Office of the Revisor of Statutes
Minnesota Session Laws - 1998, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 389-H.F.No. 3840
An act relating to the financing and operation of
government in this state; providing property tax
reform; providing a property tax rebate; making
changes to property tax rates, levies, notices,
hearings, assessments, exemptions, aids, and credits;
providing bonding and levy authority, and other powers
to certain political subdivisions; making changes to
income, sales, excise, mortgage registry and deed,
premiums, health care provider, and solid waste tax
provisions; allowing credits; authorizing the
imposition of certain local sales, use, excise, and
lodging taxes; authorizing a sanitary sewer district;
modifying provisions relating to the budget reserve
and other accounts; making changes to tax increment
financing, regional development, housing, and economic
development provisions; providing for the taxation of
taconite and the distribution of taconite taxes;
modifying provisions relating to the taxation and
operation of gaming; providing tax incentives for
border city zones; making miscellaneous changes to
state and local tax and administrative provisions;
changing the senior citizens' property tax deferral
program; providing grants, loan guarantees, and low
interest loans; changing certain fiscal note
requirements; providing for a land transfer;
appropriating money; amending Minnesota Statutes 1996,
sections 16A.102, subdivisions 1 and 2; 124A.03,
subdivision 1f; 240.15, subdivisions 1 and 5;
272.0211, subdivision 1; 273.135, subdivision 2;
273.1391, subdivision 2; 273.1398, subdivisions 1a, 2,
and 4; 275.07, by adding a subdivision; 290.01,
subdivision 3b; 290.06, subdivisions 2c; 290.067,
subdivision 2a; 290.0671, by adding subdivisions;
290.091, subdivision 2; 290.0921, subdivision 3a;
290.10; 290.21, subdivision 3; 290A.03, subdivision 3;
290A.14; 295.52, subdivision 4a; 297A.01, subdivisions
8 and 15; 297A.02, subdivisions 2 and 4; 297A.135,
subdivisions 4, as amended; and 5, as added; 297A.25,
subdivision 60, and by adding subdivisions; 297E.02,
subdivisions 1, 4, and 6; 298.22, subdivision 2;
298.221; 298.2213, subdivision 4; 298.225, subdivision
1; 298.28, subdivisions 2, 3, 4, 6, 7, 9, 10, and 11;
298.48, subdivision 1; 325E.112, by adding a
subdivision; 462.396, subdivision 2; 462A.21, by
adding a subdivision; 462A.222, subdivision 3;
469.015, subdivision 4; 469.169, by adding
subdivisions; 469.170, by adding a subdivision;
469.171, subdivision 9; 469.174, by adding a
subdivision; 469.175, subdivisions 5, 6, 6a, and by
adding a subdivision; 469.176, subdivision 7; 469.177,
by adding a subdivision; 469.1771, subdivision 5, and
by adding a subdivision; 469.303; 473.39, by adding a
subdivision; 473.3915, subdivisions 2 and 3; 475.58,
subdivisions 1 and 3; 477A.0122, subdivision 6;
477A.03, subdivision 2, and by adding a subdivision;
and 477A.14; Minnesota Statutes 1997 Supplement,
sections 3.986, subdivisions 2 and 4; 3.987,
subdivisions 1 and 2; 3.988, subdivision 3; 3.989,
subdivisions 1 and 2; 16A.152, subdivision 2; 60A.15,
subdivision 1; 124.239, subdivisions 5, 5a, and 5b;
124.315, subdivisions 4 and 5; 124.918, subdivision 8;
270.60, subdivision 4; 270.67, subdivision 2; 272.02,
subdivision 1; 272.115, subdivisions 4 and 5; 273.112,
subdivisions 2, 3, and 4; 273.124, subdivision 14;
273.126, subdivision 3; 273.127, subdivision 3;
273.13, subdivisions 22, 23, 24, 25, and 31; 273.1382,
subdivision 1, and by adding a subdivision; 275.065,
subdivisions 3 and 6; 275.70, subdivision 5, and by
adding a subdivision; 275.71, subdivisions 2, 3, and
4; 275.72, by adding a subdivision; 276.04,
subdivision 2; 287.08; 289A.02, subdivision 7;
289A.19, subdivision 2; 290.01, subdivisions 19, 19a,
19b, 19c, 19f, and 31; 290.0671, subdivision 1;
290.0673, subdivisions 2 and 6; 290.091, subdivision
6; 290.371, subdivision 2; 290A.03, subdivisions 11,
13, and 15; 290B.03, subdivision 2; 290B.04,
subdivisions 1, 3, and by adding subdivisions;
290B.05, subdivisions 1, 2, and 4; 290B.06; 290B.07;
290B.08, subdivision 2; 290B.09, subdivision 1;
291.005, subdivision 1; 295.52, subdivision 4;
297A.01, subdivision 16; 297A.25, subdivisions 3, 9,
11, 59, and by adding a subdivision; 297A.256,
subdivision 1; 297A.48, by adding a subdivision;
297B.03; 297G.01, by adding a subdivision; 297G.03,
subdivision 1; 297H.04, by adding a subdivision;
298.24, subdivision 1; 298.28, subdivisions 9a and 9b;
298.296, subdivision 4; 349.19, subdivision 2a;
446A.085, subdivision 1; 462A.05, subdivision 39;
462A.071, subdivisions 2, 4, 6, and 8; 465.715, by
adding subdivisions; 469.169, subdivision 11; and
477A.011, subdivision 36; Laws 1965, chapter 326,
section 1, subdivision 5, as amended; Laws 1967,
chapter 170, section 1, subdivision 5, as amended;
Laws 1971, chapter 773, section 1, as amended; and
section 2, as amended; Laws 1976, chapter 162, section
1, as amended; Laws 1980, chapter 511, section 1,
subdivision 2, as amended; section 2; and section 3;
Laws 1984, chapter 380, section 1, as amended; and
section 2; Laws 1991, chapter 291, article 8, section
27, subdivision 3; Laws 1992, chapter 511, article 2,
section 52, as amended; article 8, section 33,
subdivision 5; Laws 1993, chapter 375, article 9,
section 46, subdivisions 2, 3, and 5; Laws 1994,
chapter 587, article 11, by adding; Laws 1995, chapter
255, article 3, section 2, subdivision 1, as amended;
and subdivision 4, as amended; chapter 264, article 2,
section 44; Laws 1997, chapter 105, section 3, as
amended; chapter 225, article 2, section 64; chapter
231, article 1, section 16, as amended; article 2,
section 63, subdivision 1; and section 68,
subdivisions 1 and 3; article 5, section 18,
subdivision 1; article 7, section 47; article 10,
section 24; article 13, section 19; and Laws 1997
Second Special Session chapter 2, section 4,
subdivision 3; proposing coding for new law in
Minnesota Statutes, chapters 272; 273; 290B; 298;
365A; 462A; 469; 471; and 477A; repealing Minnesota
Statutes 1996, sections 289A.50, subdivision 6;
297A.02, subdivision 2; 298.012; 298.21; 298.23;
298.34, subdivisions 1 and 4; 298.391, subdivisions 2
and 5; and 365A.09; Minnesota Statutes 1997
Supplement, sections 3.987, subdivision 3; 14.431; and
273.13, subdivision 32.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
PROPERTY TAX REBATE
Section 1. [1998 PROPERTY TAX REBATE.]
(a) A credit is allowed against the tax imposed under
Minnesota Statutes, chapter 290, to an individual, other than a
dependent, as defined in sections 151 and 152 of the Internal
Revenue Code, disregarding section 152(b)(3) of the Internal
Revenue Code, equal to 20 percent of the qualified property tax
paid before January 1, 1999, for taxes assessed in 1997. The
maximum amount of qualifying tax to which the credit applies is
$7,500.
(b) For property owned and occupied by the taxpayer during
1998, qualified property tax means property taxes payable as
defined in Minnesota Statutes, section 290A.03, subdivision 13,
assessed in 1997 and payable in 1998, and deductible by the
individual under section 164 of the Internal Revenue Code of
1986, as amended through December 31, 1997, except the
requirement in Minnesota Statutes, section 290A.03, subdivision
13, that the taxpayer own and occupy the property on January 2,
1998, does not apply. In the case of agricultural land assessed
as part of a homestead pursuant to Minnesota Statutes, section
273.13, subdivision 23, the owner is allowed to calculate the
credit on all property taxes on the homestead, except to the
extent the owner is required to furnish a rent certificate under
Minnesota Statutes, section 290A.19, to a tenant leasing a part
of the farm homestead.
(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
1998. 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), apply to determine the
amount of the credit for the individual.
(d) For an individual who both owned and rented principal
residences in calendar year 1998, qualified taxes are the sum of
the amounts under paragraphs (b) and (c).
(e) If the amount of the credit under this section exceeds
the taxpayer's tax liability under Minnesota Statutes, chapter
290, the commissioner shall refund the excess.
(f) To claim a credit under this section, 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) This credit applies to taxable years beginning after
December 31, 1997, and before January 1, 1999.
(h) Payment of the credit under this section is subject to
Minnesota Statutes, chapter 270A, and any other provision
applicable to refunds under Minnesota Statutes, chapter 290.
(i) An amount sufficient to pay refunds under this section
is appropriated to the commissioner of revenue from the general
fund.
Sec. 2. [TRANSFER TO GENERAL FUND.]
The commissioner of finance shall transfer $500,000,000
from the property tax reform account to the general fund on July
1, 1998.
Sec. 3. Laws 1997, chapter 231, article 1, section 16, as
amended by Laws 1997, First Special Session chapter 5, section
35, and Laws 1997, Third Special Session chapter 3, section 11,
and Laws 1998, chapter 304, section 1, is amended to read:
Sec. 16. [PROPERTY TAX REBATE.]
(a) A credit is allowed against the tax imposed under
Minnesota Statutes, chapter 290, to an individual, other than as
a dependent, as defined in sections 151 and 152 of the Internal
Revenue Code, disregarding section 152(b)(3) of the Internal
Revenue Code, equal to 20 percent of the qualified property tax
paid before January 1, 1998, for taxes assessed in 1996.
(b) For property owned and occupied by the taxpayer during
1997, qualified tax means property taxes payable as defined in
Minnesota Statutes, section 290A.03, subdivision 13, assessed in
1996 and payable in 1997, except the requirement that the
taxpayer own and occupy the property on January 2, 1997, does
not apply. The credit is allowed only to the individual and
spouse, if any, who paid the tax, whether directly, through an
escrow arrangement, or under a contractual agreement for the
purchase or sale of the property. In the case of agricultural
land assessed as part of a homestead pursuant to Minnesota
Statutes, section 273.13, subdivision 23, the owner is allowed
to calculate the credit on all property taxes on the homestead,
except to the extent the owner is required to furnish a rent
certificate under Minnesota Statutes, section 290A.19, to a
tenant leasing a part of the farm homestead.
(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.
(i) Payment of the credit under this section is subject to
Minnesota Statutes, chapter 270A, and any other provision
applicable to refunds under Minnesota Statutes, chapter 290.
Sec. 4. [APPROPRIATION.]
$1,837,000 is appropriated from the general fund for fiscal
year 1999 to the commissioner of revenue to administer section 1.
ARTICLE 2
PROPERTY TAX REFORM
Section 1. Minnesota Statutes 1997 Supplement, 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
receivable under subdivision 5a; 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 after reduction
for any alternative facilities aid receivable under subdivision
5a.
Sec. 2. Minnesota Statutes 1997 Supplement, section
124.239, subdivision 5a, is amended 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, provided that the amount does not
exceed the amount certified to be levied for those purposes for
taxes payable in 1997, or for a district that made a levy under
subdivision 5, paragraph (b), the lesser of the district's
annual levy amount, or one-sixth of the amount of levy that it
certified for that purpose for taxes payable in 1998.
Sec. 3. Minnesota Statutes 1997 Supplement, section
124.239, subdivision 5b, is amended to read:
Subd. 5b. [ALTERNATIVE FACILITIES APPROPRIATION.] (a) An
amount not to exceed $17,000,000 $19,700,000 for fiscal year
2000 and $20,000,000 for fiscal year 2001 and each year
thereafter is appropriated from the general fund to the
commissioner of children, families, and learning for fiscal year
2000 and each year thereafter for payment of alternative
facilities aid under subdivision 5a. The 2000 appropriation
includes $1,700,000 for 1999 and $15,300,000 for 2000.
(b) The appropriation in paragraph (a) must be reduced by
the amount of any money specifically appropriated for the same
purpose in any year from any state fund.
Sec. 4. Minnesota Statutes 1997 Supplement, section
124.315, subdivision 4, is amended to read:
Subd. 4. [INTEGRATION LEVY.] A district may levy an amount
equal to 46 33 percent for fiscal year 2000 and 22 percent for
fiscal year 2001 and thereafter of the district's integration
revenue as defined in subdivision 3.
Sec. 5. Minnesota Statutes 1997 Supplement, section
124.315, subdivision 5, is amended to read:
Subd. 5. [INTEGRATION AID.] A district's integration aid
equals 54 67 percent for fiscal year 2000 and 78 percent for
fiscal year 2001 and thereafter of the district's integration
revenue as defined in subdivision 3.
Sec. 6. Minnesota Statutes 1996, section 124A.03,
subdivision 1f, is amended to read:
Subd. 1f. [REFERENDUM EQUALIZATION REVENUE.] A district's
referendum equalization revenue equals $315 $350 times the
district's actual pupil units for that year.
Referendum equalization revenue must not exceed a
district's total referendum revenue for that year.
Sec. 7. Minnesota Statutes 1997 Supplement, section
273.127, subdivision 3, is amended to read:
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 2.5 percent applies for taxes payable in 2000.
Sec. 8. Minnesota Statutes 1997 Supplement, 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 $75,000
of market value of class 1a property has a net class rate of one
percent of its market value; and the market value of class 1a
property that exceeds $75,000 has a class rate of 1.85 1.7
percent of its market value.
(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 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. The remaining market value of class 1b
property has a 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 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. If any portion of the class
1c resort property is classified as class 4c under subdivision
25, the entire property must meet the requirements of
subdivision 25, paragraph (d), clause (1), to qualify for class
1c treatment under this paragraph.
(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. 9. Minnesota Statutes 1997 Supplement, section
273.13, subdivision 23, is amended to read:
Subd. 23. [CLASS 2.] (a) Class 2a property is agricultural
land including any improvements that is homesteaded. The market
value of the house and garage and immediately surrounding one
acre of land has the same class rates as class 1a property under
subdivision 22. The value of the remaining land including
improvements up to $115,000 has a net class rate of 0.4 0.35
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 0.9 0.8 percent of market value.
The remaining property over the $115,000 market value in excess
of 320 acres has a class rate of 1.4 1.25 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 1.4 1.25
percent of market value.
(c) Agricultural land as used in this section means
contiguous acreage of ten acres or more, used during the
preceding year for agricultural purposes. "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, or land included in state or federal farm
programs. Agricultural classification for property shall be
determined 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 for raising or
cultivating agricultural products, shall be considered as
agricultural land.
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. 10. Minnesota Statutes 1997 Supplement, section
273.13, subdivision 24, is amended to read:
Subd. 24. [CLASS 3.] (a) Commercial and industrial
property and utility real and personal property, except class 5
property as identified in subdivision 31, clause (1), is class
3a. Each parcel has a class rate of 2.7 2.45 percent of the
first tier of market value, and 4.0 3.5 percent of the remaining
market value, 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 utility property owned
by one person or entity, only one parcel in each county has a
reduced class rate on the first tier of market value.
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 3.5 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 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 equal to 85 percent of the class rate of the
second tier of the commercial property rate under paragraph (a)
on any portion of the market value that does not qualify for the
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 A class rate equal to 85
percent of the class rate of the second tier of the commercial
property class rate under paragraph (a) 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. 11. Minnesota Statutes 1997 Supplement, section
273.13, subdivision 25, as amended by Laws 1997, Third Special
Session chapter 3, section 28, 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 2.15 percent of market value.
All other class 4a property has a class rate of 2.9 2.5 percent
of market value. 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 2.1 1.7 percent of
market value.
(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 1.25 percent on the first
$75,000 of market value and a class rate of 2.1 1.7 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.
(d) Class 4c property includes:
(1) 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
during 90 consecutive days and either (i) at least 60 percent of
all paid bookings by lodging guests during the year must be for
periods of at least two consecutive nights; or (ii) at least 20
percent of the annual gross receipts must be from charges for
rental of fish houses, boats and motors, snowmobiles, downhill
or cross-country ski equipment, or charges for marina services,
launch services, and guide services, or the sale of bait and
fishing tackle. For purposes of this determination, a paid
booking of five or more nights shall be counted as two
bookings. 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 provided that the entire property including that portion
of the property classified as class 1c also meets the
requirements for class 4c under this clause; otherwise the
entire property is classified as class 3. 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 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, the county, or
a special taxing district;
(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) (ii) 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.
(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;
(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
(5) manufactured home parks as defined in section 327.14,
subdivision 3; and
(6) real property that is actively and exclusively devoted
to indoor fitness, health, social, recreational, and related
uses, is owned and operated by a not-for-profit corporation, and
is located within the metropolitan area as defined in section
473.121, subdivision 2.
Class 4c property has a class rate of 2.1 1.8 percent of
market value, except that (i) for each parcel of seasonal
residential recreational property not used for commercial
purposes the first $75,000 of market value has a class rate
of 1.4 1.25 percent, and the market value that exceeds $75,000
has a class rate of 2.5 2.2 percent, and (ii) manufactured home
parks assessed under clause (5) have a class rate of two
percent, and (iii) property described in paragraph (d), clause
(4), has the same class rate as the rate applicable to the first
tier of class 4bb nonhomestead residential real estate under
paragraph (c).
(e) Class 4d property 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 one percent of market
value.
(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. 12. Minnesota Statutes 1997 Supplement, 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 4.0 3.5 percent of
market value for taxes payable in 1998 and thereafter.
Sec. 13. Minnesota Statutes 1997 Supplement, section
273.1382, subdivision 1, is amended to read:
Subdivision 1. [EDUCATION HOMESTEAD CREDIT.] Each year,
beginning with property taxes payable in 1998, the respective
county auditors shall determine the initial tax rate for each
school district for the general education levy certified under
section 124A.23, subdivision 2 or 3. That rate plus the school
district's education homestead credit tax rate adjustment under
section 275.08, subdivision 1e, 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 68 percent for
taxes payable in 1999 and 69 percent for taxes payable in 2000
and thereafter 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 $320 for taxes
payable in 1999 and $335 for taxes payable in 2000 and
thereafter. 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.
Sec. 14. Minnesota Statutes 1997 Supplement, section
273.1382, is amended by adding a subdivision to read:
Subd. 1a. [CREDIT PERCENTAGE REDUCTION.] If the general
education levy target for fiscal year 2000 or 2001 is increased
by another law enacted prior to the 1999 legislative session,
the commissioner of revenue shall adjust the percentage rates of
the education homestead credit for the corresponding taxes
payable year by multiplying the percentage rate by the ratio of
the prior general education levy target to the current general
education levy target. If an adjustment is made under this
section for fiscal year 2001, the adjusted rate shall remain in
effect for future years until amended by subsequent legislation.
Sec. 15. Minnesota Statutes 1996, section 273.1398,
subdivision 1a, is amended to read:
Subd. 1a. [TAX BASE DIFFERENTIAL.] (a) For aids payable in
1997 2000, for purposes of computing the fiscal disparity
adjustment only, the tax base differential is 0.25 0.2 percent
of the assessment year 1995 1998 taxable market value of class
4c noncommercial seasonal recreational residential 3
commercial-industrial property up to $72,000 over $150,000.
(b) For aids payable in 1998, the tax base differential is
0.25 percent of the assessment year 1996 taxable market value of
class 4c noncommercial seasonal recreational residential
property up to $72,000.
Sec. 16. Minnesota Statutes 1996, section 273.1398,
subdivision 2, is amended to read:
Subd. 2. [HOMESTEAD AND AGRICULTURAL CREDIT AID.]
Homestead and agricultural credit aid for each unique taxing
jurisdiction equals the product of (1) the homestead and
agricultural credit aid base, and (2) the growth adjustment
factor, plus the net tax capacity adjustment and the fiscal
disparity adjustment. For aid payable in 2000, each county
shall have its homestead and agricultural credit aid permanently
reduced by an amount equal to one-third of the additional amount
received by the county under section 477A.03, subdivision 2,
paragraph (c), clause (ii).
Sec. 17. Minnesota Statutes 1996, section 273.1398,
subdivision 4, is amended to read:
Subd. 4. [DISPARITY REDUCTION CREDIT.] (a) Beginning with
taxes payable in 1989, class 4a, class 3a, and class 3b property
qualifies for a disparity reduction credit if: (1) the property
is located in a border city that has an enterprise zone
designated pursuant to section 469.168, subdivision 4; (2) the
property is located in a city with a population greater than
2,500 and less than 35,000 according to the 1980 decennial
census; (3) the city is adjacent to a city in another state or
immediately adjacent to a city adjacent to a city in another
state; and (4) the adjacent city in the other state has a
population of greater than 5,000 and less than 75,000.
(b) The credit is an amount sufficient to reduce (i) the
taxes levied on class 4a property to 2.3 percent of the
property's market value and (ii) the tax on class 3a and class
3b property to 3.3 2.3 percent of market value.
(c) The county auditor shall annually certify the costs of
the credits to the department of revenue. The department shall
reimburse local governments for the property taxes foregone as
the result of the credits in proportion to their total levies.
Sec. 18. Minnesota Statutes 1997 Supplement, section
290A.03, subdivision 11, is amended to read:
Subd. 11. [RENT CONSTITUTING PROPERTY TAXES.] "Rent
constituting property taxes" means 18 19 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.
Sec. 19. Minnesota Statutes 1997 Supplement, 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 after deductions made under sections 273.135,
273.1382, 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 18 19 percent of the gross rent paid
in the preceding year for the site on which the homestead is
located. 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 273.124, 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. 20. Minnesota Statutes 1996, section 477A.0122,
subdivision 6, is amended to read:
Subd. 6. [REPORT.] (a) On or before March 15 of the year
following the year in which the distributions under this section
are received, each county shall file with the commissioner of
revenue and commissioner of human services a report on prior
year expenditures for out-of-home placement and family
preservation, including expenditures under this section. For
the human services programs specified in this section, the
commissioner of revenue and commissioner of human services, in
consultation with representatives of county governments, shall
make a recommendation to the 1999 legislature as to which
current reporting requirements imposed on county governments, if
any, may be eliminated, replaced, or consolidated on the report
established by this section. For aid payable in calendar year
2000 and thereafter, each county shall provide information on
the amount of state aid, local property tax revenue, and federal
aid expended by that county on the programs specified in this
section using the consolidated financial report recommended by
the commissioner of revenue and commissioner of human services
under this subdivision.
(b) The commissioner of revenue and the commissioner of
human services, in consultation with representatives of county
governments and children's advocacy representatives, shall study
the current formula used in distributing aid under this section
and factors related to out-of-home placement and family
preservation expenditures and make a report to the house and
senate tax committees by February 1, 1999. The report shall
include a recommendation for a new formula to be used in
distributing the aid under this section, beginning with aids
payable in 2000.
Sec. 21. [REPEALER.]
Minnesota Statutes 1997 Supplement, section 273.13,
subdivision 32, is repealed.
Sec. 22. [APPROPRIATIONS; FUND TRANSFERS.]
Subdivision 1. [GENERAL FUND TRANSFER.] The sum of
$12,027,000 is transferred from the property tax reform account
to the general fund on June 30, 1999.
Subd. 2. [EDUCATION LEVY REDUCTION APPROPRIATION.] In
addition to any amount appropriated by other law, $51,300,000 is
appropriated to the commissioner of children, families, and
learning in fiscal year 2000 and $57,000,000 in fiscal year 2001
and thereafter to fund a reduction in the statewide general
education property tax levy. The fiscal year 2001 appropriation
includes $5,700,000 for 2000 and $51,300,000 for 2001. The
amounts appropriated for fiscal years 2000 and 2001 are from the
property tax reform account; subsequent appropriations are from
the general fund.
Subd. 3. [REFERENDUM EQUALIZATION AID.] For fiscal year
2000, $6,300,000 and for fiscal year 2001, $7,000,000 is
appropriated from the property tax reform account to the
commissioner of children, families, and learning to fund the
additional costs of referendum equalization aid under section 6.
Subd. 4. [INTEGRATION AID.] For fiscal year 2000,
$6,300,000 and for fiscal year 2001, $12,400,000 is appropriated
to the commissioner of children, families, and learning from the
property tax reform account to fund the increase in integration
aid under section 5.
Subd. 5. [ALTERNATIVE FACILITIES AID.] $2,700,000 for
fiscal year 2000 and $3,000,000 for fiscal year 2001 is
appropriated from the property tax reform account to the
commissioner of children, families, and learning to finance the
increase in alternative facilities aid under sections 2 and 3.
Subd. 6. [EDUCATION HOMESTEAD CREDIT INCREASE.] The
amounts necessary to make the increased payments attributable to
the increases in education homestead credit percentage rates and
maximums under sections 13 and 14 are transferred from the
property tax reform account to the general fund in fiscal years
2000 and 2001.
Subd. 7. [FISCAL DISPARITIES HACA.] The amount necessary
to fund the fiscal year 2001 cost of fiscal disparities HACA
under section 15 is transferred from the property tax reform
account to the general fund for fiscal year 2001.
Subd. 8. [PROPERTY TAX REFUND INCREASE.] The additional
amount necessary to fund the changes in the property tax refund
under sections 18 and 19 for fiscal years 2000 and 2001 is
transferred from the property tax reform account to the general
fund in each of those fiscal years.
Subd. 9. [FAMILY PRESERVATION AID INCREASE.] The sum of
$20,000,000 is transferred from the property tax reform account
to the general fund in fiscal year 2001 to fund a portion of the
increase in family preservation aid under article 4, section 8,
paragraph (c)(ii).
Subd. 10. [LOCAL GOVERNMENT AID INCREASE.] The sum of
$3,000,000 in each of fiscal years 2000 and 2001 is transferred
from the property tax reform account to the general fund to
cover the additional local government aid appropriation provided
in article 4, section 8, paragraph (d).
Subd. 11. [EXISTING LOW-INCOME HOUSING AID.] The amount
necessary to fund the cost of the existing low-income housing
aid under article 4, section 10, is transferred from the
property tax reform account to the general fund in each of
fiscal years 2000 and 2001.
Subd. 12. [GENERAL FUND TRANSFER.] In the event that there
are insufficient funds within the property tax reform account to
fund any of the payments or transfers provided under this
section, sufficient funds are appropriated from the general fund
to the property tax reform account to fully fund the
appropriation or transfer in fiscal year 2000 or 2001.
Sec. 23. [EFFECTIVE DATES.]
Sections 1 to 7 are effective for revenue for fiscal year
2000. Sections 8 to 14 and 17 are effective beginning with
taxes payable in 1999. Sections 15 and 16 are effective
beginning with aids payable in 2000. Sections 18 and 19 are
effective beginning with rents paid in 1998. Sections 20 to 22
are effective the day following final enactment.
ARTICLE 3
PROPERTY TAXES, LOCAL BONDING AND LEVY AUTHORITY
Section 1. Minnesota Statutes 1997 Supplement, section
272.02, subdivision 1, is amended to read:
Subdivision 1. All property described in this section to
the extent herein limited shall be exempt from taxation:
(1) All public burying grounds.
(2) All public schoolhouses.
(3) All public hospitals.
(4) All academies, colleges, and universities, and all
seminaries of learning.
(5) All churches, church property, and houses of worship.
(6) Institutions of purely public charity except parcels of
property containing structures and the structures described in
section 273.13, subdivision 25, paragraph (c), clauses (1), (2),
and (3), or paragraph (d) (e), 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 federal government, 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
installed after January 1, 1991, and used as an electric power
source are exempt.
"Small 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 two
megawatts or less of electricity as measured by nameplate
ratings.
(b) Medium scale wind energy conversion systems installed
after January 1, 1991, 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.
(30) 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,
1997, that is intended to be used as a business incubator in a
high-unemployment county but is not occupied on the assessment
date. 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, and "high-unemployment county" is a
county that had an average annual unemployment rate of 7.9
percent or greater in 1997. Property that qualifies for the
exemption under this clause is limited to no more than two
contiguous parcels and structures that do not exceed in the
aggregate 40,000 square feet. This exemption expires after
taxes payable in 2005.
(31) Notwithstanding any other law to the contrary, real
property that meets the following criteria is exempt:
(i) constitutes a wastewater treatment system (a)
constructed by a municipality using public funds, (b) operates
under a State Disposal System Permit issued by the Minnesota
pollution control agency pursuant to chapters 115 and 116 and
Minnesota Rules, chapter 700l, and (c) applies its effluent to
land used as part of an agricultural operation;
(ii) is located within a municipality of a population of
less than 10,000;
(iii) is used for treatment of effluent from a private
potato processing facility; and
(iv) is owned by a municipality and operated by a private
entity under agreement with that municipality.
Sec. 2. Minnesota Statutes 1996, section 272.0211,
subdivision 1, is amended to read:
Subdivision 1. [EFFICIENCY DETERMINATION AND
CERTIFICATION.] An owner or operator of a new or existing
electric power generation facility, excluding wind energy
conversion systems, may apply to the commissioner of revenue for
a market value exclusion on the property as provided for in this
section. This exclusion shall apply only to the market value of
the equipment of the facility, and shall not apply to the
structures and the land upon which the facility is located. The
commissioner of revenue shall prescribe the forms and procedures
for this application. Upon receiving the application, the
commissioner of revenue shall request the commissioner of public
service to make a determination of the efficiency of the
applicant's electric power generation facility. In calculating
the efficiency of a facility, the commissioner of public service
shall use a definition of efficiency which calculates efficiency
as the sum of:
(1) the useful electrical power output; plus
(2) the useful thermal energy output; plus
(3) the fuel energy of the useful chemical products,
all divided by the total energy input to the facility, expressed
as a percentage. The commissioner must include in this formula
the energy used in any on-site preparation of materials
necessary to convert the materials into the fuel used to
generate electricity, such as a process to gasify petroleum
coke. The commissioner shall use the high heating value for all
substances in the commissioner's efficiency calculations, except
for wood for fuel in a biomass-eligible project under section
216B.2424; for these instances, the commissioner shall adjust
the heating value to allow for energy consumed for evaporation
of the moisture in the wood. The applicant shall provide the
commissioner of public service with whatever information the
commissioner deems necessary to make the determination. Within
30 days of the receipt of the necessary information, the
commissioner of public service shall certify the findings of the
efficiency determination to the commissioner of revenue and to
the applicant. The commissioner of public service shall
determine the efficiency of the facility and certify the
findings of that determination to the commissioner of revenue
every two years thereafter from the date of the original
certification.
Sec. 3. Minnesota Statutes 1997 Supplement, 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. 4. Minnesota Statutes 1997 Supplement, section
273.112, subdivision 3, is amended to read:
Subd. 3. Real estate shall be entitled to valuation and
tax deferment under this section only if it is:
(a) actively and exclusively devoted to golf, skiing, lawn
bowling, croquet, or archery or firearms range recreational use
or 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 for use in the case of real estate
devoted to golf 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. 5. Minnesota Statutes 1997 Supplement, 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. 6. Minnesota Statutes 1997 Supplement, section
272.115, subdivision 4, is amended to read:
Subd. 4. [ELIGIBILITY FOR HOMESTEAD STATUS.] No real
estate sold or transferred on or after January 1, 1993, for
which a certificate of real estate value is required under
subdivision 1 this section 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.
Sec. 7. Minnesota Statutes 1997 Supplement, section
272.115, subdivision 5, is amended to read:
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, for
highway or roadway right-of-way purposes, 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. 8. Minnesota Statutes 1997 Supplement, section
273.124, subdivision 14, is amended to read:
Subd. 14. [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.]
(a) Real estate of less than ten acres that is the homestead of
its owner must be classified as class 2a under section 273.13,
subdivision 23, paragraph (a), if:
(1) the parcel on which the house is located is contiguous
on at least two sides to (i) agricultural land, (ii) land owned
or administered by the United States Fish and Wildlife Service,
or (iii) land administered by the department of natural
resources on which in lieu taxes are paid under sections 477A.11
to 477A.14;
(2) its owner also owns a noncontiguous parcel of
agricultural land that is at least 20 acres;
(3) the noncontiguous land is located not farther than two
four townships or cities, or a combination of townships or
cities from the homestead; and
(4) the agricultural use value of the noncontiguous land
and farm buildings is equal to at least 50 percent of the market
value of the house, garage, and one acre of land.
Homesteads initially classified as class 2a under the
provisions of this paragraph shall remain classified as class
2a, irrespective of subsequent changes in the use of adjoining
properties, as long as the homestead remains under the same
ownership, the owner owns a noncontiguous parcel of agricultural
land that is at least 20 acres, and the agricultural use value
qualifies under clause (4).
(b) Except as provided in paragraph (d), noncontiguous land
shall be included as part of a homestead under section 273.13,
subdivision 23, paragraph (a), only if the homestead is
classified as class 2a and the detached land is located in the
same township or city, or not farther than two four townships or
cities or combination thereof from the homestead. Any taxpayer
of these noncontiguous lands must notify the county assessor
that the noncontiguous land is part of the taxpayer's homestead,
and, if the homestead is located in another county, the taxpayer
must also notify the assessor of the other county.
(c) Agricultural land used for purposes of a homestead and
actively farmed by a person holding a vested remainder interest
in it must be classified as a homestead under section 273.13,
subdivision 23, paragraph (a). If agricultural land is
classified class 2a, any other dwellings on the land used for
purposes of a homestead by persons holding vested remainder
interests who are actively engaged in farming the property, and
up to one acre of the land surrounding each homestead and
reasonably necessary for the use of the dwelling as a home, must
also be assessed class 2a.
(d) Agricultural land and buildings that were class 2a
homestead property under section 273.13, subdivision 23,
paragraph (a), for the 1997 assessment shall remain classified
as agricultural homesteads for subsequent assessments if:
(1) the property owner abandoned the homestead dwelling
located on the agricultural homestead as a result of the April
1997 floods;
(2) the property is located in the county of Polk, Clay,
Kittson, Marshall, Norman, or Wilkin;
(3) the agricultural land and buildings remain under the
same ownership for the current assessment year as existed for
the 1997 assessment year and continue to be used for
agricultural purposes;
(4) the dwelling occupied by the owner is located in
Minnesota and is within 30 miles of one of the parcels of
agricultural land that is owned by the taxpayer; and
(5) the owner notifies the county assessor that the
relocation was due to the 1997 floods, and the owner furnishes
the assessor any information deemed necessary by the assessor in
verifying the change in homestead dwelling. For taxes payable
in 1998, the owner must notify the assessor by December 1,
1997. Further notifications to the assessor are not required if
the property continues to meet all the requirements in this
paragraph and any dwellings on the agricultural land remain
uninhabited.
Sec. 9. Minnesota Statutes 1997 Supplement, section
273.126, subdivision 3, is amended to read:
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 or
voucher. For applications for class 4d made before July 1,
1999, the required percent of units for an applicant is
increased to 40 percent and the maximum rent that may be charged
on a unit occupied by a family with a section 8 certificate or
voucher is limited to the fair market rent for the area, as
established by the United States Department of Housing and Urban
Development, if within the five year period ending January 2 of
the assessment year:
(1) 40 percent or more of the units in the project or
development were covered by a section 8 project-based housing
assistance contract and the contract has been canceled or no
longer applies; or
(2) the units were in a project or development financed
with a direct federal loan or federally insured loan made
pursuant to Title II of the National Housing Act and the loan
has been paid or prepaid, eliminating the restrictions on rents
under Title II of the Act.
(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.
Sec. 10. [273.1383] [1997 FLOOD LOSS REPLACEMENT AID.]
Subdivision 1. [FLOOD NET TAX CAPACITY LOSS.] In
assessment years 1998, 1999, and 2000, the county assessor of
each county listed in section 273.124, subdivision 14, paragraph
(d), clause (2), shall compute a hypothetical county net tax
capacity based upon market values for the current assessment
year and the class rates that were in effect for assessment year
1997. The amount, if any, by which the assessment year 1997
total taxable net tax capacity exceeds the hypothetical taxable
net tax capacity shall be known as the county's "flood net tax
capacity loss" for the current assessment year. The county
assessor of each county whose flood net tax capacity loss for
the current year exceeds five percent of its assessment year
1997 total taxable net tax capacity shall certify its flood net
tax capacity loss to the commissioner of revenue by August 1 of
the assessment year.
Subd. 2. [FLOOD LOSS AID.] Each year, each county with a
flood net tax capacity loss equal to or greater than five
percent of its assessment year 1997 total taxable net tax
capacity shall be entitled to flood loss aid equal to the flood
net tax capacity loss times the county government's average
local tax rate for taxes payable in 1998.
Subd. 3. [DUTIES OF COMMISSIONER.] The commissioner of
revenue shall determine each qualifying county's aid amount. If
the sum of the aid amounts for all qualifying counties exceeds
the appropriation limit, the commissioner shall proportionately
reduce each county's aid amount so that the sum of county aid
amounts is equal to the appropriation limit. The commissioner
shall notify each county of its flood loss aid amount by August
15 of the assessment year. The commissioner shall make payments
to each county on or before July 20 of the taxes payable year
corresponding to the assessment year.
Subd. 4. [APPROPRIATION.] An amount necessary to fund the
aid amounts under this section is annually appropriated from the
general fund to the commissioner of revenue in fiscal years
2000, 2001, and 2002, for calendar years 1999, 2000, and 2001.
The maximum amount of the appropriation is limited to $1,700,000
for fiscal year 2000 and $1,500,000 per year for fiscal years
2001 and 2002. In addition, the amount of the appropriation
under Laws 1997, Second Special Session chapter 2, section 9,
that the commissioner determines will not be spent for the
programs under that section is available to pay the aid amounts
under this section.
Sec. 11. [273.80] [DISTRESSED HOMESTEAD REINVESTMENT
EXEMPTION.]
Subdivision 1. [DEFINITIONS.] For purposes of this
section, the following terms shall have the meanings given.
"Substantially condition deficient" means that repairs
estimated to cost at least $20,000 are necessary to restore a
house to sound operating condition, according to prevailing
costs of home improvements for the area.
"Sound operating condition" means that a home meets minimal
health and safety standards for residential occupancy under
applicable housing or building codes.
"Residential rehabilitation consultant" means a person who
is employed by a housing services organization recognized by
resolution of the city council of the city in which the property
is located, and who has been trained in residential housing
rehabilitation.
"Census tract" means a tract defined for the 1990 federal
census.
Subd. 2. [ELIGIBILITY.] An owner-occupied, detached,
single-family dwelling is eligible for treatment under this
section if it:
(1) is located in a city of the first class;
(2) is located in a census tract where the median value of
owner-occupied homes is less than 80 percent of the median value
of owner-occupied homes for the entire city, according to the
1998 assessment;
(3) has an estimated market value less than 60 percent of
the median value of owner-occupied homes for the entire city,
according to the 1998 assessment; and
(4) has been declared to be substantially condition
deficient, by a residential rehabilitation consultant.
Subd. 3. [QUALIFICATION.] A home which meets the
eligibility requirements of subdivision 2 before May 1, 2003,
qualifies for the property tax exemption under subdivision 4
after a residential rehabilitation consultant certifies that the
home is in sound operating condition, and that all permits
necessary to make the repairs were obtained. An owner need not
occupy the dwelling while the necessary repairs are being done,
provided that the property is occupied prior to granting the
exemption under subdivision 4. All or a part of the repairs
necessary to restore the house to sound operating conditions may
be done prior to the owner purchasing the property, if those
repairs are done by or for a 501(c)(3) nonprofit organization.
Subd. 4. [PROPERTY TAX EXEMPTION.] A home qualifying under
subdivision 3 is exempt from all property taxes on the land and
buildings for taxes payable for five consecutive years following
its certification under subdivision 3, if the property is owned
and occupied by the same person who owned it when the home was
certified as substantially condition deficient or by the first
purchaser from the 501(c)(3) nonprofit organization that
repaired the property. To be effective beginning with taxes
payable in the following year, the certification must be made by
September 1.
Subd. 5. [ASSESSMENT; RECORD.] The assessor may require
whatever information is necessary to determine eligibility for
the tax exemption under this section. During the time that the
property is exempt, the assessor shall continue to value the
property and record its current value on the tax rolls.
Sec. 12. Minnesota Statutes 1997 Supplement, section
275.065, subdivision 3, is amended to read:
Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The
county auditor shall prepare and the county treasurer shall
deliver after November 10 and on or before November 24 each
year, by first class mail to each taxpayer at the address listed
on the county's current year's assessment roll, a notice of
proposed property taxes.
(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 proposes to
collect for taxes payable the following year. 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 as
each appears in the records of the county assessor on November 1
of 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, state determined school tax net of the education
homestead credit under section 273.1382, voter approved school
levy, other local school levy, and the sum of the special taxing
districts, and as a total of all taxing authorities:
(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.
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 between the total taxes
payable in the current year and the total proposed taxes,
expressed 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 satisfactory
documentation is provided to the county assessor by the
applicable deadline, and the property qualifies for the
homestead classification in that assessment year, the assessor
shall reclassify the property to homestead for taxes payable in
the following year.
(h) In the case of class 4 residential property used as a
residence for lease or rental periods of 30 days or more, the
taxpayer must either:
(1) mail or deliver a copy of the notice of proposed
property taxes to each tenant, renter, or lessee; or
(2) post a copy of the notice in a conspicuous place on the
premises of the property.
The notice must be mailed or posted by the taxpayer by
November 27 or within three days of receipt of the notice,
whichever is later. A taxpayer may notify the county treasurer
of the address of the taxpayer, agent, caretaker, or manager of
the premises to which the notice must be mailed in order to
fulfill the requirements of this paragraph.
(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) If a statutory or home rule charter city or a town has
exercised the local levy option provided by section 473.388,
subdivision 7, it may include in the notice of its proposed
taxes the amount of its proposed taxes attributable to its
exercise of the option. In the first year of the city or town's
exercise of this option, the statement shall include an estimate
of the reduction of the metropolitan council's tax on the parcel
due to exercise of that option. The metropolitan council's levy
shall be adjusted accordingly.
Sec. 13. Minnesota Statutes 1997 Supplement, 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
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 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 first Thursday 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 Wednesday of
December. A continuation hearing, if necessary, shall be held
on the second Monday Wednesday of December even if that second
Monday Wednesday 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. Until September 15, the first and
second Mondays of December are reserved for the use of the
cities. If a city does not certify these its hearing 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. 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.
(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. 14. Minnesota Statutes 1996, section 275.07, is
amended by adding a subdivision to read:
Subd. 5. [REVISED FINAL LEVY.] (a) If the final levy of a
taxing jurisdiction certified to the county auditor is incorrect
due to an error in the deduction of the aid received under
section 273.1398, subdivision 2, in determining the certified
levy as required under subdivision 1, the taxing jurisdiction
may apply to the commissioner of revenue to increase the levy
and recertify it in the correct amount. The commissioner must
receive the request by January 2.
(b) If the commissioner determines that the requirements of
paragraph (a) have been met, the commissioner shall notify the
taxing jurisdiction that the revised final levy has been
approved. Upon receipt of the approval, but no later than
January 15, the governing body of the taxing jurisdiction shall
adopt the revised final levy and the taxing jurisdiction shall
recertify the revised final levy to the county auditor. The
county auditor shall use the revised final levy to compute the
tax rate for the taxing jurisdiction.
(c) The county auditor shall report to the commissioner of
revenue the revised final levy used to determine the tax rates
for the taxing jurisdiction. The provisions of section 275.065,
subdivisions 6, 6a, and 7 do not apply to the revised final levy
for the taxing jurisdiction certified under this section.
(d) The taxing jurisdiction must publish in an official
newspaper of general circulation in the taxing jurisdiction a
notice of its revised final levy. The notice shall contain
examples of the tax impact of the revised final levy on
homestead, apartment, and commercial classes of property in the
taxing jurisdiction. The county auditor shall assist the taxing
jurisdiction in preparing the examples for the publication.
Sec. 15. Minnesota Statutes 1997 Supplement, section
287.08, is amended to read:
287.08 [TAX, HOW PAYABLE; RECEIPTS.]
(a) The tax imposed by sections 287.01 to 287.12 shall be
paid to the treasurer of the county in which the mortgaged land
or some part thereof is situated at or before the time of filing
the mortgage for record or registration. The treasurer shall
endorse receipt on the mortgage, countersigned by the county
auditor, who shall charge the amount to the treasurer and such
receipt shall be recorded with the mortgage, and such receipt of
the record thereof shall be conclusive proof that the tax has
been paid to the amount therein stated and authorize any county
recorder to record the mortgage. Its form, in substance, shall
be "registration tax hereon of ..................... dollars
paid." If the mortgages be exempt from taxation the endorsement
shall be "exempt from registration tax," to be signed in either
case by the treasurer as such, and in case of payment to be
countersigned by the auditor. In case the treasurer shall be
unable to determine whether a claim of exemption should be
allowed, the tax shall be paid as in the case of a taxable
mortgage.
(b) Upon written application of the taxpayer, the county
treasurer may refund in whole or in part any tax which has been
erroneously paid, or a person having paid a mortgage registry
tax amount may seek a refund of such tax, or other appropriate
relief, by bringing an action in tax court in the county in
which the tax was paid, within 60 days of the payment. The
action is commenced by the serving of a petition for relief on
the county treasurer, and by filing a copy with the court. The
county attorney shall defend the action. The county treasurer
shall notify the treasurer of each county that has or would
receive a portion of the tax as paid.
(c) If the county treasurer determines a refund should be
paid, or if a refund is ordered, the county treasurer of each
county that actually received a portion of the tax shall
immediately pay a proportionate share of three percent of the
refund using any available county funds. The county treasurer
of each county which received, or would have received, a portion
of the tax shall also pay their county's proportionate share of
the remaining 97 percent of the court-ordered refund on or
before the tenth day of the following month using solely the
mortgage registry tax funds that would be paid to the
commissioner of revenue on that date under section 287.12. If
the funds on hand under this procedure are insufficient to fully
fund 97 percent of the court-ordered refund, the county
treasurer of the county in which the action was brought shall
file a claim with the commissioner of revenue under section
16A.48 for the remaining portion of 97 percent of the refund,
and shall pay over the remaining portion upon receipt of a
warrant from the state issued pursuant to the claim.
(d) When any such mortgage covers real property situate in
more than one county in this state the whole of such tax shall
be paid to the treasurer of the county where the mortgage is
first presented for record or registration, and the payment
shall be receipted and countersigned as above provided. If the
principal debt or obligation secured by such a multiple county
mortgage exceeds $1,000,000, the tax shall be divided and paid
over by the county treasurer receiving the same, on or before
the tenth day of each month after receipt thereof, to the county
or counties entitled thereto in the ratio which the market value
of the real property covered by the mortgage in each county
bears to the market value of all the property described in the
mortgage. In making such division and payment the county
treasurer shall send therewith a statement giving the
description of the property described in the mortgage and the
market value of the part thereof situate in each county. For
the purpose aforesaid, the treasurer of any county may require
the treasurer of any other county to certify to the former the
market valuation of any tract of land in any such mortgage.
Sec. 16. [365A.095] [DISSOLUTION.]
A petition signed by at least 75 percent of the property
owners in the territory of the subordinate service district
requesting the removal of the district may be presented to the
town board. Within 30 days after the town board receives the
petition, the town clerk shall determine the validity of the
signatures on the petition. If the requisite number of
signatures are certified as valid, the town board must hold a
public hearing on the petitioned matter. Within 30 days after
the end of the hearing, the town board must decide whether to
discontinue the subordinate service district, continue as it is,
or take some other action with respect to it.
Sec. 17. Minnesota Statutes 1996, section 462.396,
subdivision 2, is amended to read:
Subd. 2. [BUDGET; HEARING; LEVY LIMITS.] On or before
August 20 each year, the commission shall submit its proposed
budget for the ensuing calendar year showing anticipated
receipts, disbursements and ad valorem tax levy with a written
notice of the time and place of the public hearing on the
proposed budget to each county auditor and municipal clerk
within the region and those town clerks who in advance have
requested a copy of the budget and notice of public hearing. On
or before September 15 each year, the commission shall adopt,
after a public hearing held not later than September 15, a
budget covering its anticipated receipts and disbursements for
the ensuing year and shall decide upon the total amount
necessary to be raised from ad valorem tax levies to meet its
budget. After adoption of the budget and no later than
September 15, the secretary of the commission shall certify to
the auditor of each county within the region the county share of
the tax, which shall be an amount bearing the same proportion to
the total levy agreed on by the commission as the net tax
capacity of the county bears to the net tax capacity of the
region. (1) For taxes levied in 1990 and thereafter 1998, the
maximum amounts of levies made for the purposes of sections
462.381 to 462.398 are the following amounts, less the sum of
regional planning grants from the commissioner to that region:
for Region 1, $180,337; for Region 2, $150,000 $180,000; for
Region 3, $353,110; for Region 5, $195,865; for Region 6E,
$197,177; for Region 6W, $150,000 $180,000; for Region
7E, $158,653 $180,000; for Region 8, $206,107; for Region 9,
$343,572. (2) For taxes levied in 1999 and thereafter, the
maximum amount that may be levied by each commission shall be
the amount authorized in clause (1), or 103 percent of the
amount levied in the previous year, whichever is greater. The
auditor of each county in the region shall add the amount of any
levy made by the commission within the limits imposed by this
subdivision to other tax levies of the county for collection by
the county treasurer with other taxes. When collected the
county treasurer shall make settlement of the taxes with the
commission in the same manner as other taxes are distributed to
political subdivisions.
Sec. 18. Minnesota Statutes 1997 Supplement, section
462A.071, subdivision 2, is amended to read:
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. Beginning in calendar year
2000, the agency shall adopt procedures and deadlines for making
application to permit certification of the units qualifying to
the assessor by no later than April 1 of the assessment year.
(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 qualifying units
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
housing development fund.
Sec. 19. Minnesota Statutes 1997 Supplement, section
462A.071, subdivision 4, is amended to read:
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 or the housing quality standards adopted by the
United States Department of Housing and Urban Development, if no
local housing maintenance code has been adopted.
(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.
Sec. 20. Minnesota Statutes 1997 Supplement, section
462A.071, subdivision 6, is amended to read:
Subd. 6. [SECTION 8 AND, TAX CREDIT, AND RURAL HOUSING
SERVICE 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; or
(3) are financed by the Rural Housing Service of the United
States Department of Agriculture and receive payments under the
rental assistance program pursuant to section 521(a) of the
Housing Act of 1949, 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).
Sec. 21. Minnesota Statutes 1997 Supplement, section
462A.071, subdivision 8, is amended to read:
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, or the
section 8 availability requirements, a penalty applies equal to
the increased taxes that would have been imposed if the property
unit had not been classified under class 4d for the year in
which restrictions were violated, plus an additional amount
equal to ten percent of the increased taxes. The provisions of
section 279.03 apply to the amount of increased taxes that would
have been imposed if a unit 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 housing
development 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.
Sec. 22. Minnesota Statutes 1996, section 473.39, is
amended by adding a subdivision to read:
Subd. 1e. [OBLIGATIONS.] In addition to the authority in
subdivisions 1a, 1b, 1c, and 1d, the council may issue
certificates of indebtedness, bonds, or other obligations under
this section in an amount not exceeding $32,500,000, 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.
The metropolitan council, the city of St. Paul, and the
Minnesota department of transportation shall jointly assess the
feasibility of locating a bus storage facility near Mississippi
and Cayuga Street and I-35E in St. Paul. If the metropolitan
council determines feasibility, the first priority for siting
must be at that location.
Sec. 23. Minnesota Statutes 1996, section 473.3915,
subdivision 2, is amended to read:
Subd. 2. [REGULAR ROUTE TRANSIT SERVICE.] "Regular route
transit service" means services as defined in section 473.385,
subdivision 1, paragraph (b), with at least two scheduled runs
per hour between 7:00 a.m. and 6:30 p.m., Monday to Friday, and
regularly scheduled service on Saturday, Sunday, and holidays,
and weekdays after 6:30 p.m. The two scheduled runs for buses
leaving a replacement transit service transit hub need not be on
the same route.
Sec. 24. Minnesota Statutes 1996, section 473.3915,
subdivision 3, is amended to read:
Subd. 3. [TRANSIT ZONE.] "Transit zone" means: (1) the
area within one-quarter of a mile of a route along which regular
route transit service is provided that is also within the
metropolitan urban service area, as determined by the council;
or (2) the area within one-eighth of a mile around a replacement
transit service transit hub. "Transit zone" includes any light
rail transit route for which funds for construction have been
committed.
Sec. 25. Minnesota Statutes 1996, section 475.58,
subdivision 1, is amended to read:
Subdivision 1. [APPROVAL BY ELECTORS; EXCEPTIONS.]
Obligations authorized by law or charter may be issued by any
municipality upon obtaining the approval of a majority of the
electors voting on the question of issuing the obligations, but
an election shall not be required to authorize obligations
issued:
(1) to pay any unpaid judgment against the municipality;
(2) for refunding obligations;
(3) for an improvement or improvement program, which
obligation is payable wholly or partly from the proceeds of
special assessments levied upon property specially benefited by
the improvement or by an improvement within the improvement
program, or of taxes levied upon the increased value of property
within a district for the development of which the improvement
is undertaken, including obligations which are the general
obligations of the municipality, if the municipality is entitled
to reimbursement in whole or in part from the proceeds of such
special assessments or taxes and not less than 20 percent of the
cost of the improvement or the improvement program is to be
assessed against benefited property or is to be paid from the
proceeds of federal grant funds or a combination thereof, or is
estimated to be received from such taxes within the district;
(4) payable wholly from the income of revenue producing
conveniences;
(5) under the provisions of a home rule charter which
permits the issuance of obligations of the municipality without
election;
(6) under the provisions of a law which permits the
issuance of obligations of a municipality without an election;
(7) to fund pension or retirement fund liabilities pursuant
to section 475.52, subdivision 6;
(8) under a capital improvement plan under section 373.40;
and
(9) to fund facilities as provided in subdivision 3; and
(10) under sections 469.1813 to 469.1815 (property tax
abatement authority bonds).
Sec. 26. Minnesota Statutes 1996, section 477A.14, is
amended to read:
477A.14 [USE OF FUNDS.]
Forty percent of the total payment to the county shall be
deposited in the county general revenue fund to be used to
provide property tax levy reduction. The remainder shall be
distributed by the county in the following priority:
(a) 37.5 cents for each acre of county-administered other
natural resources land shall be deposited in a resource
development fund to be created within the county treasury for
use in resource development, forest management, game and fish
habitat improvement, and recreational development and
maintenance of county-administered other natural resources
land. Any county receiving less than $5,000 annually for the
resource development fund may elect to deposit that amount in
the county general revenue fund;
(b) From the funds remaining, within 30 days of receipt of
the payment to the county, the county treasurer shall pay each
organized township 30 cents per acre of acquired natural
resources land and 7.5 cents per acre of other natural resources
land located within its boundaries. Payments for natural
resources lands not located in an organized township shall be
deposited in the county general revenue fund. Payments to
counties and townships pursuant to this paragraph shall be used
to provide property tax levy reduction, except that of the
payments for natural resources lands not located in an organized
township, the county may allocate the amount determined to be
necessary for maintenance of roads in unorganized townships.
Provided that, if the total payment to the county pursuant to
section 477A.12 is not sufficient to fully fund the distribution
provided for in this clause, the amount available shall be
distributed to each township and the county general revenue fund
on a pro rata basis; and
(c) Any remaining funds shall be deposited in the county
general revenue fund. Provided that, if the distribution to the
county general revenue fund exceeds $35,000, the excess shall be
used to provide property tax levy reduction.
Sec. 27. Laws 1971, chapter 773, section 1, as amended by
Laws 1974, chapter 351, section 5, Laws 1976, chapter 234,
sections 1 and 7, Laws 1978, chapter 788, section 1, Laws 1981,
chapter 369, section 1, Laws 1983, chapter 302, section 1, Laws
1988, chapter 513, section 1, and Laws 1992, chapter 511,
article 9, section 23, is amended to read:
Section 1. [ST. PAUL, CITY OF; CAPITAL IMPROVEMENT
PROGRAM.]
Subdivision 1. Notwithstanding any provision of the
charter of the city of St. Paul, the council of said city shall
have power by a resolution adopted by five affirmative votes of
all its members to authorize the issuance and sale of general
obligation bonds of the city in the years stated and in the
aggregate annual amounts not to exceed the limits prescribed in
subdivision 2 of this section for the payment of which the full
faith and credit of the city is irrevocably pledged.
Subd. 2. For each of the years through 1998 2003, the city
of St. Paul is authorized to issue bonds in the aggregate
principal amount of $8,000,000 $15,000,000 for each year; or in
an amount equal to one-fourth of one percent of the assessors
estimated market value of taxable property in St. Paul,
whichever is greater, provided that no more than
$8,000,000 $15,000,000 of bonds is authorized to be issued in
any year, unless St. Paul's local general obligation debt as
defined in this section is less than six percent of market value
calculated as of December 31 of the preceding year; but at no
time shall the aggregate principal amount of bonds authorized
exceed $15,700,000 in 1992, $16,600,000 in 1993, $16,600,000 in
1994, $16,600,000 in 1995, $17,500,000 in 1996, $17,500,000 in
1997, and $18,000,000 in 1998, $18,000,000 in 1999, $19,000,000
in 2000, $19,000,000 in 2001, $19,500,000 in 2002, and
$20,000,000 in 2003.
Subd. 3. For purposes of this section, St. Paul's general
obligation debt shall consist of the principal amount of all
outstanding bonds of (1) the city of St. Paul, the housing and
redevelopment authority of St. Paul, the civic center authority
of St. Paul, and the port authority of St. Paul, for which the
full faith and credit of the city or any of the foregoing
authorities has been pledged; (2) Independent School District
625, for which the full faith and credit of the district has
been pledged; and (3) the county of Ramsey, for which the full
faith and credit of the county has been pledged, reduced by an
amount equal to the principal amount of the outstanding bonds
multiplied by a figure, the numerator of which is equal to the
assessed value net tax capacity of property within the county
outside of the city of St. Paul and the denominator of which is
equal to the assessed value net tax capacity of the county.
There shall be deducted before making the foregoing
computations the outstanding principal amount of all refunded
bonds, all tax or aid anticipation certificates of indebtedness
of the city, the authorities, the school district and the county
for which the full faith and credit of the bodies has been
pledged and all tax increment financed bonds which have not
used, for the prior three consecutive years, general tax levies
or capitalized interest to support annual principal and interest
payments.
Sec. 28. Laws 1971, chapter 773, section 2, as amended by
Laws 1978, chapter 788, section 2, Laws 1983, chapter 302,
section 2, Laws 1988, chapter 513, section 2, and Laws 1992,
chapter 511, article 9, section 24, is amended to read:
Sec. 2. The proceeds of all bonds issued pursuant to
section 1 hereof shall be used exclusively for the acquisition,
construction, and repair of capital improvements and, commencing
in the year 1992 and notwithstanding any provision in Laws 1978,
chapter 788, section 5, as amended, for redevelopment project
activities as defined in Minnesota Statutes, section 469.002,
subdivision 14, in accordance with Minnesota Statutes, section
469.041, clause (6). The amount of proceeds of bonds authorized
by section 1 used for redevelopment project activities shall not
exceed $655,000 in 1992, $690,000 in 1993, $690,000 in 1994,
$690,000 in 1995, $700,000 in 1996, $700,000 in 1997,
and $725,000 in 1998 or any later year.
None of the proceeds of any bonds so issued shall be
expended except upon projects which have been reviewed, and have
received a priority rating, from a capital improvements
committee consisting of 18 members, of whom a majority shall not
hold any paid office or position under the city of St. Paul.
The members shall be appointed by the mayor, with at least four
members from each Minnesota senate district located entirely
within the city and at least two members from each senate
district located partly within the city. Prior to making an
appointment to a vacancy on the capital improvement budget
committee, the mayor shall consult the legislators of the senate
district in which the vacancy occurs. The priorities and
recommendations of the committee shall be purely advisory, and
no buyer of any bonds shall be required to see to the
application of the proceeds.
Sec. 29. Laws 1976, chapter 162, section 1, as amended by
Laws 1982, chapter 474, section 1, Laws 1983, chapter 338,
section 1, Laws 1989 First Special Session chapter 1, article 5,
section 45, and Laws 1991, chapter 167, section 1, is amended to
read:
Section 1. [RED RIVER OF THE NORTH WATERSHED; TAX BY
WATERSHED DISTRICTS.]
Each watershed district located both within the counties of
Kittson, Marshall, Polk, Pennington, Red Lake, Norman, Clay,
Mahnomen, Clearwater, Roseau, Wilkin, Ottertail, Becker,
Koochiching, Beltrami, Traverse, Grant, Big Stone, Stevens, and
Itasca, which district and within the hydrologic basin of the
Red River of the North that is a member of the Red River
watershed management board, established by a joint powers
agreement in accordance with Minnesota Statutes, section 471.59,
may levy an ad valorem tax not to exceed 0.04836 percent of the
taxable market value of all property within the district. This
levy shall be in excess of any levy authorized by Minnesota
Statutes, section 103D.905. The proceeds of one-half of this
levy shall be credited to the district's construction fund and
shall be used for the development, construction, and maintenance
of projects and programs of benefit to the district. The
proceeds of the remaining one-half of this levy shall be
credited to the general fund of the Red River watershed
management board and shall be used for funding the development,
construction, and maintenance of projects and programs of
benefit to the Red River basin. The Red River management board
shall adopt criteria for member districts to follow in applying
for funding from the board.
Sec. 30. Laws 1984, chapter 380, section 1, as amended by
Laws 1994, chapter 505, article 6, section 27, is amended to
read:
Section 1. [TAX.]
The Anoka county board may levy a tax on of not more than
.01 percent of the taxable market value of taxable
property located within the county outside of excluding any
taxable property taxed by any city in which is situated a for
the support of any free public library, to acquire, better, and
construct county library buildings and to pay principal and
interest on bonds issued for that purpose. The tax shall be
disregarded in the calculation of levies or limits on levies
provided by Minnesota Statutes, section 373.40, or other law.
Sec. 31. Laws 1984, chapter 380, section 2, is amended to
read:
Sec. 2. [AUTHORIZATION.]
The Anoka county board may, by resolution adopted by a
four-sevenths vote, issue and sell general obligation bonds of
the county in the amount of $9,000,000 in the manner provided in
Minnesota Statutes, chapter 475, to acquire, better, and
construct county library buildings. The total amount of bonds
outstanding at any time shall not exceed $5,000,000. The county
board, prior to the issuance of any bonds authorized by section
1 and after adopting the resolution as provided above in this
section, shall adopt a resolution by majority vote of the county
board stating the amount, purpose and, in general, the security
to be provided for the bonds, and shall publish the resolution
once each week for two consecutive weeks in the medium of
official and legal publication of the county. The bonds may be
issued without the submission of the question of their issuance
to the voters of the county library district unless within 21
days after the second publication of the resolution a petition
requesting a referendum, signed by at least ten percent of the
registered voters of the county, is filed with the county
auditor. If a petition is filed, bonds may be issued unless
disapproved by a majority of the voters of the county library
district, voting on the question of their issuance at a regular
or special election. The bonds shall not be subject to the
requirements of Minnesota Statutes, sections 475.57 to 475.59.
The maturity years and amounts and interest rates of each series
of bonds shall be fixed so that the maximum amount of principal
and interest to become due in any year, on the bonds of that
series and of all outstanding series issued by or for the
purposes of libraries, shall not exceed an amount equal to
three-fourths of a mill times the assessed value the lesser of
(i) .01 percent of the taxable market value of all taxable
property in the county, which was not excluding any taxable
property taxed in 1981 by any city for the support of any free
public library, as last finally equalized before the issuance of
the series or (ii) $1,250,000. When the tax levy authorized in
this sections section is collected, it shall be appropriated and
credited to a debt service fund for the bonds. The tax levy for
the debt service fund under Minnesota Statutes, section 475.61
shall be reduced by the amount available or reasonably
anticipated to be available in the fund to make payments
otherwise payable from the levy pursuant to section 475.61.
Sec. 32. Laws 1992, chapter 511, article 2, section 52, as
amended by Laws 1997, chapter 231, article 2, section 50, 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 Minnesota Statutes, 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, 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 (1) costs
incurred in connection with the development and maintenance of
cost-sharing projects with the United States Army Corps of
Engineers or (2) administrative costs associated with 1997 flood
mitigation projects. The board of managers shall make the levy
for the administrative fund in accordance with Minnesota
Statutes, section 103D.915.
Sec. 33. Laws 1994, chapter 587, article 11, is amended by
adding a section to read:
Sec. 5a. [POLITICAL SUBDIVISION.]
For purposes of Minnesota Statutes, section 275.066, the
Chisholm/Hibbing airport authority is a political subdivision of
the state of Minnesota.
Sec. 34. Laws 1997, chapter 231, article 2, section 63,
subdivision 1, is amended to read:
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 2000, 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 $2,500 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 $2,500 per unit minimum.
Sec. 35. Laws 1997, chapter 231, article 2, section 68,
subdivision 1, is amended to read:
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.
Sec. 36. Laws 1997, chapter 231, article 2, section 68,
subdivision 3, is amended to read:
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 or 1998;
(2) a facility that was converted to an elderly assisted
living facility during calendar year 1997 or 1998; 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 1999 regular
legislative session.
Sec. 37. [CHILD CARE FACILITY.]
In connection with the capital expenditure authority in
Minnesota Statutes, section 473.39, subdivision 1e, the
metropolitan council shall consider incorporating in a new
transfer garage a child care facility to assist in the
recruitment and retention of metropolitan transit drivers.
Sec. 38. [QUALIFIED PROPERTY.]
A contiguous property located within a county adjacent to a
county containing a city of the first class and within the
metropolitan area as defined in Minnesota Statutes, section
473.121, shall be valued and classified under sections 39 and
40, provided it meets the following conditions:
(1) the property does not exceed 60 acres;
(2) the property includes a sculpture garden open to the
public, either free of charge or for a nominal admission fee;
(3) the property includes a system of internal roads and
paths for pedestrian use and an amphitheater for live artistic
performances;
(4) the property is used for a summer youth art camp;
(5) the property is used for seminars for aspiring and
professional artists;
(6) the property includes the homestead of the owner; and
(7) the property has been owned by the owner for at least
40 years.
Sec. 39. [CLASSIFICATION.]
Notwithstanding any law to the contrary, a property
qualifying under section 38 shall be classified as class 2a
property under Minnesota Statutes, section 273.13, subdivision
23.
Sec. 40. [VALUATION.]
Notwithstanding Minnesota Statutes, section 273.11,
subdivision 1, the land qualifying under section 38 shall be
valued as if it were agricultural property, using a per acre
valuation equal to the average per acre valuation of similar
agricultural property within the county.
Sec. 41. [SPECIAL ASSESSMENT DEFERRAL AUTHORIZED.]
Notwithstanding Minnesota Statutes, chapter 429, a city may
defer the payment of any special assessment levied against a
property qualifying under section 38 as determined by the city.
Sec. 42. [TRANSFER OF PROPERTY; PAYMENT OF DEFERRED
TAXES.]
Subdivision 1. [ADDITIONAL TAX.] The assessor shall make a
separate determination of the market value and net tax capacity
of a property qualifying under section 38 as if sections 39 and
40 did not apply. The tax based upon the appropriate local tax
rate applicable to such property in the taxing district shall be
recorded on the property assessment records.
Subd. 2. [RECAPTURE.] (a) Property or any portion thereof
qualifying under section 38 is subject to additional taxes if (1)
ownership of the property is transferred to anyone other than
the spouse or child of the current owner, or (2) the current
owner or the spouse or child of the current owner has not
conveyed or entered into a contract before July 1, 2002, to
convey the property to a nonprofit foundation or corporation
created to own and operate the property as an art park providing
the services included in section 38, clauses (2) to (5).
(b) The additional taxes are imposed at the earlier of (1)
the year following transfer of ownership to anyone other than
the spouse or child of the current owner or a nonprofit
foundation or corporation created to own and operate the
property as an art park, or (2) for taxes payable in 2003. The
additional taxes are equal to the difference between the taxes
determined under sections 39 and 40 and the amount determined
under subdivision 1 for all years that the property qualified
under section 38. The additional taxes must be extended against
the property on the tax list for the current year; provided,
however, that no interest or penalties may be levied on the
additional taxes if timely paid.
Subd. 3. [CURRENT OWNER.] For purposes of this section,
"current owner" means the owner of property qualifying under
section 38 on the date of final enactment of this act or that
owner's spouse or child.
Subd. 4. [NONPROFIT FOUNDATION OR CORPORATION.] For
purposes of this act, "nonprofit foundation or corporation"
means a nonprofit entity created to own and operate the property
as an art park providing the services included in section 38,
clauses (2) to (5).
Sec. 43. [WATER SUPPLY PROJECTS OF MORE THAN $15,000,000.]
Notwithstanding Minnesota Statutes, chapter 410, or
Minneapolis city charter, chapter 15, section 9, the city of
Minneapolis and its board of estimate and taxation may issue and
sell bonds or incur other indebtedness for a capital improvement
project related to water supply that in all phases from
inception to completion exceeds $15,000,000 without submitting
the question of issuing such obligations or incurring such
indebtedness to the electorate for approval.
Sec. 44. [JENSEN-NOPEMING SPECIAL DISTRICT.]
Subdivision 1. [SPECIAL DISTRICT MAY BE ESTABLISHED.] The
counties of Carlton and St. Louis may establish the
Jensen-Nopeming Special District with authority to levy a
property tax not greater than $200,000 annually for the capital
costs of the Chris Jensen Nursing Home and the Nopeming Nursing
Home. The tax may be levied on taxable property in the
territory described in Minnesota Statutes, section 458D.02,
subdivision 2. The district shall be governed by a board
composed of those members of the St. Louis county board who
represent territory subject to taxation by the district and two
members of the Carlton county board elected by the Carlton
county board to serve terms provided by the board. The proceeds
of the tax may be used only for capital costs of the nursing
homes. As provided by Minnesota Statutes, chapter 475, debt may
be incurred by the district for capital costs of the nursing
home and the proceeds of the tax may be pledged to secure the
debt. The district may enter into appropriate agreements with
either county to facilitate the incurrence of debt or otherwise
discharge its duties under this section.
By April 15, 1999, the St. Louis county board shall
complete a study examining the long-term profitability of Chris
Jensen and Nopeming nursing homes. Upon completion of the
study, the board must adopt a plan to eliminate any future
property tax revenue dedicated to operating costs of the two
facilities.
Subd. 2. [LOCAL APPROVAL.] Subdivision 1 is effective the
day after the county boards of Carlton and St. Louis counties
comply with the provisions of Minnesota Statutes, section
645.021, subdivision 3.
Sec. 45. [CITIES OF MINNEAPOLIS AND ST. PAUL; TRANSIT ZONE
TAX.]
Subdivision 1. [DEFINITIONS.] (a) For purposes of this
section, the following terms have the meanings given.
(b) "City" is the city of Minneapolis or the city of St.
Paul.
(c) "Downtown taxing district" means:
(1) for the city of Minneapolis, the geographic area in
which the city may impose the tax under Laws 1986, chapter 396,
section 4, as amended by Laws 1986, chapter 400, section 44; and
(2) for the city of St. Paul, taxing wards numbers 3 and 4.
(d) "Purchase agreement" includes an option agreement to
acquire a leasehold interest that includes an option to purchase.
(e) "Transit zone tax capacity" means the reduction in net
tax capacity of transit zone property in the downtown taxing
district that result from the reduced class rate under the
provisions of Minnesota Statutes, section 273.13, subdivision
24, paragraph (c), or a successor provision. Transit zone tax
capacity is determined without regard to captured or original
net tax capacity under Minnesota Statutes, section 469.177, or
to the distribution or contribution value under Minnesota
Statutes, section 473F.08.
Subd. 2. [EXEMPTION.] The tax under this section does not
apply to:
(1) property for which a building permit was issued before
December 31, 1998; or
(2) property for which a building permit was issued before
June 30, 2001, if:
(i) at least 50 percent of the land on which the structure
is to be built has been acquired or is the subject of signed
purchase agreements or signed options as of March 15, 1998, by
the entity that proposes construction of the project or an
affiliate of the entity;
(ii) signed agreements have been entered into with one
entity or with affiliated entities to lease for the account of
the entity or affiliated entities at least 50 percent of the
square footage of the structure or the owner of the structure
will occupy at least 50 percent of the square footage of the
structure; and
(iii)(A) the project proposer has submitted the completed
data portions of an environmental assessment worksheet by
December 31, 1998, or (B) a notice of determination of adequacy
of an environmental impact statement has been published by April
1, 1999, or (C) an alternative urban areawide review has been
completed by April 1, 1999; or
(3) property for which a building permit is issued before
July 30, 1999, if:
(i) at least 50 percent of the land on which the structure
is to be built has been acquired or is the subject of signed
purchase agreements as of March 31, 1998, by the entity that
proposes construction of the project or an affiliate of the
entity;
(ii) a signed agreement has been entered into between the
building developer and a tenant to lease for its own account at
least 200,000 square feet of space in the building;
(iii) a signed letter of intent is entered into by July 1,
1998, between the building developer and the tenant to lease the
space for its own account; and
(iv) the environmental review process required by state law
was commenced by December 31, 1998; or
(4)(i) property a portion of the land on which the
structure is to be built is the subject of condemnation
proceedings as of March 15, 1998; and
(ii) signed agreements have been entered into with one
entity or with affiliated entities to lease for the account of
the entity or affiliated entities at least 50 percent of the
square footage of the structure or the owner of the structure
will occupy at least 50 percent of the square footage of the
structure.
Subd. 3. [AUTHORITY TO IMPOSE.] (a) The city may, by
ordinance, impose a tax on transit zone tax capacity within the
downtown taxing district.
(b) The rate of the tax equals the sum of the ad valorem
property tax rates imposed by the county, city, school district,
and special taxing districts in the city that apply for the
taxable year.
(c) The tax equals the rate multiplied by the transit zone
tax capacity.
(d) The tax imposed is not included in the calculation of
levies or levy limits.
Subd. 4. [COLLECTION AND ADMINISTRATION.] Any tax imposed
under this section is payable at the same time and in the same
manner and must be collected and imposed as provided by general
law for ad valorem taxes. Any tax not paid by the due date is
subject to the same penalty and interest as ad valorem taxes not
paid by the due date.
Subd. 5. [USE OF REVENUES.] The revenues from the tax
imposed under this section must be deposited in a separate
account on the city's books and records. Money in the account
may only be used in the downtown taxing district to provide
transit services or transit related projects that directly
increase the feasibility of existing or proposed transit system
services or improvements.
Subd. 6. [EFFECTIVE DATE.] This section is effective the
day following final enactment and applies to the cities of
Minneapolis and St. Paul under the provisions of Minnesota
Statutes, section 645.023.
Sec. 46. [APPLICATION.]
Sections 23 and 24 apply in the counties of Anoka, Carver,
Dakota, Hennepin, Ramsey, Scott, and Washington.
Sec. 47. [REPEALER.]
Minnesota Statutes 1996, section 365A.09, is repealed.
Sec. 48. [EFFECTIVE DATE.]
Section 1, clause (30), is effective for the 1998
assessment for taxes payable in 1999 through assessment year
2004, taxes payable in 2005, and section 1, clause (31), is
effective beginning with the 1998 assessment payable 1999 and
thereafter, except that for the 1998 assessment, the filing
requirement under Minnesota Statutes, section 272.025,
subdivision 3, for both clauses (30) and (31) shall be 60 days
after enactment of this act. Sections 2, 29, and 43 are
effective the day following final enactment. Sections 3 to 5
and 8 are effective for the 1998 assessment, taxes payable in
1999 and thereafter. Sections 6 and 7 are effective for real
estate sales and transfers occurring on or after July 1, 1998.
Sections 9, 18, paragraph (c), and 19 to 21 are effective
beginning for property taxes assessed in 1998 and payable in
1999. Section 10 is effective for aids payable in 1999, 2000,
and 2001. Section 12 is effective beginning with notices
prepared in 1998 for taxes payable in 1999. Section 13 is
effective for public hearings held in 1998 and thereafter.
Sections 14, 23, 24, and 46 are effective for taxes payable in
1999 and thereafter. Section 15 is effective for mortgages
recorded or registered on or after July 1, 1998. Section 25
confirms the original intent of the legislature in enacting the
abatement law and is effective retroactively to the same time
Minnesota Statutes, sections 469.1813 to 469.1815, became
effective. Section 26 is effective for payments to counties
after June 30, 1998. Sections 27 and 28 are effective upon
compliance by the governing body of the city of St. Paul with
Minnesota Statutes, section 645.021, subdivision 3. Sections 30
and 31 are effective the day after the chief clerical officer of
Anoka county complies with Minnesota Statutes, section 645.021,
subdivision 3. Sections 32 and 33 are effective for taxes
levied in 1997, payable in 1998, and thereafter. Section 34 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. Sections 38 to 42 are effective beginning with taxes
payable in 1998 and ending with taxes payable in 2003. Section
48, subdivision 1, is effective the day following final
enactment.
An applicant for class 4d for taxes payable in 1999 may
withdraw its application by June 1, 1998, if the provisions
added to Minnesota Statutes, section 273.126, subdivision 3, by
section 9, would require the applicant to increase the percent
of units that must be made available for section 8 tenants.
ARTICLE 4
GENERAL LEVY LIMITS AND STATE AIDS
Section 1. Minnesota Statutes 1997 Supplement, section
275.70, subdivision 5, is amended to read:
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 June 11, 1997,
for the amount of tax dollars lost due to abatements authorized
under section 273.123, subdivision 7, and Laws 1997, chapter
231, article 2, section 64, to the extent that they are related
to the major disaster and to the extent that neither the state
or federal government reimburses the local government for the
amount lost;
(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).;
(10) for the amount of tax revenue lost due to abatements
authorized under section 273.123, subdivision 7, for damage
related to the tornadoes of March 29, 1998, to the extent that
neither the state or federal government provides reimbursement
for the amount lost;
(11) pay amounts required to correct an error in the levy
certified to the county auditor by a city or county in a levy
year, but only to the extent that when added to the preceding
year's levy it is not in excess of an applicable statutory,
special law or charter limitation, or the limitation imposed on
the governmental subdivision by sections 275.70 to 275.74 in the
preceding levy year; and
(12) to pay an abatement under section 469.1815.
Sec. 2. Minnesota Statutes 1997 Supplement, section
275.70, is amended by adding a subdivision to read:
Subd. 6. [MATCHING FUND REQUIREMENTS.] The special levy
provided in subdivision 5, clause (8), does not include the
increased direct and indirect costs related to general increases
in program costs where there is no mandated increase regarding
the matching fund requirements. Specifically, but without
limitation, the following provisions apply to the special levy
authorization in subdivision 5, clause (8): (1) increases in
direct or indirect income maintenance administrative costs are
not included; (2) increases for social services and social
services administration are included, but only to the extent
that the minimum local share amount needed to receive community
social service aids exceeds the amount levied for social
services and social services administration for the taxes
payable year 1997; and (3) increases in county costs for Title
IV-E Foster Care Services over the amount levied for the taxes
payable year 1997 are included to the extent the amount from
both years represents the local matching fund requirement for
the federal grant.
Sec. 3. Minnesota Statutes 1997 Supplement, section
275.71, subdivision 2, is amended to read:
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; and
(5) the amount of any payments certified to the local
government unit in 1997 under sections 298.28 and 298.282.
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 equal to its adjusted levy limit
base in the previous year, subject to any adjustments under
section 275.72 and multiplied by the increase that would have
occurred under subdivision 3, clause (3), if that clause had
been in effect for taxes levied in 1997.
Sec. 4. Minnesota Statutes 1997 Supplement, section
275.71, subdivision 3, is amended to read:
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 or section 275.72,
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; and
(3) one plus a percentage equal to the percentage increase
in the taxable market value of the jurisdiction due to new
construction of class 3 and class 5 property, as defined in
section 273.13, subdivisions 24 and 31, for the most recent year
for which data are available.
Sec. 5. Minnesota Statutes 1997 Supplement, section
275.71, subdivision 4, is amended to read:
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, (5) flood loss
aid under section 273.1383, and (6) low-income housing aid under
sections 477A.06 and 477A.065.
Sec. 6. Minnesota Statutes 1997 Supplement, section
275.72, is amended by adding a subdivision to read:
Subd. 2a. [ADJUSTMENTS FOR CHANGES IN SERVICE LEVELS.] If
a local governmental unit, as a result of an annexation
agreement prior to January 1, 1997, has different tax rates in
various parts of the jurisdiction due to different service
levels, it may petition the commissioner of revenue to adjust
its levy limits established under section 275.71. The
commissioner shall adjust the levy limits to reflect scheduled
changes in tax rates related to increasing service levels in
areas currently receiving less city services. The local
governmental unit shall provide the commissioner with any
information the commissioner deems necessary in making the levy
limit adjustment.
Sec. 7. Minnesota Statutes 1997 Supplement, section
477A.011, subdivision 36, is amended to read:
Subd. 36. [CITY AID BASE.] (a) Except as provided in
paragraphs (b), (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.
(e) The city aid base for a city is increased by $200,000
in 1999 and thereafter and the maximum amount of total aid it
may receive under section 477A.013, subdivision 9, paragraph
(c), is also increased by $200,000 in calendar year 1999 only,
provided that:
(i) the city was incorporated as a statutory city after
December 1, 1993;
(ii) its city aid base does not exceed $5,600; and
(iii) the city had a population in 1996 of 5,000 or more.
(f) The city aid base for a city is increased by $450,000
in 1999 to 2008 and the maximum amount of total aid it may
receive under section 477A.013, subdivision 9, paragraph (c), is
also increased by $450,000 in calendar year 1999 only, provided
that:
(i) the city had a population in 1996 of at least 50,000;
(ii) its population had increased by at least 40 percent in
the ten-year period ending in 1996; and
(iii) its city's net tax capacity for aids payable in 1998
is less than $700 per capita.
(g) Beginning in 2002, the city aid base for a city is
equal to the sum of its city aid base in 2001 and the amount of
additional aid it was certified to receive under section 477A.06
in 2001. For 2002 only, the maximum amount of total aid a city
may receive under section 477A.013, subdivision 9, paragraph
(c), is also increased by the amount it was certified to receive
under section 477A.06 in 2001.
Sec. 8. Minnesota Statutes 1996, section 477A.03,
subdivision 2, is amended to read:
Subd. 2. [ANNUAL APPROPRIATION.] (a) A sum sufficient to
discharge the duties imposed by sections 477A.011 to 477A.014 is
annually appropriated from the general fund to the commissioner
of revenue. For aids payable in 1996 and thereafter, the total
aids paid under sections 477A.013, subdivision 9, and 477A.0122
are the amounts certified to be paid in the previous year,
adjusted for inflation as provided under subdivision 3.
(b) Aid payments to counties under section 477A.0121 are
limited to $20,265,000 in 1996. Aid payments to counties under
section 477A.0121 are limited to $27,571,625 in 1997. For aid
payable in 1998 and thereafter, the total aids paid under
section 477A.0121 are the amounts certified to be paid in the
previous year, adjusted for inflation as provided under
subdivision 3.
(c)(i) For aids payable in 1998 and thereafter, the total
aids paid to counties under section 477A.0122 are the amounts
certified to be paid in the previous year, adjusted for
inflation as provided under subdivision 3.
(ii) Aid payments to counties under section 477A.0122 in
2000 are further increased by an additional $30,000,000 in 2000.
(d) Aid payments to cities in 1999 under section 477A.013,
subdivision 9, are limited to $380,565,489. For aids payable in
2000 and 2001, the total aids paid under section 477A.013,
subdivision 9, are the amounts certified to be paid in the
previous year, adjusted for inflation as provided under
subdivision 3. For aids payable in 2002, the total aids paid
under section 477A.013, subdivision 9, are the amounts certified
to be paid in the previous year, adjusted for inflation as
provided under subdivision 3, and increased by the amount
certified to be paid in 2001 under section 477A.06. For aids
payable in 2003 and thereafter, the total aids paid under
section 477A.013, subdivision 9, are the amounts certified to be
paid in the previous year, adjusted for inflation as provided
under subdivision 3. The additional amount authorized under
subdivision 4 is not included when calculating the appropriation
limits under this paragraph.
Sec. 9. Minnesota Statutes 1996, section 477A.03, is
amended by adding a subdivision to read:
Subd. 4. [ADDITIONAL MONEY FOR CITY AID.] For the calendar
years 1999 to 2008, the limit on the annual appropriation for
aids paid under section 477A.013, subdivision 9, as determined
in subdivision 2, paragraph (d), is increased by $450,000.
Sec. 10. [477A.06] [EXISTING LOW-INCOME HOUSING AID.]
Subdivision 1. [ELIGIBILITY.] (a) For assessment years
1998, 1999, and 2000, for all class 4d property on which
construction was begun before January 1, 1999, the assessor
shall determine the difference between the actual net tax
capacity and the net tax capacity that would be determined for
the property if the class rates for assessment year 1997 were in
effect.
(b) In calendar years 1999, 2000, and 2001, each city shall
be eligible for aid equal to (i) the amount by which the sum of
the differences determined in clause (a) for the corresponding
assessment year exceeds 2.5 percent of the city's total taxable
net tax capacity for taxes payable in 1998, multiplied by (ii)
the city government's average local tax rate for taxes payable
in 1998.
Subd. 2. [CERTIFICATION.] The county assessor shall notify
the commissioner of revenue of the amount determined under
subdivision 1, paragraph (b), clause (i), for any city which
qualifies for aid under this section by June 30 of the
assessment year, in a form prescribed by the commissioner. The
commissioner shall notify each city of its qualifying aid amount
by August 15 of the assessment year.
Subd. 3. [APPROPRIATION; PAYMENT.] (a) The commissioner
shall pay each city its qualifying aid amount on or before July
20 of each year. An amount sufficient to pay the aid authorized
under this section is appropriated to the commissioner of
revenue from the property tax reform account in fiscal years
2000 and 2001, and from the general fund in fiscal year 2002.
(b) For fiscal years 2001 and 2002, the amount of aid
appropriated under this section may not exceed $1,500,000 each
year.
(c) If the total amount of aid that would otherwise be
payable under the formula in this section exceeds the maximum
allowed under paragraph (b), the amount of aid for each city is
reduced proportionately to equal the limit.
Sec. 11. [477A.065] [NEW CONSTRUCTION LOW-INCOME HOUSING
AID.]
Subdivision 1. [ELIGIBILITY.] Each taxes payable year,
each city containing class 4d property on which initial
construction was begun after January 1, 1999, shall be eligible
for aid equal to (1) 1.5 times the net tax capacity of the
property for the assessment year corresponding to the taxes
payable year, multiplied by (2) the city government's average
local tax rate for the previous taxes payable year.
Subd. 2. [CERTIFICATION.] The county assessor shall notify
the commissioner of revenue of the amount determined under
subdivision 1, clause (1), for any city which qualifies for aid
under this section by June 30 of each assessment year, in a form
prescribed by the commissioner. The commissioner shall notify
each city of its qualifying aid amount by August 15 of the
assessment year.
Subd. 3. [APPROPRIATION; PAYMENT.] The commissioner shall
pay each city its qualifying aid amount on or before July 20 of
each year. An amount sufficient to pay the aid authorized under
this section is appropriated to the commissioner of revenue from
the general fund each year.
Sec. 12. [CITY OF COON RAPIDS; ADJUSTMENT IN 1999 AID
PAYMENTS.]
Notwithstanding Minnesota Statutes, section 477A.015, the
July 20, 1999, aid payment to the city of Coon Rapids for aid
under section 477A.013, subdivision 9, shall equal the entire
amount of its city aid base increase in 1999 under section
477A.011, subdivision 36, plus one-half of the remaining amount
of its aid under section 477A.013, subdivision 9. The remainder
of its 1999 aid under section 477A.013, subdivision 9, shall be
paid on or before December 26, 1999.
Sec. 13. [TEMPORARY LOCAL GOVERNMENT AID INCREASES.]
For payments in calendar year 1998 only, the city of East
Grand Forks shall receive an additional payment of $9,200,000
and the city of Warren shall receive an additional payment of
$800,000 under the provisions of Minnesota Statutes, sections
477A.011 to 477A.014. For payments in calendar year 1999 only,
the city of East Grand Forks shall receive an additional aid
payment of $4,600,000 and the city of Warren shall receive an
additional payment of $400,000 under the provisions of Minnesota
Statutes, sections 447A.011 to 477A.014. The amounts of these
payments shall not be included in the calculation of any other
aids provided under Minnesota Statutes, chapter 477A, or other
law, or in any limitations on levies or expenditures.
$10,000,000 is appropriated in fiscal year 1999 and
$5,000,000 is appropriated in fiscal year 2000 to the
commissioner of revenue from the general fund to make the
payments under this section.
Sec. 14. [CITY OF RED WING; LEVY LIMITS.]
Subdivision 1. [LEVY LIMIT BASE INCREASE.] The levy limit
base of the city of Red Wing for taxes levied in 1998 under
Minnesota Statutes, section 275.71, subdivision 2, paragraph
(b), is increased by $477,677.
Subd. 2. [EFFECTIVE DATE.] Upon compliance by the
governing body of the city of Red Wing with Minnesota Statutes,
section 645.021, subdivision 3, subdivision 1 is effective for
taxes levied in 1998, payable in 1999.
Sec. 15. [WAITE PARK; LEVY LIMIT ADJUSTMENT.]
Subdivision 1. [ADJUSTED LEVY LIMIT BASE.] For taxes
levied in 1998 only, the adjusted levy limit base defined in
Minnesota Statutes, section 275.71, subdivision 3, for the city
of Waite Park, is increased by $117,000.
Subd. 2. [EFFECTIVE DATE.] Upon compliance by the
governing body of the city of Waite Park with Minnesota
Statutes, section 645.021, subdivision 3, subdivision 1 is
effective for taxes levied in 1998, payable in 1999.
Sec. 16. [CITY OF COON RAPIDS; LEVY LIMITS.]
Subdivision 1. [LEVY LIMIT BASE INCREASE.] For taxes
levied in 1998 only, the adjusted levy limit base defined in
Minnesota Statutes, section 275.71, subdivision 3, for the city
of Coon Rapids, is increased by $450,000.
Subd. 2. [EFFECTIVE DATE.] Upon compliance by the
governing body of the city of Coon Rapids with Minnesota
Statutes, section 645.021, subdivision 3, subdivision 1 is
effective for taxes levied in 1998, payable in 1999.
Sec. 17. [CITY OF ST. PETER; LEVY LIMIT EXEMPTION.]
For taxes levied in 1998, payable in 1999, the city of St.
Peter is exempt from the levy limits imposed under Minnesota
Statutes, sections 275.71 to 275.74. This section is effective
the day after compliance by the governing body of the city of
St. Peter with Minnesota Statutes, section 645.021, subdivision
3.
Sec. 18. [EFFECTIVE DATES.]
Sections 1, 3 to 6, 14, and 15 are effective for taxes
levied in 1998, payable in 1999. Section 2 is effective for
taxes levied in 1997 and 1998, payable in 1998 and 1999.
Sections 7 and 8 are effective for aids payable in 1999 and
thereafter. Section 9 is effective for aids payable in 1999 to
2008. Section 10 is effective for aids payable in 1999 to
2001. Section 11 is effective for aids payable in 2001 and
thereafter. Section 12 is effective for aids payable in 1999
only. Section 13 is effective for aids payable in 1998 and 1999
only.
ARTICLE 5
SENIOR CITIZEN'S PROPERTY TAX DEFERRAL
Section 1. Minnesota Statutes 1997 Supplement, section
276.04, subdivision 2, is amended to read:
Subd. 2. [CONTENTS OF TAX STATEMENTS.] (a) The treasurer
shall provide for the printing of the tax statements. The
commissioner of revenue shall prescribe the form of the property
tax statement and its contents. The statement must contain a
tabulated statement of the dollar amount due to each taxing
authority 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 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), 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. 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 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 adding the
property's total property tax to 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;
(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 credit 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) 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 clause (4)
that local governments will receive in the following year. The
commissioner must certify this amount by January 1 of each year.
Sec. 2. Minnesota Statutes 1996, section 290A.14, is
amended to read:
290A.14 [PROPERTY TAX STATEMENT.]
The county treasurer shall prepare and send a sufficient
number of copies of the property tax statement to the owner, and
to the owner's escrow agent if the taxes are paid via an escrow
account, to enable the owner to comply with the filing
requirements of this chapter and to retain one copy as a
record. The property tax statement, in a form prescribed by the
commissioner, shall indicate the manner in which the claimant
may claim relief from the state under both this chapter and
chapter 290B, and the amount of the tax for which the applicant
may claim relief. The statement shall also indicate if there
are delinquent property taxes on the property in the preceding
year. Taxes included in a confession of judgment under section
279.37 shall not constitute delinquent taxes as long as the
claimant is current on the payments required to be made under
section 279.37.
Sec. 3. Minnesota Statutes 1997 Supplement, section
290B.03, subdivision 2, is amended to read:
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, but not to exceed one acre. The
homestead may be part of a multidwelling building and the land
on which it is built.
Sec. 4. Minnesota Statutes 1997 Supplement, section
290B.04, subdivision 1, is amended to read:
Subdivision 1. [INITIAL APPLICATION.] (a) 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 annual
deferred amount for each year and, the cumulative deferral and
interest to that appear on each year's property tax statement as
notice prepared by the county under section 290B.04, subdivision
6, is public data.
The application must state that program participants may
claim the property tax refund based on the full amount of
property taxes eligible for the refund, including any deferred
amounts. The application must also state that property tax
refunds will be used to offset any deferral and interest under
this program, and that any other amounts subject to revenue
recapture under section 270A.03, subdivision 7, will also be
used to offset any deferral and interest under this program.
(b) As part of the initial application process, the
commissioner may require the applicant to obtain at the
applicant's own cost and submit:
(1) if the property is registered property under chapter
508 or 508A, a copy of the original certificate of title in the
possession of the county registrar of titles (sometimes referred
to as "condition of register"), or
(2) if the property is abstract property, a report prepared
by a licensed abstracter showing the last deed and any
unsatisfied mortgages, liens, judgments, and state and federal
tax lien notices which were recorded on or after the date of
that last deed with respect to the property or to the applicant.
The certificate or report under clauses (1) and (2) need
not include references to any documents filed or recorded more
than 40 years prior to the date of the certification or report.
The certification or report must be as of a date not more than
30 days prior to submission of the application.
The commissioner may also require the county recorder or
county registrar of the county where the property is located to
provide copies of recorded documents related to the applicant or
the property, for which the recorder or registrar shall not
charge a fee. The commissioner may use any information
available to determine or verify eligibility under this section.
Sec. 5. Minnesota Statutes 1997 Supplement, section
290B.04, subdivision 3, is amended to read:
Subd. 3. [ANNUAL EXCESS-INCOME 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 notify
the commissioner of revenue in writing by July 1 if the
taxpayer's household income for the preceding calendar year
exceeded $30,000. 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. No property taxes may be deferred under chapter 290B
in any year following the year in which a program participant
filed or should have filed an excess-income certification under
this subdivision, unless the participant has filed a resumption
of eligibility certification as described in subdivision 4.
Sec. 6. Minnesota Statutes 1997 Supplement, section
290B.04, is amended by adding a subdivision to read:
Subd. 4. [RESUMPTION OF ELIGIBILITY CERTIFICATION BY
TAXPAYER.] A taxpayer who has previously filed an excess-income
certification under subdivision 3 may resume program
participation if the taxpayer's household income for a
subsequent year is $30,000 or less. If the taxpayer chooses to
resume program participation, the taxpayer must notify the
commissioner of revenue in writing by July 1 of the year
following a calendar year in which the taxpayer's household
income is $30,000 or less. The certification must state the
taxpayer's total household income for the previous calendar
year. Once a taxpayer resumes participation in the program
under this subdivision, participation will continue until the
taxpayer files a subsequent excess-income certification under
subdivision 3 or until participation is terminated under section
290B.08, subdivision 1.
Sec. 7. Minnesota Statutes 1997 Supplement, section
290B.04, is amended by adding a subdivision to read:
Subd. 5. [PENALTY FOR FAILURE TO FILE EXCESS-INCOME
CERTIFICATION; INVESTIGATIONS.] (a) The commissioner shall
assess a penalty equal to 20 percent of the property taxes
improperly deferred in the case of a false application, a false
certification, or in the case of a required excess-income
certification which was not filed as of the applicable due
date. The commissioner shall assess a penalty equal to 50
percent of the property taxes improperly deferred if the
taxpayer knowingly filed a false application or certification,
or knowingly failed to file a required excess-income
certification by the applicable due date. The commissioner
shall assess penalties under this section through the issuance
of an order under the provisions of chapter 289A. Persons
affected by a commissioner's order issued under this section may
appeal as provided in chapter 289A.
(b) The commissioner may conduct investigations related to
initial applications and excess-income certifications required
under this chapter within the period ending 3-1/2 years from the
due date of the application or certification.
Sec. 8. Minnesota Statutes 1997 Supplement, section
290B.04, is amended by adding a subdivision to read:
Subd. 6. [ANNUAL NOTICE TO PARTICIPANT.] Annually, on or
before July 1, the county auditor shall notify, in writing, each
participant in the county who is in the senior citizen's
deferral program of the current year's deferred taxes and the
total cumulative deferred taxes and accrued interest on the
participant's property as of that date.
Sec. 9. Minnesota Statutes 1997 Supplement, section
290B.05, subdivision 1, is amended to read:
Subdivision 1. [DETERMINATION BY COMMISSIONER.] The
commissioner shall determine each qualifying homeowner's "annual
maximum property tax amount" following approval of the
homeowner's initial application and following the receipt of a
resumption of eligibility certification. The "annual maximum
property tax amount" equals five percent of the homeowner's
total household income for the year preceding either the initial
application or the resumption of eligibility certification,
whichever is applicable. Following approval of the initial
application, 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 relative
to the appropriate assessment year 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.
Sec. 10. Minnesota Statutes 1997 Supplement, section
290B.05, subdivision 2, is amended to read:
Subd. 2. [CERTIFICATION BY COMMISSIONER.] On or before
December 1 of the year of initial application, the commissioner
shall certify to the county auditor of the county in which the
qualifying homestead is located (1) the annual maximum property
tax amount; and (2) the maximum allowable deferral for the year;
and (3) the cumulative deferral and interest for all years
preceding the next taxes payable year. On or before December 1
of any year in which a homeowner files a resumption of
eligibility certification, the commissioner shall certify to the
county auditor the new annual maximum property tax amount to be
used in calculating the deferral for subsequent years.
Sec. 11. Minnesota Statutes 1997 Supplement, section
290B.05, subdivision 4, is amended to read:
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. 12. Minnesota Statutes 1997 Supplement, section
290B.06, is amended to read:
290B.06 [PROPERTY TAX REFUNDS; OFFSET.]
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 as defined in section 270A.03,
subdivision 7, 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. 13. Minnesota Statutes 1997 Supplement, section
290B.07, is amended to read:
290B.07 [LIEN; DEFERRED PORTION.]
(a) 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. Any deferral made under this chapter
shall not be construed as delinquent property taxes.
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.
(b) If property for which taxes have been deferred under
this chapter forfeits under chapter 281 for nonpayment of a
nondeferred property tax amount, or because of nonpayment of
amounts previously deferred following a termination under
section 290B.08, the lien for the taxes deferred under this
chapter, plus interest and costs, shall be canceled by the
county auditor as provided in section 282.07. However,
notwithstanding any other law to the contrary, any proceeds from
a subsequent sale of the property under chapter 282 or another
law, must be used to first reimburse the county's forfeited tax
sale fund for any direct costs of selling the property or any
costs directly related to preparing the property for sale, and
then to reimburse the state for the amount of the canceled
lien. Within 90 days of the receipt of any sale proceed to
which the state is entitled under these provisions, the county
auditor must pay those funds to the commissioner of revenue by
warrant for deposit in the general fund. No other deposit, use,
distribution, or release of gross sale proceeds or receipts may
be made by the county until payments sufficient to fully
reimburse the state for the canceled lien amount have been
transmitted to the commissioner.
Sec. 14. Minnesota Statutes 1997 Supplement, section
290B.08, subdivision 2, is amended to read:
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 for terminations under subdivision 1, paragraph
(a), clauses (1) and (2), and within one year of termination of
the deferral for terminations under subdivision 1, paragraph
(a), clauses (3) and (4). 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. 15. Minnesota Statutes 1997 Supplement, section
290B.09, subdivision 1, is amended to read:
Subdivision 1. [DETERMINATION; PAYMENT.] The commissioner
of revenue county auditor shall determine the total current
year's deferred amount of property tax under this chapter in
each the county, basing determinations on a review of and submit
those amounts as part of the 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.
Sec. 16. [290B.10] [SENIOR DEFERRAL PROGRAM; INFORMATION
PROVIDED.]
The commissioner of revenue shall provide information about
the senior deferral program and eligibility criteria for the
program in the instruction booklet prepared for taxpayers to use
in applying for property tax refunds under chapter 290A.
Sec. 17. [EFFECTIVE DATE.]
Sections 1 and 3 to 15 are effective for deferrals of
property taxes payable in 1999 and thereafter, except that the
July 1 application date for taxes payable in 1999 in section 4
is extended to August 1 for applications filed in 1998 only.
Section 2 is effective for statements prepared in 1998 for
taxes payable in 1999 and thereafter. Section 16 is effective
for booklets prepared in 1998 for refunds claimed in 1999 and
thereafter.
ARTICLE 6
INCOME AND FRANCHISE TAXES
Section 1. Minnesota Statutes 1997 Supplement, section
289A.19, subdivision 2, is amended to read:
Subd. 2. [CORPORATE FRANCHISE AND MINING COMPANY TAXES.]
Corporations or mining companies shall receive an extension of
seven months for filing the return of a corporation subject to
tax under chapter 290 or for filing the return of a mining
company subject to tax under sections 298.01 and 298.015 if:.
Interest on any balance of tax not paid when the regularly
required return is due must be paid at the rate specified in
section 270.75, from the date such payment should have been made
if no extension was granted, until the date of payment of such
tax.
If a corporation or mining company does not:
(1) the corporation or mining company pays pay at least 90
percent of the amount of tax shown on the return on or before
the regular due date of the return, the penalty prescribed by
section 289A.60, subdivision 1, shall be imposed on the unpaid
balance of tax; or
(2) pay the balance due shown on the regularly required
return is paid on or before the extended due date of the return;
and
(3) interest on any balance due is paid at the rate
specified in section 270.75 from the regular due date of the
return until the tax is paid, the penalty prescribed by section
289A.60, subdivision 1, shall be imposed on the unpaid balance
of tax from the original due date of the return.
Sec. 2. Minnesota Statutes 1996, section 290.01,
subdivision 3b, is amended to read:
Subd. 3b. [LIMITED LIABILITY COMPANY.] For purposes of
this chapter and chapter 289A, a limited liability company that
is formed under either the laws of this state or under similar
laws of another state, and that is considered to be a
partnership will be treated as an entity similar to its
treatment for federal income tax purposes, is considered to be a
partnership and the members must be considered to be partners.
Sec. 3. Minnesota Statutes 1997 Supplement, 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;
(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.;
(7) in the year stock of a corporation that had made a
valid election under section 1362 of the Internal Revenue Code
but was not an "S" corporation under section 290.9725 is sold or
disposed of in a transaction taxable under the Internal Revenue
Code, the amount of difference between the Minnesota basis of
the stock under subdivision 19f, paragraph (m), and the federal
basis if the Minnesota basis is lower than the shareholder's
federal basis; and
(8) the amount of expense, interest, or taxes disallowed
pursuant to section 290.10.
Sec. 4. Minnesota Statutes 1997 Supplement, 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, less the credit allowed
under section 290.0674, not to exceed $1,625 for each dependent
in grades kindergarten to 6 and $2,500 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. For the purposes of this
clause, "tuition" includes fees or tuition as defined in section
290.0674, subdivision 1, clause (1). 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. Equipment
expenses qualifying for deduction includes expenses as defined
and limited in section 290.0674, subdivision 1, clause (3).
"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;
(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);
(9) the exemption amount allowed under Laws 1995, chapter
255, article 3, section 2, subdivision 3;
(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; and
(11) to the extent not subtracted under clause (1), 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.;
(12) in the year stock of a corporation that had made a
valid election under section 1362 of the Internal Revenue Code
but was not an "S" corporation under section 290.9725 is sold or
disposed of in a transaction taxable under the Internal Revenue
Code, the amount of difference between the Minnesota basis of
the stock under subdivision 19f, paragraph (m), and the federal
basis if the Minnesota basis is higher than the shareholder's
federal basis; and
(13) an amount equal to an individual's, trust's, or
estate's net federal income tax liability for the tax year that
is attributable to items of income, expense, gain, loss, or
credits federally flowing to the taxpayer in the tax year from a
corporation, having a valid election in effect for federal tax
purposes under section 1362 of the Internal Revenue Code but not
treated as a "S" corporation for state tax purposes under
section 290.9725.
Sec. 5. Minnesota Statutes 1997 Supplement, 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), (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, the Minnesota basis in the shareholder's stock in the
corporation shall be computed as if the corporation were not an
"S" corporation for federal tax purposes.
Sec. 6. Minnesota Statutes 1996, section 290.06,
subdivision 2c, is amended to read:
Subd. 2c. [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES,
AND TRUSTS.] (a) The income taxes imposed by this chapter upon
married individuals filing joint returns and surviving spouses
as defined in section 2(a) of the Internal Revenue Code must be
computed by applying to their taxable net income the following
schedule of rates:
(1) On the first $19,910, 6 percent;
(2) On all over $19,910, but not over $79,120, 8 percent;
(3) On all over $79,120, 8.5 percent.
Married individuals filing separate returns, estates, and
trusts must compute their income tax by applying the above rates
to their taxable income, except that the income brackets will be
one-half of the above amounts.
(b) The income taxes imposed by this chapter upon unmarried
individuals must be computed by applying to taxable net income
the following schedule of rates:
(1) On the first $13,620, 6 percent;
(2) On all over $13,620, but not over $44,750, 8 percent;
(3) On all over $44,750, 8.5 percent.
(c) The income taxes imposed by this chapter upon unmarried
individuals qualifying as a head of household as defined in
section 2(b) of the Internal Revenue Code must be computed by
applying to taxable net income the following schedule of rates:
(1) On the first $16,770, 6 percent;
(2) On all over $16,770, but not over $67,390, 8 percent;
(3) On all over $67,390, 8.5 percent.
(d) In lieu of a tax computed according to the rates set
forth in this subdivision, the tax of any individual taxpayer
whose taxable net income for the taxable year is less than an
amount determined by the commissioner must be computed in
accordance with tables prepared and issued by the commissioner
of revenue based on income brackets of not more than $100. The
amount of tax for each bracket shall be computed at the rates
set forth in this subdivision, provided that the commissioner
may disregard a fractional part of a dollar unless it amounts to
50 cents or more, in which case it may be increased to $1.
(e) An individual who is not a Minnesota resident for the
entire year must compute the individual's Minnesota income tax
as provided in this subdivision. After the application of the
nonrefundable credits provided in this chapter, the tax
liability must then be multiplied by a fraction in which:
(1) The numerator is the individual's Minnesota source
federal adjusted gross income as defined in section 62 of the
Internal Revenue Code disregarding income or loss flowing from a
corporation having a valid election for the taxable year under
section 1362 of the Internal Revenue Code but which is not an
"S" corporation under section 290.9725 and increased by the
addition required for interest income from non-Minnesota state
and municipal bonds under section 290.01, subdivision 19a,
clause (1), after applying the allocation and assignability
provisions of section 290.081, clause (a), or 290.17; and
(2) the denominator is the individual's federal adjusted
gross income as defined in section 62 of the Internal Revenue
Code of 1986, as amended through April 15, 1995, increased by
the addition required for interest income from non-Minnesota
state and municipal bonds under section 290.01, subdivision 19a,
clause (1) amounts specified in section 290.01, subdivision 19a,
clauses (1), (5), (6), and (7), and reduced by the amounts
specified in section 290.01, subdivision 19b, clauses (1), (11),
and (12).
Sec. 7. Minnesota Statutes 1997 Supplement, section
290.0671, subdivision 1, is amended to read:
Subdivision 1. [CREDIT ALLOWED.] (a) An individual is
allowed a credit against the tax imposed by this chapter equal
to a percentage of the credit for which the individual is
eligible earned income. To receive a credit, a taxpayer must be
eligible for a credit under section 32 of the Internal Revenue
Code. The percentage is 15 for individuals without a qualifying
child, and 25 for individuals with at least one qualifying
child. For purposes of this section, "qualifying child" has the
meaning given in section 32(c)(3) of the Internal Revenue Code.
(b) For individuals with no qualifying children, the credit
equals 1.1475 percent of the first $4,460 of earned income. The
credit is reduced by 1.1475 percent of earned income or modified
adjusted gross income, whichever is greater, in excess of
$5,570, but in no case is the credit less than zero.
(c) For individuals with one qualifying child, the credit
equals 6.8 percent of the first $6,680 of earned income and 8.5
percent of earned income over $11,650 but less than $12,990.
The credit is reduced by 4.77 percent of earned income or
modified adjusted gross income, whichever is greater, in excess
of $14,560, but in no case is the credit less than zero.
(d) For individuals with two or more qualifying children,
the credit equals eight percent of the first $9,390 of earned
income and 20 percent of earned income over $14,350 but less
than $16,230. The credit is reduced by 8.8 percent of earned
income or modified adjusted gross income, whichever is greater,
in excess of $17,280, but in no case is the credit less than
zero.
(e) For a nonresident or part-year resident, the credit
determined under section 32 of the Internal Revenue Code must be
allocated based on the percentage calculated under section
290.06, subdivision 2c, paragraph (e).
(f) For a person who was a resident for the entire tax year
and has earned income not subject to tax under this chapter, the
credit must be allocated based on the ratio of federal adjusted
gross income reduced by the earned income not subject to tax
under this chapter over federal adjusted gross income.
Sec. 8. Minnesota Statutes 1996, section 290.0671, is
amended by adding a subdivision to read:
Subd. 1a. [DEFINITIONS.] For purposes of this section, the
terms "qualifying child," "earned income," and "modified
adjusted gross income" have the meanings given in section 32(c)
of the Internal Revenue Code.
Sec. 9. Minnesota Statutes 1996, section 290.0671, is
amended by adding a subdivision to read:
Subd. 7. [INFLATION ADJUSTMENT.] The earned income amounts
used to calculate the credit and the income thresholds at which
the maximum credit begins to be reduced in subdivision 1 must be
adjusted for inflation. The commissioner shall adjust the
earned income and threshold amounts by the percentage determined
under section 290.06, subdivision 2d, for the taxable year.
Sec. 10. Minnesota Statutes 1997 Supplement, section
290.0673, subdivision 2, is amended to read:
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 $15,000 per year in the last two years;
(iii) have assets of no more than $5,000 $7,000, 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 cumulatively 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.
Sec. 11. Minnesota Statutes 1997 Supplement, section
290.0673, subdivision 6, is amended to read:
Subd. 6. [NONREFUNDABLE REFUNDABLE.] The taxpayer must use
the tax credit for the taxable year in which the certificate is
issued to the employer. If the credit for the taxable year may
not exceed exceeds the liability for tax under section 290.06,
subdivision 1, chapter 290 for the taxable year, before
reduction by the nonrefundable credits allowed under this
chapter the commissioner shall refund the excess to the
taxpayer. An amount sufficient to pay the refunds authorized by
this subdivision is appropriated to the commissioner from the
general fund.
Sec. 12. Minnesota Statutes 1996, section 290.091,
subdivision 2, is amended to read:
Subd. 2. [DEFINITIONS.] For purposes of the tax imposed by
this section, the following terms have the meanings given:
(a) "Alternative minimum taxable income" means the sum of
the following for the taxable year:
(1) the taxpayer's federal alternative minimum taxable
income as defined in section 55(b)(2) of the Internal Revenue
Code;
(2) the taxpayer's itemized deductions allowed in computing
federal alternative minimum taxable income, but excluding:
(i) the Minnesota charitable contribution deduction and;
(ii) the medical expense deduction;
(iii) the casualty, theft, and disaster loss deduction; and
(iv) the impairment-related work expenses of a disabled
person;
(3) for depletion allowances computed under section 613A(c)
of the Internal Revenue Code, with respect to each property (as
defined in section 614 of the Internal Revenue Code), to the
extent not included in federal alternative minimum taxable
income, the excess of the deduction for depletion allowable
under section 611 of the Internal Revenue Code for the taxable
year over the adjusted basis of the property at the end of the
taxable year (determined without regard to the depletion
deduction for the taxable year);
(4) to the extent not included in federal alternative
minimum taxable income, the amount of the tax preference for
intangible drilling cost under section 57(a)(2) of the Internal
Revenue Code determined without regard to subparagraph (E);
(5) to the extent not included in federal alternative
minimum taxable income, the amount of interest income as
provided by section 290.01, subdivision 19a, clause (1);
(6) amounts added to federal taxable income as provided by
section 290.01, subdivision 19a, clauses (5), (6), and (7);
less the sum of the amounts determined under the following
clauses (1) to (3) (4):
(1) interest income as defined in section 290.01,
subdivision 19b, clause (1);
(2) an overpayment of state income tax as provided by
section 290.01, subdivision 19b, clause (2), to the extent
included in federal alternative minimum taxable income; and
(3) the amount of investment interest paid or accrued
within the taxable year on indebtedness to the extent that the
amount does not exceed net investment income, as defined in
section 163(d)(4) of the Internal Revenue Code. Interest does
not include amounts deducted in computing federal adjusted gross
income; and
(4) amounts subtracted from federal taxable income as
provided by section 290.01, subdivision 19b, clauses (11) and
(12).
In the case of an estate or trust, alternative minimum
taxable income must be computed as provided in section 59(c) of
the Internal Revenue Code.
(b) "Investment interest" means investment interest as
defined in section 163(d)(3) of the Internal Revenue Code.
(c) "Tentative minimum tax" equals seven percent of
alternative minimum taxable income after subtracting the
exemption amount determined under subdivision 3.
(d) "Regular tax" means the tax that would be imposed under
this chapter (without regard to this section and section
290.032), reduced by the sum of the nonrefundable credits
allowed under this chapter.
(e) "Net minimum tax" means the minimum tax imposed by this
section.
(f) "Minnesota charitable contribution deduction" means a
charitable contribution deduction under section 170 of the
Internal Revenue Code to or for the use of an entity described
in section 290.21, subdivision 3, clauses (a) to (e). When the
federal deduction for charitable contributions is limited under
section 170(b) of the Internal Revenue Code, the allowable
contributions in the year of contribution are deemed to be first
contributions to entities described in section 290.21,
subdivision 3, clauses (a) to (e).
Sec. 13. Minnesota Statutes 1997 Supplement, section
290.091, subdivision 6, is amended to read:
Subd. 6. [CREDIT FOR PRIOR YEARS' LIABILITY.] (a) A credit
is allowed against the tax imposed by this chapter on
individuals, trusts, and estates equal to the minimum tax credit
for the taxable year. The minimum tax credit equals the
adjusted net minimum tax for taxable years beginning after
December 31, 1988, reduced by the minimum tax credits allowed in
a prior taxable year. The credit may not exceed the excess (if
any) for the taxable year of
(1) the regular tax, over
(2) the greater of (i) the tentative alternative minimum
tax, or (ii) zero.
(b) The adjusted net minimum tax for a taxable year equals
the lesser of the net minimum tax or the excess (if any) of
(1) the tentative minimum tax, over
(2) seven percent of the sum of
(i) adjusted gross income as defined in section 62 of the
Internal Revenue Code,
(ii) interest income as defined in section 290.01,
subdivision 19a, clause (1),
(iii) the amount added to federal taxable income as
provided by section 290.01, subdivision 19a, clauses (5), (6),
and (7),
(iv) interest on specified private activity bonds, as
defined in section 57(a)(5) of the Internal Revenue Code, to the
extent not included under clause (ii),
(iv) (v) depletion as defined in section 57(a)(1),
determined without regard to the last sentence of paragraph (1),
of the Internal Revenue Code, less
(v) (vi) the deductions allowed in computing alternative
minimum taxable income provided in subdivision 2, paragraph (a),
clause (2) of the first series of clauses and clauses (1),
(2), and (3), and (4) of the second series of clauses, and
(vi) (vii) the exemption amount determined under
subdivision 3.
In the case of an individual who is not a Minnesota
resident for the entire year, adjusted net minimum tax must be
multiplied by the fraction defined in section 290.06,
subdivision 2c, paragraph (e). In the case of a trust or
estate, adjusted net minimum tax must be multiplied by the
fraction defined under subdivision 4, paragraph (b).
Sec. 14. Minnesota Statutes 1996, section 290.10, is
amended to read:
290.10 [NONDEDUCTIBLE ITEMS.]
Except as provided in section 290.17, subdivision 4,
paragraph (i), in computing the net income of a corporation
taxpayer no deduction shall in any case be allowed for expenses,
interest and taxes connected with or allocable against the
production or receipt of all income not included in the measure
of the tax imposed by this chapter, except that for corporations
engaged in the business of mining or producing iron ore, the
mining of which is subject to the occupation tax imposed by
section 298.01, subdivision 4, this shall not prevent the
deduction of expenses and other items to the extent that the
expenses and other items are allowable under this chapter and
are not deductible, capitalizable, retainable in basis, or taken
into account by allowance or otherwise in computing the
occupation tax and do not exceed the amounts taken for federal
income tax purposes for that year. Occupation taxes imposed
under chapter 298, royalty taxes imposed under chapter 299, or
depletion expenses may not be deducted under this clause.
Sec. 15. Minnesota Statutes 1996, section 290.21,
subdivision 3, is amended to read:
Subd. 3. An amount for contribution or gifts made within
the taxable year:
(a) to or for the use of the state of Minnesota, or any of
its political subdivisions for exclusively public purposes,
(b) to or for the use of any community chest, corporation,
organization, trust, fund, association, or foundation located in
and carrying on substantially all of its activities within this
state, organized and operating exclusively for religious,
charitable, public cemetery, scientific, literary, artistic, or
educational purposes, or for the prevention of cruelty to
children or animals, no part of the net earnings of which inures
to the benefit of any private stockholder or individual,
(c) to a fraternal society, order, or association,
operating under the lodge system located in and carrying on
substantially all of their activities within this state if such
contributions or gifts are to be used exclusively for the
purposes specified in clause (b), or for or to posts or
organizations of war veterans or auxiliary units or societies of
such posts or organizations, if they are within the state and no
part of their net income inures to the benefit of any private
shareholder or individual,
(d) to or for the use of the United States of America for
exclusively public purposes if the contribution or gift consists
of real property located in Minnesota,
(e) to or for the use of a foundation if the foundation is
organized and operated exclusively for a purpose in clause (b),
and has no part of its net earnings inuring to the benefit of a
private shareholder or individual, but does not carry on
substantially all of its activities within this state. The
deduction under this clause equals the amount of the
corporation's contributions or gifts to the foundation within
the taxable year multiplied by a fraction equal to the ratio of
the foundation's total expenditures during the taxable year for
the benefit of organizations described in clause (b) to the
foundation's total expenditures during the taxable year,
(f) the total deduction hereunder shall not exceed 15
percent of the taxpayer's taxable net income less the deductions
allowable under this section other than those for contributions
or gifts,
(g) in the case of a corporation reporting its taxable
income on the accrual basis, if: (A) the board of directors
authorizes a charitable contribution during any taxable year,
and (B) payment of such contribution is made after the close of
such taxable year and on or before the 15th day of the third
month following the close of such taxable year; then the
taxpayer may elect to treat such contribution as paid during
such taxable year. The election may be made only at the time of
the filing of the return for such taxable year, and shall be
signified in such manner as the commissioner shall by rules
prescribe.
For a contribution of ordinary income or capital gain
property, the amount allowed as a deduction is limited to the
amount deductible under section 170(e) of the Internal Revenue
Code. The contribution must also qualify under the rules in
clauses (a) to (g) to be deductible.
Sec. 16. Minnesota Statutes 1997 Supplement, 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; or
(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 is an "S" corporation under section
290.9725.
Sec. 17. Laws 1995, chapter 255, article 3, section 2,
subdivision 1, as amended by Laws 1996, chapter 464, article 4,
section 1, and Laws 1997, chapter 231, article 5, section 16, 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. Initial
applications for the homesteading program in this paragraph
shall not be accepted after December 31, 1998.
Sec. 18. Laws 1995, chapter 255, article 3, section 2,
subdivision 4, as amended by Laws 1996, chapter 464, article 4,
section 2, is amended to read:
Subd. 4. [EXPIRATION.] Initial applications for the urban
homesteading program in the zones designated under subdivision
1, paragraph (a), shall not be accepted after July 1, 1997, for
homes purchased and occupied before May 1, 1997. For homes
purchased and occupied on or after May 1, 1997, but before July
1, 1998, initial applications shall not be accepted after June
30, 1998.
Sec. 19. [PROHIBITION OF USE OF SOCIAL SECURITY NUMBERS.]
No label, envelope, or other material printed by the
department of revenue may include the social security number of
the taxpayer in a place that will be visible when delivered or
mailed to the taxpayer.
Sec. 20. [REPEALER.]
Minnesota Statutes 1996, section 289A.50, subdivision 6, is
repealed.
Sec. 21. [EFFECTIVE DATES.]
Section 1 is effective for extensions received under
Minnesota Statutes, section 289A.19, subdivision 2, for tax
years beginning after December 31, 1996. Section 2 is effective
retroactive to August 1, 1997. The change in section 3 made by
clause (7) and section 12, paragraph (a), clause (2)(iii) of the
first set of clauses, are effective for tax years beginning
after December 31, 1996. The change in section 3 made by clause
(8) is effective for tax years beginning after December 31, 1997.
Sections 4, clauses (11) and (12); 5; 12, paragraph (a), clause
(6) of the first set of clauses, and clause (4) of the second
set of clauses; 10; 11; and 13 are effective for tax years
beginning after December 31, 1996. Section 6 is effective for
tax years beginning after December 31, 1996, except the change
in denominator for Minnesota Statutes, section 290.01,
subdivision 19b, clause (1), is effective for tax years
beginning after December 31, 1997. Sections 7 and 8 are
effective for tax years beginning after December 31, 1997.
Section 9 is effective for tax years beginning after December
31, 1998. Section 4, clause (13); section 12, paragraph (a),
clause (2)(iv) of the first set of clauses; and sections 14, 15,
and 20 are effective for tax years beginning after December 31,
1997. Section 16 is effective for tax years beginning after
December 31, 1998. Sections 17 and 18 are effective the day
following final enactment.
ARTICLE 7
FEDERAL UPDATE
Section 1. Minnesota Statutes 1997 Supplement, 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 December 31, 1996, and
includes the provisions of section 1(a) and (b) of Public Law
Number 104-117 1997.
Sec. 2. Minnesota Statutes 1997 Supplement, section
290.01, subdivision 19, is amended to read:
Subd. 19. [NET INCOME.] The term "net income" means the
federal taxable income, as defined in section 63 of the Internal
Revenue Code of 1986, as amended through the date named in this
subdivision, incorporating any elections made by the taxpayer in
accordance with the Internal Revenue Code in determining federal
taxable income for federal income tax purposes, and with the
modifications provided in subdivisions 19a to 19f.
In the case of a regulated investment company or a fund
thereof, as defined in section 851(a) or 851(h) of the Internal
Revenue Code, federal taxable income means investment company
taxable income as defined in section 852(b)(2) of the Internal
Revenue Code, except that:
(1) the exclusion of net capital gain provided in section
852(b)(2)(A) of the Internal Revenue Code does not apply;
(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, 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, and the provisions of
sections 975 and 1604(d)(2) and (e) of the Taxpayer Relief Act
of 1997, Public Law Number 105-34, 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,
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, and the provisions of section 1604(a)(1), (2), and (3)
of the Taxpayer Relief Act of 1997, Public Law Number 105-34,
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, and the provision of
section 1604(c) of the Taxpayer Relief Act of 1997, Public Law
Number 105-34, 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, 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, and the provisions of sections 1011, 1211(b)(1), and
1602(f) of the Taxpayer Relief Act of 1997, Public Law Number
105-34, 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, and the
provisions of sections 1174 and 1601(i)(2) of the Taxpayer
Relief Act of 1997, Public Law Number 105-34, 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, and the provisions of sections 313(a)
and (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b),
1002, 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086,
1087, 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2),
1601(f)(5) and (h), and 1604(d)(1) of the Taxpayer Relief Act of
1997, Public Law Number 105-34, shall 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.
The provisions of sections 202(a) and (b), 221(a), 225,
312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and
(c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306,
1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528,
1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e)
of the Taxpayer Relief Act of 1997, Public Law Number 105-34,
shall become effective at the time they become effective for
federal purposes.
The Internal Revenue Code of 1986, as amended through
December 31, 1997, shall be in effect for taxable years
beginning after December 31, 1997.
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 1997 Supplement, 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;
(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.; and
(7) the amount of a partner's pro rata share of net income
which does not flow through to the partner because the
partnership elected to pay the tax on the income under section
6242(a)(2) of the Internal Revenue Code.
Sec. 4. Minnesota Statutes 1997 Supplement, 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 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;
(5) the amount of any special deductions taken for federal
income tax purposes under sections 241 to 247 of the Internal
Revenue Code;
(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;
(7) the amount of any capital losses deducted for federal
income tax purposes under sections 1211 and 1212 of the Internal
Revenue Code;
(8) the amount of any charitable contributions deducted for
federal income tax purposes under section 170 of the Internal
Revenue Code;
(9) the exempt foreign trade income of a foreign sales
corporation under sections 921(a) and 291 of the Internal
Revenue Code;
(10) the amount of percentage depletion deducted under
sections 611 through 614 and 291 of the Internal Revenue Code;
(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;
(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.; and
(14) the amount of a partner's pro rata share of net income
which does not flow through to the partner because the
partnership elected to pay the tax on the income under section
6242(a)(2) of the Internal Revenue Code.
Sec. 5. Minnesota Statutes 1997 Supplement, 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 December 31, 1996, and
includes the provisions of section 1(a) and (b) of Public Law
Number 104-117 1997.
Sec. 6. Minnesota Statutes 1996, section 290.06,
subdivision 2c, is amended to read:
Subd. 2c. [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES,
AND TRUSTS.] (a) The income taxes imposed by this chapter upon
married individuals filing joint returns and surviving spouses
as defined in section 2(a) of the Internal Revenue Code must be
computed by applying to their taxable net income the following
schedule of rates:
(1) On the first $19,910, 6 percent;
(2) On all over $19,910, but not over $79,120, 8 percent;
(3) On all over $79,120, 8.5 percent.
Married individuals filing separate returns, estates, and
trusts must compute their income tax by applying the above rates
to their taxable income, except that the income brackets will be
one-half of the above amounts.
(b) The income taxes imposed by this chapter upon unmarried
individuals must be computed by applying to taxable net income
the following schedule of rates:
(1) On the first $13,620, 6 percent;
(2) On all over $13,620, but not over $44,750, 8 percent;
(3) On all over $44,750, 8.5 percent.
(c) The income taxes imposed by this chapter upon unmarried
individuals qualifying as a head of household as defined in
section 2(b) of the Internal Revenue Code must be computed by
applying to taxable net income the following schedule of rates:
(1) On the first $16,770, 6 percent;
(2) On all over $16,770, but not over $67,390, 8 percent;
(3) On all over $67,390, 8.5 percent.
(d) In lieu of a tax computed according to the rates set
forth in this subdivision, the tax of any individual taxpayer
whose taxable net income for the taxable year is less than an
amount determined by the commissioner must be computed in
accordance with tables prepared and issued by the commissioner
of revenue based on income brackets of not more than $100. The
amount of tax for each bracket shall be computed at the rates
set forth in this subdivision, provided that the commissioner
may disregard a fractional part of a dollar unless it amounts to
50 cents or more, in which case it may be increased to $1.
(e) An individual who is not a Minnesota resident for the
entire year must compute the individual's Minnesota income tax
as provided in this subdivision. After the application of the
nonrefundable credits provided in this chapter, the tax
liability must then be multiplied by a fraction in which:
(1) The numerator is the individual's Minnesota source
federal adjusted gross income as defined in section 62 of the
Internal Revenue Code increased by the addition additions
required for interest income from non-Minnesota state and
municipal bonds under section 290.01, subdivision 19a, clause
clauses (1) and (7), after applying the allocation and
assignability provisions of section 290.081, clause (a), or
290.17; and
(2) the denominator is the individual's federal adjusted
gross income as defined in section 62 of the Internal Revenue
Code of 1986, as amended through April 15, 1995, increased by
the addition required for interest income from non-Minnesota
state and municipal bonds amounts specified under section
290.01, subdivision 19a, clause clauses (1) and (7).
Sec. 7. Minnesota Statutes 1996, section 290.067,
subdivision 2a, is amended to read:
Subd. 2a. [INCOME.] (a) For purposes of this section,
"income" means the sum of the following:
(1) federal adjusted gross income as defined in section 62
of the Internal Revenue Code; and
(2) the sum of the following amounts to the extent not
included in clause (1):
(i) all nontaxable income;
(ii) the amount of a passive activity loss that is not
disallowed as a result of section 469, paragraph (i) or (m) of
the Internal Revenue Code and the amount of passive activity
loss carryover allowed under section 469(b) of the Internal
Revenue Code;
(iii) an amount equal to the total of any discharge of
qualified farm indebtedness of a solvent individual excluded
from gross income under section 108(g) of the Internal Revenue
Code;
(iv) cash public assistance and relief;
(v) any pension or annuity (including railroad retirement
benefits, all payments received under the federal Social
Security Act, supplemental security income, and veterans
benefits), which was not exclusively funded by the claimant or
spouse, or which was funded exclusively by the claimant or
spouse and which funding payments were excluded from federal
adjusted gross income in the years when the payments were made;
(vi) interest received from the federal or a state
government or any instrumentality or political subdivision
thereof;
(vii) workers' compensation;
(viii) nontaxable strike benefits;
(ix) the gross amounts of payments received in the nature
of disability income or sick pay as a result of accident,
sickness, or other disability, whether funded through insurance
or otherwise;
(x) a lump sum distribution under section 402(e)(3) of the
Internal Revenue Code;
(xi) contributions made by the claimant to an individual
retirement account, including a qualified voluntary employee
contribution; simplified employee pension plan; self-employed
retirement plan; cash or deferred arrangement plan under section
401(k) of the Internal Revenue Code; or deferred compensation
plan under section 457 of the Internal Revenue Code; and
(xii) nontaxable scholarship or fellowship grants.
In the case of an individual who files an income tax return
on a fiscal year basis, the term "federal adjusted gross income"
means federal adjusted gross income reflected in the fiscal year
ending in the next calendar year. Federal adjusted gross income
may not be reduced by the amount of a net operating loss
carryback or carryforward or a capital loss carryback or
carryforward allowed for the year.
(b) "Income" does not include:
(1) amounts excluded pursuant to the Internal Revenue Code,
sections 101(a), and 102, and 121;
(2) amounts of any pension or annuity that were exclusively
funded by the claimant or spouse if the funding payments were
not excluded from federal adjusted gross income in the years
when the payments were made;
(3) surplus food or other relief in kind supplied by a
governmental agency;
(4) relief granted under chapter 290A; and
(5) child support payments received under a temporary or
final decree of dissolution or legal separation.
Sec. 8. Minnesota Statutes 1996, section 290.0921,
subdivision 3a, is amended to read:
Subd. 3a. [EXEMPTIONS.] The following entities are exempt
from the tax imposed by this section:
(1) cooperatives taxable under subchapter T of the Internal
Revenue Code or organized under chapter 308 or a similar law of
another state;
(2) corporations subject to tax under section 60A.15,
subdivision 1;
(3) real estate investment trusts;
(4) regulated investment companies or a fund thereof; and
(5) entities having a valid election in effect under
section 860D(b) of the Internal Revenue Code.; and
(6) small corporations exempt from the federal alternative
minimum tax under section 55(e) of the Internal Revenue Code.
Sec. 9. Minnesota Statutes 1996, section 290A.03,
subdivision 3, is amended to read:
Subd. 3. [INCOME.] (1) "Income" means the sum of the
following:
(a) federal adjusted gross income as defined in the
Internal Revenue Code; and
(b) the sum of the following amounts to the extent not
included in clause (a):
(i) all nontaxable income;
(ii) the amount of a passive activity loss that is not
disallowed as a result of section 469, paragraph (i) or (m) of
the Internal Revenue Code and the amount of passive activity
loss carryover allowed under section 469(b) of the Internal
Revenue Code;
(iii) an amount equal to the total of any discharge of
qualified farm indebtedness of a solvent individual excluded
from gross income under section 108(g) of the Internal Revenue
Code;
(iv) cash public assistance and relief;
(v) any pension or annuity (including railroad retirement
benefits, all payments received under the federal Social
Security Act, supplemental security income, and veterans
benefits), which was not exclusively funded by the claimant or
spouse, or which was funded exclusively by the claimant or
spouse and which funding payments were excluded from federal
adjusted gross income in the years when the payments were made;
(vi) interest received from the federal or a state
government or any instrumentality or political subdivision
thereof;
(vii) workers' compensation;
(viii) nontaxable strike benefits;
(ix) the gross amounts of payments received in the nature
of disability income or sick pay as a result of accident,
sickness, or other disability, whether funded through insurance
or otherwise;
(x) a lump sum distribution under section 402(e)(3) of the
Internal Revenue Code;
(xi) contributions made by the claimant to an individual
retirement account, including a qualified voluntary employee
contribution; simplified employee pension plan; self-employed
retirement plan; cash or deferred arrangement plan under section
401(k) of the Internal Revenue Code; or deferred compensation
plan under section 457 of the Internal Revenue Code; and
(xii) nontaxable scholarship or fellowship grants.
In the case of an individual who files an income tax return
on a fiscal year basis, the term "federal adjusted gross income"
shall mean federal adjusted gross income reflected in the fiscal
year ending in the calendar year. Federal adjusted gross income
shall not be reduced by the amount of a net operating loss
carryback or carryforward or a capital loss carryback or
carryforward allowed for the year.
(2) "Income" does not include
(a) amounts excluded pursuant to the Internal Revenue Code,
sections 101(a), and 102, and 121;
(b) amounts of any pension or annuity which was exclusively
funded by the claimant or spouse and which funding payments were
not excluded from federal adjusted gross income in the years
when the payments were made;
(c) surplus food or other relief in kind supplied by a
governmental agency;
(d) relief granted under this chapter; or
(e) child support payments received under a temporary or
final decree of dissolution or legal separation.
(3) The sum of the following amounts may be subtracted from
income:
(a) for the claimant's first dependent, the exemption
amount multiplied by 1.4;
(b) for the claimant's second dependent, the exemption
amount multiplied by 1.3;
(c) for the claimant's third dependent, the exemption
amount multiplied by 1.2;
(d) for the claimant's fourth dependent, the exemption
amount multiplied by 1.1;
(e) for the claimant's fifth dependent, the exemption
amount; and
(f) if the claimant or claimant's spouse was disabled or
attained the age of 65 on or before December 31 of the year for
which the taxes were levied or rent paid, the exemption amount.
For purposes of this subdivision, the "exemption amount"
means the exemption amount under section 151(d) of the Internal
Revenue Code for the taxable year for which the income is
reported.
Sec. 10. Minnesota Statutes 1997 Supplement, section
290A.03, subdivision 15, is amended to read:
Subd. 15. [INTERNAL REVENUE CODE.] "Internal Revenue Code"
means the Internal Revenue Code of 1986, as amended through
December 31, 1996 1997.
Sec. 11. Minnesota Statutes 1997 Supplement, 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 December 31,
1996, and includes the provisions of section 1(a)(4) of Public
Law Number 104-117 1997.
Sec. 12. [INSTRUCTION TO REVISOR.]
Each place in Minnesota Statutes that refers to section
851(h) or 851(q) of the Internal Revenue Code, the revisor in
the next edition of Minnesota Statutes shall substitute "851(g)"
for those references.
Sec. 13. [EFFECTIVE DATES.]
Sections 1, 3, 4, and 6 to 9 are effective for tax years
beginning after December 31, 1997. Sections 5, 10, and 11 are
effective at the same time federal changes made by the Taxpayer
Relief Act of 1997, Public Law Number 105-34, which are
incorporated into Minnesota Statutes, chapters 290, 290A, and
291 by these sections, become effective for federal tax purposes.
ARTICLE 8
SALES TAX
Section 1. Minnesota Statutes 1996, section 297A.01,
subdivision 8, is amended to read:
Subd. 8. "Sales price" means the total consideration
valued in money, for a retail sale whether paid in money or
otherwise, excluding therefrom any amount allowed as credit for
tangible personal property taken in trade for resale, without
deduction for the cost of the property sold, cost of materials
used, labor or service cost, interest, or discount allowed after
the sale is consummated, the cost of transportation incurred
prior to the time of sale, any amount for which credit is given
to the purchaser by the seller, or any other expense
whatsoever. A deduction may be made for charges of up to 15
percent in lieu of tips, if the consideration for such charges
is separately stated. No deduction shall be allowed for charges
for services that are part of a sale. Except as otherwise
provided in this subdivision, a deduction may also be made for
interest, financing, or carrying charges, charges for labor or
services used in installing or applying the property sold or
transportation charges if the transportation occurs after the
retail sale of the property only if the consideration for such
charges is separately stated. "Sales price," for purposes of
sales of ready-mixed concrete sold from a ready-mixed concrete
truck, includes any transportation, delivery, or other service
charges, and no deduction is allowed for those charges, whether
or not the charges are separately stated. There shall not be
included in "sales price" cash discounts allowed and taken on
sales or the amount refunded either in cash or in credit for
property returned by purchasers.
Sec. 2. Minnesota Statutes 1996, section 297A.01,
subdivision 15, is amended to read:
Subd. 15. "Farm machinery" means new or used machinery,
equipment, implements, accessories, and contrivances used
directly and principally in the production for sale, but not
including the processing, of livestock, dairy animals, dairy
products, poultry and poultry products, fruits, vegetables,
forage, grains and bees and apiary products. "Farm machinery"
includes:
(1) machinery for the preparation, seeding or cultivation
of soil for growing agricultural crops and sod, harvesting and
threshing of agricultural products, harvesting or mowing of sod,
and certain machinery for dairy, livestock and poultry farms;
(2) barn cleaners, milking systems, grain dryers, automatic
feeding systems and similar installations, whether or not the
equipment is installed by the seller and becomes part of the
real property;
(3) irrigation equipment sold for exclusively agricultural
use, including pumps, pipe fittings, valves, sprinklers and
other equipment necessary to the operation of an irrigation
system when sold as part of an irrigation system, whether or not
the equipment is installed by the seller and becomes part of the
real property;
(4) logging equipment, including chain saws used for
commercial logging;
(5) fencing used for the containment of farmed cervidae, as
defined in section 17.451, subdivision 2; and
(6) primary and backup generator units used to generate
electricity for the purpose of operating farm machinery, as
defined in this subdivision, or providing light or space heating
necessary for the production of livestock, dairy animals, dairy
products, or poultry and poultry products; and
(7) aquaculture production equipment as defined in
subdivision 19.
Repair or replacement parts for farm machinery shall not be
included in the definition of farm machinery.
Tools, shop equipment, grain bins, feed bunks, fencing
material except fencing material covered by clause (5),
communication equipment and other farm supplies shall not be
considered to be farm machinery. "Farm machinery" does not
include motor vehicles taxed under chapter 297B, snowmobiles,
snow blowers, lawn mowers except those used in the production of
sod for sale, garden-type tractors or garden tillers and the
repair and replacement parts for those vehicles and machines.
Sec. 3. Minnesota Statutes 1997 Supplement, 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;
(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; or
(8) ready-mixed concrete trucks in which the ready-mixed
concrete is mixed as part of the delivery process.
(c) Capital equipment does not include the following:
(1) motor vehicles taxed under chapter 297B;
(2) machinery or equipment used to receive or store raw
materials;
(3) building materials;
(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;
(5) "farm machinery" as defined by subdivision 15, and
"aquaculture production equipment" as defined by subdivision 19;
or
(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.
Sec. 4. Minnesota Statutes 1996, section 297A.02,
subdivision 2, is amended to read:
Subd. 2. [MACHINERY AND EQUIPMENT.] Notwithstanding the
provisions of subdivision 1, the rate of the excise tax imposed
upon sales of farm machinery and aquaculture production
equipment is 2.5 2.0 percent for sales after June 30, 1998, and
before July 1, 1999, and 1.0 percent for sales after June 30,
1999, and before July 1, 2000.
Sec. 5. Minnesota Statutes 1996, section 297A.02,
subdivision 4, is amended to read:
Subd. 4. [MANUFACTURED HOUSING AND PARK TRAILERS.]
Notwithstanding the provisions of subdivision 1, for sales at
retail of manufactured homes as defined in section 327.31,
subdivision 6, that are used for residential purposes and new or
used park trailers, as defined in section 168.011, subdivision
8, paragraph (b), the excise tax is imposed upon 65 percent of
the sales price dealer's cost of the home or, and for sales of
new and used park trailers, as defined in section 168.011,
subdivision 8, paragraph (b), the excise tax is imposed upon 65
percent of the sales price of the park trailer.
Sec. 6. Minnesota Statutes 1996, section 297A.135,
subdivision 4, as amended by Laws 1997, Third Special Session
chapter 3, section 23, is amended to read:
Subd. 4. [EXEMPTION EXEMPTIONS.] (a) The tax and the fee
imposed by this section do not apply to a lease or rental of (1)
a vehicle to be used by the lessee to provide a licensed taxi
service; (2) a hearse or limousine used in connection with a
burial or funeral service; or (3) a van designed or adapted
primarily for transporting property rather than passengers.
(b) The lessor may elect not to charge the fee imposed in
subdivision 1a if in the previous calendar year the lessor had
no more than 20 vehicles available for lease that would have
been subject to tax under this section, or no more than $50,000
in gross receipts that would have been subject to tax under this
section.
Sec. 7. Minnesota Statutes 1996, section 297A.135,
subdivision 5, as added by Laws 1997, Third Special Session
chapter 3, section 23, is amended to read:
Subd. 5. [PAYMENT OF EXCESS FEES.] On the first sales tax
return due following the end of a calendar year during which a
lessor has imposed a fee under subdivision 1a, the lessor shall
report to the commissioner of revenue, in the form required by
the commissioner, the amount of the fee collected and the amount
of motor vehicle registration taxes paid by the lessor under
chapter 168 on vehicles subject to the fee under this section.
If the amount of the fee collected during the previous year
exceeds the amount of motor vehicle registration taxes paid
under chapter 168 during the previous year, the lessor shall
remit the excess to the commissioner of revenue at the time the
report is submitted.
Sec. 8. Minnesota Statutes 1997 Supplement, section
297A.25, subdivision 3, is amended to read:
Subd. 3. [MEDICINES; MEDICAL DEVICES.] The gross receipts
from the sale of and storage, use, or consumption 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.
Medical supplies purchased by a licensed health care
facility or licensed health care professional to provide medical
treatment to residents or patients are exempt. The exemption
does not apply to medical equipment or components of medical
equipment, laboratory supplies, radiological supplies, and other
items used in providing medical services. For purposes of this
subdivision, "medical supplies" means adhesive and nonadhesive
bandages, gauze pads and strips, cotton applicators,
antiseptics, nonprescription drugs, eye solution, and other
similar supplies used directly on the resident or patient in
providing medical services.
Sec. 9. Minnesota Statutes 1997 Supplement, section
297A.25, subdivision 9, is amended to read:
Subd. 9. [MATERIALS CONSUMED IN PRODUCTION.] The gross
receipts from the sale of and the storage, use, or consumption
of all materials, including chemicals, fuels, petroleum
products, lubricants, packaging materials, including returnable
containers used in packaging food and beverage products, feeds,
seeds, fertilizers, electricity, gas and steam, used or consumed
in agricultural or industrial production of personal property
intended to be sold ultimately at retail, whether or not the
item so used becomes an ingredient or constituent part of the
property produced are exempt. Seeds, trees, fertilizers, and
herbicides purchased for use by farmers in the Conservation
Reserve Program under United States Code, title 16, section
590h, as amended through December 31, 1991, the Integrated Farm
Management Program under section 1627 of Public Law Number
101-624, the Wheat and Feed Grain Programs under sections 301 to
305 and 401 to 405 of Public Law Number 101-624, and the
conservation reserve program under sections 103F.505 to
103F.531, are included in this exemption. Sales to a
veterinarian of materials used or consumed in the care,
medication, and treatment of horses and agricultural production
animals are exempt under this subdivision. Chemicals used for
cleaning food processing machinery and equipment are included in
this exemption. Materials, including chemicals, fuels, and
electricity purchased by persons engaged in agricultural or
industrial production to treat waste generated as a result of
the production process are included in this exemption. Such
production shall include, but is not limited to, research,
development, design or production of any tangible personal
property, manufacturing, processing (other than by restaurants
and consumers) of agricultural products whether vegetable or
animal, commercial fishing, refining, smelting, reducing,
brewing, distilling, printing, mining, quarrying, lumbering,
generating electricity and the production of road building
materials. Such production shall not include painting,
cleaning, repairing or similar processing of property except as
part of the original manufacturing process. Machinery,
equipment, implements, tools, accessories, appliances,
contrivances, furniture and fixtures, used in such production
and fuel, electricity, gas or steam used for space heating or
lighting, are not included within this exemption; however,
accessory tools, equipment and other short lived items, which
are separate detachable units used in producing a direct effect
upon the product, where such items have an ordinary useful life
of less than 12 months, are included within the exemption
provided herein. Electricity used to make snow for outdoor use
for ski hills, ski slopes, or ski trails is included in this
exemption. Petroleum and special fuels used in producing or
generating power for propelling ready-mixed concrete trucks on
the public highways of this state are not included in this
exemption.
Sec. 10. Minnesota Statutes 1997 Supplement, 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 an instrumentality of a political
subdivision that is accredited as an optional/special function
school by the North Central Association of Colleges and Schools,
school districts, public libraries, public library systems,
multicounty, multitype library systems as defined in section
134.001, county law libraries under chapter 134A, the state
library under section 480.09, and the legislative reference
library 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).
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 to a town of gravel and of machinery, equipment, and
accessories, except motor vehicles, used exclusively for road
and bridge maintenance 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. 11. Minnesota Statutes 1997 Supplement, section
297A.25, subdivision 59, is amended to read:
Subd. 59. [FARM MACHINERY.] The gross receipts from the
sale of used farm machinery and, after June 30, 2000, the gross
receipts from the sale of new farm machinery, are exempt.
Sec. 12. Minnesota Statutes 1996, section 297A.25,
subdivision 60, is amended to read:
Subd. 60. [CONSTRUCTION MATERIALS; STATE CONVENTION
CENTER.] Construction materials and supplies are exempt from the
tax imposed under this chapter, regardless of whether purchased
by the owner or a contractor, subcontractor, or builder, if:
(1) the materials and supplies are used or consumed in
constructing improvements to a state convention center located
in a city located outside of the metropolitan area as defined in
section 473.121, subdivision 2, and the center is governed by an
11-person board of which four are appointed by the governor; and
(2) the improvements are financed in whole or in part by
nonstate resources including, but not limited to, revenue or
general obligations issued by the state convention center board
of the city in which the center is located.
The exemption provided by this subdivision applies to
construction materials and supplies purchased prior to December
31, 1998.
Sec. 13. Minnesota Statutes 1996, section 297A.25, is
amended by adding a subdivision to read:
Subd. 73. [BIOSOLIDS PROCESSING EQUIPMENT.] The gross
receipts from the sale of and the storage, use, or consumption
of equipment designed to process, dewater, and recycle biosolids
for wastewater treatment facilities of political subdivisions,
and materials incidental to installation of that equipment, are
exempt.
Sec. 14. Minnesota Statutes 1996, section 297A.25, is
amended by adding a subdivision to read:
Subd. 74. [CONSTRUCTION MATERIALS; MINNEAPOLIS CONVENTION
CENTER.] Purchases of materials, supplies, or equipment used or
consumed in the construction, equipment, improvement, or
expansion of the Minneapolis convention center are exempt from
the tax imposed under this chapter and from any sales and use
tax imposed by a local unit of government notwithstanding any
ordinance or charter provision. This exemption applies
regardless of whether the materials, supplies, or equipment are
purchased by the city or by a construction manager or contractor.
Sec. 15. Minnesota Statutes 1996, section 297A.25, is
amended by adding a subdivision to read:
Subd. 75. [CONSTRUCTION MATERIALS; RIVERCENTRE
ARENA.] Purchases of materials, supplies, or equipment used or
consumed in the construction, equipment, improvement, or
expansion of the RiverCentre arena complex in the city of St.
Paul are exempt from the tax imposed under this chapter and from
any sales and use tax imposed by a local unit of government
notwithstanding any ordinance or charter provision. This
exemption applies regardless of whether the materials, supplies,
or equipment are purchased by the city or by a construction
manager or contractor.
Sec. 16. Minnesota Statutes 1997 Supplement, section
297A.25, is amended by adding a subdivision to read:
Subd. 76. [CONSTRUCTION MATERIALS FOR AN ENVIRONMENTAL
LEARNING CENTER.] Construction materials and supplies are exempt
from the tax imposed under this section, regardless of whether
purchased by the owner or a contractor, subcontractor, or
builder, if they are used or consumed in constructing or
improving the Long Lake Conservation Center pursuant to the
funding provided under Laws 1994, chapter 643, section 23,
subdivision 28, as amended by Laws 1995, First Special Session
chapter 2, article 1, section 48; and Laws 1996, chapter 463,
section 7, subdivision 26. The tax shall be calculated and paid
as if the rate in section 297A.02, subdivision 1, was in effect
and a refund applied for in the manner prescribed in section
297A.15, subdivision 7.
Sec. 17. Minnesota Statutes 1996, section 297A.25, is
amended by adding a subdivision to read:
Subd. 77. [SOYBEAN OILSEED PROCESSING AND REFINING
FACILITY.] 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 for soybean oilseed processing and
refining;
(2) the total capital investment made in the facility is at
least $60,000,000; and
(3) the facility is constructed by a Minnesota-based
cooperative, organized under chapter 308A.
Sec. 18. Minnesota Statutes 1996, section 297A.25, is
amended by adding a subdivision to read:
Subd. 78. [EARLE BROWN HERITAGE CENTER CONSTRUCTION
MATERIALS.] Purchases of materials and supplies used or consumed
in and equipment incorporated into the construction,
improvement, or expansion of the Earle Brown Heritage Center in
Brooklyn Center are exempt from the tax imposed under this
chapter, and from any sales and use tax imposed by a local unit
of government notwithstanding any ordinance or charter
provision. This exemption applies regardless of whether the
materials, supplies, or equipment are purchased by the city or a
contractor, subcontractor, or builder.
Sec. 19. Minnesota Statutes 1997 Supplement, section
297A.256, subdivision 1, is amended to read:
Subdivision 1. [FUNDRAISING SALES BY NONPROFIT GROUPS.]
Notwithstanding the provisions of this chapter, the following
sales made by a "nonprofit organization" are exempt from the
sales and use tax.
(a)(1) All sales made by an organization for fundraising
purposes if that organization exists solely for the purpose of
providing educational or social activities for young people
primarily age 18 and under. This exemption shall apply only if
the gross annual sales receipts of the organization from
fundraising do not exceed $10,000.
(2) A club, association, or other organization of
elementary or secondary school students organized for the
purpose of carrying on sports, educational, or other
extracurricular activities is a separate organization from the
school district or school for purposes of applying the $10,000
limit. This paragraph does not apply if the sales are derived
from admission charges or from activities for which the money
must be deposited with the school district treasurer under
section 123.38, subdivision 2, or be recorded in the same manner
as other revenues or expenditures of the school district under
section 123.38, subdivision 2b.
(b) All sales made by an organization for fundraising
purposes if that organization is a senior citizen group or
association of groups that in general limits membership to
persons age 55 or older and is organized and operated
exclusively for pleasure, recreation and other nonprofit
purposes and no part of the net earnings inure to the benefit of
any private shareholders. This exemption shall apply only if
the gross annual sales receipts of the organization from
fundraising do not exceed $10,000.
(c) The gross receipts from the sales of tangible personal
property at, admission charges for, and sales of food, meals, or
drinks at fundraising events sponsored by a nonprofit
organization when the entire proceeds, except for the necessary
expenses therewith, will be used solely and exclusively for
charitable, religious, or educational purposes. This exemption
does not apply to admission charges for events involving bingo
or other gambling activities or to charges for use of amusement
devices involving bingo or other gambling activities. For
purposes of this paragraph, a "nonprofit organization" means any
unit of government, corporation, society, association,
foundation, or institution organized and operated for
charitable, religious, educational, civic, fraternal, senior
citizens' or veterans' purposes, no part of the net earnings of
which inures to the benefit of a private individual.
If the profits are not used solely and exclusively for
charitable, religious, or educational purposes, the entire gross
receipts are subject to tax.
Each nonprofit organization shall keep a separate
accounting record, including receipts and disbursements from
each fundraising event. All deductions from gross receipts must
be documented with receipts and other records. If records are
not maintained as required, the entire gross receipts are
subject to tax.
The exemption provided by this paragraph does not apply to
any sale made by or in the name of a nonprofit corporation as
the active or passive agent of a person that is not a nonprofit
corporation.
The exemption for fundraising events under this paragraph
is limited to no more than 24 days a year. Fundraising events
conducted on premises leased for more than four five days but
less than 30 days do not qualify for this exemption.
(d) The gross receipts from the sale or use of tickets or
admissions to a golf tournament held in Minnesota are exempt if
the beneficiary of the tournament's net proceeds qualifies as a
tax-exempt organization under section 501(c)(3) of the Internal
Revenue Code, as amended through December 31, 1994, including a
tournament conducted on premises leased or occupied for more
than four days.
Sec. 20. Minnesota Statutes 1997 Supplement, section
297A.48, is amended by adding a subdivision to read:
Subd. 9a. [LOCAL RESOLUTION BEFORE APPLICATION FOR
AUTHORITY.] Before the governing body of a political subdivision
requests legislative approval of a special law for a local sales
tax that is administered under this section, it shall adopt a
resolution indicating its approval of the tax. The resolution
must include, at a minimum, information on the proposed tax
rate, how the revenues will be used, the total revenue that will
be raised before the tax expires, and the estimated length of
time that the tax will be in effect.
Sec. 21. Minnesota Statutes 1997 Supplement, section
297B.03, is amended to read:
297B.03 [EXEMPTIONS.]
There is specifically exempted from the provisions of this
chapter and from computation of the amount of tax imposed by it
the following:
(1) Purchase or use, including use under a lease purchase
agreement or installment sales contract made pursuant to section
465.71, of any motor vehicle by the United States and its
agencies and instrumentalities and by any person described in
and subject to the conditions provided in section 297A.25,
subdivision 18.
(2) Purchase or use of any motor vehicle by any person who
was a resident of another state at the time of the purchase and
who subsequently becomes a resident of Minnesota, provided the
purchase occurred more than 60 days prior to the date such
person began residing in the state of Minnesota.
(3) Purchase or use of any motor vehicle by any person
making a valid election to be taxed under the provisions of
section 297A.211.
(4) Purchase or use of any motor vehicle previously
registered in the state of Minnesota when such transfer
constitutes a transfer within the meaning of section 351 or 721
of the Internal Revenue Code of 1986, as amended through
December 31, 1988.
(5) Purchase or use of any vehicle owned by a resident of
another state and leased to a Minnesota based private or for
hire carrier for regular use in the transportation of persons or
property in interstate commerce provided the vehicle is titled
in the state of the owner or secured party, and that state does
not impose a sales tax or sales tax on motor vehicles used in
interstate commerce.
(6) Purchase or use of a motor vehicle by a private
nonprofit or public educational institution for use as an
instructional aid in automotive training programs operated by
the institution. "Automotive training programs" includes motor
vehicle body and mechanical repair courses but does not include
driver education programs.
(7) Purchase of a motor vehicle for use as an ambulance by
an ambulance service licensed under section 144E.10.
(8) Purchase of a motor vehicle by or for a public library,
as defined in section 134.001, subdivision 2, as a bookmobile or
library delivery vehicle.
(9) Purchase of a ready-mixed concrete truck.
(10) Purchase or use of a motor vehicle by a town for use
exclusively for road maintenance, including snowplows and dump
trucks, but not including automobiles, vans, or pickup trucks.
Sec. 22. Minnesota Statutes 1997 Supplement, section
297G.01, is amended by adding a subdivision to read:
Subd. 3a. [CIDER.] "Cider" means a product that contains
not less than one-half of one percent nor more than seven
percent alcohol by volume and is made from the alcoholic
fermentation of the juice of apples. Cider includes, but is not
limited to, flavored, sparkling, and carbonated cider.
Sec. 23. Minnesota Statutes 1997 Supplement, section
297G.03, subdivision 1, is amended to read:
Subdivision 1. [GENERAL RATE; DISTILLED SPIRITS AND WINE.]
The following excise tax is imposed on all distilled spirits and
wine manufactured, imported, sold, or possessed in this state:
Standard Metric
(a) Distilled spirits, $5.03 per gallon $1.33 per liter
liqueurs, cordials,
and specialties regardless
of alcohol content
(excluding ethyl alcohol)
(b) Wine containing $ .30 per gallon $ .08 per liter
14 percent or less
alcohol by volume
(except cider as defined
in section 297G.01,
subdivision 3a)
(c) Wine containing $ .95 per gallon $ .25 per liter
more than 14 percent
but not more than 21
percent alcohol by volume
(d) Wine containing more $1.82 per gallon $ .48 per liter
than 21 percent but not
more than 24 percent
alcohol by volume
(e) Wine containing more $3.52 per gallon $ .93 per liter
than 24 percent alcohol
by volume
(f) Natural and $1.82 per gallon $ .48 per liter
artificial sparkling wines
containing alcohol
(g) Cider as defined in $ .15 per gallon $ .04 per liter
section 297G.01,
subdivision 3a
In computing the tax on a package of distilled spirits or
wine, a proportional tax at a like rate on all fractional parts
of a gallon or liter must be paid, except that the tax on a
fractional part of a gallon less than 1/16 of a gallon is the
same as for 1/16 of a gallon.
Sec. 24. Minnesota Statutes 1996, section 475.58,
subdivision 3, is amended to read:
Subd. 3. [YOUTH ICE FACILITIES.] (a) A municipality may,
without regard to the election requirement under subdivision 1
or under any other provision of law or a home rule charter,
issue and sell obligations to finance acquisition, improvement,
or construction of an indoor ice arena intended to be used
predominantly for youth athletic activities if all the following
conditions are met:
(1) the obligations are secured by a pledge of revenues
from the facility;
(2) the facility and its financing are approved by
resolutions of at least two of the following governing bodies of
(i) the city in which the facility is located, (ii) the school
district in which the facility is located, or (iii) the county
in which the facility is located;
(3) the governing body of the municipality finds, based on
analysis provided by a professional experienced in finance, that
the facility's revenues and other available money will be
sufficient to pay the obligations, without reliance on a
property tax levy or the municipality's general purpose state
aid; and
(4) no petition for an election has been timely filed under
paragraph (b).
(b) At least 30 days before issuing obligations under this
subdivision, the municipality must hold a public hearing on the
issue. The municipality must publish or provide notice of the
hearing in the same manner provided for its regular meetings.
The obligations are not exempt from the election requirement
under this subdivision, if:
(1) registered voters equal to ten percent of the votes
cast in the last general election in the municipality sign a
petition requesting a vote on the issue; and
(2) the petition is filed with the municipality within 20
days after the public hearing.
(c) This subdivision expires December 31, 1997 1998.
Sec. 25. Laws 1980, chapter 511, section 1, subdivision 2,
as amended by Laws 1991, chapter 291, article 8, section 22, is
amended to read:
Subd. 2. Notwithstanding Minnesota Statutes, Section
477A.01, Subdivision 18 477A.016, or any other law, ordinance,
or city charter provision to the contrary, the city of Duluth
may, by ordinance, impose an additional sales tax of up to
one and one-half percent on sales transactions which are
described in Minnesota Statutes, Section 297A.01, Subdivision 3,
Clause (c). When the city council determines that the taxes
imposed under this subdivision and under section 26 at a rate of
one-half of one percent have produced revenue sufficient to pay
the debt service on bonds in a principal amount of $8,000,000
since the imposition of the taxes at the rate of one and
one-half percent, the rate of the tax under this subdivision is
reduced to one percent. The imposition of this tax shall not be
subject to voter referendum under either state law or city
charter provisions.
Sec. 26. Laws 1980, chapter 511, section 2, is amended to
read:
Sec. 2. [CITY OF DULUTH; TAX ON RECEIPTS BY HOTELS AND
MOTELS.]
Notwithstanding Minnesota Statutes, Section 477A.01,
Subdivision 18 477A.016, or any other law, or ordinance, or city
charter provision to the contrary, the city of Duluth may, by
ordinance, impose an additional tax of one and one-half percent
upon the gross receipts from the sale of lodging for periods of
less than 30 days in hotels and motels located in the
city. When the city council determines that the taxes imposed
under this section and section 25 at a rate of one-half of one
percent have produced revenue sufficient to pay the debt service
on bonds in a principal amount of $8,000,000 since the
imposition of the taxes at the rate of one and one-half percent,
the rate of the tax under this section is reduced to one
percent. The tax shall be collected in the same manner as the
tax set forth in the Duluth city charter, section 54(d),
paragraph one. The imposition of this tax shall not be subject
to voter referendum under either state law or city charter
provisions.
Sec. 27. Laws 1980, chapter 511, section 3, is amended to
read:
Sec. 3. [ALLOCATION OF REVENUES.]
Revenues received from the taxes authorized by section 1,
subdivision 2, and section 2 shall be used to pay for activities
conducted by the city or by other organizations which promote
tourism in the city of Duluth, including capital improvements of
tourism facilities, and to subsidize the Duluth Arena-Auditorium
and the Spirit Mountain recreation authority. Distribution of
the revenues derived from these taxes shall be approved by the
Duluth city council at least once annually, may include pledging
such revenues to pay principal of and interest on city of Duluth
bonds issued to finance such tourism facilities, and shall be
made in accordance with the policy set forth in this section.
Sec. 28. Laws 1991, chapter 291, article 8, section 27,
subdivision 3, is amended to read:
Subd. 3. [USE OF REVENUES.] Revenues received from taxes
authorized by subdivisions 1 and 2 shall be used by the city to
pay the cost of collecting the tax and to pay all or a portion
of the expenses of constructing and operating facilities as part
of an urban revitalization project in downtown Mankato known as
Riverfront 2000. Authorized expenses include, but are not
limited to, acquiring property and paying relocation expenses
related to the development of Riverfront 2000 and related
facilities, and securing or paying debt service on bonds or
other obligations issued to finance the construction of
Riverfront 2000 and related facilities. For purposes of this
section, "Riverfront 2000 and related facilities" means a
civic-convention center, an arena, a riverfront park, a
technology center and related educational facilities, and all
publicly owned real or personal property that the governing body
of the city determines will be necessary to facilitate the use
of these facilities, including but not limited to parking,
skyways, pedestrian bridges, lighting, and landscaping.
Sec. 29. Laws 1992, chapter 511, article 8, section 33,
subdivision 5, is amended to read:
Subd. 5. [TERMINATION OF TAXES.] The taxes imposed
pursuant to subdivisions 1 and 2 shall terminate at the later of
(1) December 31, 1998, or (2) on the first day of the second
month next succeeding a determination by the city council that
sufficient funds have been received from the taxes to finance
capital and administrative costs of $28,760,000 for improvements
for fire station, city hall, and public library facilities and
to prepay or retire at maturity the principal, interest, and
premium due on any bonds issued for the improvements. Any funds
remaining after completion of the improvements and retirement or
redemption of the bonds may be placed in the general fund of the
city.
Sec. 30. 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, including
the demolition of the existing arena and the construction and
equipping of a new arena.
(b) The remainder of the funds must be spent for capital
projects to further residential, cultural, commercial, and
economic development in both downtown St. Paul and St. Paul
neighborhoods. The amount apportioned under this paragraph
shall be no less than 60 percent of the revenues derived from
the tax each year, except to the extent that a portion of that
amount is required to pay debt service on (1) bonds issued for
the purposes of paragraph (a) prior to March 1, 1998; or (2)
bonds issued for the purposes of paragraph (a) after March 1,
1998, but only if the city council determines that 40 percent of
the revenues derived from the tax together with other revenues
pledged to the payment of the bonds, including the proceeds of
definitive bonds, is expected to exceed the annual debt service
on the bonds.
(c) If in any year more than 40 percent of the revenue
derived from the tax authorized by subdivision 1 is used to pay
debt service on the bonds issued for the purposes of paragraph
(a) and to fund a reserve for the bonds, the amount of the debt
service payment that exceeds 40 percent of the revenue must be
determined for that year. In any year when 40 percent of the
revenue produced by the sales tax exceeds the amount required to
pay debt service on the bonds and to fund a reserve for the
bonds under paragraph (a), the amount of the excess must be made
available for capital projects to further residential, cultural,
commercial, and economic development in the neighborhoods and
downtown until the cumulative amounts determined for all years
under the preceding sentence have been made available under this
sentence. The amount made available as reimbursement in the
preceding sentence is not included in the 60 percent determined
under paragraph (b).
(d) 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. 31. Laws 1993, chapter 375, article 9, section 46,
subdivision 3, is amended to read:
Subd. 3. [BONDS.] The city may issue general obligation
bonds of the city or special revenue bonds to finance all or a
portion of the cost for projects authorized in subdivision 2,
paragraph (a). The debt represented by the bonds shall not be
included in computing any debt limitations applicable to the
city. The bonds may be paid from or secured by any funds
available to the city, including the tax authorized under
subdivision 1, any revenues derived from the project, tax
increments from the tax increment district that includes the
project, and revenue from any lodging tax imposed under Laws
1982, chapter 523, article 25, section 1. The bonds may be
issued in one or more series and sold without election on the
question of issuance of the bonds or a property tax to pay
them. Except as otherwise provided in this section, the bonds
must be issued, sold, and secured in the manner provided in
Minnesota Statutes, chapter 475. The aggregate principal amount
of bonds issued under this subdivision may not exceed $65
million, provided that the city may issue additional bonds under
this subdivision as long as the total principal amount of the
additional bonds together with the outstanding principal amount
of the bonds previously issued under this subdivision does not
exceed $130 million. The bonds authorized by this subdivision
shall not be included in local general obligation debt as
defined in Laws 1971, chapter 773, as amended, including Laws
1992, chapter 511, and shall not affect the amount of capital
improvement bonds authorized to be issued by the city of St.
Paul.
Sec. 32. Laws 1993, chapter 375, article 9, section 46,
subdivision 5, is amended to read:
Subd. 5. [EXPIRATION OF TAXING AUTHORITY.] The authority
granted by subdivision 1 to the city to impose a sales tax shall
expire when the principal and interest on any bonds or other
obligations issued to finance projects authorized in subdivision
2, paragraph (a) have been paid on December 31, 2030, or at an
earlier time as the city shall, by ordinance, determine. Any
funds remaining after completion of projects approved under
subdivision 2, paragraph (a) and retirement or redemption of any
bonds or other obligations may be placed in the general fund of
the city.
Sec. 33. Laws 1995, chapter 264, article 2, section 44, as
amended by Laws 1996, chapter 471, article 2, section 27, is
amended to read:
Sec. 44. [EFFECTIVE DATE.]
Section 1 is effective the day following final enactment.
Sections 3 and 4 are effective June 1, 1995. Section 4 is
repealed June 1, 2000.
Sections 5 to 21 and 43, paragraph (a), are effective July
1, 1995.
Sections 23, 28, 33, 40, 42, and the part of section 22
amending language in paragraph (i), clause (vii), are effective
the day following final enactment.
Sections 24 and 34 are effective for sales made after
December 31, 1996.
Section 25 is effective beginning with leases or rentals
made after June 30, 1995.
Section 26 is effective retroactively for sales after May
31, 1992.
Section 27 is effective for sales made after June 30, 1995.
Section 29 and the part of section 22 striking the language
after paragraph (h) are effective for sales after June 30, 1995.
Section 32 is effective for sales made after June 30, 1995,
and before July 1, 1998 1999.
Sections 35 and 36 are effective for sales or transfers
made after June 30, 1995.
Section 38 is effective the day after the governing body of
the city of Winona complies with Minnesota Statutes, section
645.021, subdivision 3.
Section 39 is effective upon compliance by the Minneapolis
city council with Minnesota Statutes, section 645.021,
subdivision 3.
Section 43, paragraph (b), is effective for sales of 900
information services made after June 30, 1995.
Sec. 34. Laws 1997, chapter 231, article 7, section 47, is
amended to read:
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 20 is effective for sales and purchases occurring
after December 31, 1995.
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.
Sec. 35. [TRANSFER OF TRAVEL TRAILERS EXEMPTED.]
Notwithstanding the provisions of Minnesota Statutes,
chapter 297B, any transfer of title of a travel trailer from the
Federal Emergency Management Agency to the state of Minnesota
and any subsequent transfer of title of the trailer to a
political subdivision of the state shall be exempt from the tax
imposed under Minnesota Statutes, chapter 297B.
Sec. 36. [CITY OF ST. PAUL; USE OF SALES TAX REVENUES.]
The revenue derived from the sales tax imposed by the city
of St. Paul under Laws 1993, chapter 375, article 9, section 46,
as amended by Laws 1997, chapter 231, article 7, section 40,
that is distributed to the city's cultural STAR program must be
awarded through a grant or loan review process as provided in
this section. Eighty percent of the revenue must be annually
awarded to nonprofit arts organizations, libraries, and museums
that are located in the designated cultural district of downtown
St. Paul, and the remaining 20 percent may be awarded to
businesses in the cultural district for projects which enhance
visitor enjoyment of the district, or to nonprofit arts
organizations, libraries, and museums located in St. Paul but
outside of the cultural district. Grants or loans may be used
for capital improvements. The restrictions in this section
apply to all STAR cultural funds expended for projects approved
after June 30, 1998.
Sec. 37. [ST. PAUL NEIGHBORHOOD INVESTMENT SALES TAX
EXPENDITURES; CITIZEN REVIEW PROCESS.]
Subdivision 1. [REQUIREMENT.] Expenditures of revenues
from the sales tax imposed by the city of St. Paul that are
dedicated to neighborhood investments may be made only after
review of the proposals for expenditures by the citizen review
panel described in this section. The panel must evaluate the
proposals and provide a report to the city council that makes
recommendations regarding the proposed expenditures in rank
order.
Subd. 2. [APPOINTMENT OF MEMBERS.] The citizen review
panel must consist of 17 members, each of whom represents one of
the district councils. The mayor must appoint the members, and
the appointments are subject to confirmation by a majority vote
of the city council. Members serve for a term of four years.
Elected officials and employees of the city are ineligible to
serve as members of the panel.
Sec. 38. [CITY OF BEMIDJI.]
Subdivision 1. [SALES AND USE TAX AUTHORIZED.]
Notwithstanding Minnesota Statutes, section 477A.016, or any
other provision of law, ordinance, or city charter, if approved
by the city voters at a general election held within one year of
the date of final enactment of this act, the city of Bemidji may
impose by ordinance a sales and use tax of up to one-half of one
percent for the purposes specified in subdivision 3. 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 provision of
law, ordinance, or city charter, if a sales and use tax is
imposed under subdivision 1, the city of Bemidji may impose by
ordinance, for the purpose 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 by the city to
pay the cost of collecting the taxes and to pay all or part of
the capital and administrative cost of acquiring and
constructing facilities as part of a regional convention center
in Bemidji. Authorized expenses include, but are not limited
to, acquiring property and paying construction expenses related
to the development of a convention center which is an arena for
sporting events, concerts, trade shows, conventions, meeting
rooms, and other compatible uses including, but not limited to,
parking, lighting, and landscaping.
Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds
under Minnesota Statutes, chapter 475, to finance the capital
expenditure and improvement projects. An election to approve
the bonds under Minnesota Statutes, section 475.58, may be held
in combination with the election to authorize imposition of the
tax under subdivision 1. Whether to permit imposition of the
tax and issuance of bonds may be posed to the voters as a single
question. The question must state that the sales tax revenues
are pledged to pay the bonds, but that the bonds are general
obligations and will be guaranteed by the city's property taxes.
(b) The issuance of bonds under this subdivision is not
subject to Minnesota Statutes, section 275.60.
(c) The bonds are not included in computing any debt
limitation applicable to the city, and the levy of taxes under
Minnesota Statutes, section 475.61, to pay principal of and
interest on the bonds is not subject to any levy limitation.
The aggregate principal amount of bonds, plus the aggregate of
the taxes used directly to pay eligible capital expenditures and
improvements, may not exceed $25,000,000, plus an amount equal
to the costs related to issuance of the bonds.
(d) The taxes may be pledged to and used for the payment of
the bonds and any bonds issued to refund them only if the bonds
and any refunding bonds are general obligations of 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 taxes to finance
the capital and administrative costs for acquisition and
construction of a convention center and related facilities to
repay 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 the
day after compliance by the governing body of the city of
Bemidji with Minnesota Statutes, section 645.021, subdivision 3.
Sec. 39. [CITY OF DETROIT LAKES.]
Subdivision 1. [SALES AND USE TAX AUTHORIZED.]
Notwithstanding Minnesota Statutes, section 477A.016, or any
other contrary provision of law, ordinance, or city charter, if
approved by the city voters at a general election held within
one year of the date of final enactment of this act, the city of
Detroit Lakes may, by ordinance, impose an additional sales and
use tax of up to one-half of one percent for the purposes
specified in subdivision 3. 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
Detroit Lakes may impose, by ordinance, 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 by the city to
pay the costs of collecting the taxes and to pay all or part of
the capital and administrative costs, up to $6,000,000, for
constructing a community center. Authorized expenses include,
but are not limited to, acquiring property and paying
construction and operating expenses related to the development
of the community center and paying debt service on bonds or
other obligations issued to finance the construction of the
community center.
Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds
under Minnesota Statutes, chapter 475, to finance the capital
expenditure and improvement projects. An election to approve
the bonds under Minnesota Statutes, section 475.58, may be held
in combination with the election to authorize imposition of the
tax under subdivision 1. Whether to permit imposition of the
tax and issuance of bonds may be posed to the voters as a single
question. The question must state that the sales tax revenues
are pledged to pay the bonds, but that the bonds are general
obligations and will be guaranteed by the city's property taxes.
(b) The issuance of bonds under this subdivision is not
subject to Minnesota Statutes, section 275.60.
(c) The bonds are not included in computing any debt
limitation applicable to the city, and the levy of taxes under
Minnesota Statutes, section 475.61, to pay principal of and
interest on the bonds is not subject to any levy limitation.
The aggregate principal amount of bonds, plus the aggregate of
the taxes used directly to pay eligible capital expenditures and
improvements may not exceed $6,000,000, plus an amount equal to
the costs related to issuance of the bonds.
(d) The taxes may be pledged to and used for the payment of
the bonds and any bonds issued to refund them, only if the bonds
and any refunding bonds are general obligations of 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 constructing
the community center and to prepay or retire at maturity the
principal, interest, and premium due on any bonds issued for the
construction. Any funds remaining after completion of the
project or retirement or redemption of the bonds may be placed
in the general fund of the city.
Subd. 6. [EFFECTIVE DATE.] This section is effective the
day after compliance by the governing body of the city of
Detroit Lakes with Minnesota Statutes, section 645.021,
subdivision 3.
Sec. 40. [CITY OF FERGUS FALLS.]
Subdivision 1. [SALES AND USE TAX AUTHORIZED.]
Notwithstanding Minnesota Statutes, section 477A.016, or any
other provision of law, ordinance, or city charter, if approved
by the city voters at a general election held within one year of
the date of final enactment of this act, the city of Fergus
Falls may impose by ordinance a sales and use tax of up to
one-half of one percent for the purposes specified in
subdivision 3. The provisions of Minnesota Statutes, section
297A.48, govern the imposition, administration, collection, and
enforcement of the tax authorized under this subdivision, except
that the sales and use taxes shall not apply to farm machinery.
Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding
Minnesota Statutes, section 477A.016, or any other provision of
law, ordinance, or city charter, if a sales and use tax is
imposed under subdivision 1, the city of Fergus Falls may impose
by ordinance, 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 by the city to
pay the costs of collecting the taxes and to pay all or part of
the capital and administrative costs of constructing facilities
as part of a regional conference center, community center,
recreational and tourism project in Fergus Falls known as
Project Reach Out. Authorized expenses include, but are not
limited to, acquiring property and paying construction and
operating expenses related to the development of Project Reach
Out and related facilities, and paying debt service on bonds or
other obligations issued to finance the construction of Project
Reach Out and related facilities.
For purposes of this section, "Project Reach Out and
related facilities" means a regional conference center,
community center, regional park and recreational facilities, and
all publicly owned real or personal property that the governing
body of the city determines are necessary to facilitate the use
of these facilities, including but not limited to, parking,
pedestrian bridges, lighting, and landscaping.
Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds
under Minnesota Statutes, chapter 475, to finance the capital
expenditure and improvement projects. An election to approve
the bonds under Minnesota Statutes, section 475.58, may be held
in combination with the election to authorize imposition of the
tax under subdivision 1. Whether to permit imposition of the
tax and issuance of bonds may be posed to the voters as a single
question. The question must state that the sales tax revenues
are pledged to pay the bonds, but that the bonds are general
obligations and will be guaranteed by the city's property taxes.
(b) The issuance of bonds under this subdivision is not
subject to Minnesota Statutes, section 275.60.
(c) The bonds are not included in computing any debt
limitation applicable to the city, and the levy of taxes under
Minnesota Statutes, section 475.61, to pay principal of and
interest on the bonds is not subject to any levy limitation.
The aggregate principal amount of bonds, plus the aggregate of
the taxes used directly to pay eligible capital expenditures and
improvements may not exceed $9,000,000, plus an amount equal to
the costs related to issuance of the bonds.
(d) The taxes may be pledged to and used for the payment of
the bonds and any bonds issued to refund them, only if the bonds
and any refunding bonds are general obligations of the city.
Subd. 5. [TERMINATION OF TAXES.] The taxes imposed under
subdivisions 1 and 2 expire when the city determines that
sufficient funds have been received from the taxes to finance
the capital and administrative costs for acquisition,
construction, improvement, and operation of Project Reach Out
and related 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 the
day after compliance by the governing body of the city of Fergus
Falls with Minnesota Statutes, section 645.021, subdivision 3.
Sec. 41. [CITY OF HUTCHINSON; TAXES AUTHORIZED.]
Subdivision 1. [SALES AND USE TAX.] Notwithstanding
Minnesota Statutes, section 477A.016, or any other provision of
law, ordinance, or city charter, if approved by the city voters
at a general election or special election held within one year
of final enactment of this act, the city of Hutchinson may
impose by ordinance a sales and use tax of up to one-half of one
percent for the purposes specified in subdivision 3. 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 provision of
law, ordinance, or city charter, the city of Hutchinson may
impose by ordinance, 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 by the city to
pay the cost of collecting the taxes and to pay for construction
and improvement of a civic and community center and recreational
facilities to serve seniors and youth. Authorized expenses
include, but are not limited to, acquiring property, paying
construction and operating expenses related to the development
of an authorized facility, and paying debt service on bonds or
other obligations issued to finance the construction or
expansion of an authorized facility. The capital expenses for
all projects authorized under this paragraph that may be paid
with these taxes is limited to $5,000,000, plus an amount equal
to the costs related to issuance of the bonds.
Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds
under Minnesota Statutes, chapter 475, to finance the capital
expenditure and improvement projects. An election to approve
the bonds under Minnesota Statutes, section 475.58, may be held
in combination with the election to authorize imposition of the
tax under subdivision 1. Whether to permit imposition of the
tax and issuance of bonds may be posed to the voters as a single
question. The question must state that the sales tax revenues
are pledged to pay the bonds, but that the bonds are general
obligations and will be guaranteed by the city's property taxes.
(b) The issuance of bonds under this subdivision is not
subject to Minnesota Statutes, section 275.60.
(c) The bonds are not included in computing any debt
limitation applicable to the city, and the levy of taxes under
Minnesota Statutes, section 475.61, to pay principal of and
interest on the bonds is not subject to any levy limitation.
The aggregate principal amount of bonds, plus the aggregate of
the taxes used directly to pay eligible capital expenditures and
improvements may not exceed $5,000,000, plus an amount equal to
the costs related to issuance of the bonds.
(d) The taxes may be pledged to and used for the payment of
the bonds and any bonds issued to refund them, only if the bonds
and any refunding bonds are general obligations of 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 facilities
described in subdivision 3, and to prepay or retire at maturity
the principal, interest, and premium due on any bonds issued for
the facilities under subdivision 5. 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 the
day after compliance by the governing body of the city of
Hutchinson with Minnesota Statutes, section 645.021, subdivision
3.
Sec. 42. [CITY OF OWATONNA; SALES AND USE TAX.]
Subdivision 1. [SALES AND USE TAX AUTHORIZED.]
Notwithstanding Minnesota Statutes, section 477A.016, or any
other provision of law, ordinance, or city charter, if approved
by the city voters at a general election held within one year of
the date of final enactment of this act, the city of Owatonna
may impose by ordinance a sales and use tax of up to one-half of
one percent for the purposes specified in subdivision 3. 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 provision of
law, ordinance, or city charter, if a sales and use tax is
imposed under subdivision 1, the city of Owatonna may impose by
ordinance, 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 by the city to
pay the costs of collecting the taxes and to pay all or part of
the capital and administrative costs of constructing and
improving infrastructure and facilities as part of Owatonna
Economic Development 2000 and related facilities. Authorized
expenses include, but are not limited to, acquiring property and
paying construction and operating expenses related to the
development of Owatonna Economic Development 2000 and related
facilities, and paying debt service on bonds or other
obligations issued to finance the construction of Owatonna
Economic Development 2000 and related facilities.
For purposes of this section, "Owatonna Economic
Development 2000 and related facilities" means the improvement
of the Owatonna regional airport and infrastructure
improvements, including roads and the extension of water and
sewer services, for an economic and tourism project.
Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds
under Minnesota Statutes, chapter 475, to finance the capital
expenditure and improvement projects. An election to approve
the bonds under Minnesota Statutes, section 475.58, may be held
in combination with the election to authorize imposition of the
tax under subdivision 1. Whether to permit imposition of the
tax and issuance of bonds may be posed to the voters as a single
question. The question must state that the sales tax revenues
are pledged to pay the bonds, but that the bonds are general
obligations and will be guaranteed by the city's property taxes.
(b) The issuance of bonds under this subdivision is not
subject to Minnesota Statutes, section 275.60.
(c) The bonds are not included in computing any debt
limitation applicable to the city, and the levy of taxes under
Minnesota Statutes, section 475.61, to pay principal of and
interest on the bonds is not subject to any levy limitation.
The aggregate principal amount of bonds, plus the aggregate of
the taxes used directly to pay eligible capital expenditures and
improvements may not exceed $5,000,000, plus an amount equal to
the costs related to issuance of the bonds.
(d) The taxes may be pledged to and used for the payment of
the bonds and any bonds issued to refund them, only if the bonds
and any refunding bonds are general obligations of 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 acquisition,
construction, and improvement of Owatonna Economic Development
2000 and related 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 the
day after compliance by the governing body of the city of
Owatonna with Minnesota Statutes, section 645.021, subdivision 3.
Sec. 43. [CITY OF ROCHESTER; TAXES.]
Subdivision 1. [SALES AND USE TAXES AUTHORIZED.]
Notwithstanding Minnesota Statutes, section 477A.016, or any
other contrary provision of law, ordinance, or city charter,
upon termination of the taxes authorized under Laws 1992,
chapter 511, article 8, section 33, subdivision 1, and if
approved by the voters of the city at a general or special
election held within one year of the date of final enactment of
this act, the city of Rochester may, by ordinance, impose an
additional 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, upon termination
of the tax authorized under Laws 1992, chapter 511, article 8,
section 33, subdivision 2, the city of Rochester may, by
ordinance, impose 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 the
taxes authorized by subdivisions 1 and 2 must be used by the
city to pay for the cost of collecting and administering the
taxes and to pay for the following projects:
(1) transportation infrastructure improvements including
both highway and airport improvements;
(2) improvements to the civic center complex;
(3) a municipal water, sewer, and storm sewer project
necessary to improve regional ground water quality; and
(4) construction of a regional recreation and sports center
and associated facilities available for both community and
student use, located at or adjacent to the Rochester center.
The total amount of capital expenditures or bonds for these
projects that may be paid from the revenues raised from the
taxes authorized in this section may not exceed $71,500,000.
The total amount of capital expenditures or bonds for the
project in clause (4) that may be paid from the revenues raised
from the taxes authorized in this section may not exceed
$20,000,000.
Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds
under Minnesota Statutes, chapter 475, to finance the capital
expenditure and improvement projects. An election to approve
the bonds under Minnesota Statutes, section 475.58, may be held
in combination with the election to authorize imposition of the
tax under subdivision 1. Whether to permit imposition of the
tax and issuance of bonds may be posed to the voters as a single
question. The question must state that the sales tax revenues
are pledged to pay the bonds, but that the bonds are general
obligations and will be guaranteed by the city's property taxes.
(b) The issuance of bonds under this subdivision is not
subject to Minnesota Statutes, section 275.60.
(c) The bonds are not included in computing any debt
limitation applicable to the city, and the levy of taxes under
Minnesota Statutes, section 475.61, to pay principal of and
interest on the bonds is not subject to any levy limitation.
The aggregate principal amount of bonds, plus the aggregate of
the taxes used directly to pay eligible capital expenditures and
improvements may not exceed $71,500,000, plus an amount equal to
the costs related to issuance of the bonds.
(d) The taxes may be pledged to and used for the payment of
the bonds and any bonds issued to refund them, only if the bonds
and any refunding bonds are general obligations of 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 projects and to prepay or retire at maturity the
principal, interest, and premium due on any bonds issued for the
projects 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 the
day after compliance by the governing body of the city of
Rochester with Minnesota Statutes, section 645.021, subdivision
3.
Sec. 44. [CENTRAL MINNESOTA EVENTS CENTER; LOCAL OPTION
TAXES.]
Subdivision 1. [SALES AND USE TAX AUTHORIZED.]
Notwithstanding Minnesota Statutes, section 477A.016, or any
other provision of law, ordinance, or city charter, the cities
of St. Cloud, Sauk Rapids, Sartell, Waite Park, and St. Joseph
may impose by ordinance a sales and use tax of up to one-half of
one percent for the purposes specified in subdivision 3. This
tax, and the taxes described in subdivisions 2 to 4, may be
imposed in any of these cities only if approved by the voters of
the city at a general election held within one year of the date
of final enactment of this act, or at an election held on the
first Tuesday in November of 1999. The provisions of Minnesota
Statutes, section 297A.48, govern the imposition,
administration, collection, and enforcement of the taxes
authorized under this subdivision.
Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding
Minnesota Statutes, section 477A.016, or any other provision of
law, ordinance, or city charter, the cities identified in
subdivision 1 may impose by ordinance, for the purposes
specified in subdivision 3, an excise tax of up to $20 per motor
vehicle acquired from any person engaged within the city in the
business of selling motor vehicles at retail.
Subd. 3. [FOOD AND BEVERAGE TAX
AUTHORIZED.] Notwithstanding Minnesota Statutes, section
477A.016, or any other provision of law, ordinance, or city
charter, the cities identified in subdivision 1 may each impose
by ordinance, for the purposes specified in subdivision 5, a tax
of up to one percent on the gross receipts from the on-sales of
intoxicating liquor and fermented malt beverages and the sale of
food and beverages sold at restaurants and places of refreshment
within the city. The city shall define "restaurant" and "place
of refreshment" as part of the ordinance.
Subd. 4. [LODGING TAX AUTHORIZED.] Notwithstanding
Minnesota Statutes, section 477A.016, or any other provision of
law, ordinance, or city charter, the cities identified in
subdivision 1 may each impose by ordinance, for the purposes
specified in subdivision 5, a tax of up to one percent on the
gross receipts from the furnishing for a consideration of
lodging and related services by a hotel, rooming house, tourist
court, motel, or trailer camp, other than the renting or leasing
of it for a continuous period of 30 days or more. This tax is
in addition to the tax authorized in Minnesota Statutes, section
469.190, and is not included in calculating the tax rate subject
to the limit imposed on lodging taxes in Minnesota Statutes,
section 469.190, subdivision 2.
Subd. 5. [USE OF REVENUES.] (a) Revenues received from the
taxes authorized by subdivisions 1 to 4 must be used to pay for
the cost of collecting the taxes; to pay all or part of the
capital or administrative cost of the acquisition, construction,
and improvement of the Central Minnesota Events Center and
related on-site and off-site improvements; and to pay for the
operating deficit, if any, in the first five years of operation
of the facility. Authorized expenses related to acquisition,
construction, and improvement of the center include, but are not
limited to, acquiring property, paying construction and
operating expenses related to the development of the facility,
and securing and paying debt service on bonds or other
obligations issued to finance construction or improvement of the
authorized facility.
(b) In addition, if the revenues collected from a tax
imposed in subdivisions 1 to 4 are greater than the amount
needed to meet obligations under paragraph (a) in any year, the
surplus may be returned to the cities in a manner agreed upon by
the participating cities under this section, to be used by the
cities for projects of regional significance, limited to the
acquisition and improvement of park land and open space; the
purchase, renovation, and construction of public buildings and
land primarily used for the arts, libraries, and community
centers; and for debt service on bonds issued for these
purposes. The amount of surplus revenues raised by a tax will
be determined either as provided for by an applicable joint
powers agreement or by a governing entity in charge of
administering the project in paragraph (a).
Subd. 6. [BONDING AUTHORITY.] (a) The cities named in
subdivision 1 may issue bonds under Minnesota Statutes, chapter
475, to finance the acquisition, construction, and improvement
of the Central Minnesota Events Center. An election to approve
the bonds under Minnesota Statutes, section 475.58, may be held
in combination with the election to authorize imposition of the
tax under subdivision 1. Whether to permit imposition of the
tax and issuance of bonds may be posed to the voters as a single
question. The question must state that the sales tax revenues
are pledged to pay the bonds, but that the bonds are general
obligations and will be guaranteed by the city's property taxes.
(b) The issuance of bonds under this subdivision is not
subject to Minnesota Statutes, section 275.60.
(c) The bonds are not included in computing any debt
limitation applicable to the city, and the levy of taxes under
Minnesota Statutes, section 475.61, to pay principal of and
interest on the bonds is not subject to any levy limitation.
The aggregate principal amount of bonds issued by all cities
named in subdivision 1, plus the aggregate of the taxes used
directly to pay eligible capital expenditures and improvements
may not exceed $50,000,000, plus an amount equal to the costs
related to issuance of the bonds, less any amount made available
to the cities for the project described in subdivision 5 under
the capital expenditure legislation adopted during the 1998
session of the legislature.
(d) The taxes may be pledged to and used for the payment of
the bonds and any bonds issued to refund them, only if the bonds
and any refunding bonds are general obligations of the city.
Subd. 7. [TERMINATION OF TAXES.] The taxes imposed by each
city under subdivisions 1 to 4 expire when sufficient funds have
been received from the taxes to finance the obligations under
subdivision 3, and to prepay or retire at maturity the
principal, interest, and premium due on the original bonds
issued for the initial acquisition, construction, and
improvement of the Central Minnesota Events Center as determined
under an applicable joint powers agreement or by a governing
entity in charge of administering the project. Any funds
remaining after completion of the project and retirement or
redemption of the bonds may be placed in the general funds of
the cities imposing the taxes. The taxes imposed by a city
under this section may expire at an earlier time by city
ordinance, if authorized under the applicable joint powers
agreement or by the governing entity in charge of administering
the project.
If the cities that pass a referendum required under
subdivision 6 determine that the revenues raised from the sum of
all the taxes authorized by referendum under this subdivision
will not be sufficient to fund the project in subdivision 5,
none of the authorized taxes may be imposed.
Subd. 8. [EFFECTIVE DATE.] This section is effective
August 1, 1998, with respect to any city listed in subdivision 1
upon compliance of the governing body of that city with
Minnesota Statutes, section 645.021, subdivision 3.
Sec. 45. [CITY OF TWO HARBORS; TAXES AUTHORIZED.]
Subdivision 1. [SALES AND USE TAXES.] Notwithstanding
Minnesota Statutes, section 477A.016, or any other provision of
law, ordinance, or city charter, if approved by the voters of
the city at the next general election held after the date of
final enactment of this act, the city of Two Harbors may impose
by ordinance, a sales and use tax at a rate of up to one-half of
one percent for the purposes specified in subdivision 3. 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 Two
Harbors may impose by ordinance, 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 the
taxes authorized under subdivision 1 must be used for sanitary
sewer separation, wastewater treatment, and harbor refuge
development projects.
Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds
under Minnesota Statutes, chapter 475, to finance the capital
expenditure and improvement projects. An election to approve
the bonds under Minnesota Statutes, section 475.58, may be held
in combination with the election to authorize imposition of the
tax under subdivision 1. Whether to permit imposition of the
tax and issuance of bonds may be posed to the voters as a single
question. The question must state that the sales tax revenues
are pledged to pay the bonds, but that the bonds are general
obligations and will be guaranteed by the city's property taxes.
(b) The issuance of bonds under this subdivision is not
subject to Minnesota Statutes, section 275.60.
(c) The bonds are not included in computing any debt
limitation applicable to the city, and the levy of taxes under
Minnesota Statutes, section 475.61, to pay principal of and
interest on the bonds is not subject to any levy limitation.
The aggregate principal amount of bonds, plus the aggregate of
the taxes used directly to pay eligible capital expenditures and
improvements may not exceed $20,000,000, plus an amount equal to
the costs related to issuance of the bonds.
(d) The taxes may be pledged to and used for the payment of
the bonds and any bonds issued to refund them, only if the bonds
and any refunding bonds are general obligations of the city.
Subd. 5. [TERMINATION OF TAXES.] The authority granted
under subdivision 1 to the city of Two Harbors to impose sales
and use taxes expires when the costs of the projects described
in subdivision 3 have been paid.
Subd. 6. [EFFECTIVE DATE.] This section is effective the
day after compliance by the governing body of the city of Two
Harbors with Minnesota Statutes, section 645.021, subdivision 3.
Sec. 46. [CITY OF WINONA; TAXES AUTHORIZED.]
Subdivision 1. [SALES AND USE TAX AUTHORIZED.]
Notwithstanding Minnesota Statutes, section 477A.016, or any
other provision of law, ordinance, or city charter, if approved
by the city voters at a general election held within one year of
the date of final enactment of this act, the city of Winona may
impose by ordinance a sales and use tax of up to one-half of one
percent for the purposes specified in subdivision 3. 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 Winona
may impose by ordinance, 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 by the city to
pay the costs of collecting the taxes and to pay all or a part
of the capital and administrative costs of the dredging of Lake
Winona, including paying debt service on bonds or other
obligations issued to finance the project under subdivision 4.
Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds
under Minnesota Statutes, chapter 475, to finance the capital
expenditure and improvement projects. An election to approve
the bonds under Minnesota Statutes, section 475.58, may be held
in combination with the election to authorize imposition of the
tax under subdivision 1. Whether to permit imposition of the
tax and issuance of bonds may be posed to the voters as a single
question. The question must state that the sales tax revenues
are pledged to pay the bonds, but that the bonds are general
obligations and will be guaranteed by the city's property taxes.
(b) The issuance of bonds under this subdivision is not
subject to Minnesota Statutes, section 275.60.
(c) The bonds are not included in computing any debt
limitation applicable to the city, and the levy of taxes under
Minnesota Statutes, section 475.61, to pay principal of and
interest on the bonds is not subject to any levy limitation.
The aggregate principal amount of bonds, plus the aggregate of
the taxes used directly to pay eligible capital expenditures and
improvements may not exceed $4,000,000, plus an amount equal to
the costs related to issuance of the bonds.
(d) The taxes may be pledged to and used for the payment of
the bonds and any bonds issued to refund them, only if the bonds
and any refunding bonds are general obligations of 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 dredging of Lake Winona 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 upon
compliance by the governing body of the city of Winona with
Minnesota Statutes, section 645.021, subdivision 3.
Sec. 47. [REPEALER.]
Minnesota Statutes 1996, section 297A.02, subdivision 2, is
repealed.
Sec. 48. [EFFECTIVE DATE.]
Sections 1, 3, 8, 9, 19, and 21 are effective for sales and
purchases made after June 30, 1998. Sections 2 and 47 are
effective for sales made after June 30, 2000. Sections 5, 13,
and 17 are effective for sales made after June 30, 1998.
Sections 6 and 7 are effective for rentals after June 30, 1998.
Section 10 is effective for purchases made after June 30, 1998.
Sections 12, 14, 15, and 34 are effective the day following
final enactment. Section 16 is effective for purchases made
after December 1, 1997. Section 18 is effective for purchases
made after June 30, 1998, and before July 1, 2003. Section 20
is effective for local laws enacted after June 30, 1998.
Sections 22 and 23 are effective July 1, 1998. Section 24 is
effective December 31, 1997. Sections 25 to 27 are effective
upon approval by the governing body of the city of Duluth and
compliance with Minnesota Statutes, section 645.021, subdivision
3. Section 28 is effective upon approval by the governing body
of the city of Mankato and compliance with Minnesota Statutes,
section 645.021, subdivision 3. Section 29 is effective upon
approval by the governing body of the city of Rochester and
compliance with Minnesota Statutes, section 645.021, subdivision
3. Sections 30 to 32, 36, and 37 are effective the day after
the governing body of the city of St. Paul complies with
Minnesota Statutes, section 645.021. Section 35 is effective
for transfers after November 30, 1997, and before January 1,
1999.
ARTICLE 9
BUDGET RESERVES
Section 1. Minnesota Statutes 1997 Supplement, 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 as follows:
(a) first, to the budget reserve until the total amount in
the account equals $522,000,000 $622,000,000; 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. [EXCESS REVENUE; TO REDUCE BORROWING.]
Subdivision 1. [TAX REFORM AND REDUCTION ACCOUNT.] A tax
reform and reduction account is established in the general fund.
Amounts in the account are available only to provide tax reform
and reduction, as enacted by law. The governor shall make
recommendations to the legislature regarding uses of the money
in the account to reduce taxes and to reform the Minnesota tax
system.
Subd. 2. [PRIORITIES.] If on the basis of a forecast of
general fund revenues and expenditures after November 1 in 1998,
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 as follows:
(1) first, to the budget reserve until the total amount in
that account equals $622,000,000; then
(2) second, to the tax reduction and reform account until
the amount allocated equals $200,000,000; and
(3) third, to reduce the need to borrow money to finance
state building projects as provided in subdivision 3.
Subd. 3. [CANCELLATION OF BOND APPROPRIATIONS AND
AUTHORIZATIONS.] The commissioner of finance shall reduce
appropriations from the bond proceeds fund and the state
transportation fund in 1998 H.F. No. 3843, if enacted, for which
bonds have not yet been sold as authorized by that law, by the
amount of general fund revenue made available for this purpose
under subdivision 2, and the amount reduced is appropriated from
the general fund for the same purposes as the appropriations
reduced. The commissioner of finance shall reduce the bond sale
authorizations in 1998 H.F. No. 3843 accordingly.
Sec. 3. [APPROPRIATION.]
On July 1, 1998, $100,000,000 is appropriated from the
general fund to the commissioner of finance to transfer to the
budget reserve account under Minnesota Statutes, section
16A.152, subdivision 1a.
ARTICLE 10
TACONITE TAXES
Section 1. Minnesota Statutes 1997 Supplement, section
124.918, subdivision 8, is amended to read:
Subd. 8. [TACONITE PAYMENT AND OTHER REDUCTIONS.] (1)
Reductions in levies pursuant to section 124.918, subdivision 1,
and section 273.138, shall be made prior to the reductions in
clause (2).
(2) Notwithstanding any other law to the contrary,
districts which received payments pursuant to sections 298.018;
298.23 to 298.28, except an amount distributed under section
298.28, subdivision 4, paragraph (c), clause (ii); 298.34 to
298.39; 298.391 to 298.396; 298.405; and any law imposing a tax
upon severed mineral values, or recognized revenue pursuant to
section 477A.15; shall not include a portion of these aids in
their permissible levies pursuant to those sections, but instead
shall reduce the permissible levies authorized by this chapter
and chapter 124A by the greater of the following:
(a) an amount equal to 50 percent of the total dollar
amount of the payments received pursuant to those sections or
revenue recognized pursuant to section 477A.15 in the previous
fiscal year; or
(b) an amount equal to the total dollar amount of the
payments received pursuant to those sections or revenue
recognized pursuant to section 477A.15 in the previous fiscal
year less the product of the same dollar amount of payments or
revenue times the ratio of the maximum levy allowed the district
under Minnesota Statutes 1986, sections 124A.03, subdivision 2,
124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10,
subdivision 3a, 124A.12, subdivision 3a, and 124A.14,
subdivision 5a, to the total levy allowed the district under
this section and Minnesota Statutes 1986, sections 124A.03,
124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10,
subdivision 3a, 124A.12, subdivision 3a, 124A.14, subdivision
5a, and 124A.20, subdivision 2, for levies certified in
1986 five percent.
(3) No reduction pursuant to this subdivision shall reduce
the levy made by the district pursuant to section 124A.23, to an
amount less than the amount raised by a levy of a net tax rate
of 6.82 percent times the adjusted net tax capacity for taxes
payable in 1990 and thereafter of that district for the
preceding year as determined by the commissioner. The amount of
any increased levy authorized by referendum pursuant to section
124A.03, subdivision 2, shall not be reduced pursuant to this
subdivision. The amount of any levy authorized by section
124.912, subdivision 1, to make payments for bonds issued and
for interest thereon, shall not be reduced pursuant to this
subdivision.
(4) Before computing the reduction pursuant to this
subdivision of the health and safety levy authorized by sections
124.83 and 124.91, subdivision 6, the commissioner shall
ascertain from each affected school district the amount it
proposes to levy under each section or subdivision. The
reduction shall be computed on the basis of the amount so
ascertained.
(5) Notwithstanding any law to the contrary, any amounts
received by districts in any fiscal year pursuant to sections
298.018; 298.23 to 298.28; 298.34 to 298.39; 298.391 to 298.396;
298.405; or any law imposing a tax on severed mineral values;
and not deducted from general education aid pursuant to section
124A.035, subdivision 5, clause (2), and not applied to reduce
levies pursuant to this subdivision shall be paid by the
district to the St. Louis county auditor in the following amount
by March 15 of each year, the amount required to be subtracted
from the previous fiscal year's general education aid pursuant
to section 124A.035, subdivision 5, which is in excess of the
general education aid earned for that fiscal year. The county
auditor shall deposit any amounts received pursuant to this
clause in the St. Louis county treasury for purposes of paying
the taconite homestead credit as provided in section 273.135.
Sec. 2. Minnesota Statutes 1996, section 273.135,
subdivision 2, is amended to read:
Subd. 2. The amount of the reduction authorized by
subdivision 1 shall be:
(a) In the case of property located within the boundaries
of a municipality which meets the qualifications prescribed in
section 273.134, 66 percent of the tax, provided that the
reduction shall not exceed the maximum amounts specified in
clause (c), and shall not exceed an amount sufficient to reduce
the effective tax rate on each parcel of property to 95 percent
of the base year effective tax rate. In no case will the
reduction for each homestead resulting from this credit be less
than $10.
(b) In the case of property located within the boundaries
of a school district which qualifies as a tax relief area but
which is outside the boundaries of a municipality which meets
the qualifications prescribed in section 273.134, 57 percent of
the tax, provided that the reduction shall not exceed the
maximum amounts specified in clause (c), and shall not exceed an
amount sufficient to reduce the effective tax rate on each
parcel of property to 95 percent of the base year effective tax
rate. In no case will the reduction for each homestead
resulting from this credit be less than $10.
(c) The maximum reduction of the tax is $225.40 $315.10 on
property described in clause (a) and $200.10 $289.80 on property
described in clause (b). , for taxes payable in 1985. These
maximum amounts shall increase by $15 times the quantity one
minus the homestead credit equivalency percentage per year for
taxes payable in 1986 and subsequent years.
For the purposes of this subdivision, "homestead credit
equivalency percentage" means one minus the ratio of the net
class rate to the gross class rate applicable to the first
$72,000 of the market value of residential homesteads,
"effective tax rate" means tax divided by the market value of a
property, and the "base year effective tax rate" means the
payable 1988 tax on a property with an identical market value to
that of the property receiving the credit in the current year
after the application of the credits payable under Minnesota
Statutes 1988, section 273.13, subdivisions 22 and 23, and this
section, divided by the market value of the property.
Sec. 3. Minnesota Statutes 1996, section 273.1391,
subdivision 2, is amended to read:
Subd. 2. The amount of the reduction authorized by
subdivision 1 shall be:
(a) In the case of property located within a school
district which does not meet the qualifications of section
273.134 as a tax relief area, but which is located in a county
with a population of less than 100,000 in which taconite is
mined or quarried and wherein a school district is located which
does meet the qualifications of a tax relief area, and provided
that at least 90 percent of the area of the school district
which does not meet the qualifications of section 273.134 lies
within such county, 57 percent of the tax on qualified property
located in the school district that does not meet the
qualifications of section 273.134, provided that the amount of
said reduction shall not exceed the maximum amounts specified in
clause (c), and shall not exceed an amount sufficient to reduce
the effective tax rate on each parcel of property to the product
of 95 percent of the base year effective tax rate multiplied by
the ratio of the current year's tax rate to the payable 1989 tax
rate. In no case will the reduction for each homestead
resulting from this credit be less than $10. The reduction
provided by this clause shall only be applicable to property
located within the boundaries of the county described therein.
(b) In the case of property located within a school
district which does not meet the qualifications of section
273.134 as a tax relief area, but which is located in a school
district in a county containing a city of the first class and a
qualifying municipality, but not in a school district containing
a city of the first class or adjacent to a school district
containing a city of the first class unless the school district
so adjacent contains a qualifying municipality, 57 percent of
the tax, but not to exceed the maximums specified in clause (c),
and shall not exceed an amount sufficient to reduce the
effective tax rate on each parcel of property to the product of
95 percent of the base year effective tax rate multiplied by the
ratio of the current year's tax rate to the payable 1989 tax
rate. In no case will the reduction for each homestead
resulting from this credit be less than $10.
(c) The maximum reduction of the tax is $200.10 for taxes
payable in 1985. This maximum amount shall increase by $15
multiplied by the quantity one minus the homestead credit
equivalency percentage per year for taxes payable in 1986 and
subsequent years $289.80.
For the purposes of this subdivision, "homestead credit
equivalency percentage" means one minus the ratio of the net
class rate to the gross class rate applicable to the first
$72,000 of the market value of residential homesteads, and
"effective tax rate" means tax divided by the market value of a
property, and the "base year effective tax rate" means the
payable 1988 tax on a property with an identical market value to
that of the property receiving the credit in the current year
after application of the credits payable under Minnesota
Statutes 1988, section 273.13, subdivisions 22 and 23, and this
section, divided by the market value of the property.
Sec. 4. [298.001] [DEFINITIONS.]
Subdivision 1. [GENERALLY.] As used in this chapter, the
terms defined in this section have the meanings given in this
section.
Subd. 2. [CITY.] "City" includes any home rule charter
city, statutory city, or any city however organized.
Subd. 3. [PERSON.] "Person" means individuals,
fiduciaries, estates, trusts, partnerships, companies, joint
stock companies, corporations, and all associations.
Subd. 4. [TACONITE.] "Taconite" means ferruginous chert or
ferruginous slate in the form of compact, siliceous rock, in
which the iron oxide is so finely disseminated that
substantially all of the iron-bearing particles of merchantable
grade are smaller than 20 mesh and which is not merchantable as
iron ore in its natural state, and which cannot be made
merchantable by simple methods of beneficiation involving only
crushing, screening, washing, jigging, drying, or any
combination thereof.
Subd. 5. [IRON SULPHIDES.] "Iron sulphides" means chemical
combinations of iron and sulphur (mineralogically known as
pyrrhotite, pyrites, or marcasite), in relatively impure
condition, which are not merchantable as iron ore and which
cannot be made merchantable by the simple methods of
beneficiation above described.
Subd. 6. [SEMITACONITE.] "Semitaconite" means altered iron
formation, altered taconite, ferruginous chert, or ferruginous
slate which has been oxidized and partially leached and in which
the iron oxide is so finely disseminated that substantially all
of the iron-bearing particles of merchantable grade are smaller
than 20 mesh and which is not merchantable as iron ore in its
natural state, and which cannot be made merchantable by simple
methods of beneficiation involving only crushing, screening,
washing, jigging, heavy media separation, spirals, cyclones,
drying, or any combination thereof.
Subd. 7. [AGGLOMERATES.] "Agglomerates" means the
merchantable iron ore aggregates which are produced by
agglomeration.
Subd. 8. [COMMISSIONER.] "Commissioner" means the
commissioner of revenue of the state of Minnesota.
Sec. 5. Minnesota Statutes 1996, section 298.22,
subdivision 2, is amended to read:
Subd. 2. There is hereby created the iron range resources
and rehabilitation board, consisting of 11 members, five of whom
shall be are state senators appointed by the subcommittee on
committees of the rules committee of the senate, and five of
whom shall be are representatives, appointed by the speaker of
the house of representatives, their terms of office to commence
on May 1, 1943, and continue until January 3rd, 1945, or until
their successors are appointed and qualified. Their successors
The members shall be appointed each two years in the same manner
as the original members were appointed, in January of every
second odd-numbered year, commencing in January, 1945. The 11th
member of said the board shall be is the commissioner of natural
resources of the state of Minnesota. Vacancies on the board
shall be filled in the same manner as the original members were
chosen. At least a majority of the legislative members of the
board shall be elected from state senatorial or legislative
districts in which over 50 percent of the residents reside
within a tax relief area as defined in section 273.134. All
expenditures and projects made by the commissioner of iron range
resources and rehabilitation shall first be submitted to said
the iron range resources and rehabilitation board for approval
by at least eight board members of expenditures and projects for
rehabilitation purposes as provided by this section, and the
method, manner, and time of payment of all said funds proposed
to be disbursed shall be first approved or disapproved by said
the board. The board shall biennially make its report to the
governor and the legislature on or before November 15 of each
even-numbered year. The expenses of said the board shall be
paid by the state of Minnesota from the funds raised pursuant to
this section.
Sec. 6. Minnesota Statutes 1996, section 298.221, is
amended to read:
298.221 [RECEIPTS FROM CONTRACTS; APPROPRIATION.]
(a) All moneys money paid to the state of Minnesota
pursuant to the terms of any contract entered into by the state
under authority of Laws 1941, chapter 544, section 4, or of said
section as amended section 298.22 and any fees which may, in the
discretion of the commissioner of iron range resources and
rehabilitation, be charged in connection with any project
pursuant to that section as amended, shall be deposited in the
state treasury to the credit of the iron range resources and
rehabilitation board account in the special revenue fund and are
hereby appropriated for the purposes of section 298.22.
(b) Notwithstanding section 7.09, merchandise may be
accepted by the commissioner of the iron range resources and
rehabilitation board for payment of advertising contracts if the
commissioner determines that the merchandise can be used for
special event prizes or mementos at facilities operated by the
board. Nothing in this paragraph authorizes the commissioner or
a member of the board to receive merchandise for personal use.
Sec. 7. Minnesota Statutes 1996, section 298.2213,
subdivision 4, is amended to read:
Subd. 4. [PROJECT APPROVAL.] The board shall by August 1,
1987, and each year thereafter prepare a list of projects to be
funded from the money appropriated in this section with
necessary supporting information including descriptions of the
projects, plans, and cost estimates. A project must not be
approved by the board unless it finds that:
(1) the project will materially assist, directly or
indirectly, the creation of additional long-term employment
opportunities;
(2) the prospective benefits of the expenditure exceed the
anticipated costs; and
(3) in the case of assistance to private enterprise, the
project will serve a sound business purpose.
To be proposed by the board, a project must be approved by
at least eight iron range resources and rehabilitation board
members and the commissioner of iron range resources and
rehabilitation. The list of projects must be submitted to the
governor, who shall, by November 15 of each year, approve,
disapprove, or return for further consideration, each project.
The money for a project may be spent only upon approval of the
project by the governor. The board may submit supplemental
projects for approval at any time.
Sec. 8. Minnesota Statutes 1996, section 298.225,
subdivision 1, is amended to read:
Subdivision 1. For distribution of taconite production tax
in 1987 and thereafter with respect to production in 1986 and
thereafter, The distribution of the taconite production tax as
provided in section 298.28, subdivisions 2 to 5, 6, paragraphs
paragraph (b) and (c), 7, and 8, shall equal the lesser of the
following amounts:
(1) the amount distributed pursuant to this section and
section 298.28, with respect to 1983 production if the
production for the year prior to the distribution year is no
less than 42,000,000 taxable tons. If the production is less
than 42,000,000 taxable tons, the amount of the distributions
shall be reduced proportionately at the rate of two percent for
each 1,000,000 tons, or part of 1,000,000 tons by which the
production is less than 42,000,000 tons; or
(2)(i) for the distributions made pursuant to section
298.28, subdivisions 4, paragraphs (b) and (c), and 6, paragraph
(c), 50 40.5 percent of the amount distributed pursuant to this
section and section 298.28, with respect to 1983 production.
(ii) for the distributions made pursuant to section 298.28,
subdivision 5, paragraphs (b) and (d), 75 percent of the amount
distributed pursuant to this section and section 298.28, with
respect to 1983 production.
Sec. 9. Minnesota Statutes 1997 Supplement, section
298.24, subdivision 1, is amended to read:
Subdivision 1. (a) For concentrate produced in 1992, 1993,
1994, and 1995 1997 and 1998, 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 $2.141 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 1999 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) 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.
(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.
(e) If the tax or any part of the tax imposed by this
subdivision is held to be unconstitutional, a tax
of $2.054 $2.141 per gross ton of merchantable iron ore
concentrate produced shall be imposed.
(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.
(g)(1) Notwithstanding any other provision of this
subdivision, for the first 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 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. 10. Minnesota Statutes 1996, section 298.28,
subdivision 2, is amended to read:
Subd. 2. [CITY OR TOWN WHERE QUARRIED OR PRODUCED.] (a)
4.5 cents per gross ton of merchantable iron ore concentrate,
hereinafter referred to as "taxable ton," must be allocated to
the city or town in the county in which the lands from which
taconite was mined or quarried were located or within which the
concentrate was produced. If the mining, quarrying, and
concentration, or different steps in either thereof are carried
on in more than one taxing district, the commissioner shall
apportion equitably the proceeds of the part of the tax going to
cities and towns among such subdivisions upon the basis of
attributing 40 percent of the proceeds of the tax to the
operation of mining or quarrying the taconite, and the remainder
to the concentrating plant and to the processes of
concentration, and with respect to each thereof giving due
consideration to the relative extent of such operations
performed in each such taxing district. The commissioner's
order making such apportionment shall be subject to review by
the tax court at the instance of any of the interested taxing
districts, in the same manner as other orders of the
commissioner.
(b) Four cents per taxable ton shall be allocated to cities
and organized townships affected by mining because their
boundaries are within three miles of a taconite mine pit that
has been actively mined in at least one of the prior three years.
If a city or town is located near more than one mine meeting
these criteria, the city or town is eligible to receive aid
calculated from only the mine producing the largest taxable
tonnage. When more than one municipality qualifies for aid
based on one company's production, the aid must be apportioned
among the municipalities in proportion to their populations. Of
the amounts distributed under this paragraph to each
municipality, one-half must be used for infrastructure
improvement projects, and one-half must be used for projects in
which two or more municipalities cooperate. Each municipality
that receives a distribution under this paragraph must report
annually to the iron range resources and rehabilitation board
and the commissioner of iron range resources and rehabilitation
on the projects involving cooperation with other municipalities.
Sec. 11. Minnesota Statutes 1996, section 298.28,
subdivision 3, is amended to read:
Subd. 3. [CITIES; TOWNS.] (a) 12.5 cents per taxable ton,
less any amount distributed under subdivision 8, and paragraph
(b), must be allocated to the taconite municipal aid account to
be distributed as provided in section 298.282.
(b) An amount must be allocated to towns or cities that is
annually certified by the county auditor of a county containing
a taconite tax relief area within which there is (1) an
organized township if, as of January 2, 1982, more than 75
percent of the assessed valuation of the township consists of
iron ore or (2) a city if, as of January 2, 1980, more than 75
percent of the assessed valuation of the city consists of iron
ore.
(c) The amount allocated under paragraph (b) will be the
portion of a township's or city's certified levy equal to the
proportion of (1) the difference between 50 percent of January
2, 1982, assessed value in the case of a township and 50 percent
of the January 2, 1980, assessed value in the case of a city and
its current assessed value to (2) the sum of its current
assessed value plus the difference determined in (1), provided
that the amount distributed shall not exceed $55 per capita in
the case of a township or $75 per capita in the case of a city.
For purposes of this limitation, population will be determined
according to the 1980 decennial census conducted by the United
States Bureau of the Census. If the current assessed value of
the township exceeds 50 percent of the township's January 2,
1982, assessed value, or if the current assessed value of the
city exceeds 50 percent of the city's January 2, 1980, assessed
value, this paragraph shall not apply. For purposes of this
paragraph, "assessed value," when used in reference to years
other than 1980 or 1982, means, for distributions for production
year 1989, production taxes payable in 1990, the appropriate net
tax capacities multiplied by 8.2 and for distributions for
production year 1990 and thereafter, production taxes payable in
1991 and thereafter, the appropriate net tax capacities
multiplied by 10.2.
Sec. 12. Minnesota Statutes 1996, section 298.28,
subdivision 4, is amended to read:
Subd. 4. [SCHOOL DISTRICTS.] (a) 27.5 22.28 cents per
taxable ton plus the increase provided in paragraph (d) must be
allocated to qualifying school districts to be distributed,
based upon the certification of the commissioner of revenue,
under paragraphs (b) and (c).
(b) 5.5 4.46 cents per taxable ton must be distributed to
the school districts in which the lands from which taconite was
mined or quarried were located or within which the concentrate
was produced. The distribution must be based on the
apportionment formula prescribed in subdivision 2.
(c)(i) 22 17.82 cents per taxable ton, less any amount
distributed under paragraph (e), shall be distributed to a group
of school districts comprised of those school districts in which
the taconite was mined or quarried or the concentrate produced
or in which there is a qualifying municipality as defined by
section 273.134 in direct proportion to school district indexes
as follows: for each school district, its pupil units
determined under section 124.17 for the prior school year shall
be multiplied by the ratio of the average adjusted net tax
capacity per pupil unit for school districts receiving aid under
this clause as calculated pursuant to chapter 124A for the
school year ending prior to distribution to the adjusted net tax
capacity per pupil unit of the district. Each district shall
receive that portion of the distribution which its index bears
to the sum of the indices for all school districts that receive
the distributions.
(ii) Notwithstanding clause (i), each school district that
receives a distribution under sections 298.018; 298.23 to
298.28, exclusive of any amount received under this clause;
298.34 to 298.39; 298.391 to 298.396; 298.405; or any law
imposing a tax on severed mineral values that is less than the
amount of its levy reduction under section 124.918, subdivision
8, for the second year prior to the year of the distribution
shall receive a distribution equal to the difference; the amount
necessary to make this payment shall be derived from
proportionate reductions in the initial distribution to other
school districts under clause (i).
(d) Any school district described in paragraph (c) where a
levy increase pursuant to section 124A.03, subdivision 2, is
authorized by referendum, shall receive a distribution according
to the following formula. In 1994, the amount distributed per
ton shall be equal to the amount per ton distributed in 1991
under this paragraph increased in the same proportion as the
increase between the fourth quarter of 1989 and the fourth
quarter of 1992 in the implicit price deflator as defined in
section 298.24, subdivision 1 from a fund that receives a
distribution in 1998 of 21.3 cents per ton. On July 15, 1995,
and subsequent years of 1999, and each year thereafter, the
increase over the amount established for the prior year shall be
determined according to the increase in the implicit price
deflator as provided in section 298.24, subdivision 1. Each
district shall receive the product of:
(i) $175 times the pupil units identified in section
124.17, subdivision 1, enrolled in the second previous year or
the 1983-1984 school year, whichever is greater, less the
product of 1.8 percent times the district's taxable net tax
capacity in the second previous year; times
(ii) the lesser of:
(A) one, or
(B) the ratio of the sum of the amount certified pursuant
to section 124A.03, subdivision 1g, in the previous year, plus
the amount certified pursuant to section 124A.03, subdivision
1i, in the previous year, plus the referendum aid according to
section 124A.03, subdivision 1h, for the current year, plus an
amount equal to the reduction under section 124A.03, subdivision
3b, to the product of 1.8 percent times the district's taxable
net tax capacity in the second previous year.
If the total amount provided by paragraph (d) is
insufficient to make the payments herein required then the
entitlement of $175 per pupil unit shall be reduced uniformly so
as not to exceed the funds available. Any amounts received by a
qualifying school district in any fiscal year pursuant to
paragraph (d) shall not be applied to reduce general education
aid which the district receives pursuant to section 124A.23 or
the permissible levies of the district. Any amount remaining
after the payments provided in this paragraph shall be paid to
the commissioner of iron range resources and rehabilitation who
shall deposit the same in the taconite environmental protection
fund and the northeast Minnesota economic protection trust fund
as provided in subdivision 11.
Each district receiving money according to this paragraph
shall reserve $25 times the number of pupil units in the
district. It may use the money for early childhood programs or
for outcome-based learning programs that enhance the academic
quality of the district's curriculum. The outcome-based
learning programs must be approved by the commissioner of
children, families, and learning.
(e) There shall be distributed to any school district the
amount which the school district was entitled to receive under
section 298.32 in 1975.
Sec. 13. Minnesota Statutes 1996, section 298.28,
subdivision 6, is amended to read:
Subd. 6. [PROPERTY TAX RELIEF.] (a) Fifteen In 1999, 38.81
cents per taxable ton, less any amount required to be
distributed under paragraphs (b) and (c), and less any amount
required to be deducted under paragraph (d), must be allocated
to St. Louis county acting as the counties' fiscal agent, to be
distributed as provided in sections 273.134 to 273.136.
(b) If an electric power plant owned by and providing the
primary source of power for a taxpayer mining and concentrating
taconite is located in a county other than the county in which
the mining and the concentrating processes are conducted, .1875
cent per taxable ton of the tax imposed and collected from such
taxpayer shall be paid to the county.
(c) If an electric power plant owned by and providing the
primary source of power for a taxpayer mining and concentrating
taconite is located in a school district other than a school
district in which the mining and concentrating processes are
conducted, .5625 .7282 cent per taxable ton of the tax imposed
and collected from the taxpayer shall be paid to the school
district.
(d) Two cents per taxable ton must be deducted from the
amount allocated to the St. Louis county auditor under paragraph
(a).
Sec. 14. Minnesota Statutes 1996, section 298.28,
subdivision 7, is amended to read:
Subd. 7. [IRON RANGE RESOURCES AND REHABILITATION BOARD.]
Three For the 1998 distribution, 6.5 cents per taxable ton shall
be paid to the iron range resources and rehabilitation board for
the purposes of section 298.22. The amount determined in this
subdivision shall be increased in 1981 and subsequent years
prior to 1988 in the same proportion as the increase in the
steel mill products index as provided in section 298.24,
subdivision 1, and shall be increased in 1989, 1990, and 1991
according to the increase in the implicit price deflator as
provided in section 298.24, subdivision 1. In 1992 and 1993,
the amount distributed per ton shall be the same as the amount
distributed per ton in 1991. In 1994, the amount distributed
shall be the distribution per ton for 1991 increased in the same
proportion as the increase between the fourth quarter of 1989
and the fourth quarter of 1992 in the implicit price deflator as
defined in section 298.24, subdivision 1. That amount shall be
increased in 1995 1999 and subsequent years in the same
proportion as the increase in the implicit price deflator as
provided in section 298.24, subdivision 1. The amount
distributed in 1988 shall be increased according to the increase
that would have occurred in the rate of tax under section 298.24
if the rate had been adjusted according to the implicit price
deflator for 1987 production. The amount distributed pursuant
to this subdivision shall be expended within or for the benefit
of a tax relief area defined in section 273.134. No part of the
fund provided in this subdivision may be used to provide loans
for the operation of private business unless the loan is
approved by the governor.
Sec. 15. Minnesota Statutes 1996, section 298.28,
subdivision 9, is amended to read:
Subd. 9. [MINNESOTA ECONOMIC PROTECTION TRUST FUND.] 1.5
In 1999, 3.35 cents per taxable ton shall be paid to the
northeast Minnesota economic protection trust fund.
Sec. 16. Minnesota Statutes 1997 Supplement, 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
2000 and 20.4 cents per ton for distributions in 1997 shall be
paid to the taconite economic development fund. No distribution
shall be made under this paragraph in any year in which total
industry production falls below 30 million tons.
(b) An amount equal to 50 percent of the tax under section
298.24 for concentrate sold in the form of pellet chips and
fines not exceeding 5/16 inch in size and not including crushed
pellets shall be paid to the taconite economic development
fund. The amount paid shall not exceed $700,000 annually for
all companies. If the initial amount to be paid to the fund
exceeds this amount, each company's payment shall be prorated so
the total does not exceed $700,000.
Sec. 17. Minnesota Statutes 1997 Supplement, section
298.28, subdivision 9b, is amended to read:
Subd. 9b. [TACONITE ENVIRONMENTAL FUND.] Five cents per
ton for distributions in 1998 and 1999, and 2000 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. 18. Minnesota Statutes 1996, section 298.28,
subdivision 10, is amended to read:
Subd. 10. [INCREASE.] Beginning with distributions in
2000, the amounts determined under subdivisions 6, paragraph
(a), and 9 shall be increased in 1979 and subsequent years prior
to 1988 in the same proportion as the increase in the steel mill
products index as provided in section 298.24, subdivision 1.
The amount distributed in 1988 shall be increased according to
the increase that would have occurred in the rate of tax under
section 298.24 if the rate had been adjusted according to the
implicit price deflator for 1987 production. Those amounts
shall be increased in 1989, 1990, and 1991 in the same
proportion as the increase in the implicit price deflator as
provided in section 298.24, subdivision 1. In 1992 and 1993,
the amounts determined under subdivisions 6, paragraph (a), and
9, shall be the distribution per ton determined for distribution
in 1991. In 1994, the amounts determined under subdivisions 6,
paragraph (a), and 9, shall be the distribution per ton
determined for distribution in 1991 increased in the same
proportion as the increase between the fourth quarter of 1989
and the fourth quarter of 1992 in the implicit price deflator as
defined in section 298.24, subdivision 1. Those amounts shall
be increased in 1995 and subsequent years in the same proportion
as the increase in the implicit price deflator as provided in
section 298.24, subdivision 1.
The distributions per ton determined under subdivisions 5,
paragraphs (b) and (d), and 6, paragraphs paragraph (b) and (c)
for distribution in 1988 and subsequent years shall be the
distribution per ton determined for distribution in 1987. The
distribution per ton under subdivision 6, paragraph (c), for
distribution in 2000 and subsequent years shall be 81 percent of
the distribution per ton determined for distribution in 1987.
Sec. 19. Minnesota Statutes 1996, section 298.28,
subdivision 11, is amended to read:
Subd. 11. [REMAINDER.] (a) The proceeds of the tax imposed
by section 298.24 which remain after the distributions and
payments in subdivisions 2 to 10a, as certified by the
commissioner of revenue, and paragraphs (b) and, (c), and (d)
have been made, together with interest earned on all money
distributed under this section prior to distribution, shall be
divided between the taconite environmental protection fund
created in section 298.223 and the northeast Minnesota economic
protection trust fund created in section 298.292 as follows:
Two-thirds to the taconite environmental protection fund and
one-third to the northeast Minnesota economic protection trust
fund. The proceeds shall be placed in the respective special
accounts.
(b) There shall be distributed to each city, town, school
district, and county the amount that it received under section
294.26 in calendar year 1977; provided, however, that the amount
distributed in 1981 to the unorganized territory number 2 of
Lake county and the town of Beaver Bay based on the
between-terminal trackage of Erie Mining Company will be
distributed in 1982 and subsequent years to the unorganized
territory number 2 of Lake county and the towns of Beaver Bay
and Stony River based on the miles of track of Erie Mining
Company in each taxing district.
(c) There shall be distributed to the iron range resources
and rehabilitation board the amounts it received in 1977 under
section 298.22. The amount distributed under this paragraph
shall be expended within or for the benefit of the tax relief
area defined in section 273.134.
(d) There shall be distributed to each school district 81
percent of the amount that it received under section 294.26 in
calendar year 1977.
Sec. 20. Minnesota Statutes 1997 Supplement, section
298.296, subdivision 4, is amended to read:
Subd. 4. [TEMPORARY LOAN AUTHORITY.] (a) The board may
recommend that up to $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 1999, whichever is earlier.
(c) Additionally, the board may recommend that up to
$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 1999.
Sec. 21. Minnesota Statutes 1996, section 298.48,
subdivision 1, is amended to read:
Subdivision 1. [ANNUAL FILING.] By April 1 each year,
every owner or lessee of mineral rights who, in respect thereto,
has engaged in any exploration for or mining of taconite,
semitaconite, or iron-sulphide shall, within six months of June
3, 1977, file with the commissioner of revenue all data of the
following kinds in the possession or under the control of the
owner or lessee which was acquired prior to January 1, 1977
during the preceding calendar year:
(a) Maps and other records indicating the location,
character and extent of exploration for taconite, semitaconite,
or iron-sulphides;
(b) Logs, notes and other records indicating the nature of
minerals encountered during the course of exploration;
(c) The results of any analyses of metallurgical tests or
samples taken in connection with exploration;
(d) The ultimate pit layout and the supporting cross
sections; and
(e) Any other data which the commissioner of revenue may
determine to be relevant to the determination of the location,
nature, extent, quality or quantity of unmined ores of said
minerals. The commissioner of revenue shall have the power to
may compel submission of the data. The court administrator of
any court of record, upon demand of the commissioner, shall
issue a subpoena for the production of any data before the
commissioner. Disobedience of subpoenas issued under this
section shall be punished by the district court of the district
in which the subpoena is issued as for a contempt of the
district court. By April 1 of each succeeding year every owner
or lessee of mineral rights shall file with the commissioner of
revenue all such data acquired during the preceding calendar
year.
Sec. 22. [USE OF PRODUCTION TAX PROCEEDS.]
An amount equal to the amount distributed under Laws 1997,
chapter 231, article 8, section 16, shall be used by the iron
range resources and rehabilitation board to make equal grants to
the cities of Chisholm and Hibbing to be used for the
establishment of an industrial park located at the
Chisholm/Hibbing airport.
Sec. 23. [REPEALER.]
Minnesota Statutes 1996, sections 298.012; 298.21; 298.23;
298.34, subdivisions 1 and 4; and 298.391, subdivisions 2 and 5,
are repealed.
Sec. 24. [EFFECTIVE DATE.]
Section 1 is effective for taxes levied in 2000. Sections
2 and 3 are effective for taxes payable in 1999. Sections 8;
10; 12, other than paragraph (d); 13, paragraph (c); 18; and 19
are effective for distributions in 2000 and subsequent years.
Sections 13, paragraph (a); and 22 are effective for production
year 1998, distributions made in 1999.
ARTICLE 11
TAX INCREMENT FINANCING AND DEVELOPMENT
Section 1. Minnesota Statutes 1996, section 469.174, is
amended by adding a subdivision to read:
Subd. 28. [DECERTIFY OR DECERTIFICATION.] "Decertify" or
"decertification" means the termination of a tax increment
financing district which occurs when the county auditor removes
all remaining parcels from the district.
Sec. 2. Minnesota Statutes 1996, section 469.175,
subdivision 5, is amended to read:
Subd. 5. [ANNUAL DISCLOSURE.] (a) For all tax increment
financing districts, whether created prior or subsequent to
August 1, 1979, on or before July 1 of each year, The authority
shall annually submit to the county board, the county auditor,
the school board, state auditor and, if the authority is other
than the municipality, the governing body of the municipality, a
report of the status of the district. The report shall include
the following information: the amount and the source of revenue
in the account, the amount and purpose of expenditures from the
account, the amount of any pledge of revenues, including
principal and interest on any outstanding bonded indebtedness,
the original net tax capacity of the district and any
subdistrict, the captured net tax capacity retained by the
authority, the captured net tax capacity shared with other
taxing districts, the tax increment received, and any additional
information necessary to demonstrate compliance with any
applicable tax increment financing plan. The authority must
submit the annual report for a year on or before August 1 of the
next year.
(b) An annual statement showing the tax increment received
and expended in that year, the original net tax capacity,
captured net tax capacity, amount of outstanding bonded
indebtedness, the amount of the district's and any subdistrict's
increments paid to other governmental bodies, the amount paid
for administrative costs, the sum of increments paid, directly
or indirectly, for activities and improvements located outside
of the district, and any additional information the authority
deems necessary shall be published in a newspaper of general
circulation in the municipality. If the fiscal disparities
contribution under chapter 276A or 473F for the district is
computed under section 469.177, subdivision 3, paragraph (a),
the annual statement must disclose that fact and indicate the
amount of increased property tax imposed on other properties in
the municipality as a result of the fiscal disparities
contribution. The commissioner of revenue shall prescribe the
form of this statement and the method for calculating the
increased property taxes. The authority must publish the annual
statement for a year no later than July 1 August 15 of the next
year. The authority must identify the newspaper of general
circulation in the municipality to which the annual statement
has been or will be submitted for publication and provide a copy
of the annual statement to the state auditor by the time it
submits it for publication on or before August 1 of the year in
which the statement must be published.
(c) The disclosure and reporting requirements imposed by
this subdivision apply to districts certified before, on, or
after August 1, 1979.
Sec. 3. Minnesota Statutes 1996, section 469.175,
subdivision 6, is amended to read:
Subd. 6. [FINANCIAL REPORTING.] (a) The state auditor
shall develop a uniform system of accounting and financial
reporting for tax increment financing districts. The system of
accounting and financial reporting shall, as nearly as possible:
(1) provide for full disclosure of the sources and uses of
public funds in the district;
(2) permit comparison and reconciliation with the affected
local government's accounts and financial reports;
(3) permit auditing of the funds expended on behalf of a
district, including a single district that is part of a
multidistrict project or that is funded in part or whole through
the use of a development account funded with tax increments from
other districts or with other public money;
(4) be consistent with generally accepted accounting
principles.
(b) The authority must annually submit to the state
auditor, on or before July 1, a financial report in compliance
with paragraph (a). Copies of the report must also be provided
to the county and school district boards and to the governing
body of the municipality, if the authority is not the
municipality. To the extent necessary to permit compliance with
the requirement of financial reporting, the county and any other
appropriate local government unit or private entity must provide
the necessary records or information to the authority or the
state auditor as provided by the system of accounting and
financial reporting developed pursuant to paragraph (a). The
authority must submit the annual report for a year on or before
August 1 of the next year.
(c) The annual financial report must also include the
following items:
(1) the original net tax capacity of the district and any
subdistrict;
(2) the captured net tax capacity of the district,
including the amount of any captured net tax capacity shared
with other taxing districts;
(3) for the reporting period and for the duration of the
district, the amount budgeted under the tax increment financing
plan, and the actual amount expended for, at least, the
following categories:
(i) acquisition of land and buildings through condemnation
or purchase;
(ii) site improvements or preparation costs;
(iii) installation of public utilities, parking facilities,
streets, roads, sidewalks, or other similar public improvements;
(iv) administrative costs, including the allocated cost of
the authority;
(v) public park facilities, facilities for social,
recreational, or conference purposes, or other similar public
improvements;
(4) for properties sold to developers, the total cost of
the property to the authority and the price paid by the
developer; and
(5) the amount of increments rebated or paid to developers
or property owners for privately financed improvements or other
qualifying costs.
(d) The reporting requirements imposed by this subdivision
apply to districts certified before, on, and after August 1,
1979.
Sec. 4. Minnesota Statutes 1996, section 469.175,
subdivision 6a, is amended to read:
Subd. 6a. [REPORTING REQUIREMENTS.] (a) The municipality
must annually report to the state auditor the following amounts
for the entire municipality:
(1) the total principal amount of nondefeased tax increment
financing bonds that are outstanding at the end of the previous
calendar year; and
(2) the total annual amount of principal and interest
payments that are due for the current calendar year on (i)
general obligation tax increment financing bonds, and (ii) other
tax increment financing bonds.
(b) The municipality must annually report to the state
auditor the following amounts for each tax increment financing
district located in the municipality:
(1) the type of district, whether economic development,
redevelopment, housing, soils condition, mined underground
space, or hazardous substance site;
(2) the date on which the district is required to be
decertified;
(3) the amount of any payments and the value of in-kind
benefits, such as physical improvements and the use of building
space, that are financed with revenues derived from increments
and are provided to another governmental unit (other than the
municipality) during the preceding calendar year;
(4) the tax increment revenues for taxes payable in the
current calendar year;
(5) whether the tax increment financing plan or other
governing document permits increment revenues to be expended (i)
to pay bonds, the proceeds of which were or may be expended on
activities located outside of the district, (ii) for deposit
into a common fund from which money may be expended on
activities located outside of the district, or (iii) to
otherwise finance activities located outside of the tax
increment financing district; and
(6) any additional information that the state auditor may
require.
(c) The report required by this subdivision must be filed
with the state auditor on or before July 1 of each year. The
municipality must submit the annual report for a year required
by this subdivision on or before August 1 of the next year.
(d) The state auditor may provide for combining the reports
required by this subdivision and subdivisions 5 and 6 so that
only one report is made for each year to the auditor.
(e) This section applies to districts certified before, on,
and after August 1, 1979.
Sec. 5. Minnesota Statutes 1996, section 469.175, is
amended by adding a subdivision to read:
Subd. 6b. [DURATION OF DISCLOSURE AND REPORTING
REQUIREMENTS.] The disclosure and reporting requirements imposed
by subdivisions 5, 6, and 6a apply with respect to a tax
increment financing district beginning with the annual
disclosure and reports for the year in which the original net
tax capacity of the district was certified and ending with the
annual disclosure and reports for the year in which both of the
following events have occurred:
(1) decertification of the district; and
(2) expenditure or return to the county auditor of all
remaining revenues derived from tax increments paid by
properties in the district.
Sec. 6. Minnesota Statutes 1996, section 469.176,
subdivision 7, is amended to read:
Subd. 7. [PARCELS NOT INCLUDABLE IN DISTRICTS.] (a) The
authority may request inclusion in a tax increment financing
district and the county auditor may certify the original tax
capacity of a parcel or a part of a parcel that qualified under
the provisions of section 273.111 or 273.112 or chapter 473H for
taxes payable in any of the five calendar years before the
filing of the request for certification only for
(1) a district in which 85 percent or more of the planned
buildings and facilities (determined on the basis of square
footage) are for a qualified manufacturing or production of
tangible personal property, including processing resulting in
the change in condition of the property facility or a qualified
distribution facility or a combination of both; or
(2) a qualified housing district as defined in section
273.1399, subdivision 1.
(b) (1) A distribution facility means buildings and other
improvements to real property that are used to conduct
activities in at least each of the following categories:
(i) to store or warehouse tangible personal property;
(ii) to take orders for shipment, mailing, or delivery;
(iii) to prepare personal property for shipment, mailing,
or delivery; and
(iv) to ship, mail, or deliver property.
(2) A manufacturing facility includes space used for
manufacturing or producing tangible personal property, including
processing resulting in the change in condition of the property,
and space necessary for and related to the manufacturing
activities.
(3) To be a qualified facility, the owner or operator of a
manufacturing or distribution facility must agree to pay and pay
90 percent or more of the employees of the facility at a rate
equal to or greater than 160 percent of the federal minimum wage
for individuals over the age of 20.
Sec. 7. Minnesota Statutes 1996, section 469.177, is
amended by adding a subdivision to read:
Subd. 12. [DECERTIFICATION OF TAX INCREMENT FINANCING
DISTRICT.] The county auditor shall decertify a tax increment
financing district when the earliest of the following times is
reached:
(1) the applicable maximum duration limit under section
469.176, subdivisions 1a to 1g;
(2) the maximum duration limit, if any, provided by the
municipality pursuant to section 469.176, subdivision 1;
(3) the time of decertification specified in section
469.1761, subdivision 4, if the commissioner of revenue issues
an order of noncompliance and the maximum duration limit for
economic development districts has been exceeded;
(4) upon completion of the required actions to allow
decertification under section 469.1763, subdivision 4; or
(5) upon receipt by the county auditor of a written request
for decertification from the authority that requested
certification of the original net tax capacity of the district
or its successor.
Sec. 8. Minnesota Statutes 1996, section 469.1771, is
amended by adding a subdivision to read:
Subd. 2a. [SUSPENSION OF DISTRIBUTION OF TAX
INCREMENT.] (a) If an authority fails to make a disclosure or to
submit a report containing the information required by section
469.175, subdivisions 5 and 6, regarding a tax increment
financing district within the time provided in section 469.175,
subdivisions 5 and 6, or if a municipality fails to submit a
report containing the information required of section 469.175,
subdivision 6a, regarding a tax increment financing district
within the time provided in section 469.175, subdivision 6a, the
state auditor shall mail to the authority a written notice that
it or the municipality has failed to make the required
disclosure or to submit a required report with respect to a
particular district. The state auditor shall mail the notice on
or before the third Tuesday of August of the year in which the
disclosure or report was required to be made or submitted. The
notice must describe the consequences of failing to disclose or
submit a report as provided in paragraph (b). If the state
auditor has not received a copy of a disclosure or a report
described in this paragraph on or before the third Tuesday of
November of the year in which the disclosure or report was
required to be made or submitted, the state auditor shall mail a
written notice to the county auditor to hold the distribution of
tax increment from a particular district.
(b) Upon receiving written notice from the state auditor to
hold the distribution of tax increment, the county auditor shall
hold:
(1) 25 percent of the amount of tax increment that
otherwise would be distributed, if the distribution is made
after the third Friday in November but during the year in which
the disclosure or report was required to be made or submitted;
or
(2) 100 percent of the amount of tax increment that
otherwise would be distributed, if the distribution is made
after December 31 of the year in which the disclosure or report
was required to be made or submitted.
(c) Upon receiving the copy of the disclosure and all of
the reports described in paragraph (a) with respect to a
district regarding which the state auditor has mailed to the
county auditor a written notice to hold distribution of tax
increment, the state auditor shall mail to the county auditor a
written notice lifting the hold and authorizing the county
auditor to distribute to the authority or municipality any tax
increment that the county auditor had held pursuant to paragraph
(b). The state auditor shall mail the written notice required
by this paragraph within five working days after receiving the
last outstanding item. The county auditor shall distribute the
tax increment to the authority or municipality within 15 working
days after receiving the written notice required by this
paragraph.
(d) Notwithstanding any law to the contrary, any interest
that accrues on tax increment while it is being held by the
county auditor pursuant to paragraph (b) is not tax increment
and may be retained by the county.
(e) For purposes of sections 469.176, subdivisions 1a to
1g, and 469.177, subdivision 11, tax increment being held by the
county auditor pursuant to paragraph (b) is considered
distributed to or received by the authority or municipality as
of the time that it would have been distributed or received but
for paragraph (b).
Sec. 9. Minnesota Statutes 1996, section 469.1771,
subdivision 5, is amended to read:
Subd. 5. [DISPOSITION OF PAYMENTS.] If the authority does
not have sufficient increments or other available money to make
a payment required by this section, the municipality that
approved the district must use any available money to make the
payment including the levying of property taxes. Money received
by the county auditor under this section must be distributed as
excess increments under section 469.176, subdivision 2,
paragraph (a), clause (4)., except that if the county auditor
receives the payment after (1) 60 days from a municipality's
receipt of the state auditor's notification under subdivision 1,
paragraph (c), of noncompliance requiring the payment, or (2)
the commencement of an action by the county attorney to compel
the payment, then no distributions may be made to the
municipality that approved the tax increment financing district.
Sec. 10. [469.1791] [TAX INCREMENT FINANCING SPECIAL
TAXING DISTRICT.]
Subdivision 1. [DEFINITIONS.] (a) As used in this section,
the terms defined in this subdivision have the meanings given
them.
(b) "City" means a city containing a tax increment
financing district, the request for certification of which was
made before June 2, 1997.
(c) "Enabling ordinance" means an ordinance adopted by a
city council establishing a special taxing district.
(d) "Special taxing district" means all or any portion of
the property located within a tax increment financing district,
the request for certification of which was made before June 2,
1997.
(e) "Development or redevelopment services" has the meaning
given in the city's enabling ordinance, and may include any
services or expenditures the city or its economic development
authority or housing and redevelopment authority or port
authority may provide or incur under sections 469.001 to
469.1081 and 469.124 to 469.134, including, without limitation,
amounts necessary to pay the principal of or interest on bonds
issued by the city or its economic development authority or
housing and redevelopment authority or port authority under
section 469.178, for the tax increment financing districts
contained within the special taxing district or projects to be
funded with increments from tax increment financing districts
contained within the special taxing district.
(f) "Preexisting obligations" means bonds issued and sold
before June 2, 1997, and binding contracts entered into before
June 2, 1997, to the extent that the bonds and contracts are
secured by a pledge of increments from the tax increment
financing district contained within the special taxing district.
Subd. 2. [ESTABLISHMENT OF SPECIAL TAXING DISTRICT.] The
governing body of a city may adopt an ordinance establishing a
special taxing district, if the conditions under subdivision 3
are satisfied. The ordinance must describe with particularity
the property to be included in the district and the development
or redevelopment services to be provided in the district. Only
property that is subject to an assessment agreement or
development agreement with the city or its economic development
authority, housing and redevelopment authority, or port
authority, as of the date of adoption of the ordinance, may be
included within the special taxing district and be subject to
the tax imposed by the city on the district. The ordinance may
not be adopted until after a public hearing has been held on the
question. Notice of the hearing must include the time and place
of the hearing, a map showing the boundaries of the proposed
district, and a statement that all persons owning property in
the proposed district that would be subject to a special tax
will be given the opportunity to be heard at the hearing.
Within 30 days after adoption of the ordinance under this
subdivision, the governing body shall send a copy of the
ordinance to the commissioner of revenue.
Subd. 3. [PRECONDITIONS TO ESTABLISH DISTRICT.] (a) A city
may establish a special taxing district within a tax increment
financing district under this section only if the conditions
under paragraphs (b) and (c) are met or if the city elects to
exercise the authority under paragraph (d).
(b) The city has determined that:
(1) total tax increments from the district, including
unspent increments from previous years and increments
transferred under paragraph (c), will be insufficient to pay the
amounts due in a year on preexisting obligations; and
(2) this insufficiency of increments resulted from the
reduction in property tax class rates enacted in the 1997 and
1998 legislative sessions.
(c) The city has agreed to transfer any available
increments from other tax increment financing districts in the
city to pay the preexisting obligations of the district. This
requirement does not apply to any available increments of a
qualified housing district, as defined in section 273.1399,
subdivision 1. Notwithstanding any law to the contrary, the
city may require a development authority to transfer available
increments for any of its tax increment financing districts in
the city to make up an insufficiency in another district in the
city, regardless of whether the district was established by the
development authority or another development authority.
Notwithstanding any law to the contrary, increments transferred
under this authority must be spent to pay preexisting
obligations. "Development authority" for this purpose means any
authority as defined in section 469.174, subdivision 2.
(d) If a tax increment financing district does not qualify
under paragraphs (b) and (c), the governing body may elect to
establish a special taxing district under this section. If the
city elects to exercise this authority, increments from the tax
increment financing district and the proceeds of the tax imposed
under this section may only be used to pay preexisting
obligations and reasonable administrative expenses of the
authority for the tax increment financing district. The tax
increment financing district must be decertified when all
preexisting obligations have been paid.
Subd. 4. [NOTICE; HEARING.] Notice of the hearing must be
given by publication in the official newspaper of the city at
least ten but not more than 30 days prior to the hearing. Not
less than ten days before the hearing, notice must also be
mailed to the owner of each parcel within the area proposed to
be included within the district. For the purpose of giving
mailed notice, owners are those shown on the records of the
county auditor. At the public hearing a person affected by the
proposed district may testify on any issues relevant to the
proposed district. The hearing may be adjourned from time to
time and the ordinance establishing the district may be adopted
at any time within six months after the date of the conclusion
of the hearing by a vote of the majority of the governing body
of the city.
Subd. 5. [BENEFIT; OBJECTION.] Before the ordinance is
adopted or at the hearing at which it is to be adopted, any
affected landowner may file a written objection with the city
clerk asserting that the landowner's property should not be
included in the district or should not be subject to a special
tax and objecting to:
(1) the fact that the landowner's property is not subject
to an assessment agreement or development agreement; or
(2) the fact that neither the landowner's property nor its
use is benefited by the development or redevelopment services
provided.
The governing body shall make a determination on the objection
within 30 days of its filing. Pending its determination, the
governing body may delay adoption of the ordinance or it may
adopt the ordinance with a reservation that the landowner's
property may be excluded from the district or district special
taxes when a determination is made.
Subd. 6. [APPEAL TO DISTRICT COURT.] Within 30 days after
the determination of the objection, any person aggrieved may
appeal to the district court by serving a notice upon the mayor
or city clerk. No appeal may be filed if the aggrieved person
failed to timely file a written objection with the city clerk
under subdivision 5, and the failure was not due to reasonable
cause. The notice must be filed with the court administrator of
the district court within ten days after its service. The city
clerk shall furnish the appellant a certified copy of the
findings and determination of the governing body. The court may
affirm the action objected to or, if the appellant's objections
have merit, modify or cancel it. If the appellant does not
prevail upon the appeal, the costs incurred are taxed to the
appellant by the court and judgment entered for them. All
objections are deemed waived unless presented on appeal.
Subd. 7. [MODIFICATION OF SPECIAL TAXING DISTRICT.] The
boundaries of the special taxing district may be enlarged or
reduced under the procedures for establishment of the district
under subdivision 2. Property added to the district is subject
to the special tax imposed within the district after the
property becomes a part of the district.
Subd. 8. [SPECIAL TAX AUTHORITY.] A city may impose a
special tax within a special taxing district that is reasonably
related to the development or redevelopment services provided.
The tax may be imposed at a rate or amount sufficient to produce
the revenues required to provide the development or
redevelopment services within the project area subject to limits
under subdivision 9. The special tax is payable only in a year
in which the assessment or development agreement for the
property subject to the tax remains in effect for that taxes
payable year.
Subd. 9. [LIMITS ON TAX.] (a) The maximum levy for any
year may not exceed the least of:
(1) the amount specified in the assessment agreement or
development agreement;
(2) the amount needed to pay preexisting obligations, less
available increments including increments transferred from other
districts; and
(3) the amount of the general ad valorem tax that would
have been paid by the captured net tax capacity of the tax
increment financing district, if the property tax class rates
for taxes payable in 1997 were in effect, less the amount of the
general ad valorem tax imposed for the payable year on the
captured net tax capacity.
(b) If the city uses the proceeds of a tax imposed under
this section to pay preexisting obligations secured by
increments from more than one tax increment financing district,
the city must establish a special taxing district in each of the
districts and impose a uniform rate upon all the districts. The
maximum limits under paragraph (a) must be calculated in
aggregate for all of the affected districts.
(c) If neither the assessment agreement nor the development
agreement specify a tax amount but state an agreed market value
for the property, the amount specified for purposes of paragraph
(a), clause (1), is the market value of the property under the
agreement multiplied by the class rate for taxes payable in 1997
and multiplied by the sum of the ad valorem tax rates for all
the taxing jurisdictions.
Subd. 10. [LIMITS UNDER OTHER LAW.] The tax imposed under
this section is not included in the calculation of levies or
limits imposed under law or charter. Section 275.065 does not
apply to any tax imposed under this section. The tax proceeds
are subject to the restrictions imposed by law on revenues
derived from tax increments and may only be spent for the
purposes for which increments may be spent.
Subd. 11. [COLLECTION AND ADMINISTRATION.] The special tax
must be imposed on the net tax capacity of the taxable property
located in the geographic area described in the ordinance.
Taxable net tax capacity must be determined without regard to
captured or original net tax capacity under section 469.177 or
to the distribution or contribution value under section
473F.08. The city shall compute the amount of the tax for each
parcel subject to tax and certify the amount to the county
auditor by the date provided in section 429.061, subdivision 3,
for the annual certification of special assessment
installments. The special tax is payable and must be collected
at the same time and in the same manner as provided for payment
and collection of ad valorem taxes. Special taxes not paid on
or before the applicable due date are subject to the same
penalty and interest as ad valorem tax amounts not paid by the
respective due date. The due date for the special tax is the
due date for the real property tax for the property on which the
special tax is imposed.
Sec. 11. Laws 1965, chapter 326, section 1, subdivision 5,
as amended by Laws 1975, chapter 110, section 1, and Laws 1985,
chapter 87, section 3, is amended to read:
Subd. 5. [PROMOTION OF TOURIST, AGRICULTURAL AND
INDUSTRIAL DEVELOPMENT.] The amount to be spent annually for the
purposes of this subdivision shall not exceed $1 $4 per capita
of the county's population.
Sec. 12. Laws 1967, chapter 170, section 1, subdivision 5,
as amended by Laws 1985, chapter 87, section 6, is amended to
read:
Subd. 5. Promotion of tourist, agricultural and industrial
developments. The amount to be spent annually for the purposes
of this subdivision shall not exceed $1 $4 per capita of the
county's population.
Sec. 13. Laws 1997, chapter 231, article 10, section 24,
is amended to read:
Sec. 24. [TASK FORCE; TIF TAX INCREMENT FINANCING
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 1999
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 May 1, 1999.
Sec. 14. [GOLDEN VALLEY; TAX INCREMENT FINANCING.]
Subdivision 1. [DISTRICT EXTENSION.] (a) Notwithstanding
Minnesota Statutes, section 469.176, subdivision 1c, tax
increments from the Valley Square tax increment financing
district shall be paid to the housing and redevelopment
authority of the city of Golden Valley for property taxes
payable in 2001 through 2010 for the following parcels in the
district, identified by their property tax identification
numbers:
(1) 31-118-21-14-0001;
(2) 31-118-21-14-0006;
(3) 31-118-21-14-0018 through 31-118-21-14-0022;
(4) 31-118-21-14-0029 through 31-118-21-14-0032; and
(5) 31-118-21-41-0001.
(b) Increments permitted to be paid to the authority by
paragraph (a) may only be used to pay or defease bonds issued to
fund public redevelopment costs within the redevelopment project
or bonds issued to refund the bonds.
(c) Collection or receipt of increments by the housing and
redevelopment authority under paragraph (a) does not reduce or
affect the amount of increments that the authority may receive
after April 1, 2001, for the district to pay bonds issued before
April 1, 1990.
(d) Any housing financed or assisted, directly or
indirectly, with increments from the district during the
extension period permitted by this section must meet the
requirements of Minnesota Statutes, section 469.1761.
Subd. 2. [EFFECTIVE DATE.] This section is effective the
day after compliance with the requirements of Minnesota
Statutes, sections 469.1782, subdivision 2, and 645.021,
subdivision 3.
Sec. 15. [CITY OF BROWERVILLE; TAX INCREMENT FINANCING.]
Subdivision 1. [EXPENDITURE OUTSIDE DISTRICT.]
Notwithstanding the provisions of Minnesota Statutes, section
469.1763, the city of Browerville may expend tax increments from
tax increment district No. 2 for eligible activities outside tax
increment district No. 2 but within development district No. 1.
The limitations contained in Minnesota Statutes, section
469.1763, subdivision 2, do not apply if the expenditures are
used to finance improvements to provide sewer and water service
to the tax increment financing district.
Subd. 2. [EFFECTIVE DATE.] This section is effective only
after its approval by the governing body of the city of
Browerville and compliance with Minnesota Statutes, section
645.021, subdivision 3.
Sec. 16. [CITY OF DEEPHAVEN; TAX INCREMENT FINANCING.]
Subdivision 1. [AUTHORIZATION OF EXPENDITURES.]
Notwithstanding any law to the contrary, the city of Deephaven
may expend revenues derived from tax increment financing
district number 1-1 that are available and unencumbered on the
date of enactment of this act to finance a public improvement
located outside of the district under the conditions in
subdivision 2. The public improvement must be included in the
tax increment plan prior to January 1, 1997.
Subd. 2. [CONDITIONS ON USE.] The authority under
subdivision 1 to spend increments outside of the tax increment
financing district number 1-1 is subject to the following
conditions:
(1) The city must request decertification of district
number 1-1 by no later than December 31, 1998.
(2) The city transfers no more than $800,000 of increments
from district number 1-1 to a separate account on the city's
books and records. The interest earned on this account is not
tax increment for purposes of Minnesota Statutes, sections
469.174 to 469.179.
(3) Any unspent increments from district number 1-1 after
the transfer under clause (2) are excess increments that must be
distributed under Minnesota Statutes, section 469.176,
subdivision 2, clause (4).
(4) Money in the account established under clause (2) may
only be spent to pay for the improvement of the Minnetonka
boulevard-Carsons Bay bridge project in the city. If matching
funds are not available for the project by December 31, 2002,
the balance in the account must be distributed as excess
increments under Minnesota Statutes, section 469.176,
subdivision 2, clause (4). Any unspent amounts after completion
of the project must be distributed as excess increments under
Minnesota Statutes, section 469.176, subdivision 2, clause (4).
(5) The authority to spend increments from district number
1-1 other than money transferred to the account under clause (2)
expires upon the day following final enactment of this act.
Subd. 3. [EFFECTIVE DATE.] This section is effective the
day upon approval by the governing body of the city of Deephaven
and compliance with Minnesota Statutes, section 645.021,
subdivision 3, and applies to revenues expended after the date
of final enactment.
Sec. 17. [CITY OF BURNSVILLE; ADMISSIONS TAX.]
Subdivision 1. [IMPOSITION.] Notwithstanding Minnesota
Statutes, section 477A.016, or any other contrary provision of
law or ordinance, the governing body of the city of Burnsville
may by ordinance impose a tax on admissions to an amphitheater
to be constructed within the city.
Subd. 2. [RATE.] The tax may be imposed at a rate not to
exceed $2 per paid admission. The governing body of the city
may by ordinance change the rate imposed, subject to the
limitation in this subdivision.
Subd. 3. [COLLECTION.] The method of collection of the tax
must be specified in the ordinance imposing the tax. The tax is
exempt from the rules under Minnesota Statutes, section
297A.48. The commissioner of revenue and the city may enter
into agreements for the collection and administration of the tax
by the state on behalf of the city. The commissioner may charge
the city a reasonable fee for its services from the proceeds of
the tax. The tax is subject to the same interest, penalties,
and enforcement provisions as the tax imposed under Minnesota
Statutes, chapter 297A.
Subd. 4. [USE OF PROCEEDS.] The city must pay money
received from the tax imposed under this section into a separate
fund or account to be used only to pay:
(1) the costs of imposing and collecting the tax; and
(2) for parking lots or ramps, and other public
improvements as defined by Minnesota Statutes, section 429.021,
within the boundaries of the tax increment financing district
established under section 18, or that serve the area within the
district.
Subd. 5. [EFFECTIVE DATE.] This section is effective the
day following final enactment.
Sec. 18. [CITY OF BURNSVILLE; TAX INCREMENT FINANCING
DISTRICT.]
Subdivision 1. [AUTHORIZATION.] The governing body of the
city of Burnsville may create a soils condition tax increment
financing district, as provided in this section, for an
amphitheater and related infrastructure improvements. Except as
otherwise provided in this section, the provisions of Minnesota
Statutes, sections 469.174 to 469.179, apply to the district.
The city or its economic development authority may be the
"authority" for the purposes of Minnesota Statutes, sections
469.174 to 469.179.
Subd. 2. [SPECIAL RULES.] (a) The district established
under subdivision 1 is subject to the provisions of Minnesota
Statutes, sections 469.174 to 469.179, except as provided in
this subdivision.
(b) The district may consist of all or any portion of the
parcels designated by the city of Burnsville as development
district No. 2 as of April 26, 1990.
(c) Minnesota Statutes, sections 469.174, subdivision 19,
and 469.176, subdivision 4b, do not apply to the district.
(d) Upon approval of the tax increment financing plan, the
governing body of the city of Burnsville must find that the
present value of the projected cost of closure of the former
solid waste landfill within the district equals or exceeds the
present value of the projected tax increments for the maximum
duration of the district permitted by the plan.
(e) Notwithstanding the provisions of Minnesota Statutes,
section 469.1763, increments from the district established under
this section may only be expended on improvements and activities
within or directly in aid of the district and on administrative
expenses.
(f) Notwithstanding the provisions of Minnesota Statutes,
section 469.176, subdivision 1b, no tax increment may be paid to
the authority after 18 years after receipt by the authority of
the first increment for the district.
Subd. 3. [DISTRICT NO. 2-1.] Upon approval of the tax
increment financing plan for the district created under
subdivision 1, the city shall request decertification of tax
increment financing district No. 2-1. The balance of the tax
increments derived from tax increment financing district No. 2-1
may be expended under the tax increment financing plan for the
district created under subdivision 1. Minnesota Statutes,
section 469.176, subdivision 4c, does not apply to the
expenditures. Minnesota Statutes, section 469.1782, subdivision
1, does not apply to tax increment financing district No. 2-1 or
the district created under subdivision 1.
Subd. 4. [EFFECTIVE DATE.] This section is effective upon
compliance with Minnesota Statutes, sections 469.1782,
subdivision 2, and 645.021, subdivision 2.
Sec. 19. [REDEVELOPMENT DISTRICT FOR LAKE STREET PROJECT.]
Subdivision 1. [AUTHORIZATION.] Upon approval of the
governing body of the city of Minneapolis by resolution, the
Minneapolis community development agency may establish for the
Lake Street project a redevelopment tax increment financing
district with phased redevelopment. The district is subject to
Minnesota Statutes, sections 469.174 to 469.179, as amended,
except as provided in this section.
Subd. 2. [ORIGINAL NET TAX CAPACITY.] Notwithstanding
Minnesota Statutes, section 469.174, subdivision 7, the original
net tax capacity of the district, as of the date the authority
certifies to the county auditor that the authority has entered
into a redevelopment or other agreement for rehabilitation of
the site or remediation of hazardous substances, is zero.
Subd. 3. [DURATION OF DISTRICT.] Notwithstanding the
provisions of Minnesota Statutes, section 469.176, subdivision
1b, no tax increment may be paid to the authority after 18 years
from the date of receipt by the authority of the first increment
generated from the final phase of redevelopment. In no case may
increments be paid to the authority after 30 years from approval
of the tax increment plan. "Final phase of redevelopment" means
that phase of redevelopment activity which completes the
rehabilitation of the Lake Street site.
Subd. 4. [REMOVAL OF HAZARDOUS SUBSTANCES.] For purposes
of the three-year activity rule under Minnesota Statutes,
section 469.176, subdivision 1a, and the four-year action
requirement under Minnesota Statutes, section 469.176,
subdivision 6, the removal of hazardous substances from the site
shall constitute a qualifying activity.
Subd. 5. [FIVE-YEAR RULE.] The five-year period under
Minnesota Statutes, section 469.1763, subdivision 3, is extended
to ten years.
Subd. 6. [NO POOLING AUTHORITY.] Notwithstanding the
provisions of Minnesota Statutes, section 469.1763, increments
from the district established under this section may only be
expended on improvements and activities within or directly in
aid of the district and on administrative expenses related to
the district.
Subd. 7. [EFFECTIVE DATE.] This section is effective upon
compliance with Minnesota Statutes, sections 469.1782,
subdivision 2, and 645.021, subdivision 2.
Sec. 20. [CITY OF WEST ST. PAUL; DAKOTA COUNTY HOUSING AND
REDEVELOPMENT AUTHORITY; EXCEPTION TO TAX INCREMENT FINANCING
REQUIREMENTS.]
Subdivision 1. [GENERALLY.] The city of West St. Paul and
the Dakota county housing and redevelopment authority may
operate the Signal Hills redevelopment tax increment financing
district (Dakota county housing and redevelopment authority tax
increment financing district No. 10) under the provisions of
this section.
Subd. 2. [TIME LIMITS FOR INITIATING ACTION.] The time
limits for initiation of activity in the district and reporting
the initiation to the county auditor under Minnesota Statutes,
section 469.176, subdivision 6, are extended to five and six
years, respectively.
Subd. 3. [FIVE-YEAR RULE.] The district is subject to the
requirement of Minnesota Statutes, section 469.1763, subdivision
3, except that the five-year period is extended to a nine-year
period.
Subd. 4. [THREE-YEAR RULE; EXCEPTION.] The district is
subject to the provisions of Minnesota Statutes, section
469.176, subdivision 1a, except that any references to three
years in that subdivision are five years for purposes of this
section.
Subd. 5. [POOLING EXCEPTION.] The city and the Dakota
county housing and redevelopment authority may elect to increase
the limit on the percentage of increments under Minnesota
Statutes, section 469.1763, subdivision 2, that may be spent
outside of the district to 40 percent, if all the amounts spent
outside of the district, other than administrative expenses, are
for improvements and activities within or directly in aid of the
South Robert Street redevelopment tax increment financing
district (Dakota county housing and redevelopment authority tax
increment financing district No. 4).
Subd. 6. [EFFECTIVE DATE.] This section is effective upon
approval by the governing bodies of the city of West St. Paul
and Dakota county and upon compliance by the city with Minnesota
Statutes, section 645.021, subdivision 3.
Sec. 21. [CITY OF RENVILLE; TAX INCREMENT FINANCING
DISTRICT.]
Subdivision 1. [CERTIFICATION DATE.] Except as otherwise
provided in this section, for purposes of Minnesota Statutes,
section 273.1399, and chapter 469, the certification date of the
addition of the following described property to tax increment
financing district No. 1 in the city of Renville is deemed to be
November 1, 1994: Lots 5, 6, 7, 8, and 9, Block 32, O'Connor's
Addition.
Subd. 2. [ORIGINAL NET TAX CAPACITY; ORIGINAL LOCAL TAX
RATE.] The original net tax capacity of property in subdivision
1 is $432.
Subd. 3. [EXPENDITURE OF INCREMENT.] Notwithstanding the
provisions of Minnesota Statutes, section 469.176, subdivision
1b, the city of Renville may collect and expend tax increment
generated by the lots cited in subdivision 1, in tax increment
financing district No. 1 in the city of Renville, until December
31, 2003.
Subd. 4. [STATE AID OFFSET.] Minnesota Statutes, section
469.1782, subdivision 1, does not apply to the extension allowed
by this section.
Subd. 5. [EFFECTIVE DATE.] This section is effective upon
compliance with Minnesota Statutes, sections 469.1782,
subdivision 2, and 645.021, subdivision 3.
Sec. 22. [CITY OF FOLEY; TAX INCREMENT FINANCING.]
Subdivision 1. [EXPENDITURE AUTHORITY.] Notwithstanding
any law to the contrary, expenditures by the city of Foley
before January 1, 1998, of revenue derived from tax increment
financing district number 1 to finance a wastewater treatment
facility located outside of the district are authorized
expenditures of that revenue.
Subd. 2. [CONDITIONS.] The authority to spend increment
under subdivision 1 on the wastewater treatment facility is
subject to the following conditions:
(1) the city must request decertification of tax increment
financing district number 1 by no later than December 31, 1998;
and
(2) any unspent increments and any increments collected
after December 31, 1997, must be distributed under Minnesota
Statutes, section 469.176, subdivision 2, clause (4).
Subd. 3. [EFFECTIVE DATE.] This section is effective upon
local approval by the governing body of the city of Foley and
compliance with Minnesota Statutes, section 645.021, subdivision
3.
Sec. 23. [GARRISON; TAX INCREMENT FINANCING.]
The reduction in state aid under Minnesota Statutes,
section 273.1399, for the city of Garrison as a result of tax
increment financing district number 1 does not apply for aids
paid in fiscal years 1999 and 2000. The aid reduction for
fiscal years 1999 and 2000 must be deducted from aid payable to
the city in the year or years after the remainder of the aid
reduction for tax increment financing district number 1 has been
made.
Sec. 24. [NEW BRIGHTON; TAX INCREMENT FINANCING.]
Subdivision 1. [SPECIAL RULES.] (a) If the city elects
upon the adoption of the tax increment financing plan for the
district, the rules under this section apply to redevelopment or
soils condition tax increment financing districts established by
the city of New Brighton or a development authority of the city
in the area bounded on the north by the south boundary line of
tax increment district number 8 extended to Long Lake regional
park, on the east by interstate highway 35W, on the south by
interstate highway 694, and on the west by Long Lake regional
park.
(b) The five-year rule under Minnesota Statutes, section
469.1763, subdivision 3, is extended to nine years for the
district.
(c) The limitations on spending increment outside of the
district under Minnesota Statutes, section 469.1763, subdivision
2, do not apply, but increments may only be expended on
improvements or activities within the area defined in paragraph
(a).
Subd. 2. [EXPIRATION.] (a) The exception from the
limitations of Minnesota Statutes, section 469.1763, subdivision
2, expires 18 years after the receipt of the first increment
from a district to which the city has elected that this section
applies.
(b) The authority to approve tax increment financing plans
to establish a tax increment financing district under this
section expires on December 31, 2008.
Subd. 3. [EFFECTIVE DATE.] This section is effective upon
approval by the governing bodies of the city of New Brighton and
Ramsey county and upon compliance by the city with Minnesota
Statutes, section 645.021, subdivision 3.
Sec. 25. [MEEKER COUNTY; ECONOMIC DEVELOPMENT AUTHORITY;
ESTABLISHMENT AND POWERS.]
Subdivision 1. [ESTABLISHMENT.] The board of county
commissioners of Meeker county may establish an economic
development authority in the manner provided in Minnesota
Statutes, sections 469.090 to 469.1081, and may impose limits on
the authority enumerated in Minnesota Statutes, section 469.092.
The economic development authority has all of the powers and
duties granted to or imposed upon economic development
authorities under Minnesota Statutes, sections 469.090 to
469.1081. The county economic development authority may create
and define the boundaries of economic development districts at
any place or places within the county, provided that a project
as recommended by the county authority that is to be located
within the corporate limits of a city may not be commenced
without the approval of the governing body of the city.
Minnesota Statutes, section 469.174, subdivision 10, and the
contiguity requirement specified under Minnesota Statutes,
section 469.101, subdivision 1, do not apply to limit the areas
that may be designated as county economic development districts.
Subd. 2. [POWERS.] If an economic development authority is
established as provided in subdivision 1, the county may
exercise all of the powers relating to an economic development
authority granted to a city under Minnesota Statutes, sections
469.090 to 469.1081, or other law, including the power to levy a
tax to support the activities of the authority.
Subd. 3. [EFFECTIVE DATE.] This section is effective the
day after the Meeker county board's approval is filed as
provided in Minnesota Statutes, section 645.021, subdivision 3.
Sec. 26. [KITTSON COUNTY; ECONOMIC DEVELOPMENT AUTHORITY;
ESTABLISHMENT AND POWERS.]
Subdivision 1. [ESTABLISHMENT.] The board of county
commissioners of Kittson county may establish an economic
development authority in the manner provided in Minnesota
Statutes, sections 469.090 to 469.1081, and may impose limits on
the authority enumerated in Minnesota Statutes, section 469.092.
The economic development authority has all of the powers and
duties granted to or imposed upon economic development
authorities under Minnesota Statutes, sections 469.090 to
469.1081. The county economic development authority may create
and define the boundaries of economic development districts at
any place or places within the county, provided that a project
as recommended by the county authority that is to be located
within the corporate limits of a city may not be commenced
without the approval of the governing body of the city.
Minnesota Statutes, section 469.174, subdivision 10, and the
contiguity requirement specified under Minnesota Statutes,
section 469.101, subdivision 1, do not apply to limit the areas
that may be designated as county economic development districts.
Subd. 2. [POWERS.] If an economic development authority is
established as provided in subdivision 1, the county may
exercise all of the powers relating to an economic development
authority granted to a city under Minnesota Statutes, sections
469.090 to 469.1081, or other law, including the power to levy a
tax to support the activities of the authority.
Subd. 3. [EFFECTIVE DATE.] This section is effective the
day after the Kittson county board's approval is filed as
provided in Minnesota Statutes, section 645.021, subdivision 3.
Sec. 27. [BLUE EARTH COUNTY; ECONOMIC DEVELOPMENT
AUTHORITY; ESTABLISHMENT AND POWERS.]
Subdivision 1. [ESTABLISHMENT.] The board of county
commissioners of Blue Earth county may establish an economic
development authority in the manner provided in Minnesota
Statutes, sections 469.090 to 469.1081, and may impose limits on
the authority enumerated in Minnesota Statutes, section 469.092.
The economic development authority has all of the powers and
duties granted to or imposed upon economic development
authorities under Minnesota Statutes, sections 469.090 to
469.1081. The county economic development authority may create
and define the boundaries of economic development districts at
any place or places within the county, provided that a project
as recommended by the county authority that is to be located
within the corporate limits of a city may not be commenced
without the approval of the governing body of the city.
Minnesota Statutes, section 469.174, subdivision 10, and the
contiguity requirement specified under Minnesota Statutes,
section 469.101, subdivision 1, do not apply to limit the areas
that may be designated as county economic development districts.
Subd. 2. [POWERS.] If an economic development authority is
established as provided in subdivision 1, the county may
exercise all of the powers relating to an economic development
authority granted to a city under Minnesota Statutes, sections
469.090 to 469.1081, or other law, including the power to levy a
tax to support the activities of the authority.
Subd. 3. [HOUSING PROGRAMS.] The Blue Earth county
economic development authority may exercise its authority for
purposes of consolidating housing programs with the city of
Mankato.
Subd. 4. [EFFECTIVE DATE.] This section is effective the
day after the Blue Earth county board's approval is filed as
provided in Minnesota Statutes, section 645.021, subdivision 3.
Sec. 28. [SPECIAL TAXING AUTHORITY; BROOKLYN CENTER.]
Subdivision 1. [AUTHORITY.] The city of Brooklyn Center
may establish a special taxing district and impose a tax under
Minnesota Statutes, section 469.1791, for the following
described property within tax increment financing district No. 3
in the city:
All that property that is located within the area bounded
by a continuous line beginning at a point at the intersection of
county road No. 10 and trunk highway No. 100 and going
southwesterly along the center line of trunk highway No. 100 to
its intersection with Brooklyn Boulevard; thence northerly along
the center line of Brooklyn Boulevard to a point 476.52 feet
northerly of the intersection of Brooklyn Boulevard and county
road No. 10; thence easterly from that point along a straight
line to the center line of Shingle Creek; thence southerly along
the center line of Shingle Creek to its intersection with the
north right-of-way line of county road No. 10; thence easterly
along the north right-of-way line of county road No. 10 to the
east right-of-way line of Shingle Creek Parkway; thence
northerly along the west property line of lot 2, block 2,
Brookdale square addition 165.43 feet; thence northeasterly
along the northwest property line of lot 2, block 2, Brookdale
square addition 297.73 feet; thence easterly along the north
property line of lot 2, block 2, Brookdale square addition
914.34 feet; thence southerly 517.9 feet along the easterly
property line of lot 2, block 2, Brookdale square addition
extended to the center line of county road No. 10; thence
easterly along the center line of county road No. 10 to the
point of the beginning.
Subd. 2. [EXCEPTIONS FROM GENERAL LAW.] The following
requirements under general law do not apply to a special taxing
district created under this section:
(1) the preconditions for establishing a special taxing
district under Minnesota Statutes, section 469.1791, subdivision
3;
(2) the authority to file written objections under
Minnesota Statutes, section 469.1791, subdivision 5, and to
appeal to the district court under Minnesota Statutes, section
469.1791, subdivision 6; and
(3) the limits on the maximum levy and the use of the
proceeds under Minnesota Statutes, section 469.1791, subdivision
9.
Subd. 3. [RESTRICTIONS.] The authority to impose the tax
under this section is limited to property that is subject to an
assessment agreement with the city or its economic development
authority under Minnesota Statutes, section 469.177, subdivision
8, as of the date of adoption of the enabling ordinance. The
maximum levy may not exceed the amount specified in the
assessment agreement.
Subd. 4. [EFFECTIVE DATE.] This section is effective upon
compliance by the city of Brooklyn Center with Minnesota
Statutes, section 645.021, subdivision 3.
Sec. 29. [EFFECTIVE DATE.]
Sections 1, 5, and 7 apply to tax increment financing
districts certified on, before, and after August 1, 1979.
Sections 2, 3, 4, and 8 are effective for disclosures
required to be made and reports required to be submitted
beginning in 1999.
Section 6 is effective for tax increment financing
districts for which the request for certification is made after
April 30, 1998.
Section 9 is effective the day following final enactment
and applies to tax increment financing districts certified on,
before, and after August 1, 1979.
Section 10 is effective beginning for taxes payable in 1999.
Section 11 is effective upon compliance by Itasca county
with Minnesota Statutes, section 645.021, subdivision 3.
Section 12 is effective upon compliance by Koochiching
county with Minnesota Statutes, section 645.021, subdivision 3.
ARTICLE 12
BORDER CITY ZONES
Section 1. [272.0212] [BORDER DEVELOPMENT ZONE PROPERTY.]
Subdivision 1. [EXEMPTION.] All qualified property in a
zone is exempt to the extent and for the duration provided by
the zone designation and under sections 469.1731 to 469.1735.
Subd. 2. [LIMITS ON EXEMPTION.] Property in a zone is not
exempt under this section from the following:
(1) special assessments;
(2) ad valorem property taxes specifically levied for the
payment of principal and interest on debt obligations; and
(3) all taxes levied by a school district, except equalized
school levies as defined in section 273.1398, subdivision 1,
paragraph (e).
Subd. 3. [STATE AID.] Property exempt under this section
is included in the net tax capacity for purposes of computing
aids under chapter 477A.
Subd. 4. [DEFINITIONS.] (a) For purposes of this section,
the following terms have the meanings given.
(b) "Qualified property" means class 3 and class 5 property
as defined in section 273.13 that is located in a zone and is
newly constructed after the zone was designated, including the
land that contains the improvements.
(c) "Zone" means a border city development zone designated
under the provisions of section 469.1731.
Subd. 5. [FINDING REQUIRED.] The exemption under this
section is available to a parcel only if the municipality
determines that the granting of the tax exemption is necessary
to enable a business to expand within a zone or to attract a
business to a zone.
Sec. 2. Minnesota Statutes 1997 Supplement, section
469.169, subdivision 11, is amended 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. 3. Minnesota Statutes 1996, section 469.169, is
amended by adding a subdivision to read:
Subd. 12. [ADDITIONAL ZONE ALLOCATIONS.] In addition to
tax reductions authorized in subdivisions 7, 8, 9, 10, and 11,
the commissioner shall allocate tax reductions to border city
enterprise zones located on the western border of the state.
The cumulative total amount of tax reductions for all years of
the program under sections 469.1731 to 469.1735, is limited to:
(1) for the city of Breckenridge, $394,000;
(2) for the city of Dilworth, $118,200;
(3) for the city of East Grand Forks, $788,000;
(4) for the city of Moorhead, $591,000; and
(5) for the city of Ortonville, $78,800.
Allocations made under this subdivision may be used for tax
reductions provided in section 469.1732 or 469.1734 or for
reimbursements under section 469.1735, subdivision 3, but only
if the municipality determines that the granting of the tax
reduction or offset is necessary to enable a business to expand
within a city or to attract a business to a city. Limitations
on allocations under subdivision 7 do not apply to this
allocation.
Sec. 4. Minnesota Statutes 1996, section 469.170, is
amended by adding a subdivision to read:
Subd. 5e. [LIMITS ON MULTIYEAR PLANS.] The requirements
for a multiyear enterprise zone tax credit distribution plan
under subdivisions 5a to 5d apply only for:
(1) each business that will receive more than $25,000 in
credits in a year; or
(2) tax reductions under section 469.171, subdivision 1,
for businesses in areas designated under section 469.171,
subdivision 5.
Sec. 5. Minnesota Statutes 1996, section 469.171,
subdivision 9, is amended to read:
Subd. 9. [RECAPTURE.] Any business that (1) receives tax
reductions authorized by subdivisions 1 to 8, classification as
employment property pursuant to section 469.170, or an
alternative local contribution under section 469.169,
subdivision 5; and (2) ceases to operate its facility located
within the enterprise zone within two years after the expiration
of the tax reductions shall repay the amount of the tax
reduction or local contribution pursuant to the following
schedule:
Termination Repayment
of operations Portion
Less than 6 months 100 percent
6 months or more but less than 12 months 75 percent
12 months or more but less than 18 months 50 percent
18 months or more but less than 24 months 25 percent
received during the two years immediately before it ceased to
operate in the zone.
The repayment must be paid to the state to the extent it
represents a tax reduction under subdivisions 1 to 8 and to the
municipality to the extent it represents a property tax
reduction or other local contribution. Any amount repaid to the
state must be credited to the amount certified as available for
tax reductions in the zone pursuant to section 469.169,
subdivision 7. Any amount repaid to the municipality must be
used by the municipality for economic development purposes. The
commissioner of revenue may seek repayment of tax credits from a
business ceasing to operate within an enterprise zone by
utilizing any remedies available for the collection of tax.
Sec. 6. [469.1731] [BORDER CITY DEVELOPMENT ZONES.]
Subdivision 1. [DESIGNATION.] To encourage economic
development, to revitalize the designated areas, to expand tax
base and economic activity, and to provide job creation, growth,
and retention, the following border cities may designate, by
resolution, areas of the city as development zones after a
public hearing upon 30-day notice.
(a) The city of Breckenridge may designate all or any part
of the city as a zone.
(b) The city of Dilworth may designate between one and six
areas of the city as zones containing not more than 100 acres in
the aggregate.
(c) The city of East Grand Forks may designate all or any
part of the city as a zone.
(d) The city of Moorhead may designate between one and six
areas of the city as zones containing not more than 100 acres in
the aggregate.
(e) The city of Ortonville may designate between one and
six areas of the city as zones containing not more than 100
acres in the aggregate.
Subd. 2. [DEVELOPMENT PLAN.] (a) Before designating a
development zone, the city must adopt a written development plan
that addresses:
(1) evidence of adverse economic conditions within the area
resulting from competition with the bordering state or the 1997
floods or both;
(2) the viability of the development plan;
(3) public and private commitment to and other resources
available for the area;
(4) how designation would relate to a development and
revitalization plan for the city as a whole; and
(5) how the local regulatory burden will be eased for
businesses operating in the area.
(b) The development plan must include:
(1) a map of the proposed zone that indicates the
geographic boundaries, the total area, and the present use and
conditions generally of land and structures within the area;
(2) evidence of community support and commitment from
business interests;
(3) a description of the methods proposed to increase
economic opportunity and expansion, facilitate infrastructure
improvement, and identify job opportunities; and
(4) the duration of the zone designation, not to exceed 15
years.
Subd. 3. [FILING.] The city must file a copy of the
resolution and development plan with the commissioner of trade
and economic development. The designation takes effect for the
first calendar year that begins more than 90 days after the
filing.
Sec. 7. [469.1732] [TAX INCENTIVES WITHIN DEVELOPMENT
ZONES.]
Subdivision 1. [AUTHORITY.] A business that conducts
business activity within a border city development zone
designated under section 469.1731 may qualify for the property
tax exemption under section 272.0212, the corporate franchise
tax credit under subdivision 2, and the sales tax exemption
under section 469.1734, subdivision 6.
Subd. 2. [BORDER CITY ZONE CREDIT.] (a) A corporation may
claim a credit against the tax imposed by sections 290.02,
290.0921, and 290.0922, subdivision 1, paragraph (a). The
commissioner of revenue shall prescribe the method in which the
credit may be claimed. This may include allowing the credit
only as a separately processed claim for refund. The allowable
credit is based on the tax liability attributable to business
conducted within a zone, and may be equal to all or a portion of
that liability, as determined by the city.
(b) "Tax liability" means the tax liability under sections
290.02, 290.0921, and 290.0922, subdivision 1, paragraph (a),
after any other credits.
(c) The tax liability attributable to business conducted
within a zone means the taxpayer's tax liability multiplied by a
fraction:
(1) the numerator of which is:
(i) the ratio of the taxpayer's property factor under
section 290.191 located in the border city development zone, for
the taxable year over the property factor denominator determined
under section 290.191, plus
(ii) the ratio of the taxpayer's payroll factor under
section 290.191 located in the border city development zone, for
the taxable year over the payroll factor denominator determined
under section 290.191; and
(2) the denominator of which is two.
(d) Any portion of the taxpayer's tax liability that is
attributable to illegal activity conducted in the zone must not
be used to calculate a credit under this subdivision.
(e) The credit allowed under this subdivision continues
through the taxable year in which the zone designation expires.
(f) To be eligible for a credit under this subdivision, the
taxpayer must file an annual return under chapter 290.
(g) The credit allowed under this subdivision may not
exceed the lesser of:
(1) the tax liability of the taxpayer for the taxable year;
or
(2) the amount of the tax credit certificates received by
the taxpayer from the city, less any tax credit certificates
used under section 469.1734, subdivisions 4, 5, and 6.
Subd. 3. [PHASEOUT AT END OF ZONE DURATION.] During the
last three years of the duration of a border city development
zone, the available exemptions, subtractions, or credits are
reduced by the following percentages for the taxes payable year
or the taxable years that begin during:
(1) the calendar year that is two years before the final
year of designation as a development zone, 25 percent;
(2) the calendar year that is immediately before the final
year of designation as a development zone, 50 percent; and
(3) for the final calendar year of designation as a
development zone, 75 percent.
Sec. 8. [469.1733] [DISQUALIFIED TAXPAYERS.]
Subdivision 1. [DELINQUENT TAXPAYERS.] An individual or a
business is not eligible for the exemptions or credits available
under section 272.0212, 469.1732, or 469.1734, if the individual
or business owes delinquent amounts under chapter 290, 296, 297,
297A, 297B, or 297C or if the individual or business owns
property located in the city or county in which the zone is
located on which the property taxes are delinquent. Delinquency
is determined as of the date of the application for a
certificate under section 469.1735, subdivision 1. As a
condition of receiving a certificate, the individual or business
must authorize the department of revenue to disclose information
necessary to make the determination under this subdivision
notwithstanding any provision of chapter 270B or other law to
the contrary.
Subd. 2. [RELOCATION WITHIN COUNTY.] If a business located
in the county in which the border city development zone is
located relocates from outside a zone into a zone, the business
is not eligible for the exemptions or credits available in the
border city development zone, unless the governing body of the
city, for a business located in an incorporated area, or the
county, for a business located outside of an incorporated area,
approves the relocation of the business.
Subd. 3. [RELOCATION FROM OUTSIDE COUNTY.] (a) If a
business relocates more than 25 full-time equivalent jobs from a
location in Minnesota outside of the county in which the zone is
located, the business must notify the commissioner of trade and
economic development and the city and county governments from
which the jobs are being relocated. A business may satisfy the
notification requirement by notifying the commissioner of trade
and economic development, the city, and county of its intent to
transfer jobs to a zone before actually doing so. The business
is not eligible for the exemptions and credits available in the
border city development zone, if the governing body of the city
or county from which the jobs are being relocated adopts a
resolution objecting to the relocation within 60 days after its
receipt of the notice.
(b) The business becomes eligible for the exemptions and
credits available in the zone when each city and county that
objected to the relocation rescinds its objection by resolution.
(c) A city or county that objects to the relocation of jobs
must file a copy of the resolution with the commissioner of
trade and economic development and the city that created the
border city development zone into which the jobs were or intend
to be transferred.
Sec. 9. [469.1734] [TAX INCENTIVES OUTSIDE ZONES.]
Subdivision 1. [AUTHORITY.] A city with authority to
establish a border city development zone under section 469.1731
may grant the tax incentives provided by this section. This
authority applies only to projects located outside of a zone,
except as provided in subdivision 6.
Subd. 2. [DEFINITIONS.] For purposes of this section,
"qualifying business" means the business conducted by a
corporation, partnership, or individual doing business from a
fixed location within the border city but located outside of the
border city development zone.
Subd. 3. [PROPERTY TAX.] (a) A city may grant a partial or
complete exemption from property taxation of all buildings,
structures, fixtures, and improvements used in or necessary to a
qualifying business for a period not exceeding five taxes
payable years. A partial exemption must be stated as a
percentage of the total ad valorem taxes assessed against the
property.
(b) In addition to, or in lieu of, a property tax exemption
under paragraph (a), a city may establish an amount due as
payments in lieu of ad valorem taxes on buildings, structures,
fixtures, and improvements used by the qualifying business. The
city council shall designate the amount of the payments for each
year and the beginning year and the concluding year for payments
in lieu of taxes. The option to make payments in lieu of taxes
under this section is limited to 20 consecutive taxes payable
years for any qualifying business. To establish the amount of
payments in lieu of taxes, the city council may use actual or
estimated levels of assessment and taxation or may designate
different amounts of payments in lieu of other taxes in
different years to recognize future expansion plans of a
qualifying business or other considerations. The payments in
lieu shall be collected and distributed in the same manner as ad
valorem taxes.
(c) The city council must determine whether granting the
exemption or payments in lieu of taxes, or both, is necessary to
enable a business to expand in the city or to attract a business
to the city and is in the best interest of the city. If it so
determines, the city must give its approval.
Subd. 4. [INCOME TAX.] (a) Upon application by the
qualifying business to the city, and approval of the city, a
qualifying business shall receive a credit against taxes imposed
under chapter 290, other than the tax imposed under section
290.92, based on the taxable net income of the qualified
business attributable to the border city, but outside the border
city development zone, multiplied by 9.8 percent in the case of
a taxpayer under section 290.02, and 8.5 percent in the case of
a taxpayer taxable under section 290.06, subdivision 2c. The
attributable net income of a qualified business in the border
city is determined by multiplying the taxable net income of the
business entity, determined as if the business were a C
corporation, by a fraction:
(1) the numerator of which is:
(i) the ratio of the taxpayer's property factor under
section 290.191 located in the border city, but outside of the
border city development zone, for the taxable year over the
property factor denominator determined under section 290.191,
plus
(ii) the ratio of the taxpayer's payroll factor under
section 290.191 located in the border city, but outside of the
border city development zone, for the taxable year over the
payroll factor denominator determined under section 290.191; and
(2) the denominator of which is two.
(b) The credit under this subdivision applies after any
credit allowed under subdivision 5.
(c) After any notice period required by subdivision 7, the
city council must determine whether granting the credit is in
the best interest of the city, and if it so determines, must
approve the granting of the credit and determine its amount.
(d) The credit under this subdivision may not exceed the
amount of the tax credit certificates received by the taxpayer
from the city, less any tax credit certificates used under
section 469.1732, subdivision 2, and subdivisions 5 and 6.
(e) No taxpayer may receive the credit under this
subdivision for more than five taxable years.
Subd. 5. [BORDER CITY NEW INDUSTRY CREDIT.] (a) To provide
a tax incentive for new industry in border cities, a corporation
may be allowed a credit against the tax imposed by section
290.02. The commissioner shall prescribe the method in which
the credit may be claimed. This may include allowing the credit
only as a separately processed claim for refund.
(b) The credit equals one percent of the wages and salaries
paid by the taxpayer during the taxable year for employees whose
principal place of work is located in a border city but outside
of a zone designated under section 469.1731. The credit applies
for the first three taxable years of the operation of the
corporation in the border city. In the fourth and fifth taxable
years of the operation of the corporation in the border city,
the credit equals 0.5 percent of the wages and salaries. After
the fifth year, no credit is allowed. The city shall determine
the amount of wages that qualify for the credit and issue tax
credit certificates in the correct amount.
(c) The credit under this subdivision applies only to a
corporate enterprise engaged in assembling, fabricating,
manufacturing, mixing, or processing of any agricultural,
mineral, or manufactured product or combinations of them.
(d) The credit allowed under this subdivision may not
exceed the lesser of:
(1) the tax liability of the taxpayer for the taxable year;
or
(2) the amount of the tax credit certificates received by
the taxpayer from the city, less any tax credit certificates
used under subdivisions 4 and 6, and section 469.1732,
subdivision 2.
Subd. 6. [SALES TAX EXEMPTION; EQUIPMENT; CONSTRUCTION
MATERIALS.] (a) The gross receipts from the sale of machinery
and equipment and repair parts are exempt from taxation under
chapter 297A, if the machinery and equipment:
(1) are used in connection with a trade or business;
(2) are placed in service in a city that is authorized to
designate a zone under section 469.1731, regardless of whether
the machinery and equipment are used in a zone; and
(3) have a useful life of 12 months or more.
(b) The gross receipts from the sale of construction
materials are exempt, if they are used to construct a facility
for use in a trade or business located in a city that is
authorized to designate a zone under section 469.1731,
regardless of whether the facility is located in a zone. The
exemptions under this paragraph apply regardless of whether the
purchase is made by the owner, the user, or a contractor.
(c) A purchaser may claim an exemption under this
subdivision for tax on the purchases up to, but not exceeding:
(1) the amount of the tax credit certificates received from
the city, less
(2) any tax credit certificates used under the provisions
of subdivisions 4 and 5, and 469.1732, subdivision 2.
(d) The tax on sales of items exempted under this
subdivision shall be imposed and collected as if the applicable
rate under section 297A.02 applied. Upon application by the
purchaser, on forms prescribed by the commissioner, a refund
equal to the tax paid shall be paid to the purchaser. The
application must include sufficient information to permit the
commissioner to verify the sales tax paid and the eligibility of
the claimant to receive the credit. No more than two
applications for refunds may be filed under this subdivision in
a calendar year. The provisions of section 289A.40 apply to the
refunds payable under this subdivision. There is annually
appropriated to the commissioner of revenue the amount required
to make the refunds, which must be deducted from the amount of
the city's allocation under section 469.169, subdivision 12,
that remains available and its limitation under section 469.1735.
The amount to be refunded shall bear interest at the rate in
section 270.76 from the date the refund claim is filed with the
commissioner.
Subd. 7. [NOTICE TO COMPETITORS.] (a) Before an exemption
or other concession is granted under subdivision 3 or 4, the
procedure under this subdivision applies.
(b) Unless the city council determines that no existing
business within the city would be a potential competitor of the
project, the project operator shall publish two notices to
competitors of the application of the tax exemption or payments
in lieu in the official newspaper of the city. The city shall
prescribe the form of the notice. The two notices must be
published at least one week apart. The publications must be
completed not less than 15 days nor more than 30 days before the
city council approves the tax exemption or payments in lieu of
taxes.
Sec. 10. [469.1735] [LIMIT ON TAX REDUCTIONS; APPLICATIONS
REQUIRED.]
Subdivision 1. [BUSINESSES MUST APPLY.] To claim a tax
credit under section 469.1732, subdivision 2, or 469.1734,
subdivision 4 or 5, or an exemption from sales tax under section
469.1734, subdivision 6, a business must apply to the city for a
tax credit certificate. As a condition of its application, the
business must agree to furnish information to the city that is
sufficient to verify the eligibility for any credits or other
tax reductions claimed. The total amount of the state tax
reductions allowed for the specified period may not exceed the
amount of the tax credit certificates provided by the city to
the business. The city must verify the amount of tax reduction
or credits for which each business is eligible.
Subd. 2. [CITY LIMITATIONS.] (a) Each city may provide tax
credit certificates to businesses that apply and meet the
requirements for the tax credit and exemption. The certificates
that each city may provide for the period covered by this
section is limited to the amount specified in this subdivision.
(b) The maximum amount of tax credit certificates each city
may issue over the duration of the program equals the amount of
the allocation to the city under section 469.169, subdivision 12.
Subd. 3. [TRANSFER AUTHORITY FOR PROPERTY TAX.] (a) A city
may elect to use all or part of its allocation under subdivision
2 to reimburse the city or county or both for property tax
reductions under section 272.0212. To elect this option, the
city must notify the commissioner of revenue by October 1 of
each calendar year of the amount of the property tax reductions
it seeks reimbursements for taxes payable during the following
year and the governmental units to which the amounts will be
paid. The commissioner may require the city to provide
information substantiating the amount of the reductions granted
or any other information necessary to administer this
provision. The commissioner shall pay the reimbursements by
December 26. Any amount transferred under this authority
reduces the amount of tax credit certificates available under
subdivisions 1 and 2.
(b) The amount elected by the city under paragraph (a) is
appropriated to the commissioner of revenue from the general
fund to reimburse the city or county for tax reductions under
section 272.0212. The amount appropriated may not exceed the
maximum amounts allocated to a city under subdivision 2,
paragraph (b), less the amount of certificates issued by the
city under subdivision 1, and is available until expended.
Sec. 11. [EFFECTIVE DATE.]
Sections 1, 2, and 6 to 10 are effective the day following
final enactment, provided that sections 7, subdivision 2, and 9,
subdivisions 4 and 5, are effective for taxable years beginning
after December 31, 1998.
Section 4 is effective for plans required to be filed after
the day following final enactment, regardless of whether the
business received a credit and was required to file a plan in a
prior year.
Section 5 is effective for tax reductions received
beginning in the first calendar year after the day following
final enactment.
ARTICLE 13
GAMING TAXES
Section 1. Minnesota Statutes 1996, section 240.15,
subdivision 1, is amended to read:
Subdivision 1. [TAXES IMPOSED.] (a) From July 1, 1996,
until July 1, 1999, There is imposed a tax at the rate of six
percent of the amount in excess of $12,000,000 annually withheld
from all pari-mutuel pools by the licensee, including breakage
and amounts withheld under section 240.13, subdivision 4. After
June 30, 1999, the tax is imposed on the total amount withheld
from all pari-mutuel pools. For the purpose of this
subdivision, "annually" is the period from July 1 to June 30 of
the next year.
In addition to the above tax, the licensee must designate
and pay to the commission a tax of one percent of the total
amount bet on each racing day, for deposit in the Minnesota
breeders fund.
The taxes imposed by this clause must be paid from the
amounts permitted to be withheld by a licensee under section
240.13, subdivision 4.
(b) The commission may impose an admissions tax of not more
than ten cents on each paid admission at a licensed racetrack on
a racing day if:
(1) the tax is requested by a local unit of government
within whose borders the track is located;
(2) a public hearing is held on the request; and
(3) the commission finds that the local unit of government
requesting the tax is in need of its revenue to meet
extraordinary expenses caused by the racetrack.
Sec. 2. Minnesota Statutes 1996, section 240.15,
subdivision 5, is amended to read:
Subd. 5. [UNREDEEMED TICKETS.] (a) Notwithstanding any
provision to the contrary in chapter 345, unredeemed pari-mutuel
tickets shall not be considered unclaimed funds and shall be
handled in accordance with the provisions of this subdivision.
(b) Until the end of calendar year 1999, Any person
claiming to be entitled to the proceeds of any unredeemed ticket
may within one year after the conclusion of each race meet file
with the licensee a verified claim for such proceeds on such
form as the licensee prescribes along with the pari-mutuel
ticket. Unless the claimant satisfactorily establishes the
right to the proceeds, the claim shall be rejected. If the
claim is allowed, the licensee shall pay the proceeds without
interest to the claimant.
(c) Beginning January 1, 2000, not later than 100 days
after the end of a race meet a licensee who sells pari-mutuel
tickets must remit to the commission or its representative an
amount equal to the total value of unredeemed tickets from the
race meet. The remittance must be accompanied by a detailed
statement of the money on a form the commission prescribes. Any
person claiming to be entitled to the proceeds of any unredeemed
ticket who fails to claim said proceeds prior to their being
remitted to the commission, may within one year after the date
of remittance to the commission file with the commission a
verified claim for such proceeds on such form as the commission
prescribes along with the pari-mutuel ticket. Unless the
claimant satisfactorily establishes the right to the proceeds,
the claim shall be rejected. If the claim is allowed, the
commission shall pay the proceeds without interest to the
claimant. There is hereby appropriated from the general fund to
the commission an amount sufficient to make payment to persons
entitled to such proceeds.
Sec. 3. Minnesota Statutes 1996, section 297E.02,
subdivision 1, is amended to read:
Subdivision 1. [IMPOSITION.] A tax is imposed on all
lawful gambling other than (1) pull-tabs purchased and placed
into inventory after January 1, 1987, and (2) tipboards
purchased and placed into inventory after June 30, 1988, at the
rate of ten 9.5 percent on the gross receipts as defined in
section 297E.01, subdivision 8, less prizes actually paid. The
tax imposed by this subdivision is in lieu of the tax imposed by
section 297A.02 and all local taxes and license fees except a
fee authorized under section 349.16, subdivision 8, or a tax
authorized under subdivision 5.
The tax imposed under this subdivision is payable by the
organization or party conducting, directly or indirectly, the
gambling.
Sec. 4. Minnesota Statutes 1996, section 297E.02,
subdivision 4, is amended to read:
Subd. 4. [PULL-TAB AND TIPBOARD TAX.] (a) A tax is imposed
on the sale of each deal of pull-tabs and tipboards sold by a
distributor. The rate of the tax is two 1.9 percent of the
ideal gross of the pull-tab or tipboard deal. The sales tax
imposed by chapter 297A on the sale of the pull-tabs and
tipboards by the distributor is imposed on the retail sales
price less the tax imposed by this subdivision. The retail sale
of pull-tabs or tipboards by the organization is exempt from
taxes imposed by chapter 297A and is exempt from all local taxes
and license fees except a fee authorized under section 349.16,
subdivision 8.
(b) The liability for the tax imposed by this section is
incurred when the pull-tabs and tipboards are delivered by the
distributor to the customer or to a common or contract carrier
for delivery to the customer, or when received by the customer's
authorized representative at the distributor's place of
business, regardless of the distributor's method of accounting
or the terms of the sale.
The tax imposed by this subdivision is imposed on all sales
of pull-tabs and tipboards, except the following:
(1) sales to the governing body of an Indian tribal
organization for use on an Indian reservation;
(2) sales to distributors licensed under the laws of
another state or of a province of Canada, as long as all
statutory and regulatory requirements are met in the other state
or province;
(3) sales of promotional tickets as defined in section
349.12; and
(4) pull-tabs and tipboards sold to an organization that
sells pull-tabs and tipboards under the exemption from licensing
in section 349.166, subdivision 2. A distributor shall require
an organization conducting exempt gambling to show proof of its
exempt status before making a tax-exempt sale of pull-tabs or
tipboards to the organization. A distributor shall identify, on
all reports submitted to the commissioner, all sales of
pull-tabs and tipboards that are exempt from tax under this
subdivision.
(c) A distributor having a liability of $120,000 or more
during a fiscal year ending June 30 must remit all liabilities
in the subsequent calendar year by a funds transfer as defined
in section 336.4A-104, paragraph (a). The funds transfer
payment date, as defined in section 336.4A-401, must be on or
before the date the tax is due. If the date the tax is due is
not a funds transfer business day, as defined in section
336.4A-105, paragraph (a), clause (4), the payment date must be
on or before the funds transfer business day next following the
date the tax is due.
(d) Any customer who purchases deals of pull-tabs or
tipboards from a distributor may file an annual claim for a
refund or credit of taxes paid pursuant to this subdivision for
unsold pull-tab and tipboard tickets. The claim must be filed
with the commissioner on a form prescribed by the commissioner
by March 20 of the year following the calendar year for which
the refund is claimed. The refund must be filed as part of the
customer's February monthly return. The refund or credit is
equal to two 1.9 percent of the face value of the unsold
pull-tab or tipboard tickets, provided that the refund or credit
will be 1.95 percent of the face value of the unsold pull-tab or
tipboard tickets for claims for a refund or credit of taxes
filed on the February 1999 monthly return. The refund claimed
will be applied as a credit against tax owing under this chapter
on the February monthly return. If the refund claimed exceeds
the tax owing on the February monthly return, that amount will
be refunded. The amount refunded will bear interest pursuant to
section 270.76 from 90 days after the claim is filed.
Sec. 5. Minnesota Statutes 1996, section 297E.02,
subdivision 6, is amended to read:
Subd. 6. [COMBINED RECEIPTS TAX.] In addition to the taxes
imposed under subdivisions 1 and 4, a tax is imposed on the
combined receipts of the organization. As used in this section,
"combined receipts" is the sum of the organization's gross
receipts from lawful gambling less gross receipts directly
derived from the conduct of bingo, raffles, and paddlewheels, as
defined in section 297E.01, subdivision 8, for the fiscal year.
The combined receipts of an organization are subject to a tax
computed according to the following schedule:
If the combined receipts for the The tax is:
fiscal year are:
Not over $500,000 zero
Over $500,000, but not over
$700,000 two 1.9 percent of the
amount over $500,000, but
not over $700,000
Over $700,000, but not over
$900,000 $4,000 $3,800 plus four
3.8 percent of the
amount over $700,000, but
not over $900,000
Over $900,000 $12,000 $11,400 plus six
5.7 percent of the
amount over $900,000
Sec. 6. Minnesota Statutes 1997 Supplement, section
349.19, subdivision 2a, is amended to read:
Subd. 2a. [TAX REFUND OR CREDIT.] (a) Each organization
that receives a refund or credit under section 297E.02,
subdivision 4, paragraph (d), must within four business days of
receiving a refund under that paragraph deposit the refund in
the organization's gambling account.
(b) In addition, each organization must annually calculate
5.26 percent of the sum of the amount of tax it paid under:
(1) section 297E.02, subdivision 1, on gross receipts, less
prizes paid, after August 1, 1998; and
(2) section 297E.02, subdivision 6, on combined receipts
received after August 1, 1998.
(c) The calculated amount must be reported to the board on
a form prescribed by the board by March 20 of the year after the
calendar year for which the calculated amount is made. The
calculated amount must be filed as part of the organization's
report of expenditure of profits from lawful gambling required
under section 349.19, subdivision 5.
(d) The organization may expend the tax refund or credit
issued under section 297E.02, subdivision 4, paragraph (d), plus
the amount calculated under paragraph (b), only for lawful
purposes, other than lawful purposes described in section
349.12, subdivision 25, paragraph (a), clauses (8), (9), and
(12). Amounts received as refunds or allowed as credits subject
to this paragraph must be spent for qualifying lawful purposes
no later than one year after the refund or credit is received or
the tax savings calculated under paragraph (b).
Sec. 7. [EFFECTIVE DATE.]
Sections 3 to 5 are effective July 1, 1998.
ARTICLE 14
HOUSING
Section 1. [HOUSING APPROPRIATIONS.]
The sums in the columns marked "APPROPRIATIONS" are
appropriated from the general fund, or another named fund, to
the agencies and for the purposes specified in this article, to
be available for the fiscal years indicated for each purpose.
The figures "1998" and "1999," where used in this act, mean that
the appropriation or appropriations listed under them are
available for the year ending June 30, 1998, or June 30, 1999,
respectively. The term "first year" means the fiscal year
ending June 30, 1998, and "second year" means the fiscal year
ending June 30, 1999.
SUMMARY BY FUND
1998 1999
General $ -0- $10,000,000
TOTAL $ -0- $10,000,000
APPROPRIATIONS
Available for the Year
Ending June 30
1998 1999
Sec. 2. MINNESOTA HOUSING
FINANCE AGENCY -0- 10,000,000
The amounts that may be spent from this
appropriation for certain programs are
specified below.
This appropriation is for transfer to
the housing development fund for the
programs specified and is part of the
agency's budget base.
(a) Affordable Rental Investment Fund
$10,000,000 in 1999 is for the
affordable rental investment fund
program under Minnesota Statutes,
section 462A.21, subdivision 8b, to
finance the acquisition,
rehabilitation, and debt restructuring
of federally assisted rental property
and for making equity take-out loans
under Minnesota Statutes, section
462A.05, subdivision 39. The owner of
the rental property must agree to
participate in the applicable federally
assisted housing program and to extend
any existing low-income affordability
restrictions on the housing for the
maximum term permitted. The owner must
also enter into an agreement that gives
local units of government, housing and
redevelopment authorities, and
nonprofit housing organizations the
right of first refusal if the rental
property is offered for sale. Priority
must be given to properties with the
longest remaining term under an
agreement for federal rental
assistance. Priority must also be
given among comparable rental housing
developments to developments that are
or will be owned by a local government
unit, a housing and redevelopment
authority, or a nonprofit housing
organization. This appropriation is
reduced by the amount of an
appropriation for the affordable rental
investment fund program enacted in any
other legislation in the 1998 regular
session of the Minnesota Legislature.
(b) Administrative Spending Limit
Notwithstanding Laws 1997, chapter 200,
article 1, section 6, the spending
limit on cost of general administration
of housing finance agency programs is
$11,684,000 in fiscal year 1998 and
$13,278,000 in fiscal year 1999.
Sec. 3. [TRANSFER OF BONDING AUTHORITY.]
The Minnesota housing finance agency may enter into an
agreement with the city of Minnetonka for a residential rental
project which received an allocation from the housing pool in
1998, whereby the city of Minnetonka may issue up to $500,000 in
obligations pursuant to bonding authority allocated to the
Minnesota housing finance agency in 1998 under Minnesota
Statutes, section 474A.03.
Sec. 4. Minnesota Statutes 1997 Supplement, section
462A.05, subdivision 39, is amended to read:
Subd. 39. [EQUITY TAKE-OUT LOANS.] The agency may make
equity take-out loans to owners of section 8 project-based and
section 236 federally assisted rental property upon which the
agency holds a first mortgage. The owner of a section 8
project-based federally assisted rental property must agree to
participate in the section 8 federal assistance program and
extend the low-income affordability restrictions on the housing
for the maximum term of the section 8 federal assistance
contract. The owner of section 236 rental property must agree
to participate in the section 236 interest reduction payments
program, to extend any existing low-income affordability
restrictions on the housing, and to extend any rental assistance
payments for the maximum term permitted under the agreement for
rental assistance payments. The An equity take-out loan must be
secured by a subordinate loan on the property and may include
additional appropriate security determined necessary by the
agency.
Sec. 5. Minnesota Statutes 1996, section 462A.222,
subdivision 3, is amended to read:
Subd. 3. [ALLOCATION PROCEDURE.] (a) Projects will be
awarded tax credits in three competitive rounds on an annual
basis. The date for applications for each round must be
determined by the agency. No allocating agency may award tax
credits prior to the application dates established by the agency.
(b) Each allocating agency must meet the requirements of
section 42(m) of the Internal Revenue Code of 1986, as amended
through December 31, 1989, for the allocation of tax credits and
the selection of projects.
(c) For projects that are eligible for an allocation of
credits pursuant to section 42(h)(4) of the Internal Revenue
Code of 1986, as amended, tax credits may only be allocated if
the project satisfies the requirements of the allocating
agency's qualified allocation plan. For projects that are
eligible for an allocation of credits pursuant to section
42(h)(4) of the Internal Revenue Code of 1986, as amended, for
which the agency is the issuer of the bonds for the project, or
the issuer of the bonds for the project is located outside the
jurisdiction of a city or county that has received reserved tax
credits, the applicable allocation plan is the agency's
qualified allocation plan.
(d) For applications submitted for the first round, an
allocating agency may allocate tax credits only to the following
types of projects:
(1) in the metropolitan area:
(i) new construction or substantial rehabilitation of
projects in which, for the term of the extended use period, at
least 75 percent of the total tax credit units are single-room
occupancy, efficiency, or one bedroom units and which are
affordable by households whose income does not exceed 30 percent
of the median income;
(ii) new construction or substantial rehabilitation family
housing projects that are not restricted to persons who are 55
years of age or older and in which, for the term of the extended
use period, at least 75 percent of the tax credit units contain
two or more bedrooms and at least one-third of the 75 percent
contain three or more bedrooms; or
(iii) substantial rehabilitation projects in neighborhoods
targeted by the city for revitalization;
(2) outside the metropolitan area, projects which meet a
locally identified housing need and which are in short supply in
the local housing market as evidenced by credible data submitted
with the application;
(3) projects that are not restricted to persons of a
particular age group and in which, for the term of the extended
use period, a percentage of the units are set aside and rented
to persons:
(i) with a serious and persistent mental illness as defined
in section 245.462, subdivision 20, paragraph (c);
(ii) with a developmental disability as defined in United
States Code, title 42, section 6001, paragraph (5), as amended
through December 31, 1990;
(iii) who have been assessed as drug dependent persons as
defined in section 254A.02, subdivision 5, and are receiving or
will receive care and treatment services provided by an approved
treatment program as defined in section 254A.02, subdivision 2;
(iv) with a brain injury as defined in section 256B.093,
subdivision 4, paragraph (a); or
(v) with permanent physical disabilities that substantially
limit one or more major life activities, if at least 50 percent
of the units in the project are accessible as provided under
Minnesota Rules, chapter 1340;
(4) projects, whether or not restricted to persons of a
particular age group, which preserve existing subsidized housing
which is subject to prepayment if the use of tax credits is
necessary to prevent conversion to market rate use; or
(5) projects financed by the Farmers Home Administration,
or its successor agency, which meet statewide distribution goals.
(e) Before the date for applications for the second round,
the allocating agencies other than the agency shall return all
uncommitted and unallocated tax credits to the pool from which
they were allocated, along with copies of any allocation or
commitment. In the second round, the agency shall allocate the
remaining credits from the regional pools to projects from the
respective regions.
(f) In the third round, all unallocated tax credits must be
transferred to a unified pool for allocation by the agency on a
statewide basis.
(g) Unused portions of the state ceiling for low-income
housing tax credits reserved to cities and counties for
allocation may be returned at any time to the agency for
allocation.
(h) If an allocating agency determines, at any time after
the initial commitment or allocation for a specific project,
that a project is no longer eligible for all or a portion of the
low-income housing tax credits committed or allocated to the
project, the credits must be transferred to the agency to be
reallocated pursuant to the procedures established in paragraphs
(e) to (g); provided that if the tax credits for which the
project is no longer eligible are from the current year's annual
ceiling and the allocating agency maintains a waiting list, the
allocating agency may continue to commit or allocate the credits
until not later than October 1, at which time any uncommitted
credits must be transferred to the agency.
Sec. 6. [471.9997] [FEDERALLY ASSISTED RENTAL HOUSING;
IMPACT STATEMENT.]
At least 12 months before termination of participation in a
federally assisted rental housing program, including
project-based section 8 and section 236 rental housing, the
owner of the federally assisted rental housing must submit a
statement regarding the impact of termination on the residents
of the rental housing to the governing body of the local
government unit in which the housing is located. The impact
statement must identify the number of units that will no longer
be subject to rent restrictions imposed by the federal program,
the estimated rents that will be charged as compared to rents
charged under the federal program, and actions the owner will
take to assist displaced tenants in obtaining other housing. A
copy of the impact statement must be provided to each resident
of the affected building, the Minnesota housing finance agency,
and, if the property is located in the metropolitan area as
defined in section 473.121, subdivision 2, the metropolitan
council.
Sec. 7. Laws 1997, Second Special Session chapter 2,
section 4, subdivision 3, is amended to read:
Subd. 3. Community Rehabilitation
Fund Program 4,500,000
This is a one-time appropriation from
the general fund for the community
rehabilitation fund program under
Minnesota Statutes, section 462A.206.
Of this amount, up to $500,000 is
available for grants for damages
occurring after June 10, 1997, in an
area designated under a presidential
declaration of major
disaster. Pursuant to a plan approved
by the agency, grants or loans may be
made without regard to the income of
the borrower in communities where at
least 20 percent of the housing stock
is subject to acquisition and buyout as
a result of the 1997 flooding. The
grants or loans made without regard to
the borrower's income shall not exceed
the maximum grant or loan amount
available to buyout households. This
appropriation is available until
expended.
Sec. 8. [EFFECTIVE DATES.]
Sections 3, 4, and 7 are effective the day following final
enactment.
ARTICLE 15
SANITARY SEWERS
Section 1. [LEGISLATIVE PURPOSE AND POLICY.]
The legislature determines that in the cities of Farwell
and Kensington there are serious problems of water pollution and
disposal of sewage which cannot be effectively or economically
dealt with by existing government units under existing laws.
The legislature, therefore, declares that for the protection of
the public health, safety, and welfare of these areas, for the
preservation and best use of waters and other natural resources
of the state in the area, for the prevention, control, and
abatement of water pollution in the area, and for the efficient
and economic collection, treatment, and disposal of sewage, it
is necessary to establish in Minnesota for said area a sanitary
sewer board.
Sec. 2. [DEFINITIONS.]
Subdivision 1. [APPLICATION.] The terms defined in this
section shall have the meaning given them unless otherwise
provided or indicated by the context.
Subd. 2. [ACQUISITION AND BETTERMENT.] "Acquisition" and
"betterment" shall have the meanings given them in Minnesota
Statutes, chapter 475.
Subd. 3. [AGENCY.] "Agency" means the Minnesota pollution
control agency created and established by Minnesota Statutes,
chapter 116.
Subd. 4. [AGRICULTURAL PROPERTY.] "Agricultural property"
means land as is classified agricultural land within the meaning
of Minnesota Statutes, section 273.13, subdivision 23.
Subd. 5. [CURRENT COSTS OF ACQUISITION, BETTERMENT, AND
DEBT SERVICE.] "Current costs of acquisition, betterment, and
debt service" means interest and principal estimated to be due
during the budget year on bonds issued to finance said
acquisition and betterment and all other costs of acquisition
and betterment estimated to be paid during such year from funds
other than bond proceeds and federal or state grants.
Subd. 6. [DISTRICT DISPOSAL SYSTEM.] "District disposal
system" means any and all of the interceptors or treatment works
owned, constructed, or operated by the board unless designated
by the board as local sanitary sewer facilities.
Subd. 7. [FARWELL-KENSINGTON SANITARY DISTRICT AND
DISTRICT.] "Farwell-Kensington sanitary district" and "district"
mean the area over which the sanitary sewer board has
jurisdiction which shall include all that part of Douglas county
and Pope county described as follows, to wit:
(1) all of the land within the corporate limits of the city
of Farwell;
(2) all of the land within the corporate limits of the city
of Kensington.
Subd. 8. [INTERCEPTOR.] "Interceptor" means any sewer and
necessary appurtenances thereto, including but not limited to,
mains, pumping stations, and sewage flow regulating and
measuring stations, which is designed for or used to conduct
sewage originating in more than one local government unit, or
which is designed or used to conduct all or substantially all
the sewage originating in a single local government unit from a
point of collection in that unit to an interceptor or treatment
works outside that unit, or which is determined by the board to
be a major collector of sewage used or designed to serve a
substantial area in the district.
Subd. 9. [LOCAL GOVERNMENT UNIT OR GOVERNMENT
UNIT.] "Local government unit" or "government unit" means any
municipal or public corporation or governmental or political
subdivision or agency located in whole or in part in the
district, authorized by law to provide for the collection and
disposal of sewage.
Subd. 10. [LOCAL SANITARY SEWER FACILITIES.] "Local
sanitary sewer facilities" means all or any part of any disposal
system in the district other than the district disposal system.
Subd. 11. [MUNICIPALITY.] "Municipality" means any city or
town located in whole or in part in the district.
Subd. 12. [PERSON.] "Person" means any individual,
partnership, corporation, cooperative, or other organization or
entity, public or private.
Subd. 13. [POLLUTION AND SEWAGE SYSTEM.] "Pollution" and
"sewage system" shall have the meanings given them in Minnesota
Statutes, section 115.01.
Subd. 14. [SANITARY SEWER BOARD OR BOARD.] "Sanitary sewer
board" or "board" means the sanitary sewer board established for
the Farwell-Kensington sanitary district as provided in section
3.
Subd. 15. [SEWAGE.] "Sewage" means all liquid or
water-carried waste products from whatever sources derived,
together with such groundwater infiltration and surface water as
may be present.
Subd. 16. [TOTAL COSTS OF ACQUISITION AND BETTERMENT AND
COSTS OF ACQUISITION AND BETTERMENT.] "Total costs of
acquisition and betterment" and "costs of acquisition and
betterment" mean all acquisition and betterment expenses which
are permitted to be financed out of bond proceeds issued in
accordance with section 13, subdivision 4, whether or not such
expenses are in fact financed out of such bond proceeds.
Subd. 17. [TREATMENT WORKS AND DISPOSAL SYSTEM.]
"Treatment works" and "disposal system" shall have the meanings
given them in Minnesota Statutes, section 115.01.
Sec. 3. [SANITARY SEWER BOARD.]
Subdivision 1. [ESTABLISHMENT.] A sanitary sewer board
with jurisdiction in the Farwell-Kensington sanitary district is
established as a public corporation and political subdivision of
the state with perpetual succession and all the rights, powers,
privileges, immunities, and duties which may be validly granted
to or imposed upon a municipal corporation, as provided in this
article.
Subd. 2. [NUMBER, TERMS, AND ELECTION OF MEMBERS.] The
board has five members, two elected at large from the city of
Farwell and three elected at large from the city of Kensington.
The terms of the members are four years and until a successor is
qualified, except that for the first election in 1998 one at
large seat from Farwell and one from Kensington shall be for two
years and until a successor is qualified. The short term shall
be determined by lot and designated before filings open by the
municipal clerks of the two cities. The election shall be
conducted by the municipal clerks as provided in Minnesota
Statutes, chapter 205, at the same time as the city council
elections are held. Vacancies, removal, and qualification for
office are as otherwise provided by statute for elected city
council members.
Subd. 3. [CERTIFICATES OF SELECTION, OATH OF OFFICE.] A
certificate of selection of every board member selected under
subdivision 2 stating the term shall be made by the respective
municipal clerks. The certificates, with the approval appended
by other authority, if required, shall be filed with the
secretary of state. Counterparts shall be furnished to the
board member and the secretary of the board. Each member shall
qualify by taking and subscribing the oath of office prescribed
by the Minnesota Constitution, article V, section 6. Such oath,
duly certified by the official administering the same, shall be
filed with the secretary of state and the secretary of the board.
Subd. 4. [COMPENSATION OF BOARD MEMBERS.] Each board
member shall be paid a per diem compensation for meetings and
for such other services in such amount as may be specifically
authorized by the board from time to time. Per diem
compensation shall not exceed $2,000 in any one year. All
members of the board shall be reimbursed for all reasonable
expenses incurred in the performance of their duties as
determined by the board.
Sec. 4. [GENERAL PROVISIONS FOR ORGANIZATION AND OPERATION
OF BOARD.]
Subdivision 1. [OFFICERS, MEETINGS, SEAL.] A majority of
the members shall constitute a quorum at all meetings of the
board, but a lesser number may meet and adjourn from time to
time and compel the attendance of absent members. The board
shall meet regularly at such time and place as the board shall
by resolution designate. Special meetings may be held at any
time upon call of the chair or any two members, upon written
notice sent by mail to each member at least three days prior to
the meeting, or upon such other notice as the board by
resolution may provide, or without notice if each member is
present or files with the secretary a written consent to the
meeting either before or after the meeting. Except as otherwise
provided in this article, any action within the authority of the
board may be taken by the affirmative vote of a majority of the
board at a regular or adjourned regular meeting or at a duly
held special meeting, but in any case only if a quorum is
present. All meetings of the board shall be open to the public
as provided in Minnesota Statutes, section 471.705. The board
may adopt a seal, which shall be officially and judicially
noticed, to authenticate instruments executed by its authority,
but omission of the seal shall not affect the validity of any
instrument.
Subd. 2. [CHAIR.] The board shall elect a chair from its
membership. The term of the chair shall expire on January 1 of
each year. The chair shall preside at all meetings of the
board, if present, and shall perform all other duties and
functions usually incumbent upon such an officer, and all
administrative functions assigned to the chair by the board.
The board shall elect a vice-chair from its membership to act
for the chair during a temporary absence or disability.
Subd. 3. [SECRETARY AND TREASURER.] The board shall select
a person or persons who may but need not be a member or members
of the board, to act as its secretary and treasurer. The
secretary and treasurer shall hold office at the pleasure of the
board, subject to the terms of any contract of employment which
the board may enter into with the secretary or treasurer. The
secretary shall record the minutes of all meetings of the board,
and shall be custodian of all books and records of the board
except such as the board shall entrust to the custody of a
designated employee. The board may appoint a deputy to perform
any and all functions of either the secretary or the treasurer.
A secretary or treasurer who is not a member of the board or a
deputy of either shall not have any right to vote.
Subd. 4. [GENERAL MANAGER.] The board may appoint a
general manager who shall be selected solely upon the basis of
training, experience, and other qualifications and who shall
serve at the pleasure of the board and at a compensation to be
determined by the board. The general manager need not be a
resident of the district and may also be selected by the board
to serve as either secretary or treasurer, or both, of the
board. The general manager shall attend all meetings of the
board, but shall not vote, and shall:
(1) see that all resolutions, rules, regulations, or orders
of the board are enforced;
(2) appoint and remove, upon the basis of merit and
fitness, all subordinate officers and regular employees of the
board except the secretary and the treasurer and their deputies;
(3) present to the board plans, studies, and other reports
prepared for board purposes and recommend to the board for
adoption such measures as the general manager deems necessary to
enforce or carry out the powers and duties of the board, or the
efficient administration of the affairs of the board;
(4) keep the board fully advised as to its financial
condition, and prepare and submit to the board, and to the
governing bodies of the local government units, the board's
annual budget and such other financial information as the board
may request;
(5) recommend to the board for adoption such rules and
regulations as he or she deems necessary for the efficient
operation of a district disposal system and all local sanitary
sewer facilities over which the board may assume responsibility
as provided in section 18; and
(6) perform such other duties as may be prescribed by the
board.
Subd. 5. [PUBLIC EMPLOYEES.] The general manager and all
persons employed by the general manager shall be public
employees, and shall have all the rights and duties conferred on
public employees under Minnesota Statutes, sections 179A.01 to
179A.25. The compensation and conditions of employment of such
employees shall not be governed by any rule applicable to state
employees in the classified service nor to any of the provisions
of Minnesota Statutes, chapter 15A, unless the board so provides.
Subd. 6. [PROCEDURES.] The board shall adopt resolutions
or bylaws establishing procedures for board action, personnel
administration, recordkeeping, investment policy, approving
claims, authorizing or making disbursements, safekeeping funds,
and audit of all financial operations of the board.
Subd. 7. [SURETY BONDS AND INSURANCE.] The board may
procure surety bonds for its officers and employees and in such
amounts as are deemed necessary to assure proper performance of
their duties and proper accounting for funds in their custody.
It may procure insurance against such risks to property and such
liability of the board and its officers, agents, and employees
for personal injuries or death and property damage and
destruction and in such amounts as may be deemed necessary or
desirable, with the force and effect stated in Minnesota
Statutes, chapter 466.
Sec. 5. [COMPREHENSIVE PLAN.]
Subdivision 1. [BOARD PLAN AND PROGRAM.] The board shall
adopt a comprehensive plan for the collection, treatment, and
disposal of sewage in the district for such designated period as
the board deems proper and reasonable. The board shall prepare
and adopt subsequent comprehensive plans for the collection,
treatment, and disposal of sewage in the district for each such
succeeding designated period as the board deems proper and
reasonable. The plan shall take into account the preservation
and best and most economic use of water and other natural
resources in the area; the preservation, use and potential for
use of lands adjoining waters of the state to be used for the
disposal of sewage; and the impact such a disposal system will
have on present and future land use in the area affected
thereby. Such plans shall include the general location of
needed interceptors and treatment works, a description of the
area that is to be served by the various interceptors and
treatment works, a long-range capital improvements program and
such other details as the board shall deem appropriate. In
developing the plans, the board shall consult with persons
designated for such purpose by governing bodies of any municipal
or public corporation or governmental or political subdivision
or agency within the district to represent such entities and
shall consider the data, resources, and input offered to the
board by such entities and any planning agency acting on behalf
of one or more such entities. Each such plan, when adopted,
shall be followed in the district and may be revised as often as
the board deems necessary.
Subd. 2. [COMPREHENSIVE PLANS; HEARING.] Before adopting
any subsequent comprehensive plan the board shall hold a public
hearing on such proposed plan at such time and place in the
district as it shall determine. The hearing may be continued
from time to time. Not less than 45 days before the hearing,
the board shall publish notice thereof in a newspaper or
newspapers having general circulation in the district, stating
the date, time, and place of the hearing, and the place where
the proposed plan may be examined by any interested person. At
the hearing, all interested persons shall be permitted to
present their views on the plan.
Subd. 3. [MUNICIPAL PLANS AND PROGRAMS; COORDINATION WITH
BOARD'S RESPONSIBILITIES.] Before undertaking the construction
of new sewers of other disposal facilities or the substantial
alteration or improvement of any existing sewers or other
disposal facilities, each local government unit may, and shall
if the construction or alteration of any sewage disposal
facilities is contemplated by such government unit, adopt a
comprehensive plan and program for the collection, treatment,
and disposal of sewage for which the local government unit is
responsible, coordinated with the board's comprehensive plan,
and may revise the same as often as deems necessary. Each such
local plan or revision thereof shall be submitted forthwith to
the board for review and shall be subject to the approval of the
board as to those features of the plan affecting the board's
responsibilities as determined by the board. Any such features
disapproved by the board shall be modified in accordance with
the board's recommendations. No construction project involving
such features shall be undertaken by the local government unit
unless its governing body shall first find the project to be in
accordance with the government unit's comprehensive plan and
program as approved by the board. Prior to approval by the
board of the comprehensive plan and program of any local
government unit in the district, no construction project shall
be undertaken by such government unit unless approval of the
project is first secured from the board as to those features of
the project affecting the board's responsibilities as determined
by the board.
Sec. 6. [SEWER SERVICE FUNCTION.]
Subdivision 1. [DUTY OF BOARD; ACQUISITION OF EXISTING
FACILITIES; NEW FACILITIES.] At any time after the board has
become organized it shall assume ownership of all existing
interceptors and treatment works which will be needed to
implement the board's comprehensive plan for the collection,
treatment, and disposal of sewage in the district, in the manner
and subject to the conditions prescribed in subdivision 2, and
shall design, acquire, construct, better, equip, operate, and
maintain all additional interceptors and treatment works which
will be needed for such purpose. The board shall assume
ownership of all treatment works owned by a local government
unit if any part of such treatment works will be needed for such
purpose.
Subd. 2. [METHOD OF ACQUISITION; EXISTING DEBT.] The board
may require any local government unit to transfer to the board,
all of its right, title, and interest in any interceptors or
treatment works and all necessary appurtenances thereto owned by
such local government unit which will be needed for the purpose
stated in subdivision 1. Appropriate instruments of conveyance
for all such property shall be executed and delivered to the
board by the proper officers of each local government unit
concerned. The board, upon assuming ownership of any such
interceptors or treatment works, shall become obligated to pay
to such local government unit amounts sufficient to pay when due
all remaining principal of and interests on bonds issued by such
local government unit for the acquisition or betterment of the
interceptors or treatment works taken over. The board shall
also assume the same obligation with respect to so much of any
other existing disposal system owned by a local government unit
as the board determines to have been replaced or rendered
useless by the district disposal system. The amounts to be paid
under this subdivision may be offset against any amount to be
paid to the board by the local government unit as provided in
section 9. The board shall not be obligated to pay the local
government unit anything in addition to the assumption of debt
herein provided for.
Subd. 3. [EXISTING JOINT POWERS BOARD.] Effective January
1, 2000, or such earlier date as determined by the board, the
corporate existence of the joint powers board created by
agreement among local government units pursuant to Minnesota
Statutes, section 471.59, to provide the financing, acquisition,
construction, improvement, extension, operation, and maintenance
of facilities for the collection, treatment, and disposal of
sewage shall terminate. All persons regularly employed by such
joint powers board on that date shall be employees of the board,
and may at their option become members of the retirement system
applicable to persons employed directly by the board or may
continue as members of a public retirement association under any
other law, to which they belonged before such date, and shall
retain all pension rights which they may have under such latter
laws, and all other rights to which they are entitled by
contract or law. The board shall make the employer's
contributions to pension funds of its employees. Such employees
shall perform such duties as may be prescribed by the board. On
January 1, 2000, or such earlier date, all funds of such joint
powers board then on hand, and all subsequent collections of
taxes, special assessments, or service charges or any other sums
due the joint powers board or levied, or imposed by or for such
joint powers board shall be transferred to or made payable to
the sanitary sewer board and the county auditor shall remit the
sums to the board. The local government units otherwise
entitled to such cash, taxes, assessments, or service charges
shall be credited with such amounts, and such credits shall be
offset against any amounts to be paid by them to the board as
provided in section 9. On January 1, 2000, or such earlier
date, the board shall succeed to and become vested with all
right, title, and interest in and to any property, real or
personal, owned or operated by such joint powers board; and
prior to that date the proper officers of such joint powers
board shall execute and deliver to the sanitary sewer board all
deeds, conveyances, bills of sale, and other documents or
instruments required to vest in the board good and marketable
title to all such real or personal property, but this article
shall operate as such transfer and conveyance to the board of
such real or personal property, if not so transferred, as may be
required under the law or under the circumstances. On January
1, 2000, or such earlier date, the board shall become obligated
to pay or assume all outstanding bonds or other debt and all
contracts or obligations incurred by such joint powers board,
and all such bonds, obligations, or debts of the joint powers
board outstanding on the date this article becomes effective are
validated.
Subd. 4. [CONTRACTS BETWEEN LOCAL GOVERNMENT UNITS.] The
board may terminate upon 60 days mailed notice to the
contracting parties, any existing contract between or among
local government units requiring payments by a local government
unit to any other local government unit, for the use of a
disposal system, or as reimbursement of capital costs of such a
disposal system, all or part of which will be needed to
implement the board's comprehensive plan. All contracts between
or among local government units for use of a disposal system
entered into subsequent to the date on which this article
becomes effective shall be submitted to the board for approval
as to those features affecting the board's responsibilities as
determined by the board and shall not become effective until
such approval is given.
Sec. 7. [SEWAGE COLLECTION AND DISPOSAL; POWERS.]
Subdivision 1. [POWERS.] In addition to all other powers
conferred upon the board in this article, the board has the
powers specified in this section.
Subd. 2. [DISCHARGE OF TREATED SEWAGE.] The board shall
have the right to discharge the effluent from any treatment
works operated by it into any waters of the state, subject to
approval of the agency if required and in accordance with any
effluent or water quality standards lawfully adopted by the
agency, any interstate agency or any federal agency having
jurisdiction.
Subd. 3. [UTILIZATION OF DISTRICT SYSTEM.] The board may
require any person or local government unit to provide for the
discharge of any sewage, directly or indirectly, into the
district disposal system, or to connect any disposal system or a
part thereof with the district disposal system wherever
reasonable opportunity therefore is provided; may regulate the
manner in which such connections are made; may require any
person or local government unit discharging sewage into the
disposal system to provide preliminary treatment therefore; may
prohibit the discharge into the district disposal system of any
substance which it determines will or may be harmful to the
system or any persons operating it; may prohibit any extraneous
flow into the system; and may require any local government unit
to discontinue the acquisition, betterment, or operation of any
facility for such unit's disposal system wherever and so far as
adequate service is or will be provided by the district disposal
system.
Sec. 8. [BUDGET.]
Except as otherwise specifically provided in this article,
the board is subject to Minnesota Statutes, section 275.065,
popularly known as the Truth in Taxation Act. The board shall
prepare and adopt, on or before September 15 of each year, a
budget showing for the following calendar year or other fiscal
year determined by the board, sometimes referred to in this
article as the budget year, estimated receipts of money from all
sources including, but not limited to, payments by each local
government unit, federal or state grants, taxes on property, and
funds on hand at the beginning of the year, and estimated
expenditures for:
(1) costs of operation, administration, and maintenance of
the district disposal system;
(2) cost acquisition and betterment of the district
disposal system; and
(3) debt service, including principal and interest, on
general obligation bonds and certificates issued pursuant to
section 13, obligations and debts assumed under section 6,
subdivisions 2 and 3, and any money judgments entered by a court
of competent jurisdiction.
Expenditures within these general categories, and such
others as the board may from time to time determine, shall be
itemized in such detail as the board shall prescribe. The board
and its officers, agents, and employees shall not spend money
for any purpose other than debt service without having set forth
such expense in the budget nor in excess of the amount set forth
in the budget therefor, and no obligation to make sure an
expenditure shall be enforceable except as the obligation of the
person or persons incurring it; provided that the board may
amend the budget at any time by transferring from one purpose to
another any sums except money for debt service and bond proceeds
or by increasing expenditures in any amount by which cash
receipts during the budget year actually exceed the total
amounts designated in the original budget. The creation of any
obligation pursuant to section 13 or the receipts of any federal
or state grant is a sufficient budget designation of the
proceeds for the purpose for which it is authorized, and of the
tax or other revenue pledged to pay the obligation and interest
on it, whether or not specifically included in any annual budget.
Sec. 9. [ALLOCATION OF COSTS.]
Subdivision 1. [DEFINITION OF CURRENT COSTS.] The
estimated cost of administration, operation, maintenance, and
debt service of the district disposal system to be paid by the
board in each fiscal year and the estimated costs of acquisition
and betterment of the system which are to be paid during the
year from funds other than state or federal grants and bond
proceeds and all other previously unallocated payments made by
the board pursuant to this article in such year are referred to
as current costs.
Subd. 2. [COLLECTION OF CURRENT COSTS.] Current costs
shall be collected as follows:
(a) Allocation of current costs: current costs may be
allocated to local government units in the district on an
equitable basis as the board may from time to time determine by
resolution to be fair and reasonable and in the best interests
of the district. In making the allocation the board may provide
for the deferment of payment of all or part of current costs,
the reallocation of deferred costs and the reimbursement of
reallocated deferred costs on an equitable basis as the board
may from time to time determine by resolution to be fair and
reasonable and in the best interests of the district. The
adoption or revision of a method of allocation, deferment,
reallocation, or reimbursement used by the board shall be made
by the affirmative vote of at least two-thirds of the members of
the board.
(b) Direct collection: upon approval of at least
two-thirds of the members of the board, the board may provide
for direct collection of current costs by monthly or other
periodic billing of sewer users.
Sec. 10. [GOVERNMENT UNITS; PAYMENTS TO BOARD.]
Subdivision 1. [OBLIGATIONS OF GOVERNMENT UNITS TO THE
BOARD.] Each government unit shall pay to the board all sums
charged to it as provided in section 9, at the times and in the
manner determined by the board. The governing body of each such
government unit shall take all action that may be necessary to
provide the funds required for such payments and to make the
same when due.
Subd. 2. [AMOUNTS DUE BOARD; WHEN PAYABLE.] Charges
payable to the board by local government units may be made
payable at such times during each year as the board determines,
after it has taken into account the dates on which taxes,
assessments, revenue collections, and other funds become
available to the government unit required to pay such charges.
Subd. 3. [GENERAL POWERS OF GOVERNMENT UNITS; LOCAL TAX
LEVIES.] To accomplish any duty imposed on it by the board, the
governing body of every government unit may, in addition to the
powers granted in this article and in any other law or charter,
exercise the powers granted any municipality by Minnesota
Statutes, chapters 117, 412, 429, and 475 and sections 115.46,
444.075, and 471.59, with respect to the area of the government
unit located in the district. In addition thereto, the
governing body of every government unit located in whole or part
in the district may levy taxes upon all taxable property in that
part of the government unit located in the district for all or a
part of the amount payable to the board, but if the levy is for
only part of the amounts payable to the board, the governing
body of the government unit may levy additional taxes on the
entire net tax capacity of all taxable property for all or a
part of the balance remaining payable. The taxes levied under
this subdivision shall be assessed and extended as a tax upon
such taxable property by the county auditor for the next
calendar year, free from any limitation of rate or amount
imposed by law or charter. The tax shall be collected and
remitted in the same manner as other general taxes of the
government unit.
Subd. 3a. [ALTERNATE LEVY.] In lieu of levying taxes on
all taxable property pursuant to subdivision 3, the governing
body of the government unit may elect to levy taxes upon the net
tax capacity of all taxable property, except agricultural
property, and upon only 25 percent of the net tax capacity of
all agricultural property, in that part of the government unit
located in the district for all or a part of the amounts payable
to the board. If the levy is for only part of the amounts
payable to the board, the governing body may levy additional
taxes on the entire net tax capacity of all such property,
including agricultural property, for all or a part of the
balance of such amounts. The taxes shall be assessed and
extended as a tax upon such taxable property by the county
auditor for the next calendar year, free from any limitation of
rate or amount imposed by law or charge, and shall be collected
and remitted in the same manner as other general taxes of the
government unit. In computing the tax capacity pursuant to this
subdivision, the county auditor shall include only 25 percent of
the net tax capacity of all taxable agricultural property and
100 percent of the net tax capacity of all other taxable
property in that part of the government unit located within the
district and, in spreading the levy, the auditor shall apply the
tax rate upon the same percentages of agricultural and
nonagricultural taxable property. If the government unit elects
to levy taxes under this subdivision and any of the taxable
agricultural property is reclassified so as to no longer qualify
as agricultural property, it shall be subject to additional
taxes. The additional taxes shall be in an amount which,
together with any such additional taxes previously levied and
the estimated collection of additional taxes subsequently levied
on any other such reclassified property, is determined by the
governing body of the government unit to be at least sufficient
to reimburse each other government unit for any excess current
costs reallocated to it as a result of the board deferring any
current costs under section 9 on account of the difference
between the amount of such current costs initially allocated to
each government unit based on the total net tax capacity of all
taxable property in the district and the amount of such current
costs reallocated to each government unit based on 25 percent of
the net tax capacity of agricultural property and 100 percent of
the net tax capacity of all other taxable property in the
district. Any reimbursement shall be made on terms which the
board determines to be just and reasonable. These additional
taxes may be levied in any greater amount as the governing body
of the government unit determines to be appropriate, provided
that in no event shall the total amount of the additional taxes
exceed the difference between:
(1) the total amount of taxes which would have been levied
upon such reclassified property to help pay current costs
charged in each year to the government unit by the board if that
portion of such costs, if any, initially allocated by the board
solely on the basis of 100 percent of the net tax capacity of
all taxable property in the district and then reallocated on the
basis of inclusion of only 25 percent of the net tax capacity of
agricultural property in the district was not reallocated and if
the amount of taxes levied by the government unit each year
under this subdivision to pay current costs had been based on
such initial allocation and had been imposed upon 100 percent of
the net tax capacity of all taxable property, including
agricultural property, in that part of the government unit
located in the district; and
(2) the amount of taxes theretofore levied each year under
this subdivision upon such reclassified property, plus interest
on the cumulative amount of such difference accruing each year
at the approximate average annual rate borne by bonds issued by
the board and outstanding at the beginning of such year or, if
no bonds are then outstanding, at such rate of interest which
may be determined by the board, but not exceeding the maximum
rate of interest which may then be paid on bonds issued by the
board. The additional taxes shall be a lien upon the
reclassified property assessed in the same manner and for the
same duration as all other ad valorem taxes levied upon the
property. The additional taxes shall be extended against the
reclassified property on the tax list for the current year,
provided however that no penalties or additional interest shall
be levied on such additional taxes if timely paid, and shall be
collected and remitted in the same manner as other general taxes
of the government unit.
Subd. 4. [DEBT LIMIT.] Any ad valorem taxes levied under
section 10, subdivision 3, or section 5 by the governing body of
a government unit to pay any sums charged to it by the board
pursuant to this article are not subject to, or counted towards,
any limit imposed by law on the levy of taxes upon taxable
property within any governmental unit.
Subd. 5. [DEFICIENCY TAX LEVIES.] If the local government
unit fails to make any payment to the board when due, the board
may certify to the auditor of the county in which the government
unit is located the amount required for payment of such amount
with interest at not more than the maximum rate per annum
authorized at that time on assessments pursuant to Minnesota
Statutes, section 429.061, subdivision 2. The auditor shall
levy and extend such amount as a tax upon all taxable property
in that part of the government unit located in the district, for
the next calendar year, free from any limitation imposed by law
or charter. Such tax shall be collected in the same manner as
other general taxes of the government unit, and the proceeds
thereof, when collected, shall be paid by the county treasurer
to the treasurer of the board and credited to the government
unit for which the tax was levied.
Sec. 11. [PUBLIC HEARING AND SPECIAL ASSESSMENTS.]
Subdivision 1. [PUBLIC HEARING REQUIREMENT ON SPECIFIC
PROJECT.] Before the board orders any project involving the
acquisition or betterment of any interceptor or treatment works,
all or a part of the cost of which will be allocated to local
government units pursuant to section 9, as current costs, the
board shall hold a public hearing on the proposed project
following two publications in a newspaper or newspapers having
general circulation in the district, stating the time and place
of the hearing, the general nature and location of the project,
the estimated total cost of acquisition and betterment, that
portion of such costs estimated to be paid out of federal and
state grants, and that portion of such costs estimated to be
allocated to each local government unit affected thereby. The
two publications shall be a week apart and the hearing shall be
at least three days after the last publication. Not less than
45 days before the hearing notice thereof shall also be mailed
to each clerk of all local government units in the district, but
failure to give mailed notice of any defects in the notice shall
not invalidate the proceedings. The project may include all or
part of one or more interceptors or treatment works. A hearing
is not required with respect to a project, no part of the costs
of which are to be allocated to local government units as the
current costs of acquisition, betterment, and debt service.
Subd. 2. [NOTICE TO BENEFITED PROPERTY OWNERS.] If the
governing body of any local government unit in the district
proposes to assess against benefited property within such units
all or any part of the allocable costs of the project as
provided in subdivision 5, such governing body shall, not less
than ten days prior to the hearing provided for in subdivision 1
cause mailed notice thereof to be given to the owner of each
parcel within the area proposed to be specially assessed and
shall also give one week's published notice of the hearing. The
notice of hearing shall contain the same information provided in
the notice published by the board pursuant to subdivision 1, and
in addition, a description of the area proposed to be assessed
by the local government unit. For the purpose of giving mailed
notice, owners shall be those shown to be on the records of the
county auditor or, in any county where tax statements are mailed
by the county treasurer, on the records of the county treasurer;
but other appropriate records may be used for this purpose.
However, as to properties which are tax exempt or subject to
taxation on a gross earnings basis and are not listed on the
records of the county auditor or the county treasurer, the
owners thereof shall be ascertained by any practicable means and
mailed notice shall be given them as herein provided. Failure
to give mailed notice or any defects in the notice shall not
invalidate the proceedings of the board or the local governing
body.
Subd. 3. [BOARD PROCEEDINGS PERTAINING TO HEARING.] Prior
to adoption of the resolution calling for such a hearing, the
board shall secure from the district engineer or some other
competent person of the board's selection a report advising it
in a preliminary way as to whether the proposed project is
feasible, necessary, and cost effective and as to whether it
should best be made as proposed or in connection with some other
project and the estimated costs of the project as recommended;
but no error or omission in such report shall invalidate the
proceeding. The board may also take such other steps prior to
the hearing, as well in its judgment provide helpful information
in determining the desirability and feasibility of the project
including, but not limited to, preparation of plans and
specifications and advertisement for bids thereon. The hearing
may be adjourned from time to time and a resolution ordering the
project may be adopted at any time within six months after the
date of hearing. In ordering the project the board may reduce
but not increase the extent of the project as stated in the
notice of hearing, unless another hearing is held, and shall
find that the project as ordered is in accordance with the
comprehensive plan and program adopted by the board pursuant to
section 5.
Subd. 4. [EMERGENCY ACTION.] If the board by resolution
adopted by the affirmative vote of not less than two-thirds of
its members determines that an emergency exists requiring the
immediate purchase of materials or supplies or the making of
emergency repairs, it may order the purchase of such supplies
and materials and the making of such repairs prior to any
hearing required under this section, provided that the board
shall set as early a date as practicable for such hearing at the
time it declares such emergency. All other provisions of this
section shall be followed in giving notice of and conducting
such hearing. Nothing herein shall be construed as preventing
the board or its agents from purchasing maintenance supplies or
incurring maintenance costs without regard to the requirements
of this section.
Subd. 5. [POWER OF GOVERNMENT UNIT TO SPECIALLY ASSESS.] A
local government unit may specially assess all or any part of
the costs of acquisition and betterment as herein provided, of
any project ordered by the board pursuant to this section. Such
special assessments shall be levied in accordance with Minnesota
Statutes, sections 429.051 to 429.081, except as otherwise
provided in this subdivision. No other provisions of Minnesota
Statutes, chapter 429, shall apply. For purposes of levying
such special assessments, the hearing on such project required
in subdivision 1 shall serve as the hearing on the making of the
original improvement provided for by Minnesota Statutes, section
429.051. The area assessed may be less than but may not exceed
the area proposed to be assessed as stated in the notice of
hearing on the project provided for in subdivision 2. For the
purpose of determining the allocable cost of the project, or
part thereof, to the local government unit, the government unit
may adopt one of the following procedures.
(a) At any time after a contract is let for the project,
the local government unit may obtain from the board a current
written estimate, on the basis of such historical and reasonably
projected data as may be available, of that part of the total
costs of acquisition and betterment of such project or of some
portion of the project which the government unit shall
designate, which will be allocated to the government unit and
the number of years over which such costs will be allocated as
current costs of acquisition, betterment, and debt service
pursuant to section 9. The board shall not in any way be bound
by this estimate for the purpose of allocating the costs of such
project to local government units.
(b) The governing body may obtain from the board a written
statement setting forth, for such prior period as the governing
body designates, that portion of the costs previously allocated
to the local government unit as current costs of acquisition,
betterment, and debt service only, of all or any part of the
project designated by the governing body. In addition to the
allocable costs so ascertained, the local government unit may
include in the total expense it will pay, as a basis for levying
assessments, all other expenses incurred directly by the
government unit in connection with said project, or any part
thereof. Special assessments levied by the government unit with
respect to previously allocated costs ascertained under this
paragraph shall be payable in equal annual installments
extending over a period not exceeding by more than one year the
number of years which such costs have been allocated to the
government unit or the estimated useful life of said project, or
part thereof, whichever number of years is the lesser. No
limitation is placed upon the number of times the governing body
of a government unit may assess such previously allocated costs
not previously assessed by the government unit. The power to
specially assess provided for in this section shall be in
addition and supplemental to all other powers of government
units to levy special assessments.
Sec. 12. [INITIAL COSTS.]
Subdivision 1. [CONTRIBUTIONS OR ADVANCES FROM LOCAL
GOVERNMENT UNITS.] The board may, at such time as it deems
necessary and proper, request from all or some of the local
government units necessary money to defray the costs of any
obligations assumed under section 6 and the costs of
administration, operation, and maintenance. Before making such
request, the board shall, by formal resolution, determine the
necessity for such money, setting forth in such resolution the
purposes for which such money is needed and the estimated amount
for each such purpose. Upon receiving such request, the
governing body of each such government unit may provide for
payment of the amount requested or such part thereof as it deems
fair and reasonable. Such money may be paid out of general
revenue funds or any other available funds of any local
government unit and the governing bodies thereof may levy taxes
to provide funds therefor, free from any existing limitations
imposed by law or charter. Such money may be provided by such
government units with or without interest but if interest is
charged it shall not exceed five percent per annum. The board
shall credit the local government units for such payments in
allocating current costs pursuant to section 9, on such terms
and at such times as it may agree with the unit furnishing the
same.
Subd. 2. [LIMITED TAX LEVY.] The board may levy ad valorem
taxes on all taxable property in the district to defray any of
the costs described in subdivision 1, provided that such costs
have not been defrayed by contribution under subdivision 1.
Before certification of such levy to the county auditor,
the board shall determine the need for the money to be derived
from such levy by formal resolution setting forth in said
resolution the purposes for which the tax money will be used and
the amount proposed to be used for each such purpose. In
allocating current costs pursuant to section 9 the board shall
credit the government units for taxes collected pursuant to levy
made under this subdivision on such terms and at such time or
times as the board deems fair and reasonable and upon such terms
as are consistent with the provisions of section 9, subdivision
2.
Sec. 13. [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.]
Subdivision 1. [BUDGET ANTICIPATION CERTIFICATES OF
INDEBTEDNESS.] (a) At any time or times after adoption of its
annual budget and in anticipation of the collection of tax and
other revenues estimated and set forth by the board in such
budget, except:
(1) taxes already anticipated by the issuance of
certificates under subdivision 2;
(2) deficiency taxes levied pursuant to this subdivision;
and
(3) taxes levied for the payment of certificates issued
pursuant to subdivision 3, the board may by resolution,
authorize the issuance, negotiation, and sale in accordance with
subdivision 5 in such form and manner and upon such terms as it
may determine of its negotiable general obligation certificates
of indebtedness in aggregate principal amounts not exceeding 50
percent of the total amount of such tax collections and other
revenues and maturing not later than three months after the
close of the budget year in which issued. The proceeds of the
sale of such certificates shall be used solely for the purposes
for which such tax collections and other revenues are to be
expended pursuant to such budget.
(b) All such tax collections and other revenues included in
the budget for such budget year, after the expenditures of such
tax collections and other revenues in accordance with the
budget, shall be irrevocably pledged and appropriated to a
special fund to pay the principal and interest on the
certificates when due. If for any reason such tax collections
and other revenues are insufficient to pay the certificates and
interest when due, the board shall levy a tax in the amount of
the deficiency on all taxable property in the district and shall
appropriate this amount when received to the special fund.
Subd. 2. [TAX LEVY ANTICIPATION CERTIFICATES OF
INDEBTEDNESS.] At any time or times after a tax is levied by the
board pursuant to section 12, subdivision 2, and certified to
the county auditors in anticipation of the collection of such
tax, provided that such tax has not been anticipated by the
issuance of certificates under subdivision 1, the board may, by
resolution, authorize the issuance, negotiation, and sale in
accordance with subdivision 5 in such form and manner and upon
such terms and conditions as it may determine of its negotiable
general obligation tax levy anticipation certificates of
indebtedness in aggregate principal amounts not exceeding 50
percent of such uncollected tax as to which no penalty for
nonpayment or delinquency has attached. Such certificates shall
mature not later than April 1 in the year following the year in
which such tax is collectible. The proceeds of the tax in
anticipation of which such certificates were issued and other
funds which may become available shall be applied to the extent
necessary to repay such certificates.
Subd. 3. [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in
any budget year the receipts of tax and other revenues should
for some unforeseen cause become insufficient to pay the board's
current expenses, or if any calamity or other public emergency
should subject it to the necessity of making extraordinary
expenditures, the board may by resolution authorize the
issuance, negotiation, and sale in accordance with subdivision 5
in such form and manner and upon such terms and conditions as it
may determine of its negotiable general obligation certificates
of indebtedness in an amount sufficient to meet such deficiency,
and the board shall forthwith levy on all taxable property in
the district a tax sufficient to pay the certificates and
interest thereon and shall appropriate all collections of such
tax to a special fund created for the payment of such
certificates and the interest thereon.
Subd. 4. [GENERAL OBLIGATION BONDS.] The board may by
resolution authorize the issuance of general obligation bonds
maturing serially in one or more annual or semiannual
installments, for the acquisition or betterment of any part of
the district disposal system, including but without limitation
the payment of interest during construction and for a reasonable
period thereafter, or for the refunding of outstanding bonds,
certificates of indebtedness, or judgments. The board shall
pledge its full faith and credit and taxing power for the
payment of such bonds and shall provide for the issuance and
sale and for the security of such bonds in the manner provided
in Minnesota Statutes, chapter 475, and shall have the same
powers and duties as a municipality issuing bonds under that
law. No election shall be required to authorize the issuance of
such bonds and the debt limitations of Minnesota Statutes,
chapter 475, shall not apply to such bonds. The board may also
pledge for the payment of such bonds and deduct from the amount
of any tax levy required under Minnesota Statutes, section
475.61, subdivision 1, any sums receivable under section 10 or
any state and federal grants anticipated by the board and may
covenant to refund such bonds if and when and to the extent that
for any reasons such revenues, together with other funds
properly available and appropriated for such purpose, are not
sufficient to pay all principal and interest due or about to
become due thereon, provided that such revenues have not been
anticipated by the issuance of certificates under subdivision 1.
All bonds which have been or shall hereafter be issued and sold
in conformity with the provisions of this subdivision, and
otherwise in conformity with law, are hereby authorized,
legalized, and validated.
Subd. 5. [MANNER OF SALE AND ISSUANCE OF CERTIFICATES.]
Certificates issued under subdivisions 1, 2, and 3 may be issued
and sold by negotiation, without public sale, and may be sold at
a price equal to such percentage of the par value thereof, plus
accrued interest, and bearing interest at such rate or rates as
may be determined by the board. No election shall be required
to authorize the issuance of such certificates. Such
certificates shall bear the same rate of interest after maturity
as before and the full faith and credit and taxing power of the
board shall be pledged to the payment of such certificates.
Sec. 14. [TAX LEVIES.]
The board shall have power to levy taxes for the payment of
bonds or other obligations assumed by the district under section
6 and for debt service of the district disposal system
authorized in section 13 upon all taxable property within the
district without limitation of rate or amount and without
affecting the amount or rate of taxes which may be levied by the
board for other purposes or by any local government unit in the
district. No other provision of law relating to debt limit
shall restrict or in any way limit the power of the board to
issue the bonds and certificates authorized in section 13. The
board shall also have power to levy taxes as provided in
sections 10 and 12. The county auditor shall annually assess
and extend upon the tax rolls the portion of the taxes levied by
the board in each year which is certified to the auditor by the
board. The county treasurer shall collect and make settlement
of such taxes with the treasurer of the board.
Sec. 15. [DEPOSITORIES.]
The board shall from time to time designate one or more
national or state banks, or trust companies authorized to do a
banking business, as official depositories for money of the
board, and thereupon shall require the treasurer to deposit all
or a part of such money in such institutions. Such designation
shall be in writing and shall set forth all the terms and
conditions upon which the deposits are made, and shall be signed
by the chair and treasurer, and made a part of the minutes of
the board. Any bank or trust company so designated shall
qualify as a depository by furnishing a corporate surety bond or
collateral in the amounts required by Minnesota Statutes,
section 118A.03. However, no bond or collateral shall be
required to secure any deposit insofar as it is insured under
federal law.
Sec. 16. [MONEY; ACCOUNTS AND INVESTMENTS.]
Subdivision 1. [RECEIPT AND APPLICATION.] All money
received by the board shall be deposited or invested by the
treasurer and disposed of as the board may direct in accordance
with its budget; provided that any money that has been pledged
or dedicated by the board to the payment of obligations or
interest thereon or expenses incident thereto, or for any other
specific purpose authorized by law, shall be paid by the
treasurer into the fund to which they have been pledged.
Subd. 2. [FUNDS AND ACCOUNTS.] The board's treasurer shall
establish such funds and accounts as may be necessary or
convenient to handle the receipts and disbursements of the board
in an orderly fashion.
Subd. 3. [DEPOSIT AND INVESTMENT.] The money on hand in
said funds and accounts may be deposited in the official
depositories of the board or invested as hereinafter provided.
The amount thereof not currently needed or required by law to be
kept in cash on deposit may be invested in obligations
authorized for the investment of municipal sinking funds by
law. The money may also be held under certificates of deposit
issued by any official depository of the board. All investments
by the board must conform to an investment policy adopted by the
board and amended from time to time.
Subd. 4. [BONDS PROCEEDS.] The use of proceeds of all
bonds issued by the board for the acquisition and betterment of
the district disposal system, and the use, other than
investment, of all money on hand in any sinking fund or funds of
the board, shall be governed by Minnesota Statutes, chapter 475,
this article, and the resolutions authorizing the issuance of
the bonds. Such bond proceeds when received shall be
transferred to the treasurer of the board for safekeeping,
investment, and payment of the costs for which they were issued.
Subd. 5. [AUDIT.] The board shall provide for and pay the
cost of an independent annual audit of its official books and
records by the state public examiner or a certified public
accountant.
Sec. 17. [GENERAL POWERS OF BOARD.]
Subdivision 1. [ALL NECESSARY OR CONVENIENT POWER.] The
board shall have all powers which may be necessary or convenient
to discharge the duties imposed upon it by law. The powers
shall include those herein specified, but the express grant or
enumeration of powers does not limit the generality or scope of
the grant of power contained in this subdivision.
Subd. 2. [SUITS.] The board may sue or be sued.
Subd. 3. [CONTRACTS.] The board may enter into any
contract necessary or proper for the exercise of its powers of
the accomplishment of its purposes.
Subd. 4. [RULES.] The board shall have the power to adopt
rules relating to the board's responsibilities and may provide
penalties for the violation thereof not exceeding the maximum
which may be specified for a misdemeanor, and the cost of
prosecution may be added to the penalties imposed. Any rule
prescribing a penalty for violation shall be published at least
once in a newspaper having general circulation in the district.
Such violations may be prosecuted before any court in the
district having jurisdiction of misdemeanor, and every such
court shall have jurisdiction of such violations. Any constable
or other peace officer of any municipality in the district may
make arrests for such violations committed anywhere in the
district in like manner and with like effect as for violations
of village ordinances or for statutory misdemeanors. All fines
collected in such cases shall be deposited in the treasury of
the board, or may be allocated between the board and the
municipality in which such prosecution occurs on such basis as
the board and the municipality agree.
Subd. 5. [GIFTS; GRANTS.] The board may accept gifts, may
apply for and accept grants or loans of money or other property
from the United States, the state, or any person for any of its
purposes, may enter into any agreement required in connection
herewith, and may hold, use, and dispose of such money or
property in accordance with the terms of the gift, grant, loan,
or agreement relating thereto; and, with respect to any loans or
grants of funds or real or personal property or other assistance
from any state or federal government or any agency or
instrumentality thereof, the board may contract to do and
perform all acts and things required as a condition or
consideration therefore pursuant to state or federal law or
regulations, whether or not included among the powers expressly
granted to the board in this article.
Subd. 6. [JOINT POWERS.] The board may act under Minnesota
Statutes, section 471.59, or any other appropriate law providing
for joint or cooperative action between government units.
Subd. 7. [RESEARCH, HEARINGS, INVESTIGATIONS, ADVISE.] The
board may conduct research studies and programs, collect and
analyze data, prepare reports, maps, charts, and tables, and
conduct all necessary hearings and investigations in connection
with the design, construction, and operation of the district
disposal system; and may advise and assist other government
units on system planning matters within the scope of its powers,
duties, and objectives and may provide at the request of any
such governmental unit such other technical and administrative
assistance as the board deems appropriate for the government
unit to carry out the powers and duties vested in the government
unit under this article or imposed on by the board.
Subd. 8. [EMPLOYEES, CONTRACTORS, INSURANCE.] The board
may employ on such terms as it deems advisable, persons or firms
performing engineering, legal, or other services of a
professional nature; require any employee to obtain and file
with it an individual bond or fidelity insurance policy; and
procure insurance in such amounts as it deems necessary against
liability of the board or its officers or both, for personal
injury or death and property damage or destruction, with the
force and effect stated in Minnesota Statutes, chapter 466, and
against risks of damage to or destruction of any of its
facilities, equipment, or other property as it deems necessary.
Subd. 9. [PROPERTY.] The board may acquire by purchase,
lease, condemnation, gift, or grant, and real or personal
property including positive and negative easements and water and
air rights, and it may construct, enlarge, improve, replace,
repair, maintain, and operate any interceptor, treatment works,
or water facility determined to be necessary or convenient for
the collection and disposal of sewage in the district. Any
local government unit and the commissioners of transportation
and natural resources may convey to or permit the use of any
such facilities owned or controlled by it, by the board, subject
to the rights of the holders of any bonds issued with respect
thereto, with or without compensation, without an election or
approval by any other government unit or agency. All powers
conferred by this subdivision may be exercised both within or
without the district as may be necessary for the exercise by the
board of its powers or the accomplishment of its purposes. The
board may hold, lease, convey, or otherwise dispose of such
property for its purposes upon such terms and in such manner as
it shall deem advisable. Unless otherwise provided, the right
to acquire lands and property rights by condemnation shall be
exercised in accordance with Minnesota Statutes, chapter 117,
and shall apply to any property or interest therein owned by any
local government unit; provided, that no such property devoted
to an actual public use at the time, or held to be devoted to
such use within a reasonable time, shall be so acquired unless a
court of competent jurisdiction shall determine that the use
proposed by the board is paramount to such use. Except in case
of property in actual public use, the board may take possession
of any property of which condemnation proceedings have been
commenced at any time after the issuance of a court order
appointing commissioners for its condemnation.
Subd. 10. [RIGHTS-OF-WAY.] The board may construct or
maintain its systems or facilities in, along, on, under, over,
or through public waters, streets, bridges, viaducts, and other
public right-of-way without first obtaining a franchise from any
county or local government unit having jurisdiction over them;
but such facilities shall be constructed and maintained in
accordance with the ordinances and resolutions of any such
county or government unit relating to construction,
installation, and maintenance of similar facilities on such
public properties and shall not unnecessarily obstruct the
public use of such rights-of-way.
Subd. 11. [DISPOSAL OF PROPERTY.] The board may sell,
lease, or otherwise dispose of any real or personal property
acquired by it which is no longer required for accomplishment of
its purposes. Such property may be sold in the manner provided
by Minnesota Statutes, section 469.065, insofar as practical.
The board may give such notice of sale as it shall deem
appropriate. When the board determines that any property or any
part of the district disposal system which has been acquired
from a local government unit without compensation is no longer
required but is required as a local facility by the government
unit from which it was acquired, the board may by resolution
transfer it to such government unit.
Subd. 12. [JOINT OPERATIONS.] The board may contract with
the United States or any agency thereof, any state or agency
thereof, or any regional public planning body in the state with
jurisdiction over any part of the district, or any other
municipal or public corporation, or governmental subdivision in
any state, for the joint use of any facility owned by the board
or such entity, for the operation by such entity of any system
or facility of the board, or for the performance on the board's
behalf of any service including, but not limited to, planning,
on such terms as may be agreed upon by the contracting parties.
Unless designated by the board as a local sanitary sewer
facility, any treatment works or interceptor jointly used, or
operated on behalf of the board, as provided in this
subdivision, shall be deemed to be operated by the board for
purposes of including said facilities in the district disposal
system.
Sec. 18. [LOCAL FACILITIES.]
Subdivision 1. [SANITARY SEWER FACILITIES.] Except as
otherwise provided in this article, local government units shall
retain responsibility for the planning, design, acquisition,
betterment, operation, administration, and maintenance of all
local sanitary sewer facilities as provided by law.
Subd. 2. [ASSUMPTION OF RESPONSIBILITY OVER LOCAL SANITARY
SEWER FACILITIES.] The board shall upon request of any
government unit or units assume either alone or jointly with the
local government unit all or any part of the responsibility of
the local government unit described in subdivision 1. Except as
provided in subdivision 4 and for the purpose of exercising such
responsibility, the board shall have all the powers and duties
elsewhere conferred in this article with the same force and
effect as if such local sanitary sewer facilities were a part of
the district disposal system.
Subd. 3. [WATER AND STREET FACILITIES.] The board may,
upon request of any governmental unit or units, enter into an
agreement under which the board may assume either alone or
jointly with such unit or units, the responsibility for the
acquisition and construction of water and street facilities in
conjunction with (1) any project for the acquisition or
betterment of the district disposal system, or (2) any project
undertaken by the board under subdivision 2. Except as provided
in subdivision 4, and for the purpose of exercising any
responsibilities pursuant to this subdivision, the board shall
have all the powers and duties elsewhere conferred in this
article with the same force and effect as if such water or
street facilities were a part of the district disposal system.
Subd. 4. [ALLOCATION OF CURRENT COSTS.] All current costs
attributable to responsibilities assumed by the board over local
sanitary sewer facilities and water and street facilities as
provided in this section shall be allocated solely to the local
unit for or with whom such responsibilities are assumed on such
terms and over such period as the board determines to be
equitable and in the best interest of the district, provided
that if two or more government units form a region in accordance
with this section, all or part of such current costs
attributable to the region shall at the request of its joint
board be allocated to the region and provided in the agreement
establishing the region.
Subd. 5. [PART OF DISTRICT SYSTEM.] Nothing contained in
this section or in any other part of this article shall be
construed to prevent the board from including, where
appropriate, treatment works or interceptors, previously
designated or treated as local sanitary sewer facilities as a
part of the district disposal system.
Sec. 19. [SERVICE CONTRACTS WITH GOVERNMENTS OUTSIDE
DISTRICT.]
The board may contract with the United States or any agency
thereof, any state or any agency thereof, or any municipal or
public corporation, governmental subdivision or agency or
political subdivision in any state, outside the jurisdiction of
the board, for furnishing to such entities any services which
the board may furnish to local government units in the district
under this article including, but not limited to, planning for
and the acquisition, betterment, operation, administration, and
maintenance of any or all interceptors, treatment works, and
local sanitary sewer facilities, provided that the board may
further include as one of the terms of the contract that such
entity also pay to the board such amount as may be agreed upon
as a reasonable estimate of the proportionate share properly
allocable to the entity of costs of acquisition, betterment, and
debt service previously allocated to local government units in
the district. When such payments are made by such entities to
the board, they shall be applied in reduction of the total
amount of costs thereafter allocated to each local government
unit in the district, on such equitable basis as the board deems
to be in the best interest of the district. Any municipality in
the state of Minnesota may enter into such contract and perform
all acts and things required as a condition or consideration
therefore consistent with the purpose of this article, whether
or not included among the powers otherwise granted to such
municipality by law or charter, such powers to include those
powers set out in section 10, subdivisions 3, 3a, and 4.
Sec. 20. [CONTRACTS FOR CONSTRUCTION, MATERIALS, SUPPLIES,
AND EQUIPMENT.]
Subdivision 1. [PLANS AND SPECIFICATIONS.] When the board
orders a project involving the acquisition or betterment of a
part of the district disposal system it shall cause plans and
specifications of this project to be made, or if previously
made, to be modified, if necessary, and to be approved by the
agency if required, and after any required approval by the
agency, one or more contracts for work and materials called for
by such plans and specification may be awarded as provided in
this section.
Subd. 2. [UNIFORM MUNICIPAL CONTRACTING LAW.] Except as
otherwise provided in this section, all contracts for work to be
done or for purchases of materials, supplies, or equipment shall
be done in accordance with Minnesota Statutes, section 471.345.
Subd. 3. [CONTRACTS OR PURCHASES.] The board may, without
advertising for bids, enter into any contract or purchase any
materials, supplies, or equipment of the type referred to in
subdivision 2 in accordance with applicable state law.
Sec. 21. [ANNEXATION OF TERRITORY.]
Any municipality in Douglas county or Pope county, upon
resolution adopted by a four-fifths vote of its governing body,
may petition the board for annexation to the district of the
area then comprising the municipality, or any part thereof and,
if accepted by the board, such area shall be deemed annexed to
the district and subject to the jurisdiction of the board under
the terms and provisions of this article. The territory so
annexed shall be subject to taxation and assessment pursuant to
the provisions of this article and shall be subject to taxation
by the board like other property in the district for the payment
of principal and interest thereafter becoming due on general
obligations of the board, whether authorized or issued before or
after such annexation. The board may, in its discretion,
condition approval of the annexation upon the contribution, by
or on behalf of the municipality petitioning for annexation, to
the board of such amount as may be agreed upon as being a
reasonable estimate of the proportionate share, properly
allocable to the municipality, of costs or acquisition,
betterment, and debt service previously allocated to local
government units in the district, on such terms as may be agreed
upon; and in place of or in addition thereto such other and
further conditions as the board deems in the best interests of
the district. Notwithstanding any other provisions of this
article to the contrary, the conditions established for
annexation may include the requirement that the annexed
municipality pay for, contract for, and oversee the construction
of local sanitary sewer facilities and interceptor sewers as
those terms are defined in section 2. For the purpose of paying
such contribution or of satisfying any other condition
established by the board, the municipality petitioning
annexation may exercise the powers conferred in section 10.
When such contributions are made by the municipality to the
board, they shall be applied in reduction of the total amount of
costs thereafter allocated to each local government unit in the
district, on such equitable basis as the board deems to be in
the best interests of the district, applying so far as
practicable and appropriate the criteria set forth in section 9,
subdivision 2. Upon annexation of such territory, the secretary
of the board shall certify to the auditor and treasurer of the
county in which the municipality is located the fact of such
annexation and a legal description of the territory annexed.
Sec. 22. [PROPERTY EXEMPT FROM TAXATION.]
Any properties, real or personal, owned, leased,
controlled, used, or occupied by the sanitary sewer board for
any purpose under this article are declared to be acquired,
owned, leased, controlled, used, and occupied for public,
governmental, and municipal purposes, and are exempt from
taxation by the state or any political subdivision of the state,
provided that such properties are subject to special assessments
levied by a political subdivision for a local improvement in
amounts proportionate to and not exceeding the special benefit
received by the properties from such improvement. No possible
use of any such properties in any manner different from their
use as part of the disposal system at the time shall be
considered in determining the special benefit received by such
properties. All such assessments shall be subject to final
approval by the board, whose determination of the benefits shall
be conclusive upon the political subdivision levying the
assessment. All bonds, certificates of indebtedness, or other
obligations of the board, and the interest thereon, are exempt
from taxation by the state or any political subdivision of the
state.
Sec. 23. [RELATION TO EXISTING LAWS.]
This article prevails over any law or charter inconsistent
with it. The powers conferred on the board under this article
do not diminish or supersede the powers conferred on the agency
by Minnesota Statutes, chapters 115 and 116.
Sec. 24. [LOCAL APPROVAL.]
This article takes effect the day after the governing
bodies of the city of Farwell in Pope county and the city of
Kensington in Douglas county comply with Minnesota Statutes,
section 645.021, subdivision 3, or 30 days after a referendum is
held in those cities.
ARTICLE 16
MISCELLANEOUS
Section 1. Minnesota Statutes 1997 Supplement, section
3.986, subdivision 2, is amended to read:
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 December 31, 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.
Sec. 2. Minnesota Statutes 1997 Supplement, section 3.986,
subdivision 4, is amended to read:
Subd. 4. [POLITICAL SUBDIVISION.] A "political
subdivision" is a county, or home rule charter or statutory city
, town, or other taxing district or municipal corporation.
Sec. 3. Minnesota Statutes 1997 Supplement, section 3.987,
subdivision 1, is amended to read:
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 December 31, 1998, upon request
of the chair or the ranking minority member of either
legislative tax committee. Upon receipt of a request to prepare
a local impact note, the commissioner must notify the authors of
the proposed legislation or, for an administrative rule, the
head of the relevant executive agency or department, that the
request has been made. 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. Upon completion of the note, the commissioner must
provide a copy to the authors of the proposed legislation or,
for an administrative rule, to the head of the relevant
executive agency or department.
Sec. 4. Minnesota Statutes 1997 Supplement, section 3.987,
subdivision 2, is amended to read:
Subd. 2. [MANDATE EXPLANATIONS.] Before a committee
hearing on 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 chair
or ranking minority member of the committee may request that the
author provide the committee with a note that gives appropriate
responses to the following guidelines. It must state and list:
(1) the policy goals that are sought to be attained,
the and any performance standards that are to be imposed, and an
explanation why the goals and standards will best be served by
requiring compliance by on political subdivisions;
(2) any 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;
(6) what input has been obtained to ensure that the
implementing agencies have the capacity to carry out the
delegated responsibilities; and
(7) the efforts put forth, if any, to involve political
subdivisions in the creation or development of the proposed
mandate.
Sec. 5. Minnesota Statutes 1997 Supplement, section 3.988,
subdivision 3, is amended to read:
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 an amount less than or equal to one-half of one
percent of the local revenue base as defined in section
477A.011, subdivision 27, or $50,000, whichever is less for any
single local government if the mandate does not apply statewide
or less than $3,000,000 $1,000,000 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) (9) requires the holding of elections;
(11) (10) ensures due process or equal protection;
(12) (11) provides for the notification and conduct of
public meetings;
(13) (12) establishes the procedures for administrative and
judicial review of actions taken by political subdivisions;
(14) (13) protects the public from malfeasance,
misfeasance, or nonfeasance by officials of political
subdivisions;
(15) (14) relates directly to financial administration,
including the levy, assessment, and collection of taxes;
(16) (15) relates directly to the preparation and
submission of financial audits necessary to the administration
of state laws; or
(17) (16) requires uniform standards to apply to public and
private institutions without differentiation.
Sec. 6. Minnesota Statutes 1997 Supplement, section 3.989,
subdivision 1, is amended to read:
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 resulting
from legislation enacted after July 1, 1998, that specifically
reference this section and 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.
Sec. 7. Minnesota Statutes 1997 Supplement, section 3.989,
subdivision 2, is amended to read:
Subd. 2. [REPORT.] The commissioner of finance shall
prepare by September 1, 1998 2000, and by September 1 of each
even-numbered year thereafter, a report by political
subdivisions of the costs of class A state local mandates
established after June 30, 1997.
The commissioner shall annually include the statewide total
of the statement of costs of class A local mandates after June
30, 1997, as a notation in the state biennial budget for the
next fiscal year.
Sec. 8. Minnesota Statutes 1996, section 16A.102,
subdivision 1, is amended to read:
Subdivision 1. [GOVERNOR'S RECOMMENDATION.] By the fourth
Monday in January of each odd-numbered year, the governor shall
submit to the legislature a recommended revenue target for the
next two bienniums. The recommended revenue target must specify:
(1) the maximum share of Minnesota personal income to be
collected in taxes and other revenues to pay for state and local
government services;
(2) the division of the share between state and local
government revenues; and
(3) the appropriate mix and rates of income, sales, and
other state and local taxes including property taxes and other
revenues, other than property taxes, and the amount of property
taxes and the effect of the recommendations on the incidence of
the tax burden by income class.
The recommendations must be based on the November forecast
prepared under section 16A.103.
Sec. 9. Minnesota Statutes 1996, section 16A.102,
subdivision 2, is amended to read:
Subd. 2. [LEGISLATIVE BUDGET RESOLUTION.] By March 15 of
each odd-numbered year, the legislature shall by concurrent
resolution adopt revenue targets for the next two bienniums.
The resolution must specify:
(1) the maximum share of Minnesota personal income to be
collected in taxes and other revenues to pay for state and local
government services;
(2) the division of the share between state and local
government services; and
(3) the appropriate mix and rates of income, sales, and
other state and local taxes including property taxes and other
revenues, other than property taxes, and the amount of property
taxes and the effect of the resolution on the incidence of the
tax burden by income class.
The resolution must be based on the February forecast prepared
under section 16A.103 and take into consideration the revenue
targets recommended by the governor under subdivision 1.
Sec. 10. Minnesota Statutes 1997 Supplement, section
60A.15, subdivision 1, is amended to read:
Subdivision 1. [DOMESTIC AND FOREIGN COMPANIES.] (a) On or
before April 1, June 1, and December 1 of each year, every
domestic and foreign company, including town and farmers' mutual
insurance companies, domestic mutual insurance companies, marine
insurance companies, health maintenance organizations, community
integrated service networks, and nonprofit health service plan
corporations, shall pay to the commissioner of revenue
installments equal to one-third of the insurer's total estimated
tax for the current year. Except as provided in paragraphs (d),
(e), (h), and (i), installments must be based on a sum equal to
two percent of the premiums described in paragraph (b).
(b) Installments under paragraph (a), (d), or (e) are
percentages of gross premiums less return premiums on all direct
business received by the insurer in this state, or by its agents
for it, in cash or otherwise, during such year.
(c) Failure of a company to make payments of at least
one-third of either (1) the total tax paid during the previous
calendar year or (2) 80 percent of the actual tax for the
current calendar year shall subject the company to the penalty
and interest provided in this section, unless the total tax for
the current tax year is $500 or less.
(d) For health maintenance organizations, nonprofit health
service plan corporations, and community integrated service
networks, the installments must be based on an amount determined
under paragraph (h) or (i).
(e) For purposes of computing installments for town and
farmers' mutual insurance companies and for mutual property
casualty companies with total assets on December 31, 1989, of
$1,600,000,000 or less, the following rates apply:
(1) for all life insurance, two percent;
(2) for town and farmers' mutual insurance companies and
for mutual property and casualty companies with total assets of
$5,000,000 or less, on all other coverages, one percent; and
(3) for mutual property and casualty companies with total
assets on December 31, 1989, of $1,600,000,000 or less, on all
other coverages, 1.26 percent.
(f) If the aggregate amount of premium tax payments under
this section and the fire marshal tax payments under section
299F.21 made during a calendar year is equal to or exceeds
$120,000, all tax payments in the subsequent calendar year must
be paid by means of a funds transfer as defined in section
336.4A-104, paragraph (a). The funds transfer payment date, as
defined in section 336.4A-401, must be on or before the date the
payment is due. If the date the payment is due is not a funds
transfer business day, as defined in section 336.4A-105,
paragraph (a), clause (4), the payment date must be on or before
the funds transfer business day next following the date the
payment is due.
(g) Premiums under medical assistance, general assistance
medical care, the MinnesotaCare program, and the Minnesota
comprehensive health insurance plan and all payments, revenues,
and reimbursements received from the federal government for
Medicare-related coverage as defined in section 62A.31,
subdivision 3, paragraph (e), are not subject to tax under this
section.
(h) For calendar years 1997, 1998, and 1999, the
installments for health maintenance organizations, community
integrated service networks, and nonprofit health service plan
corporations must be based on an amount equal to one percent of
premiums described under paragraph (b). Health maintenance
organizations, community integrated service networks, and
nonprofit health service plan corporations that have met the
cost containment goals established under section 62J.04 in the
individual and small employer market for calendar year 1996 are
exempt from payment of the tax imposed under this section for
premiums paid after March 30, 1997, and before April 1, 1998.
Health maintenance organizations, community integrated service
networks, and nonprofit health service plan corporations that
have met the cost containment goals established under section
62J.04 in the individual and small employer market for calendar
year 1997 are exempt from payment of the tax imposed under this
section for premiums paid after March 30, 1998, and before April
1, 1999. Health maintenance organizations, community integrated
service networks, and nonprofit health service plan corporations
that have met the cost containment goals established under
section 62J.04 in the individual and small employer market for
calendar year 1998 are exempt from payment of the tax imposed
under this section for premiums paid after March 30, 1999, and
before January 1, 2000.
(i) For calendar years after 1999, the commissioner of
finance shall determine the balance of the health care access
fund on September 1 of each year beginning September 1, 1999.
If the commissioner determines that there is no structural
deficit for the next fiscal year, no tax shall be imposed under
paragraph (d) for the following calendar year. If the
commissioner determines that there will be a structural deficit
in the fund for the following fiscal year, then the
commissioner, in consultation with the commissioner of revenue,
shall determine the amount needed to eliminate the structural
deficit and a tax shall be imposed under paragraph (d) for the
following calendar year. The commissioner shall determine the
rate of the tax as either one-quarter of one percent, one-half
of one percent, three-quarters of one percent, or one percent of
premiums described in paragraph (b), whichever is the lowest of
those rates that the commissioner determines will produce
sufficient revenue to eliminate the projected structural
deficit. The commissioner of finance shall publish in the State
Register by October 1 of each year the amount of tax to be
imposed for the following calendar year.
(j) In approving the premium rates as required in sections
62L.08, subdivision 8, and 62A.65, subdivision 3, the
commissioners of health and commerce shall ensure that any
exemption from the tax as described in paragraphs (h) and (i) is
reflected in the premium rate.
Sec. 11. Minnesota Statutes 1997 Supplement, section
270.60, subdivision 4, is amended 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 is a qualified county
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) An amount sufficient to make the payments authorized by
this subdivision, not to exceed $1,100,000 in any fiscal year,
is annually appropriated from the general fund to the
commissioner. If the authorized payments exceed the amount of
the appropriation, the commissioner shall first proportionately
reduce the rate payments to counties other than qualified
counties so that the total amount equals the appropriation. If
the authorized payments to qualified counties also exceed the
amount of the appropriation, the commissioner shall then
proportionately reduce the rate so that the total amount to be
paid to qualified counties equals the appropriation.
Sec. 12. Minnesota Statutes 1997 Supplement, section
270.67, subdivision 2, is amended to read:
Subd. 2. [EXTENSION AGREEMENTS.] When any portion of any
tax payable to the commissioner of revenue together with
interest and penalty thereon, if any, has not been paid, the
commissioner may extend the time for payment for a further
period. When the authority of this section is invoked, the
extension shall be evidenced by written agreement signed by the
taxpayer and the commissioner, stating the amount of the tax
with penalty and interest, if any, and providing for the payment
of the amount in installments. The agreement may contain a
confession of judgment for the amount and for any unpaid portion
thereof and shall provide that the commissioner may forthwith
enter judgment against the taxpayer in the district court of the
county of residence as shown upon the taxpayer's tax return for
the unpaid portion of the amount specified in the extension
agreement. The agreement shall provide that it can be
terminated, after notice by the commissioner, if information
provided by the taxpayer prior to the agreement was inaccurate
or incomplete, collection of the tax covered by the agreement is
in jeopardy, there is a subsequent change in the taxpayer's
financial condition, the taxpayer has failed to make a payment
due under the agreement, or has failed to pay any other tax or
file a tax return coming due after the agreement. The notice
must be given at least 14 calendar days prior to termination,
and shall advise the taxpayer of the right to request a
reconsideration from the commissioner of whether termination is
reasonable and appropriate under the circumstances. A request
for reconsideration does not stay collection action beyond the
14-day notice period. If the commissioner has reason to believe
that collection of the tax covered by the agreement is in
jeopardy, the commissioner may proceed under sections 270.70,
subdivision 2, paragraph (b), and 270.274, and terminate the
agreement without regard to the 14-day period. The commissioner
may accept other collateral the commissioner considers
appropriate to secure satisfaction of the tax liability. The
principal sum specified in the agreement shall bear interest at
the rate specified in section 270.75 on all unpaid portions
thereof until the same has been fully paid or the unpaid portion
thereof has been entered as a judgment. The judgment shall bear
interest at the rate specified in section 270.75. If it appears
to the commissioner that the tax reported by the taxpayer is in
excess of the amount actually owing by the taxpayer, the
extension agreement or the judgment entered pursuant thereto
shall be corrected. If after making the extension agreement or
entering judgment with respect thereto, the commissioner
determines that the tax as reported by the taxpayer is less than
the amount actually due, the commissioner shall assess a further
tax in accordance with the provisions of law applicable to the
tax. The authority granted to the commissioner by this section
is in addition to any other authority granted to the
commissioner by law to extend the time of payment or the time
for filing a return and shall not be construed in limitation
thereof.
Sec. 13. Minnesota Statutes 1997 Supplement, section
295.52, subdivision 4, is amended to read:
Subd. 4. [USE TAX; PRESCRIPTION DRUGS.] (a) A person that
receives prescription drugs for resale or use in Minnesota,
other than from a wholesale drug distributor that paid the tax
under subdivision 3, is subject to a tax equal to the price paid
to the wholesale drug distributor multiplied by the tax
percentage specified in this section. Liability for the tax is
incurred when prescription drugs are received or delivered in
Minnesota by the person.
(b) A person that receives prescription drugs for use in
Minnesota from a nonresident pharmacy required to be registered
under section 151.19 is subject to a tax equal to the price paid
by the nonresident pharmacy to the wholesale drug distributor or
the price received by the nonresident pharmacy, whichever is
lower, multiplied by the tax percentage specified in this
section. Liability for the tax is incurred when prescription
drugs are received in Minnesota by the person.
Sec. 14. Minnesota Statutes 1996, section 295.52,
subdivision 4a, is amended to read:
Subd. 4a. [TAX COLLECTION.] A wholesale drug distributor
with nexus in Minnesota, who is not subject to tax under
subdivision 3, on all or a particular transaction or a
nonresident pharmacy with nexus in Minnesota, is required to
collect the tax imposed under subdivision 4, from the purchaser
of the drugs and give the purchaser a receipt for the tax paid.
The tax collected shall be remitted to the commissioner in the
manner prescribed by section 295.55, subdivision 3.
Sec. 15. Minnesota Statutes 1997 Supplement, section
297H.04, is amended by adding a subdivision to read:
Subd. 3. [INCINERATION WITH MIXED WASTE; RATE.] Nonmixed
municipal solid waste that is separately collected and
processed, but must be incinerated with mixed municipal solid
waste in accordance with an industrial solid waste management
plan approved by the pollution control agency, shall be taxed at
the rate for nonmixed municipal solid waste.
Sec. 16. Minnesota Statutes 1996, section 325E.112, is
amended by adding a subdivision to read:
Subd. 2a. [REFUND PROGRAM.] A person who accepts from the
public used motor oil and used motor oil filters as defined in
section 325E.10, subdivisions 3 and 5, may apply for a refund of
$250 for the year in which the person operates a facility that
qualifies for the reimbursement under subdivision 2, or would
qualify for the reimbursement except that it does not accept
contaminated motor oil. The refund is issued by the department
of revenue. In order to claim the refund, the applicant must
provide the commissioner of revenue with a copy of a certificate
issued to the applicant by the commissioner of the pollution
control agency verifying the applicant's eligibility for the
refund, and other information as the commissioner may
prescribe. The commissioner of the pollution control agency may
issue no more than 200 certificates for any calendar year. The
amount necessary to pay the refunds under this subdivision is
appropriated to the commissioner of revenue an amount from the
general fund.
Sec. 17. Minnesota Statutes 1997 Supplement, section
446A.085, subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] For the purposes of this
section, the terms defined in this subdivision have the meanings
given them.
(a) [ACT.] "Act" means the National Highway System
Designation Act of 1995, Public Law Number 104-59, as amended.
(b) [BORROWER.] "Borrower" means the state, counties,
cities, and other governmental entities eligible under the act
and state law to apply for and receive loans from the
transportation revolving loan fund, the trunk highway revolving
loan account, the county state-aid highway revolving loan
account, and the municipal state-aid street revolving loan
account.
(c) [DEPARTMENT.] "Department" means the department of
transportation.
(d) [LOAN.] "Loan" means financial assistance provided for
all or part of the cost of a project including money disbursed
in anticipation of reimbursement or repayment, loan guarantees,
lines of credit, credit enhancements, equipment financing
leases, bond insurance, or other forms of financial assistance.
(e) [TRANSPORTATION COMMITTEE.] "Transportation committee"
means a committee of the Minnesota public facilities authority,
acting on behalf of the Minnesota public facilities authority,
consisting of the commissioner of the department of trade and
economic development, the commissioner of finance, and the
commissioner of transportation.
Sec. 18. [462A.2092] [EMPLOYER HOUSING CONTRIBUTIONS;
MATCHING GRANT.]
(a) The commissioner may provide matching grants for
contributions made by employers for the development,
rehabilitation, or acquisition of affordable housing. An
employer contribution is eligible for a matching grant or
low-interest loan if the contribution is:
(1) made to a fund administered by a nonprofit corporation
to which the employer is not associated or to a government
agency; and
(2) used to develop or rehabilitate affordable housing
located in Minnesota or is used to assist low-income and
moderate-income households to acquire affordable housing located
in Minnesota.
(b) The matching grant is available up to the amount of the
contribution made by the employer. The amount of the matching
grant may not exceed the amount the commissioner determines is
necessary for the financial feasibility of the project or loan.
The total matching grants available for an employer's
contributions may not exceed $250,000. The commissioner shall
award the matching grant to the housing project or initiative
for which the employer contribution is used.
Sec. 19. Minnesota Statutes 1996, section 462A.21, is
amended by adding a subdivision to read:
Subd. 24. [EMPLOYER HOUSING CONTRIBUTIONS; MATCHING
GRANT.] It may spend money for the purpose of the matching grant
for employer contributions program under section 462A.2092, and
may pay costs and expenses necessary and incidental to the
development and operation of the program.
Sec. 20. Minnesota Statutes 1997 Supplement, section
465.715, is amended by adding a subdivision to read:
Subd. 1a. [APPLICATION.] Except as provided by subdivision
2, subdivision 1 only applies to a corporation for which a
certificate of incorporation is issued by the secretary of state
on or after June 1, 1997. A corporation that had been issued a
certificate of incorporation before June 1, 1997, may continue
to operate as if it had been created in compliance with
subdivision 1. This subdivision expires July 1, 1999.
Sec. 21. Minnesota Statutes 1997 Supplement, section
465.715, is amended by adding a subdivision to read:
Subd. 3. [INFORMATION.] (a) By June 30, 1998, the office
of the state auditor shall request from all counties, home rule
charter cities, statutory cities, urban towns, and school
districts information regarding all corporations, including
limited liability companies or limited liability partnerships,
whether for profit or not for profit, created by the political
subdivision. The information requested must include information
regarding the corporation's incorporation date, organizational
structure, purpose, a brief summary of the extent to which the
corporation receives or expends public funds, potential public
liabilities for conduct of the corporation, public oversight,
and public laws applicable to the corporation. This information
must be received by the state auditor on or before October 15,
1998.
(b) The office of the state auditor shall compile and
summarize the information received and report to the senate
local and metropolitan government committee and the house of
representatives local government and metropolitan affairs
committee or their successor committees by January 30, 1999.
The report may include recommendations for any changes in laws
governing the operation of existing and future corporate
entities created by such political subdivisions, and changes in
laws needed to clarify the legal status of these corporate
entities. Any corporate entity created by a political
subdivision before September 1, 1998, for which a report is not
received by the state auditor is not authorized to receive
public funds or contract with public entities after July 1, 1999.
Sec. 22. Minnesota Statutes 1996, section 469.015,
subdivision 4, is amended to read:
Subd. 4. [EXCEPTIONS.] (a) An authority need not require
competitive bidding in the following circumstances:
(1) in the case of a contract for the acquisition of a
low-rent housing project:
(i) for which financial assistance is provided by the
federal government;
(ii) which does not require any direct loan or grant of
money from the municipality as a condition of the federal
financial assistance; and
(iii) for which the contract provides for the construction
of the project upon land that is either owned by the authority
for redevelopment purposes or not owned by the authority at the
time of the contract but the contract provides for the
conveyance or lease to the authority of the project or
improvements upon completion of construction;
(2) with respect to a structured parking facility:
(i) constructed in conjunction with, and directly above or
below, a development; and
(ii) financed with the proceeds of tax increment or parking
ramp general obligation or revenue bonds; and
(3) in the case of any building in which at least 75
percent of the useable square footage constitutes a housing
development project if:
(i) the project is financed with the proceeds of bonds
issued under section 469.034 or from nongovernmental sources;
(ii) the project is either located on land that is owned or
is being acquired by the authority only for development
purposes, or is not owned by the authority at the time the
contract is entered into but the contract provides for
conveyance or lease to the authority of the project or
improvements upon completion of construction; and
(iii) the authority finds and determines that elimination
of the public bidding requirements is necessary in order for the
housing development project to be economical and feasible.
(b) An authority need not require a performance bond for
the following projects:
(1) a contract described in paragraph (a), clause (1);
(2) a construction change order for a housing project in
which 30 percent of the construction has been completed;
(3) a construction contract for a single-family housing
project in which the authority acts as the general construction
contractor; or
(4) a services or materials contract for a housing project.
For purposes of this paragraph, "services or materials
contract" does not include construction contracts.
Sec. 23. Minnesota Statutes 1996, section 469.169, is
amended by adding a subdivision to read:
Subd. 13. [ADDITIONAL ENTERPRISE ZONE ALLOCATIONS.] In
addition to tax reductions authorized in subdivisions 7, 8, 9,
10, and 11, the commissioner may allocate $500,000 for tax
reductions pursuant to enterprise zone designations, as
designated in Laws 1997, chapter 231, article 16, section 26.
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
enterprise zone. Limitations on allocations under subdivision 7
do not apply to this allocation.
Sec. 24. Minnesota Statutes 1996, section 469.303, is
amended to read:
469.303 [ELIGIBILITY REQUIREMENTS.]
An area within the city is eligible for designation as an
enterprise zone if the area (1) includes census tracts eligible
for a federal empowerment zone or enterprise community as
defined by the United States Department of Housing and Urban
Development under Public Law Number 103-66, notwithstanding the
maximum zone population standard under the federal empowerment
zone program for cities with a population under 500,000 or, (2)
is an area within a city of the second class that is designated
as an economically depressed area by the United States
Department of Commerce, or (3) includes property located in St.
Paul in a transit zone as defined in section 473.3915,
subdivision 3.
Sec. 25. Laws 1997, chapter 105, section 3, as amended by
Laws 1997, Second Special Session chapter 2, section 23, is
amended to read:
Sec. 3. [TEMPORARY WAIVER OF FEES, ASSESSMENTS, OR TAXES.]
Subdivision 1. [FEES.] Notwithstanding any law to the
contrary, for fiscal years 1997 and 1998, an agency, with the
approval of the governor, may waive fees that would otherwise be
charged for agency services. The waiver of fees must be
confined to geographic areas affected by flooding within
counties included in a federal disaster declaration and to the
minimum periods of times necessary to deal with the emergency
situation. The agency must promptly report the reasons for and
the impact of any suspended fees to the chairs of the
legislative committees that oversee the policy and budgetary
affairs of the agency. This subdivision expires February 1,
1998.
Subd. 2. [SOLID WASTE GENERATOR ASSESSMENTS AND SOLID
WASTE MANAGEMENT TAXES.] Notwithstanding any law to the
contrary, the waiver authority provided in subdivision 1 is also
extended to the commissioner of revenue in relation to the solid
waste generator assessment under Minnesota Statutes, section
116.07, subdivision 10, and the solid waste management taxes
under Laws 1997, chapter 231, article 13, for construction
debris generated from repair and demolition activities in the
area designated under Presidential Declaration of Major
Disaster, DR-1175, and disposed of in a waste management
facility designated by the commissioner of the pollution control
agency. The commissioner of revenue's authority under this
subdivision to waive the assessment and tax expires for waste
transported to the designated facilities after December 31, 1997
June 30, 1998, including waste transported to a landfill that is
limited by permit exclusively to the disposal of flood debris.
The waiver authority granted to the commissioner of revenue is
retroactive to April 1, 1997.
Sec. 26. Laws 1997, chapter 225, article 2, section 64, is
amended to read:
Sec. 64. [EFFECTIVE DATE.]
Section 8 is effective for payments made for MinnesotaCare
services on or after July 1, 1996. Section 23 is effective the
day following final enactment. Section 46 is effective January
1, 1998, and applies to high deductible health plans issued or
renewed on or after that date.
Sec. 27. Laws 1997, chapter 231, article 5, section 18,
subdivision 1, is amended to read:
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 1998 interim and the 1999
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.
Sec. 28. Laws 1997, chapter 231, article 13, section 19,
is amended to read:
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 sales or use taxes on solid waste management
services under Minnesota Statutes, section 297A.45,. The
moratorium is effective for the period from January 1, 1990,
through December 31, 1996 1997.
Sec. 29. [SPECIAL PREMIUM TAX PAYMENT.]
Health maintenance organizations, community integrated
service networks, and nonprofit health service plan corporations
that have met the cost containment goals established in
Minnesota Statutes, section 62J.04, in the individual and small
employer market for calendar year 1996 shall pay a special,
one-time 1999 premium tax payment. The tax payment must be
based on an amount equal to one percent of gross premiums less
return premiums on all direct business received by the insurer
in this state, or by its agents for it, in cash or otherwise
after March 30, 1997, and before January 1, 1998. Payment of
the tax under this section is due January 2, 1999. Provisions
relating to the payment, assessment, and collection of the tax
assessed under Minnesota Statutes, section 60A.15, shall apply
to the special tax payment assessed under this section.
Sec. 30. [PRIVATE SALE OF SURPLUS LAND; RED LAKE COUNTY.]
(a) Notwithstanding Minnesota Statutes, sections 92.45,
94.09, and 94.10, the commissioner of natural resources may sell
by private sale to the adjacent land owner, for a consideration
equal to the appraised value, the surplus land bordering public
water that is described in paragraph (c), under the remaining
provisions of Minnesota Statutes, chapter 94.
(b) The conveyance shall be in a form approved by the
attorney general.
(c) The land that may be sold is located in Red Lake
county, consists of about 50 acres, and is described as follows:
(1) Government lot 5, section 25, Township 152 North, Range
40 West;
(2) Government lot 7, section 25, Township 152 North, Range
40 West.
(d) The commissioner has determined that the land is no
longer needed for any natural resource purpose and that the
state's land management interests would best be served if the
land was returned to private ownership.
Sec. 31. [EXCHANGE OF LAKESHORE LEASED LOTS.]
Subdivision 1. [ANALYSIS OF LOTS.] By January 15, 1999,
the commissioner of natural resources must submit a report to
the chairs of the senate and house environment and natural
resources committees, the house environment, natural resources,
and agriculture finance committee, the senate environment and
agriculture budget division, the senate children, families and
learning committee, and the house education committee. The
report must provide the results of the field inspection required
by this section, recommendations on appropriations needed to
accomplish the purposes of this section, and additional
recommendations on methods to preserve public lakeshore in the
state. The commissioner must conduct a field inspection of all
lands leased pursuant to Minnesota Statutes, section 92.46,
subdivision 1. The commissioner must identify all lots within
the following classifications:
(1) the lot contains all or part of an unusual resource,
such as a historical or archaeological site, or a sensitive
ecological resource, or contains unique habitat, or has a high
scenic value;
(2) the lot provides access for adjacent state land; or
(3) the lot is part of the trust land in Horseshoe Bay, as
referenced in Laws 1997, chapter 216, section 151.
Subd. 2. [EXCHANGE OF COUNTY LAKESHORE LAND FOR LEASED
LAKESHORE LOTS.] (a) For the purposes of this section:
(1) "county land" includes, but is not limited to,
tax-forfeited land administered by any county; and
(2) "leased lakeshore lots" means lands leased by the state
pursuant to Minnesota Statutes, section 92.46, subdivision 1.
(b) By June 1, 1999, a county board with leased lakeshore
lots must petition the land exchange board with a plan for an
exchange of county land for leased lakeshore lots in the county
that are not listed by the commissioner pursuant to subdivision
1. Notwithstanding Minnesota Statutes, section 94.342, the land
proposed for the exchange must be land bordering on or adjacent
to meandered or other public waters. A county board proposing
an exchange under this section may include tax-forfeited land
administered by another county in the proposal with the consent
of that county board.
(c) In determining the value of the leased lakeshore lots
for purposes of the exchange, the land exchange board must
review an appraisal of each lot prepared by an appraiser
licensed by the commissioner of commerce. The selection of the
appraiser must be agreed to by the commissioner of natural
resources and the county board of the county containing the
leased lakeshore lot. The commissioner of natural resources
must pay the costs of appraisal and may recover these costs as
provided in this section. The commissioner must submit
appraisals under this paragraph to the land exchange board by
June 1, 1999.
(d) The land exchange board must determine whether the land
offered for exchange by a county under this section is lakeshore
of substantially equal value to the leased lakeshore lots
included in the county's petition. In making this
determination, the land exchange board must review an appraisal
of the land offered for exchange prepared by an appraiser
licensed by the commissioner of commerce. The selection of the
appraiser must be agreed to by the commissioner of natural
resources and the county board of the county containing the
leased lakeshore lots. The county must pay the costs of this
appraisal and may recover those costs as provided in this
section.
(e) Before the proposed exchange may be submitted to the
land exchange board, the commissioner of natural resources must
ensure that, whenever possible, state lands are added to the
leased lakeshore lots when necessary to provide conformance with
zoning requirements. The lands added to the leased lakeshore
lots must be included in the appraised value of the lots. If
the commissioner is unable to add the necessary land to a lot,
the lot shall be treated as if purchased at the time the state
first leased the site, for the purposes of local zoning
ordinances at the time of sale of the lot by the county.
(f) The land exchange board must determine whether the lots
are of substantially equal value and may approve the exchange,
notwithstanding the requirements of Minnesota Statutes, sections
94.342 to 94.347, relating to the approval process. If the
board approves the exchange, the commissioner must exchange the
leased lakeshore lots for the county lands, subject to the
requirements of the Minnesota Constitution, article XI, section
10, relating to the reservation of mineral and water power
rights.
Subd. 3. [COUNTY SALE.] Notwithstanding Minnesota
Statutes, section 282.018, or any other law to the contrary, a
county board must offer land that it has acquired through an
exchange under this section for sale to the lessee of the land
within 90 days from the date of acquisition for the value of the
land as determined by the county board. The county board may
include the cost of appraisal of the county land for the
purposes of this section in the value of the land. If the
lessee does not elect to purchase the land, the county board may
sell the land by public sale at the expiration of the lease term
for no less than the value of the land as determined by the
county board, including the cost of appraisal required by this
section, and the value of improvements to the land. The county
board must reimburse the lessee for the value of the
improvements to the land and the county may retain a sum from
the proceeds of the sale equivalent to the cost of appraisal.
The county board must reimburse the commissioner of natural
resources for the costs of appraisal under subdivision 2,
paragraph (c), from the proceeds of the sale.
Subd. 4. [COUNTY ENVIRONMENTAL TRUST
FUND.] Notwithstanding the provisions of Minnesota Statutes,
chapter 282, and any other law relating to the apportionment of
proceeds from the sale of tax-forfeited land, and except as
otherwise provided in this section, a county board must deposit
the money received from the sale of land under subdivision 3
into an environmental trust fund established by the county under
this subdivision. The principal from the sale of the land may
not be expended, and the county board may spend interest earned
on the principal only for purposes related to the improvement of
natural resources. To the extent money received from the sale
is attributable to tax-forfeited land from another county, the
money must be deposited in an environmental trust fund
established under this section by that county board.
Subd. 5. [NOTICE.] The commissioner must mail notice of
this section to each lessee of a leased lakeshore lot and to
each affected county board by July 1, 1998.
Sec. 32. [STATE PAYMENT OF CITY OF ADA AND EAST GRAND
FORKS DEBT OBLIGATION UPON DEFAULT; REPAYMENT; STATE OBLIGATION
NOT DEBT.]
Subdivision 1. [DEFINITIONS.] (a) For the purposes of this
section, the following terms have the meanings given.
(b) "Debt obligation" means:
(1) for the city of Ada, a loan from the Federal Emergency
Management Agency under its community disaster loan program to
the city in the amount of approximately $1,423,000, to cover
operating losses for a publicly owned health care facility that
was damaged in the spring floods of 1997; and
(2) for the city of East Grand Forks, a loan from the
Federal Emergency Management Agency under its community disaster
loan program to the city in the amount of approximately
$2,907,000.
(c) "City" means the city of Ada or the city of East Grand
Forks, as applicable for the loan.
Subd. 2. [NOTIFICATIONS; PAYMENT; APPROPRIATION.] (a) If
the city believes that it may be unable to make a principal or
interest payment on any outstanding debt obligation on the date
that payment is due, it must notify the commissioner of finance
of that fact as soon as possible, but not less than 15 working
days before the date that principal or interest payment is due.
The notice must identify the debt obligation issue in question,
the date the payment is due, the amount of principal and
interest due on the payment date, the amount of principal or
interest that the city will be unable to repay on that date, the
paying agent for the debt obligation, the wire transfer
instructions to transfer funds to that paying agent, and an
indication as to whether a payment is being requested by the
city under this section. If a paying agent becomes aware of a
potential default, it shall inform the commissioner of finance
of that fact.
(b) Except as provided in subdivision 9, upon receipt of a
notice from the city, which must include a final figure as to
the amount due that the city will be unable to repay on the date
due, the commissioner of finance shall issue a warrant to pay to
the paying agent for the debt obligation the specified amount on
or before the date due. The amounts needed for the purposes of
this subdivision are annually appropriated to the commissioner
of finance from the state general fund.
Subd. 3. [CITY BOUND; INTEREST RATE ON STATE PAID AMOUNT.]
If, at the request of the city, the state has paid part or all
of the principal or interest due on the city's debt obligation
on a specific date, the city is bound by all provisions of this
section and the amount paid shall bear taxable interest from the
date paid until the date of repayment at the state treasurer's
invested cash rate as it is certified by the commissioner of
finance. Interest only accrues on the amounts paid and
outstanding less the reduction in aid under subdivision 4 and
other payments received from the city.
Subd. 4. [PLEDGE OF CITY'S FULL FAITH AND CREDIT.] If, at
the request of the city, the state has paid part or all of the
principal or interest due on the city's debt obligation on a
specific date, the pledge of the full faith and credit and
unlimited taxing powers of the city to repay the principal and
interest due on those debt obligations, without an election or
the requirement of a further authorization, becomes a pledge of
the full faith and credit and unlimited taxing powers of the
city to repay to the state the amount paid, with interest.
Amounts paid by the state shall be repaid in the order in which
the state payments were made.
Subd. 5. [AID REDUCTION FOR REPAYMENT.] Except as provided
in this subdivision, the state shall reduce the state aid
payable to the city under chapters 273, 469, and 477A, according
to a schedule determined by the commissioner of finance, by the
amount paid by the state under this section on behalf of the
city, plus the interest due on it, and the amount reduced shall
revert from the appropriate account to the state general fund.
Payments from any federal aid payments shall not be reduced.
The amount of aids to be reduced are decreased by any amounts
repaid to the state by the city from other revenue sources.
Subd. 6. [TAX LEVY FOR REPAYMENT.] (a) With the approval
of the commissioner of finance, the city may levy in the year
the state makes a payment under this section an amount up to the
amount necessary to provide funds for the repayment of the
amount paid by the state plus interest through the date of
estimated repayment by the city. The proceeds of this levy may
be used only for this purpose unless they are in excess of the
amount actually due, in which case the excess shall be used to
repay other state payments made under this section or shall be
deposited in the debt redemption fund of the city. This levy is
an increase in the levy limits of the city for purposes of
Minnesota Statutes, section 275.065, subdivision 6. The amount
of aids to be reduced to repay the state are decreased by the
amount levied.
(b) If the state is not repaid in full for a payment made
under this section by November 30 of the calendar year following
the year in which the state makes the payment, the commissioner
of finance shall require the city to certify a property tax levy
in an amount up to the amount necessary to provide funds for
repayment of the amount paid by the state plus interest through
the date of estimated repayment by the city. To prevent undue
hardship, the commissioner may allow the city to certify the
levy over a five-year period. The proceeds of the levy may be
used only for this purpose unless they are in excess of the
amount actually due, in which case the excess must be used to
repay other state payments made under this section or must be
deposited in the debt redemption fund of the city. This levy is
an increase in the levy limits of the city for purposes of
Minnesota Statutes, section 275.065, subdivision 6. If the
commissioner orders the city to levy, the amount of aids reduced
to repay the state is decreased by the amount levied. A levy
under this subdivision must be explained as a specific increase
at the meeting required under Minnesota Statutes, section
275.065, subdivision 6.
Subd. 7. [ELECTION AS TO MANDATORY APPLICATION.] The city
may covenant and obligate itself, prior to incurring a debt
obligation, to notify the commissioner of finance of a potential
default and to use the provisions of this section to guarantee
payment of the principal and interest on those debt obligations
when due. If the city obligates itself to be bound by this
section, it shall covenant to deposit with the paying agent
three business days prior to the date on which a payment is due
an amount sufficient to make that payment or to notify the
commissioner of finance under subdivision 1 that it will be
unable to make all or a portion of that payment. The city shall
include a provision in its agreement with the paying agent for
that issue that requires the paying agent to inform the
commissioner of finance if it becomes aware of a potential
default in the payment of principal or interest on that issue or
if, on the day two business days prior to the date a payment is
due on that issue, there are insufficient funds to make the
payment on deposit with the paying agent. If the city either
covenants to be bound by this section or accepts state payments
under this section to prevent a default on debt obligations, the
provisions of this section are binding as to that issue as long
as any debt obligation of that issue remains outstanding.
Subd. 8. [MANDATORY PLAN; TECHNICAL ASSISTANCE.] If the
state makes payments on behalf of the city under this section or
the city defaults in the payment of principal or interest on an
outstanding debt obligation, it shall submit a plan to the
commissioner of finance for approval specifying the measures it
intends to implement to resolve the issues which led to its
inability to make the payment and to prevent further defaults.
The commissioner shall provide technical assistance to the city
in preparing its plan. If the commissioner determines that the
city's plan is not adequate, the commissioner shall notify the
city that the plan has been disapproved, the reasons for the
disapproval, and that the state shall not make future payments
under this section for debt obligations issued after the date
specified in that notice until its plan is approved. The
commissioner may also notify the city that until its plan is
approved, other aids due the city will be withheld after a date
specified in the notice.
Subd. 9. [STATE BOND RATING.] If the commissioner of
finance determines that the credit rating of the state would be
adversely affected thereby, the commissioner shall not issue
warrants under subdivision 2 for the payment of principal or
interest on any debt obligations for which the city did not,
prior to their issuance, obligate itself to be bound by the
provisions of this section.
Sec. 33. [COON RAPIDS BONDING.]
Subdivision 1. [AUTHORITY.] The city of Coon Rapids may
issue general obligation bonds under Minnesota Statutes, chapter
475, in an amount up to $11,000,000 to finance costs related to
the upgrading of the existing state and county bridges and
roadways within the project areas of the tax increment financing
districts designated 2-2 and 2-3. No referendum is required on
the question of the issuance of bonds under this authority. The
bonds are not included in computing any debt limitations of the
city. The levy of taxes to pay the bonds is not subject to any
levy limit.
Subd. 2. [EFFECTIVE DATE.] This section is effective the
day following final enactment without local approval and applies
to the city of Coon Rapids under Minnesota Statutes, section
645.023.
Sec. 34. [STUDY OF HOME CARE TAX INCENTIVES.]
The commissioners of revenue and human services shall
conduct a study on the issue of the effectiveness of tax
incentives to encourage people to provide care for elderly or
disabled individuals in their homes. The study must include
analysis of the most effective types of incentives and their
cost. The commissioners shall transmit the conclusions of the
study in a report to the legislature by January 15, 1999.
Sec. 35. [APPROPRIATIONS.]
Subdivision 1. [BAT STUDY.] $100,000 is appropriated from
the general fund for fiscal year 1999 to the legislative
coordinating commission to study alternative methods of taxing
business. The appropriations under this section and under Laws
1997, chapter 231, article 5, section 18, subdivision 3, are
available in fiscal years 2000 and 2001.
Subd. 2. [COST OF ADMINISTERING BILL.] $281,000 is
appropriated from the general fund for fiscal year 1999 to the
commissioner of revenue for the cost of administering this act,
excluding article 1.
Subd. 3. [HOUSING DEVELOPMENT FUND.] In addition to any
amount appropriated by other law, $250,000 is appropriated from
the general fund to the housing development fund for fiscal year
1999, $800,000 for fiscal year 2000, and $800,000 for fiscal
year 2001 to provide matching grants for employer contributions
for affordable housing under Minnesota Statutes, section
462A.2092. This appropriation is available until expended.
Subd. 4. [TRANSPORTATION.] $1,500,000 is appropriated from
the general fund for fiscal year 1999 to the state treasurer for
transfer to the transit account in the transportation revolving
loan fund established in Minnesota Statutes, section 446A.085,
subdivision 3.
Sec. 36. [REPEALER.]
(a) Minnesota Statutes 1997 Supplement, sections 3.987,
subdivision 3, and 14.431, are repealed.
(b) 1998 S.F. No. 3353, section 60, relating to the
exchange and sale of certain lakeshore lots, if enacted, is
repealed.
Sec. 37. [EFFECTIVE DATE.]
Sections 8, 9, 12, 20, 21, 23, 24, 28, and 30 are effective
the day following final enactment. Sections 15 and 25 are
effective retroactively to January 1, 1998.
Section 16 is effective January 1, 1999.
Presented to the governor April 10, 1998
Signed by the governor April 21, 1998, 9:28 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes