, to offer a concession of any kind, or to give a
concession of any kind in connection with the sale of
cigarettes. For purposes of this chapter, the term "discount"
is included in the definition of a rebate. For purposes of this
subdivision, the term "wholesaler" does not include a
manufacturer or manufacturer's representative.
Sec. 13. [383A.80] [RAMSEY COUNTY DEED AND MORTGAGE TAX.]
Subdivision 1. [AUTHORITY TO IMPOSE; RATE.] (a) The
governing body of Ramsey county may impose a mortgage registry
and deed tax.
(b) The rate of the mortgage registry tax equals one cent
for each $100 or fraction of the principal.
(c) The rate of the deed tax equals five cents for each
$500 or fraction of the amount.
Subd. 2. [GENERAL LAW PROVISIONS APPLY.] The taxes under
this section apply to the same base and must be imposed,
collected, administered, and enforced in the same manner as
provided under chapter 287 for the state mortgage registry and
deed taxes. All the provisions of chapter 287 apply to these
taxes, except the rate is as specified in subdivision 1, the
term "Ramsey county" must be substituted for "the state," and
the revenue must be deposited as provided in subdivision 3.
Subd. 3. [DEPOSIT OF REVENUES.] All revenues from the tax
are for the use of the Ramsey county board of commissioners and
must be deposited in the county's environmental response fund
under section 383B.81.
Subd. 4. [EXPIRATION.] The authority to impose the tax
under this section expires January 1, 2003.
Sec. 14. [383A.81] [ENVIRONMENTAL RESPONSE FUND.]
Subdivision 1. [CREATION.] An environmental response fund
is created for the purposes specified in this section. The
taxes imposed by section 383B.80 must be deposited in the fund.
The board of county commissioners shall administer the fund
either as a county board, a housing and redevelopment authority,
or a regional rail authority.
Subd. 2. [USES OF FUND.] The fund created in subdivision 1
must be used for the following purposes:
(1) acquisition through purchase or condemnation of lands
or property which are polluted or contaminated with hazardous
substances;
(2) paying the costs associated with indemnifying or
holding harmless the entity taking title to lands or property
from any liability arising out of the ownership, remediation, or
use of the land or property;
(3) paying for the costs of remediating the acquired land
or property;
(4) paying the costs associated with remediating lands or
property which are polluted or contaminated with hazardous
substances; or
(5) paying for the costs associated with improving the
property for economic development, recreational, housing,
transportation or rail traffic.
Subd. 3. [MATCHING FUNDS.] In expending funds under this
section, the county shall seek matching funds from contamination
clean up funds administered by the commissioner of the
department of trade and economic development, the metropolitan
council, the federal government, the private sector, and any
other source.
Subd. 4. [BONDS.] The county may pledge the proceeds from
the taxes imposed by section 383B.80 to bonds issued under this
chapter and chapters 398A, 462, 469, and 475.
Subd. 5. [PRIORITIES.] The first priority for the use of
the environmental response fund created in this section is to
clean up the site located in the city of St. Paul known as the
Dale Street Shops and Maxson Steel site or other sites at or
near rail lines that are blighted and the clean up of which will
lead to living wage jobs, and to improve the land for economic
development.
Subd. 6. [LAND SALES.] Land or property acquired under
this section may be resold at fair market value. Proceeds from
the sale of the land must be deposited in the environmental
response fund.
Subd. 7. [DOT ASSISTANCE.] The commissioner of
transportation shall collaborate with the county and any
affected municipality by providing technical assistance and
support in cleaning up a contaminated site related to a trunk
highway or railroad improvement.
Sec. 15. [383B.80] [HENNEPIN COUNTY DEED AND MORTGAGE
TAX.]
Subdivision 1. [AUTHORITY TO IMPOSE; RATE.] (a) The
governing body of Hennepin county may impose a mortgage registry
and deed tax.
(b) The rate of the mortgage registry tax equals one cent
for each $100 or fraction of the principal.
(c) The rate of the deed tax equals five cents for each
$500 or fraction of the amount.
Subd. 2. [GENERAL LAW PROVISIONS APPLY.] The taxes under
this section apply to the same base and must be imposed,
collected, administered, and enforced in the same manner as
provided under Minnesota Statutes, chapter 287 for the state
mortgage registry and deed taxes. All the provisions of chapter
287 apply to these taxes, except the rate is as specified in
subdivision 1, the term "Hennepin county" must be substituted
for the "state," and the revenue must be deposited as provided
in subdivision 3.
Subd. 3. [DEPOSIT OF REVENUES.] All revenues from the tax
are for the use of the Hennepin county board of commissioners
and must be deposited in the county's environmental response
fund under section 383B.81.
Subd. 4. [EXPIRATION.] The authority to impose the tax
under this section expires January 1, 2003.
Sec. 16. [383B.81] [ENVIRONMENTAL RESPONSE FUND.]
Subdivision 1. [CREATION.] An environmental response fund
is created for the purposes specified in this section. The
taxes imposed by section 383B.80 must be deposited in the fund.
The board of county commissioners shall administer the fund
either as a county board, a housing and redevelopment authority,
or a regional rail authority.
Subd. 2. [USES OF FUND.] The fund created in subdivision 1
must be used for the following purposes:
(1) acquisition through purchase or condemnation of lands
or property which are polluted or contaminated with hazardous
substances;
(2) paying the costs associated with indemnifying or
holding harmless the entity taking title to lands or property
from any liability arising out of the ownership, remediation, or
use of the land or property;
(3) paying for the costs of remediating the acquired land
or property;
(4) paying the costs associated with remediating lands or
property which are polluted or contaminated with hazardous
substances; or
(5) paying for the costs associated with improving the
property for economic development, recreational, housing,
transportation or rail traffic.
Subd. 3. [MATCHING FUNDS.] In expending funds under this
section the county shall seek matching funds from contamination
cleanup funds administered by the commissioners of the
department of trade and economic development, the metropolitan
council, the federal government, the private sector and any
other source.
Subd. 4. [CITY APPROVAL.] The county may not expend funds
under this section unless the governing body of the city in
which the site is located approves the project.
Subd. 5. [BONDS.] The county may pledge the proceeds from
the taxes imposed by section 383B.80 to bonds issued under this
chapter and chapters 398A, 462, 469, and 475.
Subd. 6. [PRIORITIES.] The first priority for the use of
the the environmental response fund created in this section is
to clean up the site located in the city of St. Louis Park known
as NL Industries/Tara Corporation/Golden Auto, EPA I.D. No.
MND097891634 and to provide adequate right-of-way for a portion
of the rail line to replace the 29th street line in the city of
Minneapolis, including making rail improvements, changing the
curve of the railroad track and eliminating a switching
facility, and improving the land for economic development. No
money from the environmental response fund may be expended for
remediating the site until the site has been acquired through
purchase or condemnation.
Subd. 7. [LAND SALES.] Land or property acquired under
this section may be resold at fair market value. Proceeds from
the sale of the land must be deposited in the environmental
response fund.
Subd. 8. [DOT ASSISTANCE.] With respect to the site
described in subdivision 6, the commissioner of transportation
shall collaborate with the county and any affected municipality
by providing technical assistance and support in facilitating
the railroad improvement and testing at that portion of the site
to be used for the railroad improvement.
Sec. 17. Minnesota Statutes 1996, section 398A.04,
subdivision 1, is amended to read:
Subdivision 1. [GENERAL.] An authority may exercise all
the powers necessary or desirable to implement the powers
specifically granted in this section, and in exercising the
powers is deemed to be performing an essential governmental
function and exercising a part of the sovereign power of the
state, and is a local government unit and political subdivision
of the state. Without limiting the generality of the foregoing,
the authority may:
(a) Sue and be sued, have a seal, which may but need not be
affixed to documents as directed by the board, make and perform
contracts, and have perpetual succession;
(b) Acquire real and personal property within or outside
its taxing jurisdiction, by purchase, gift, devise,
condemnation, conditional sale, lease, lease purchase, or
otherwise; or for purposes, including the facilitation of an
economic development project pursuant to section 383B.81 or
469.091 or 469.175, subdivision 7, that also improve rail
service; and
(c) Hold, manage, control, sell, convey, lease, mortgage,
or otherwise dispose of real or personal property.
Sec. 18. [458D.111] [COLLECTION OF SOLID WASTE MANAGEMENT
SERVICE CHARGES.]
Subdivision 1. [AUTHORITY.] The board shall have the
powers of a county as specified in section 400.08.
Subd. 2. [METHOD OF COLLECTING CERTAIN SERVICE
CHARGES.] The board shall determine the method of collecting
service charges in a service area by resolution.
Subd. 3. [SERVICE CHARGES ON REAL ESTATE INCLUDING EXEMPT
PROPERTY.] In addition to any methods provided in section
400.08, the board may assess and collect service charges as
follows. On or before October 15 of each year, the board shall
certify to each county auditor an itemized list of solid waste
management service charges and a description of parcels of lands
against which the charges arise. It shall be the duty of the
county auditors to include the charges upon the tax rolls of the
county for the taxes due and payable for the following year.
The solid waste management service charge shall be enforced and
collected in the manner provided for the enforcement and
collection of real property taxes. The service charges shall be
subject to the same penalties, interest, and other conditions
provided for the collection of property taxes. The board shall
reimburse each county auditor for the costs of collection of the
service charge.
Sec. 19. [465.715] [POLITICAL SUBDIVISIONS; LEASE PURCHASE
AGREEMENTS.]
Subdivision 1. [STATUTORY AUTHORIZATION REQUIRED.] A
county, home rule charter city, statutory city, town, school
district, or other political subdivision may not create a
corporation, whether for profit or not for profit, unless
explicitly authorized to do so by law.
Subd. 2. [PRE-DECEMBER 1, 1996, LEASE PURCHASE
AGREEMENTS.] The validity of any lease purchase agreement
entered into prior to December 1, 1996, and subsequent
refinancings are not affected by either the amount of
consideration paid by a lessor for an interest in real property
or, in the case of lessors organized by or on behalf of the
city, county, town, or school district, any defect in or lack of
authority to organize such entity. A nonprofit corporation
organized by or on behalf of a city, county, town, or school
district, for the purpose of a lease purchase agreement, may
continue in existence until the end of any lease agreement in
effect on December 1, 1996, but thereafter is dissolved. During
its existence, the nonprofit corporation shall conduct only
business that is necessary and directly related to the lease
agreement. The nonprofit corporation is a public corporation
for purposes of section 465.035 and is subject to all laws as if
it were a part of the city, county, town, or school district.
Sec. 20. Minnesota Statutes 1996, section 469.169, is
amended by adding a subdivision to read:
Subd. 11. [ADDITIONAL BORDER CITY ALLOCATIONS.] In
addition to tax reductions authorized in subdivisions 7, 8, 9,
and 10, 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, 1998.
Sec. 21. Minnesota Statutes 1996, section 473.39, is
amended by adding a subdivision to read:
Subd. 1d. [OBLIGATIONS; 1998-2000.] In addition to the
authority in subdivisions 1a, 1b, and 1c, the council may issue
certificates of indebtedness, bonds, or other obligations under
this section in an amount not exceeding $30,000,000, which may
be used for capital expenditures as prescribed in the council's
transit capital improvement program and for related costs,
including the costs of issuance and sale of the obligations.
Sec. 22. [PUBLIC SAFETY TRAINING FACILITY.]
Subdivision 1. [JOINT POWERS AGREEMENT; BONDS.] Each of
the cities of Bloomington, Chanhassen, Eden Prairie, Edina,
Minnetonka, and Richfield may issue general obligation bonds of
the city in an amount not to exceed $1,000,000 for its share of
the cost of the acquisition, construction, and equipping of a
public safety training facility to be jointly operated by a
joint powers association consisting of two or more municipal or
public corporations of which that city is a member. The
issuance of the bonds is subject to Minnesota Statutes, chapter
475, except that no election shall be required except as
provided in subdivision 2.
Subd. 2. [REVERSE REFERENDUM.] Before the adoption by the
governing body of a city of any resolution authorizing the
issuance of any bonds authorized by subdivision 1, the city
shall publish a notice in the official newspaper of the city
stating that the governing body of the city intends to consider
the authorization of the issuance of the bonds, stating the
amount, purpose, and, in general, the security and source of
payment for the bonds. The resolution authorizing the issuance
of the bonds shall not be adopted by the governing body of the
city for at least 15 days after publication of the notice of
intention. If within 15 days after publication of the notice of
intention a petition asking for an election on the proposition
that the city issue the bonds signed by the voters equal to at
least ten percent of the registered voters in the city is filed
with the clerk, no bonds may be issued by the city unless
approved by a majority of the voters of the city voting on the
question of the issuance at a regular or special election.
Subd. 3. [EFFECTIVE DATE; LOCAL APPROVAL.] This section is
effective with respect to any of the cities of Bloomington,
Chanhassen, Eden Prairie, Edina, Minnetonka, and Richfield the
day after compliance by that city with Minnesota Statutes,
section 645.021, subdivision 3.
Sec. 23. [CONTAMINATION CLEANUP AND RAIL IMPROVEMENT.]
Subdivision 1. [CONTAMINATION CLEANUP FUNDS.] The
commissioner of the department of trade and economic
development, pursuant to Minnesota Statutes, section 116J.555,
subdivision 1, and the metropolitan council, pursuant to
Minnesota Statutes, section 473.252, subdivision 3, paragraph
(b), clause (1), shall designate the site located in the city of
St. Louis Park and known as NL Industries/Tara Corp./Golden
Auto, EPA ID. No. MND 097891634 to be an eligible site for
receipt of contamination cleanup funds from the contaminated
site cleanup and development account in the general fund and
from the tax base revitalization account in the metropolitan
livable communities fund. Grants from these accounts shall be
available only upon confirmation from the commissioner of
transportation that Hennepin county and the city of St. Louis
Park have entered into an agreement as described in subdivision
2.
Subd. 2. [AGREEMENT BETWEEN HENNEPIN COUNTY AND CITY OF ST.
LOUIS PARK.] To qualify for receipt of funds under subdivision
1, or from the environmental response fund established in
Minnesota Statutes, section 383B.81, which funds are to be used
for the site described in subdivision 1, Hennepin county and the
city of St. Louis Park must, after consultation and negotiation
with representatives of affected neighborhoods along the
impacted and proposed rail lines, enter into an agreement with
respect to the following:
(1) acquisition through purchase or condemnation of the
entire site described in subdivision 1. A portion of the site
must be used to provide adequate rights-of-way for transferring
railroad traffic from the Canadian Pacific railroad line from
Louisiana Avenue in St. Louis Park easterly to trunk highway
55/Hiawatha Avenue, commonly referred to as the 29th street
depression, to the Canadian Pacific railroad line from the 29th
street rail line northerly to the Burlington Northern
connection, entirely within the city of St. Louis Park;
(2) responsibility for the costs of the railroad
improvement, including changing the curve of the railroad track
and eliminating a switching facility;
(3) obtaining by Hennepin county and the city of St. Louis
Park of all applicable assurances, including, but not limited
to, letters of assurance, certificates of completion, and no
association determinations available from the United States
Environmental Protection Agency and the Minnesota pollution
control agency;
(4) respective responsibilities of the parties in
remediating the acquired property and in assuming responsibility
for any required matching funds; and
(5) entitlement to proceeds from any ultimate disposition
of the property consistent with any statutory restrictions
applicable to the source of the acquisition funds.
Subd. 3. [COMMISSIONER OF TRANSPORTATION.] The
commissioner of transportation shall confirm that St. Louis Park
and Hennepin county have entered into an agreement. The
commissioner of transportation shall collaborate with the city
and county by providing technical assistance and support in
facilitating the railroad improvement and testing at that
portion of the site to be used for the railroad improvement.
The project shall proceed only if the city of St. Louis Park,
Hennepin county, and the commissioner have entered into an
agreement regarding responsibility for safety and noise
mitigation measures to be implemented or constructed on or
adjacent to the Canadian Pacific railroad line from the 29th
street rail line northerly to the Burlington Northern
connection, entirely within the city of St. Louis Park.
Sec. 24. [CITY OF ST. PAUL; RAINLEADER DISCONNECTION AND
SEWER CONNECTION PROGRAM.]
Subdivision 1. [PUBLIC PURPOSE.] The legislature finds
that the disconnection of rainleaders and the repair of
defective sanitary sewer connections is a public purpose and
that providing financing to owners of residences and businesses
to disconnect rainleaders and repair defective sanitary sewer
connections located on their private property is a public
purpose.
Subd. 2. [PROGRAM AUTHORIZED.] The city of Saint Paul may
undertake a program to disconnect rainleaders, connect buildings
to storm sewers, or correct defective sanitary sewer connections
located on private property at the written request of the owner
of the property. The city may contract for the disconnection of
rainleaders, the connection of buildings to storm sewers, and
the repair of defective sanitary sewer connections, or may pay
or reimburse the cost for disconnection of rainleaders, the
connection of buildings to storm sewers, and the repair of
defective sanitary sewer connections for which the owner of the
property has entered into contracts. As part of the program,
the city may identify criteria for private contractors and may
limit the payment or reimbursement of costs to those situations
in which the work has been performed by contractors whose
participation in the program has been approved by the city in
advance. The city need not hold any hearing in connection with
the request of individual property owners for participation in
the program.
Subd. 3. [CHARGES AUTHORIZED.] The city may charge the
cost of the program to the owners who have requested the
disconnection of their rainleaders, the connection of buildings
to storm sewers, or the repair of their sanitary sewer
connections. The amount charged may include the full amount
paid or reimbursed, the cost of administration, and the cost of
financing. The amount charged may be made payable with interest
at a rate determined by the city in installments over a period
determined by the city not to exceed 20 years and the
installments may be certified, added to, and collected in the
same manner as municipal taxes by the county department of
property taxation or similar department and paid over to the
city in the same manner as are municipal taxes. The city may
certify due and unpaid installments to the county auditor along
with taxes against the benefited property for collection as
other real property taxes are collected, in which event the
installments may be enforced in the manner required for
enforcement of real property taxes in accordance with state law.
Subd. 4. [CHARGES TO PROPERTY OWNERS.] Instead of charging
the cost of the program as provided above, the city may charge
the cost of the program to the owners who have requested the
disconnection of their rainleaders, the connection of buildings
to storm sewers, or the repair of their defective sanitary sewer
connections. The amount charged may include the full amount
paid or reimbursed, the cost of administration, and the cost of
financing. The amount charged must be payable with interest at
a rate determined by the city in installments over a period
determined by the city not to exceed 20 years. All charges for
the program are valid and enforceable without regard to
valuation of the property or the benefit conferred. After the
amount to be charged has been determined, whether or not the
work has been performed, the city must hold a public hearing on
the charges after notice mailed to the owner of the property to
be charged not less than 14 days before the published hearing.
Notice of the hearing is not required. The city shall select
Minnesota Statutes, chapter 429, or the city charter to govern
the procedure for the levy and collection of the charges, and
except as a different procedure is provided in this section,
proceedings for the imposition, appeal, repeal, supplementation,
and collection of the charges must conform to the procedures
selected.
Subd. 5. [NATURE OF CHARGES.] The charges, with accruing
interest, are a lien upon all private and public property
included in the charges, from the date of the resolution
adopting the charges, concurrent with general taxes. All
charges and interest on them must be collected and paid over in
the same manner as municipal taxes.
Subd. 6. [OBLIGATIONS AUTHORIZED.] To pay the costs of the
program, the city may issue general or special obligations in
one or more series without an election and without being subject
to limits on net debt, but otherwise in accordance with
Minnesota Statutes, chapter 475. To the payment of the
obligations, the city must pledge receipts of the charges, and
may in addition pledge revenues or net revenues of the city's
sewer service fund. The city may pledge its full faith, credit,
and taxing powers to pay the obligations, and may levy taxes to
pay the obligations.
Subd. 7. [LOCAL APPROVAL.] This section is effective the
day after the governing body of the city of Saint Paul complies
with Minnesota Statutes, section 645.021, subdivision 3.
Sec. 25. [MINNESOTA INVESTMENT FUND; CITY OF WORTHINGTON.]
Notwithstanding the grant limit contained in Minnesota
Statutes, section 116J.8731, subdivision 5, a grant of up to
$1,000,000 may be made to the city of Worthington to offset
severe job losses due to plant closings.
Sec. 26. [DESIGNATION OF KOOCHICHING COUNTY AS AN
ENTERPRISE ZONE.]
Notwithstanding the limitation in Minnesota Statutes,
section 469.167, subdivision 3, the commissioner of trade and
economic development shall designate Koochiching county as an
enterprise zone under Minnesota Statutes, sections 469.166 to
469.173.
Sec. 27. [YEAR 2000 READY.]
Any computer software or hardware that is purchased by the
state or a political subdivision with money appropriated in this
bill must be year 2000 ready.
Sec. 28. [APPROPRIATION; PAYMENT OF CLAIMS.]
$16,600,000 is appropriated in fiscal year 1998 from the
general fund to the commissioner of revenue to pay claims filed
under the Cambridge Bank Judgment.
Sec. 29. [APPROPRIATION; ADMINISTRATION OF ACT.]
$2,132,000 is appropriated from the general fund for fiscal
year 1998 and $48,000 is appropriated for fiscal year 1999 to
the commissioner of revenue to pay the costs of administering
the provisions of this act.
Sec. 30. [REPEALER.]
1997 H.F. 2158, article 1, section 25, if enacted, is
repealed. This section repeals 1997 H.F. 2158, article 1,
section 25, without regard to order of final enactment.
Sec. 31. [EFFECTIVE DATE.]
Section 9 is effective for decrees of marriage dissolution,
deeds, or other instruments executed and delivered after July 1,
1997.
Section 10 is effective for assessments made on or after
the effective date of laws 1996, chapter 471, article 2, section
32.
Section 19 is effective the day following final enactment.
Presented to the governor May 29, 1997
Signed by the governor June 2, 1997, 2:28 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes